September 13, 2013
The Senegalese government has won an initial ruling in an international arbitration case concerning an iron mining project in the south-east of the country, steel giant ArcelorMittal said Wednesday. “The arbitral tribunal has now issued its first award and decided that Senegal is entitled to terminate the 2007 agreements” but the question of possible damages has yet to be considered, ArcelorMittal said of the ruling by the Paris-based Court of Arbitration of the International Chamber of Commerce.
The world’s top steel company said it concluded an agreement with Senegal in 2007 to develop the Faleme project in the Tambacounda region to mine iron ore, a key component of steel. The envisaged investment of $2.2 billion (1.7 billion euros) was the biggest industrial project in the west African country, and was due to have started operations in 2011 and produce 25 million tonnes of iron ore per year. At the time the Senegalese government estimated the facility would bring it around 75 billion CFA francs (114 million euros, $150 million) in tax revenues per year. Luxembourg-based ArcelorMittal said the project fell behind schedule for a number of reasons including the global economic crisis and then studies showing the iron ore to be of lower quality than initially thought. It halted the project in 2009.
The steel giant said a 2011 attempt to find a mutually acceptable solution failed, leading to the arbitration procedure. The initial ruling now leads to a new phase “during which the Tribunal will decide upon the liability of ArcelorMittal as well as the amount of any damages which could be awarded to Senegal,” said the company. Courtesy Agence France-Presse
Published in ZaraiMedia.com