Rich Nation, Poor People: Can The Pro-poor President Make Any Difference? – Series 1
By Martin K. N. Kollie
Contributing Writer
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| Pro-Poor President Weah |
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| Iron Ore |
Though Liberia has produced and exported high-grade iron ore in huge quantity since 1951, it is still importing steel nail and steel rod. Iron ore in the Liberian economy accounted for nearly 30% of total export earnings in 2016, but what difference has this percentage made on the livelihood of the people?
What have Liberians got from all of these multimillion iron ore concessions? Is Nimba better off now in terms of healthcare and housing? Does Grand Capemount County have good roads and quality schools? Can inhabitants of Bong boast of electricity and safe drinking water? Aren’t citizens of Bomi Hills still living in slums and huts? Is the road leading to the Port of Buchanan paved with asphalt since 1951? Go and ask our people from surrounding villages in Putu, Grand Gedeh County. The fact is that our nation is rich in iron ore, but its people are horribly poor.
In this first edition of our new series “Rich Nation, Poor People”, our torch is mainly focusing on the mining and exporting of iron ore. It unravels how foreign companies have been hugely benefiting from exploring, exploiting and exporting millions of metric tons of iron ore from Liberia while Liberians decay in poverty.
Are you aware that over US$854 million was generated just from exporting iron ore from Liberia between 2012 and 2015? Even while this commodity was declining globally in terms of price, a total of US$124.1 million was raised by foreign companies just in 2015. In a period of 4 years (48 months), almost 1 billion (US$854.46 million) accounted for iron ore exports alone.
Between 2012 and 2015, over 15.5 million metric ton of iron ore was shipped out of Liberia. Unfortunately, counties (Nimba, Bong, Grand Gedeh and Bomi) where these iron ores are mined lack access to basic social services. Even access to safe drinking water in these rural communities is a serious challenge. Least to mention better healthcare, improved housing, quality education, good roads, improved sanitation, livelihood, etc.
Where are the dividends of our resources and who are the actual beneficiaries of this huge exportation of our nation’s iron ore? These are facts about iron ore production and exportation in Liberia you deserve to know:
1. 2012 – 2,369,850 metric ton – US$117.10 million
2. 2013 – 4,948,095 metric ton – US$314.20 million
3. 2014 – 4,159,501 metric ton – US$299.06 million
4. 2015 – 4,085,120 metric ton – US$124.10 million
5. Total 2012/2015 – 15,562,566 metric ton – US$854.46 million
What benefit(s) have we got from this US$854.46 million as a result of exporting over 15.5 million metric ton of iron ore just in a period of 4 years? Please don’t panic. The choice is yours to follow me every Tuesday and Thursday as I reveal some hard truths about Liberia’s natural wealth. As I usually say, it is your right to know and it is my duty to let you know THE FACTS.
What are iron ores? Iron ores are rocks or minerals from which metallic iron can be economically extracted. The ores are usually rich in iron oxides and vary in color from dark grey, bright yellow, or deep purple to rusty red.
Between 1960 and 1970, Liberia was the largest iron ore exporter in Africa and the third largest exporter of iron ore in the World. It became the 7th largest in 1980. As a result of iron ore production in 1960, Liberia’s growth rate in terms of per capita was better off than most Asian nations.
For example, Liberia's GDP per capita in 1960 was US$170.04 while China was US$88.72, India (US$83.81), South Korea (US$155.60), Thailand (US$100.90), Pakistan (US$81.40) and Bangladesh (US$86.30). After 58 years, this story has changed in favor of these Asian nations while Liberia continues to economically crawl on its belly.
The Liberia Mining Company (LMC) was the first foreign company to mine iron ore in Liberia in 1951. Between 1951 and 1977, LMC generated a whopping US$540 million just from mining and shipping iron ore from Bomi Hills, Bomi County.
