NEW YORK & MONROVIA, Republic of Liberia-Friday 1 April 2022 [ AETOS Wire ]
The Framework Agreement is the next step in de-risking the world-class Guinean Nimba Iron Ore Project and moving the project closer to realization
HPX and the Government of Liberia have agreed a timetable for detailed negotiations and the implementation of a definitive Concession and Access Agreement for HPX’s infrastructure requirements
(BUSINESS WIRE) -- Ivanhoe Liberia and Société des Mines de Fer de Guinée (“SMFG”), the Liberian and Guinean subsidiary companies of High Power Exploration Inc (“HPX”), announced today that they have signed an amended and restated Framework Agreement with the Government of Liberia reaffirming the principles for HPX’s non-discriminatory access to critical Liberian rail and port infrastructure and identifying HPX’s requirements for the future evacuation of ore from the Guinean Nimba Iron Ore Project. The Framework Agreement, which is immediately effective, also sets out a timetable for detailed negotiations and the implementation of a definitive Concession and Access Agreement for HPX’s infrastructure requirements.
HPX currently envisages that these infrastructure rights will include an extension of the existing rail line from Yekepa to the Guinea-Liberia border and access (with associated development and expansion rights) to the existing Yekepa-Buchanan rail corridor and to port infrastructure at or in the vicinity of Buchanan (the “Infrastructure Corridor”; and, where such infrastructure may be shared with other users, the “Shared Infrastructure”).
The Framework Agreement is another step forward in the realization of the benefits of the Guinean Nimba Iron Ore Project which will provide significant social and economic benefits to both Guinea and Liberia once in production. The Framework Agreement builds on previous important steps, including the 2019 Implementation Agreement between Liberia and Guinea securing the use by Guinean mining operators of Liberian infrastructure and transport services, and the Right of Access to existing transport infrastructure and services within the Yekepa-Buchanan port and rail corridor that was granted to HPX by the Government of Liberia in August 2021.
The 2021 PFS also estimated total project development costs at US$2.77 billion (including direct capital costs plus all engineering, owners cost, contingencies and taxes). Direct capital costs for rail and port development in Liberia are estimated at more than US$600 million. Project operating costs are estimated at below US$18/tonne. The 2021 PFS assumes construction starts in 2023.
The development of the Nimba Iron Project is estimated to create 2,000 direct permanent jobs, of which approximately 1,500 would be in Guinea and 500 in Liberia, and will help support indirect secondary employment in both countries.
Guy de Selliers, Chairman of Ivanhoe Liberia commented: “This Framework Agreement for access to critical Liberian port and rail infrastructure is an important step forward in making the Guinean Nimba Iron Ore Project a reality. It is clear that our project will deliver significant benefits in the form of investment, employment and recurring income for both Guinea and Liberia.
Through this Framework Agreement and the upcoming definitive Concession and Access Agreement, HPX is committed to ensuring that Liberia and the Liberian people reap their fair share of the benefits of the Guinean Nimba Iron Ore Project.
In addition, we want to develop our own mining activities in Liberia and have committed to start immediately identifying potential projects and exploration targets.
Now it’s time for all of us who care about mining and infrastructure in the region to become true partners and work together. Together with the Government, I really look forward to working co-operatively alongside ArcelorMittal to accelerate the development of both our Guinean Nimba Iron Ore Project and the planned expansion of their Liberian operations for the benefit of the Guinean and Liberian people, including as users of a passenger and freight rail service.”
Key Terms of the Framework Agreement
HPX and the Government of Liberia will enter into negotiations for a definitive Concession and Access Agreement for access rights (including associated development and expansion activities) in the Infrastructure Corridor to support HPX’s required capacity to export 30 million tonnes per annum (mtpa) of iron ore by 2027.
The Government of Liberia will grant HPX usage of the Infrastructure Corridor in accordance with its rights and obligations under its current Mineral Development Agreement with ArcelorMittal, and will seek to resolve with ArcelorMittal the technical and commercial terms for HPX’s usage of the Shared Infrastructure in accordance with that Mineral Development Agreement.
HPX and the Government of Liberia agree a passenger and freight traffic service will be an integral part of the railroad from the commencement of expanded operations.
HPX commits to conduct its activities within the infrastructure corridor in accordance with industry best practice and world class technical, safety, social and environmental standards for a large-scale heavy haul railroad.
HPX confirms that all environmental and social impact assessments on any infrastructure accessed by HPX will be carried out in accordance with the World Bank Group standards.
The Government will provide HPX with continuous unimpeded access to the Infrastructure Corridor to allow HPX to complete its environmental and social impact assessment and technical studies in respect of the Infrastructure.
HPX will provide two upfront prospective access payments with the first one due immediately and the second one upon the Concession and Access Agreement becoming fully effective. Further, the Government and HPX will negotiate recurring access fees and fiscal regime structure, as well as HPX’s social and community development spending obligations, as part of the Concession and Access Agreement negotiations. The level of the recurring access fee payments will be established in line with recognised international practice through detailed negotiations with the Liberian Government.
HPX and the Government have agreed to collaborate to identify and assess viable mineral prospects in Liberia.
The definitive Concession and Access Agreement embodying the above agreed principles is expected to be entered into and fully effective before the end of March, 2023.
About HPX
HPX is a privately-owned, U.S.-domiciled mineral exploration and development company.
Ivanhoe Liberia Limited is a Liberian Domestic Corporation and wholly-owed independent subsidiary of HPX. For further information, please visit www.ivanhoeliberia.com
SMFG is a Guinean incorporated mining company and an 85% owned subsidiary of HPX, owned in partnership with the Government of Guinea. For further information, please visit www.smfg.com
View source version on businesswire.com: https://www.businesswire.com/news/home/20220331005856/en/
Contacts
Media contact
James Gray
Finsbury Glover Hering
HPX@fgh.com
HPX-LON@finsbury.com
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