—As opposition LPP chides President Boakai
IPNEWS: The opposition Liberian People’s Party (LPP) has strongly criticized the administration of President Joseph N. Boakai for recognizing Bea Mountain Mining Corporation and ArcelorMittal Liberia for their tax contributions despite growing concerns about the transparency and equity of their financial practices.
In a press statement dated December 5, 2024, signed by J. Yanqui Zaza, the party’s chairman, the LPP described the decision as troubling and perplexing, raising significant ethical questions about how Liberia’s natural resource wealth is managed.
The LPP accused ArcelorMittal Liberia, a subsidiary of global steel giant ArcelorMittal, of engaging in practices that amount to deceptive financial reporting. The party alleged that ArcelorMittal Liberia sold 6 million metric tons of iron ore to its parent company for $74 per ton—substantially below the global market average, which ranged between $83 and $150 from 2020 to 2022. This pricing strategy allegedly minimized the revenue reported in Liberia, reducing the country’s tax revenues while maximizing profits for the parent company.
In 2021, ArcelorMittal’s parent company declared a staggering taxable income of $13.2 billion and distributed $4.4 billion in dividends globally. Similarly, in 2022, the parent company reported $9.1 billion in taxable income and distributed $5.3 billion in dividends. However, despite owning a 30% stake in ArcelorMittal Liberia, Liberia received no dividends. The LPP highlighted this as a glaring example of multinational corporations exploiting resource-rich nations like Liberia while limiting their financial obligations to the host country.
The LPP also pointed to issues with Bea Mountain Mining Corporation, which the Boakai administration honored for its tax contributions despite failing to meet transparency obligations. In 2022, Bea Mountain claimed to have produced 14,000 kilograms of gold, but the figure has not been independently verified, as required by the Liberia Extractive Industries Transparency Initiative (LEITI). The company also failed to disclose production data for 2019 and 2020, a violation of its Mineral Development Agreement.
The Boakai administration’s decision to recognize Bea Mountain’s and ArcelorMittal’s tax payments has sparked widespread criticism. While both companies contributed significant taxes—$78 million and $62 million for the fiscal year 2021/2022—the LPP argued that these payments primarily consisted of employee withholding taxes and royalty fees. The party stressed that these forms of taxation do not reflect Liberia’s rightful returns on the capital extracted from its natural resources.
The party emphasized that withholding taxes represents the government’s share of employee wages, not its return on Liberia’s natural resource wealth. Similarly, royalty payments are fixed fees for the privilege of conducting business, not a reflection of the actual value of the resources extracted. According to the LPP, this arrangement underscores the inequitable distribution of Liberia’s natural resource wealth, with the country receiving only a fraction of the value generated by its resources.
The LPP also criticized the Boakai administration for failing to enforce existing policies designed to promote transparency and accountability in the mining sector. LEITI, the agency responsible for monitoring concession agreements, has repeatedly recommended measures such as auditing production records, ensuring fair market pricing, and requiring all payments to be deposited into Liberia’s consolidated revenue accounts. However, the administration has made little progress in implementing these recommendations.
The party called attention to the historical lessons of Liberia’s resource exploitation, warning that the country risks repeating past mistakes. Iron ore mining generated substantial revenues from the 1950s to the 1970s, but local communities saw little benefit. The term “Bomi Hills became Bomi Holes” reflects the environmental degradation and missed development opportunities resulting from unregulated resource extraction.
The lack of transparency in the mining sector also raises questions about the legitimacy of financial transactions between Liberia-based companies and their foreign parent companies. For example, in 2021, ArcelorMittal Steel-Liberia sold 6 million metric tons of iron ore to its parent company at $74 per ton, even though global steel prices surged by 90% that year. This discrepancy suggests that the transactions may not have been conducted at arm’s length, further reducing Liberia’s revenue share.
The party stressed that the Boakai administration’s failure to address these concerns undermines Liberia’s financial interests and the public’s trust in the government. The LPP argued that the administration must prioritize transparency and accountability to ensure that the nation’s natural resources are managed equitably and sustainably.
The LPP also highlighted the importance of enforcing dividend payments from mining companies to reflect Liberia’s ownership stakes. According to LEITI, ArcelorMittal and Bea Mountain have failed to pay dividends despite generating substantial profits. In 2021 and 2022, ArcelorMittal’s parent company disbursed $4.4 billion and $5.3 billion in dividends, respectively, while Bea Mountain reported producing thousands of kilograms of gold. Yet, neither company has made dividend payments commensurate with Liberia’s ownership stakes of 30% and 15%, respectively.
The party expressed frustration over the Boakai administration’s apparent disregard for these issues, arguing that it signals a lack of commitment to protecting Liberia’s financial interests. The LPP called for a comprehensive audit of ArcelorMittal Liberia’s 2021 corporate tax returns, noting that the tax period will expire in April 2025. This audit, the party argued, is essential to ensure that the company complies with local tax regulations and contributes its fair share to the national revenue.
The party also urged the administration to provide LEITI with adequate funding and logistical support to enhance its oversight capabilities. Such support would enable LEITI to conduct site visits and verify production data, ensuring that mining companies adhere to transparency standards and fulfill their financial obligations.
The LPP further emphasized the need to enforce Liberia’s mining policies more vigorously, including measures to reduce excessive management fees, training expenses, and royalty payments to foreign parent companies. The party called for implementing clear timelines and accountability measures to ensure progress.
The LPP’s statement comes at a time of growing public frustration over multinational corporations’ perceived exploitation of Liberia’s natural resources. Many Liberians have expressed concerns that the wealth generated by the country’s abundant resources is not equitably shared with its citizens.
The party also criticized the Boakai administration for failing to address the broader systemic issues that allow multinational corporations to underreport production figures and minimize tax obligations. According to the LPP, such practices contribute to a significant and deceptive decline in the country’s revenue from taxes on income and dividends.
The LPP concluded its statement by emphasizing the need for a fundamental shift in how Liberia’s natural resources are managed. “Government is a place to serve, not to steal,” the party stated. “A better Liberia is possible if we prioritize transparency, equity, and accountability in managing the nation’s resources.” BySocrates Smythe Saywon