After LMC had depleted Bomi Hills as a result of mining for almost 27 years and raised such huge revenue (US$540 million), the Liberian government only received US$84 million (excluding rentals) which is approximately 16% of the company’s total inflow/intake. Liberia is the only country where foreigners benefit from the natural resources far more than the citizens. Rich Nation, Poor People. Can the pro-poor President make any difference?
How come Liberia has dropped from the 3rd largest producer/exporter of iron ore to the 22nd largest producer/exporter after 58 years (between 1960 and 2017)? What has gone wrong? Though we have produced and exported high-grade iron ore in huge quantity since 1951, but we are still importing steel nail and steel rod.
This speaks volume about the quality of leadership we have had and continue to have as a nation and a people. In my opinion, our nation has suffered from consistent leadership shortfall. Besides LMC, Liberia was a host to a number of multimillion companies such as the National Iron Ore Company (NIOC - 1958 in Mano River), the Liberian American-Swedish Mineral Company (LAMCO – 1960 in Yekepa) and Bong Mining Company (BMC – 1965 in Bong Mines), which became the largest German investment in Sub-Saharan Africa.
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While revenues from iron ore production are fast developing Australia, Brazil, South Africa, Mauritania, Algeria, Morocco, Canada, Malaysia, etc., the story is different in Liberia as a result of greed, fiscal indiscipline, and bad governance. For example, iron ore in the Liberian economy accounted for nearly 30% of total export earnings in 2016. But what difference has this percentage made?
In 2016, global sales from iron ore exports amounted to US$71.8 billion while global sales from iron ore in 2012 were US$131.5 billion. Even though Liberia houses the world’s largest steel giant (Arcelor Mittal), but unemployment remains as high as over 80% and there is no plan to even manufacture steel nail or steel rod in order to increase economic productivity. Does Liberia have leaders or gravy-seekers?
Between 2015 and 2016, over 392 employees of Arcelor Mittal were downsized or redundant due to the global decline in the price of iron ore to as low as US$37.50 per ton. The current price of iron ore on the world market has since increased to US$74.82 per ton, which accounts for about 100% rise in price.
While Arcelor Mittal benefits from this increment in price, hundreds of Liberians still remain downsized and those in authority are tight-lipped about this. Where are our “leaders”? In fact, are they leaders or looters? Rich Nation, Poor People. Can this new Pro-poor President turn the tide in the best interest of the Liberian people?
Up-to-date, there are 5 multimillion iron ore companies operating in Liberia, namely: Arcelor Mittal, China Union, Western Cluster, Putu Iron Ore* and BHP Billiton*. Sadly, communities where these mining operations are ongoing lack access to basic social services, which contravenes the Mining and Mineral Law of 2000 and the Mineral Policy of 2010.
Don’t we have eyes to see that we are rich, but our riches are only good enough to develop foreign countries, and not ours? Only a handful of self-seekers and economic scavengers in public service mostly benefit from these multimillion concessions while over 80% of our people languish in acute poverty and degradation. Rich Nation, Poor People – A Paradox that needs an answer if Liberia must rise! Can the pro-poor President find an answer to this paradox?
If managed and utilized well, revenues from iron ore exports could build new roads, hospitals, schools, housing facilities, dams/hydros, factories, public libraries, youth centers, create more jobs, etc. Regrettably, iron ores from our mountains have been and are being exploited without the people feeling the economic impact of their resources.
In our first edition on Tuesday, we dealt with rubber and today, we are dealing with iron ore. Watch out for our next week’s edition on the diamond. We will continue to have sleepless nights until Liberia gets on track for the good of all citizens.
Recommendation: Review all mining contracts or concessions and ensure effective monitoring of all companies in line with the Mining and Mineral Law of 2000 and the Mineral Policy of 2010.
From the largest slum of West Point and the top of Ducor, I see a NEW LIBERIA rising above the African continent. Hope is blooming - Change is in sight - Liberia will rise.
About The Author: Martin K. N. Kollie is a student studying Economics at the University of Liberia, a youth and student activist and a global columnist. He can be reached via martinkerkula1989@yahoo.com