Iron ore mine in West Africa. The Liberty Corridor railroad provides a mechanism for Ivanhoe Atlantic to get that ore to market on favourable terms. Photo: File
On the eve of the recent visit of coastal African leaders to the White House, it was announced that a letter of intent had been signed between Guma Africa Group and the Government of Liberia to develop the Liberty Corridor. The details of that agreement remain confidential, but important questions need to be asked about what role the US government played in the negotiations.
Those questions will not only force consideration of favouritism in US commercial diplomacy. They will demand evaluations of the conduct of US ambassadors, a senior adviser to the US president and a reported candidate for US assistant secretary of state for African affairs. There are concerns that the US government has endorsed a commercial project that will benefit Chinese and South African individuals and entities who undermine US national security and foreign policy interests according to the America First Foreign Policy Agenda endorsed by the Trump administration.
What is the Liberty Corridor?
The Liberty Corridor is a heavy duty railroad that will connect the Nimba District of Guinea with a new deepwater port in Didia, Liberia. The corridor will be developed on top of the existing Yekepa-Buchanan Railway Corridor. Its development will promote regional economic integration in West Africa and allow Ivanhoe Atlantic to export iron ore from its Kon Kweni Iron Ore Project through Liberia.
The Liberty Corridor is opposed by a Luxembourg-based multinational steel and mining company ArcelorMittal (AML). Back in 2005, AML entered into a Mineral Development Agreement with the Guinea government. One of the provisions of that agreement granted AML a monopoly over the Yekepa-Buchanan Railway. Since then, AML has invested a huge sum of money in expanding its operations and upgrading the infrastructure along that corridor. The Liberty Corridor will bring an end to that monopoly and potentially reduce the value of future phases of the project for AML shareholders.
The Liberty Corridor has been championed by US-based Ivanhoe Atlantic. Back in 2019, Ivanhoe Atlantic (then known as High Power Exploration) acquired the rights for the Nimba Iron Ore Mine. The Kon Kweni Iron Ore Project represents one of the highest-grade iron ore deposits that has yet to be developed in the world. According to Ivanhoe Atlantic, there are more than 700 million tonnes of direct ship ore (DSO) in the ground. More than 200 tonnes of that is high-grade ore. The Liberty Corridor provides a mechanism for Ivanhoe Atlantic to get that ore to market on favourable terms.
The Liberty Corridor could prove to be a game-changer for Ivanhoe Atlantic and the US mining sector. There are other undeveloped mineral deposits in the Southern Guinean Highlands. One is the Simandou Iron Ore Mine. It is estimated to have 1.5 billion tonnes of ore in the ground. Rio Tinto holds the rights to that mine. To export its ore, Rio Tinto is supporting the development of a 670km railway from Simandou to a new deepwater port in Forécariah, Guinea. The problem is that the Simandou Iron Ore Mine is a highly controversial project. In 2023, Rio Tinto settled a Foreign Corrupt Practices Act case with the US Securities and Exchange Commission related to the project. But there are lingering concerns about the influential role being played by Chinese companies in the project.
The Liberty Corridor is seen as a valuable alternative to the Trans-Guinean Corridor for the Kon Kweni Iron Ore Project. Industry experts suggest that Ivanhoe Atlantic would have struggled to ever realise the full potential of the Nimba Iron Ore Mine if mining financier Robert Friedland had chosen to stand and fight with Rio Tinto, Winning Consortium Simandou and the government of Guinea for fair and open access to the Trans-Guinean Corridor. Ivanhoe Atlantic simply did not have enough leverage to achieve a desired outcome.
The Liberty Corridor has been publicly endorsed by the US government. The US embassy in Monrovia publicly declared that the US government welcomed “the signing of a concession and access agreement between US-owned Ivanhoe Atlantic and the Government of Liberia” on the eve of the recent visit of coastal African leaders to the White House.
What are the Issues for the US Congress?
The Liberty Corridor raises a number of issues that the US Congress may want to consider. Two of the most important involve the appearance of favouritism and insufficient due diligence in US commercial diplomacy.
