The case considers a renegotiation of an iron ore mining contract by the Government of Liberia and steelmaker ArcelorMittal in 2006 amid criticism that the deal unfairly favored ArcelorMittal. How do private companies and governments ensure that natural resources are explored responsibly, and profits are managed conscientiously and in developing countries? How are these concerns balanced with the need to provide sufficient incentives and protections to investors in what are often unstable and risky environments? What kind of measures can the Liberian government take to stimulate post-conflict reconstruction without falling victim to the resource dependence curse?
More fundamentally, what are the social responsibilities of a multinational company investing in a developing country with limited investment history? What is reasonable from the company's perspective? What is useful to the local communities? What is the government's role in fostering corporate social responsibility?
The case of ArcelorMittal's investment in Liberia's iron ore sector is multidimensional, and raises complex issues regularly faced by companies doing business in developing countries.
Author: Obiko Pearson, Tatiana Chkourenko, Felix Macharia, Gregory Richards
Institution: Columbia Business School
Industry: Mining
Discipline: Economics, Politics, and Business Environment
Number of pages: 23
Language: English
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