Liberia: Experts Warn of HPX’s Threat to Liberia, Urge Gov’t to Declare Agreement in Default and Seek Arbitration

One of the most contentious points in the Ivanhoe letter is the insistence that the Government guarantees 30 million tons per annum (mtpa) of rail capacity.

Monrovia – In a bold and unprecedented move, HPX—represented by Ivanhoe—has issued an ultimatum to the Government of Liberia. According to a January 2025 letter, if an Access Agreement is not signed by February 15, 2025, the company will invoke a default under the March 2022 Framework Agreement. This default, it is claimed, will oblige Liberia to pay US$37 million, compounded annually at a 10% interest rate. But behind this financial threat lie demands that are not only procedurally and substantively flawed, but they also undermine Liberia’s national interests, according to experts.

A Demand for 30 mtpa Rail Capacity Without a Clear Basis

One of the most contentious points in the Ivanhoe letter is the insistence that the Government guarantees 30 million tons per annum (mtpa) of rail capacity. This figure is particularly suspect given that the actual rail capacity has yet to be determined. It appears that HPX is trying to secure an enormous share of a resource that may not even exist in the required measure. Rather than ensuring a realistic and evidence-based assessment of rail capacity, HPX’s demand could lock Liberia into an unsustainable commitment.

Undermining the Role of a Proven Operator

Another glaring issue is HPX’s call to remove ArcelorMittal as the rail operator. ArcelorMittal, the longstanding and foundational investor in Liberia’s rail infrastructure, has operated the system for over 15 years and is currently moving Liberian iron ore efficiently. In contrast, HPX seeks to shift control to a new operator—one that is associated with a proposal to transport Guinean iron ore. This move not only disregards the decades of proven experience and investment by ArcelorMittal, but it also prioritizes the interests of a foreign investor over those of Liberia.

Legal and Environmental Oversights

Perhaps the most alarming aspect of HPX’s demands is the lack of proof that the new military government has granted it the right to transit Guinean iron ore through Liberia. The necessary feasibility and environmental approvals—especially critical given that the iron ore deposit is located in a World Heritage site—are conspicuously absent. This omission raises serious questions about the legality and prudence of the project. In contrast, Guinea’s interests should never be legally or ethically prioritized over Liberia’s national and economic interests.

An Illegal Agreement and a Call for Arbitration

Adding to the controversy is the shadow of the “Weah agreement” – an agreement that was signed without proper legislative ratification. Under Liberian law, this Framework agreement was effective a predatory loan agreement and it should have been ratified by the Legislature and should have gone through the normal public hearing. By attempting to leverage an unratified and arguably illegal agreement, HPX is forcing the Government into a corner. Instead of engaging in constructive negotiations that respect Liberia’s legal processes and public interest, HPX is threatening to invoke a default clause that triggers a punitive financial penalty. And accordingly, to the Framework Agreement, only HPX can invoke a default.

Now that the February 15 deadline has passed without an Access Agreement being executed, it is incumbent upon HPX to formally invoke the default provisions of the March 2022 Framework Agreement. If they truly believe in their contractual rights, the next logical step would be to take Liberia to arbitration—a process that will put the merits of this flawed and one-sided arrangement to the test. The arbitration should address not only the financial penalty but also the illegal nature of the unratified agreement and the unsustainable operational demands that HPX has imposed.

A Challenge to HPX

Liberia’s leadership and legal community should now challenge HPX: either proceed transparently by invoking the default and entering arbitration or withdraw these baseless threats that compromise Liberia’s sovereignty and economic future. Prioritizing the interests of a Guinean investor over those of Liberia is not only unsound policy—it is a direct affront to Liberia’s right to self-determination and sustainable development.

In this pivotal moment, Liberia must stand firm. The path forward is clear: enforce the contractual safeguards provided under the Framework Agreement, subject the dispute to impartial arbitration, and ensure that any agreement respects both the rule of law and the nation’s long-term interests.

The National Legislature should seek to conduct a public hearing the March 2022 Framework Agreement to determine whether it was compliant with Liberia law and if not then it needs to be declared illegitimate.