With respect to favouritism, private claims have been made that the letter of intent was signed between the Guma Africa Group and the Liberian government only on the eve of the White House visit through coercive actions undertaken by the US government behind the scenes. According to people with knowledge of the negotiations, that diplomatic intervention was spearheaded by the US ambassador to Liberia, Mark Toner, with the support of senior Africa bureau official Troy Fitrell and senior Africa adviser to the US president, Massad Boulos.
Those unattributable remarks demand critical scrutiny from the US Congress. If true, then US commercial advocacy not only favoured one company Ivanhoe Atlantic) over at least one another (AML). It favoured a company whose chairperson of the board is J Peter Pham, a former US special envoy who is assumed to be a candidate for the assistant secretary of state for African affairs. It is therefore not surprising that there are concerns being voiced about the appearance of impropriety.
With respect to insufficient due diligence, private claims have been made that the US government failed to take reasonable steps to ensure that the Liberty Corridor fully aligned with US national security and foreign policy interests prior to endorsing the deal. Those allegations revolve around the claim that the project will benefit Chinese and South African individuals and entities who apparently undermine US national security and foreign policy interests as set forth in the America First Foreign Policy Agenda embraced by the Trump administration:
- People’s Republic of China: Through Ivanhoe Capital, there is an indirect association between Ivanhoe Atlantic and Ivanhoe Mines, and the two largest shareholders of Ivanhoe Mines are Chinese companies — CITIC Metal and Zijin Mining Group. Both have close ties to the Chinese Communist Party.
- South Africa: Through Guma Africa Group, there is a direct association between Ivanhoe Atlantic and South African Robert Gumede, who has reportedly been accused of major corruption. Among other things, the South African Special Investigating Unit recently sought to recoup more than $20 million from one of his companies for a “fraudulent and overpriced personal protective equipment (PPE) contract awarded during the Covid-19 pandemic.” Through the Liberty Corridor, there is also an indirect association between Ivanhoe Atlantic and Thelo Group. According to local media, Thelo DB Consortium is in the running to be the independent operator of the new railway. The chairperson of the Thelo Group is South African Ronnie Ntuli, who has been linked to controversial projects. Among other things, the South African parliament once blocked the controversial sale of a 30% stake in ASA Metals to a set of politically connected broad-based black economic empowerment partners “at the expense of impoverished communities”. Ntuli was reportedly one of those partners. To compound matters, Julius Malema, leader of the Economic Freedom Fighters, was linked to the scheme.
The Liberty Corridor therefore begs important questions for the American people:
- With respect to favouritism, one has to wonder whether the US government actually coerced the government of Liberia into signing the letter of intent with Ivanhoe Atlantic? Did Boulos, Fitrell, and Toner have any conflicts of interest that may have improperly influenced US commercial diplomacy (for example, business connections; post-retirement employment interests)? Did ambassador Pham ever make improper use of government connections and private information that was gained during his time in office for personal gain in the private sector?
- With respect to insufficient due diligence, one has to wonder whether the Liberty Corridor is well aligned with the strategic goals of countering major corruption, mitigating the Chinese Communist Party’s predatory practices, rewarding performance and merit in US diplomacy, and resetting bilateral relations between South Africa and the United States.
At present, the American people do not know the answers to any of those questions. That makes it difficult to make sense of the private claims and counter-claims about the deal that are swirling around Washington. The US Congress could put an end to all of this political theatre by simply holding a public hearing on the matter and setting the record straight once and for all.
Of course, that raises a knock-on question: how should the White House respond if a congressional hearing was called on the matter?
Assuming everything was above board with the negotiations, the White House might want to consider welcoming such oversight by the US Congress. A public hearing would not only provide the Trump administration with a platform to put to bed nasty insinuations about Boulos, Fitrell, Pham and Toner, such as those made in the recent hit job in Africa is Not a Country. It would provide the Trump administration with a platform to make the case to the American people that their approach to US commercial diplomacy is far superior to those of the Biden administration. That includes their approach to putting an end to the global stranglehold that companies linked to the Chinese Community Party have on access to critical minerals.
Michael Walsh is a non-resident senior fellow at the Foreign Policy Research Institute.
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