Conakry – Legal experts are raising significant questions about the validity of a recently signed Concession and Access Agreement (CAA) between Liberia and HPX/Ivanhoe's subsidiary, Société des Mines de Fer de Guinée (SMFG), arguing the deal may violate a binding 2019 bilateral framework designed to govern cross-border mining infrastructure access.
The controversy centers on whether Liberia's arrangement with SMFG to transport Guinea's Nimba iron ore through Liberian rail and port facilities complies with the Implementation Agreement (IA) signed by both nations in October 2019. That framework was specifically designed to prevent unilateral decision-making and ensure transparent, equitable access to shared infrastructure for Guinea-sourced minerals.
The Implementation Agreement: A Framework Bypassed?
The 2019 Implementation Agreement established a rigorous multi-tier approval process for any mining operator seeking to use the trans-boundary corridor. Article 5 mandated a two-stage procedure: Guinea must first approve project eligibility, followed by Liberia reviewing access requests through joint oversight committees and final approval by an Inter-Ministerial Committee (IMC).
However, according to officials familiar with the matter, there is no public evidence that these institutional safeguards were followed. No IMC deliberation minutes have been published, no monitoring committee reports are publicly available, and critically, Guinea has apparently not formally recognized HPX's project as an "approved infrastructure project" under Article 5.1.
Instead, the CAA appears to have been negotiated directly between Liberia and HPX, circumventing the bilateral institutions established to ensure transparency and mutual consent. For mining companies operating in West Africa's increasingly integrated infrastructure landscape, this raises fundamental questions about regulatory predictability and the enforceability of regional agreements.
Harmonization Requirements Ignored
A core principle of the Implementation Agreement is harmonization – aligning customs procedures, tariff structures, and regulatory frameworks between both countries to ensure fairness for all operators. Article 4.1 mandates non-discriminatory treatment and equal access for Guinean operators, while Articles 8.2 and 8.3 require harmonized regulations and common pricing standards.
The CAA, however, operates as a standalone commercial agreement with its own fiscal regime, royalty schedule, and operational framework – none harmonized with Guinean laws or subject to bilateral oversight. By establishing independent access fees and governance structures, experts warn Liberia may have breached the uniform pricing principle, potentially fragmenting what was intended as a unified cross-border framework.
For mining investors, this fragmentation presents both opportunities and risks. While bespoke arrangements may offer favorable terms, they also create regulatory uncertainty and potential diplomatic friction that could disrupt long-term operations.
Bespoke Terms Raise Red Flags
Article 9.3 of the Implementation Agreement required development of a standardized access agreement template before any specific deals were signed. This template was intended to protect both states' interests, covering customs, liability, environmental protection, and dispute resolution.
The CAA, however, appears to be an investor-driven, tailored contract granting SMFG exceptional privileges: up to 30 million tonnes per annum capacity rights, a 25+15 year operating term, and extensive compensation and stabilization clauses rarely seen in standard infrastructure agreements. These generous terms – while commercially attractive – deviate significantly from the standardized approach the bilateral framework envisioned.
Potential Violation of Anti-Unilateral Action Clause
Article 3.3 of the Implementation Agreement explicitly prohibits either country from taking unilateral measures that compromise the agreement's objectives. By granting SMFG long-term access rights without documented Guinean consent, experts argue Liberia may have violated this provision, undermining the bilateral commitment both nations ratified.
This carries significant implications beyond diplomatic tensions. Guinea could pursue international arbitration or seek compensation, arguing its rights under the 2019 framework have been violated. For SMFG and its backers, this introduces material legal risk to what appears to be a flagship project for developing Nimba's substantial iron ore resources.
Implications for Regional Mining Governance
These procedural failures strike at the heart of institutional governance in West African mining. The region has made significant progress in recent years establishing frameworks for cross-border resource development, with the Nimba corridor seen as a model for future cooperation.
If the CAA proceeds in its current form without alignment to the Implementation Agreement, it could establish a troubling precedent: that international commitments can be selectively applied when commercial pressures mount. For mining companies, this undermines the regulatory certainty essential for multi-billion dollar, multi-decade investments.
Conclusion
While the CAA promises benefits including transit revenues and community funds, its legitimacy remains questionable if incompatible with the binding bilateral framework. Experts suggest Liberia should suspend, review, and realign the agreement with the 2019 Implementation Agreement before procedural shortcuts generate costs far exceeding the deal's value – potentially including project delays, arbitration, and damaged regional cooperation frameworks that the broader mining sector depends upon.
