Published on 29 April 2015

Macky Sall's copybook blotted by ArcelorMittal affair

Macky Sall’s copybook blotted by ArcelorMittal affair

What happened in Senegal will go down in the mining annals as ArcelorMittal's most humiliating defeat in Africa, as the attached joint report from West Africa Newsletter and Africa Mining Intelligence demonstrates. In 2007, the giant steel group was euphoric after being selected to carry out the Falémé iron ore mining project in south east Senegal. Two years later, the project had foundered as a result of a poor evaluation of the Falémé reserves, a drop in iron ore prices and financial problems within the Indo-British group. ArcelorMittal was taken to court, lost its concession and was obliged to pay compensation to the Senegalese state.

The negotiations which followed, however, were carried out in total secrecy. Even the Senegalese parliament was kept in the dark about their content. Questions were raised by the opposition, which accused Macky Sall and the steel group of making secret arrangements between themselves. In the end, ArcelorMittal forked out $150 million to settle the affair but, according to American consultants Gustavson Associates, this sum was derisory compared to the $5 billion it said the steel group should have paid. Even today, the Senegalese presidency refuses to respond to demands for explanations from civil society bodies.

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