— Negotiation docs reveal
Monrovia, Liberia – Negotiations between the Government of Liberia and High Power Exploration (HPX) for multiuser access to the Yekepa-Buchanan railway are nearing a critical conclusion, with sources close to the Boakai Administration highlighting the transformative financial and economic benefits this deal could bring to the country. At the heart of the discussions is the potential for the agreement to unlock over US$1.6 billion in rail user fees for Liberia, a figure that could significantly bolster government revenue over the lifespan of the concession.
HPX, an American mining and exploration company, has proposed a comprehensive fiscal package to the Liberian government as part of its ongoing negotiations. According to a fiscal term sheet seen by The Daily Observer, HPX has already paid US$37 million under a 2022 Framework Agreement and is now offering an additional US$25 million in concession fees upon ratification of the Access and Concession Agreement. The company has also committed US$10 million in budgetary support to the newly established National Railway Authority (NRA) to fund its operations and regulatory activities.
Revenue from Rail Access Fees
A cornerstone of the proposed agreement is the revenue Liberia stands to gain from rail access and transshipment fees. In the initial phase of HPX’s operations, the company plans to evacuate between two and five million tonnes of iron ore annually through the Yekepa-Buchanan railway. For this phase, HPX has offered US$2.10 per tonne in fees payable directly to the Liberian government. Over the concession’s lifetime, the company estimates paying more than US$1.6 billion in rail user fees alone, a sum that underscores the transformative financial potential of this deal.
HPX’s long-term vision includes a significant expansion of operations under its proposed Liberty Corridor project, which aims to construct a parallel railway capable of handling up to 50 million tonnes of iron ore annually. This expansion is expected to not only increase rail user fees but also create excess capacity for other potential users, further enhancing Liberia’s ability to attract foreign investment and diversify its economy.
Infrastructure investments, economic impact
In addition to rail user fees, the deal with HPX promises substantial investments in Liberia’s infrastructure. The company has committed to investing over US$600 million in the initial use of existing infrastructure, including facilities in Tokadeh, Nimba County, and at the Buchanan Port. This figure predates the announcement of the Liberty Corridor project, which, if realized, could bring an additional US$3 to US$5 billion in infrastructure investments, including the construction of a new deep-water port and a state-of-the-art rail system.
Sources involved in the negotiations revealed that HPX plans to commence a full feasibility study for the Liberty Corridor immediately after finalizing the Access and Concession Agreement. This study will ensure the project remains on schedule, positioning Liberia as a critical hub for mining and transportation in the region.
The economic ripple effects of such infrastructure projects are expected to be far-reaching. Analysts project that the development of the Liberty Corridor will not only facilitate increased mining exports but also stimulate job creation and economic growth in Liberia. The expansion of the Buchanan Port to accommodate increased vessel traffic will further enhance government revenues through marine and port charges.
Multiuser rail system
President Joseph N. Boakai recently issued Executive Order No. 136, establishing the National Railway Authority to regulate and oversee Liberia’s rail assets. The NRA’s mandate to implement a multiuser rail system is a significant policy shift aimed at maximizing the country’s economic potential. By allowing multiple companies to access rail and port infrastructure, Liberia stands to gain even greater revenues and investment opportunities.
Economic experts believe that a multiuser rail system will foster competition, improve efficiency, and attract a broader range of investors to Liberia’s mining sector. The potential for shared rail infrastructure is particularly attractive to smaller mining companies that might otherwise struggle to finance standalone transportation solutions. With the NRA’s independent oversight, the system is expected to operate transparently and equitably, ensuring all stakeholders benefit.
Long-Term Benefits to Liberia
Beyond immediate financial gains, the deal with HPX aligns with Liberia’s broader economic goals of infrastructure development and sustainable growth. The estimated US$1.6 billion in rail user fees, coupled with billions in projected infrastructure investments, represents an unprecedented opportunity for Liberia to modernize its economy. The government’s commitment to fair and well-regulated access to national rail assets, as outlined in Executive Order No. 136, ensures that these benefits will be distributed equitably.
The use of the Yekepa-Buchanan railway and the development of the Liberty Corridor also position Liberia as a key player in West Africa’s mining and logistics sectors. With HPX leading the way, the partnership is expected to generate significant job opportunities, enhance regional connectivity, and attract further foreign direct investment.
As negotiations between the Government of Liberia and HPX approach the final stages, the stakes are high, but so are the potential rewards. With over US$1.6 billion in rail user fees on the table and billions more in infrastructure investments, the deal represents a historic opportunity for Liberia to transform its rail and mining sectors while securing long-term economic growth.
For President Boakai’s administration, the successful conclusion of these negotiations would mark a significant achievement in its efforts to leverage Liberia’s natural resources for national development.
