The Grey Chronicles

2009.July.15

Understanding GSHL: The Libyan Camp



LibyaIn December 2003, Muammar Abu Minyar al Qadhafi, the de facto chief of state since 01 September 1969, publicly announced that Libya was ridding itself of weapons of mass destruction and ballistic missile development programs, and fully cooperated with the United States, the United Kingdom, the International Atomic Energy Agency [IAEA], and the Organisation for the Prohibition of Chemical Weapons. Through these actions and decisions, Qadhafi brought Libya back into the world community. Between February and September 2004, the United States lifted all trade, commercial, and travel sanctions against Libya (Library of Congress, 2005).

As early as in the 1970s, the Libyan federal and regional governments promoted the development of the Wadi ash Shati iron ore deposit, which was located about 530 kilometers from the coast. Past resource evaluations estimated that the deposit contained from 3 to 5 billion metric tons of ore that ranges in grade from 30% to 55% iron content (Mobbs, 2007).

The government-owned Libyan Iron and Steel Company [LISCO] dominates the iron and steel manufacturing industry in Libya. A former LISCO Chairman, Dr. Mohammed A. el Mabrouk, claimed in a 2002 interview that the company is “one of the largest, if not the largest, companies in Libya, with capacity of production of 1.324 million tons of liquid steel. The execution of the complex started in 1979 and started production in 1989. The huge company’s complex (1200 ha.) is comprised of the following facilities: two 0.550-Mtpy Midrex DR (for DRI) and one 0.650-Mtpy Midrex DR (for HBI) reduction plants, steel melt shops, different products mills, a galvanizing line and a continuous coating line, apart from the sea port, a desalinization plant, a power plant, an oxygen producing plant and different workshops as well as a training center and quality control labs” (World Investment News, 2002). From then on, LISCO implemented a policy of continual improvement of its facilities by upgrading existing plants and introducing new production lines to meet increasing domestic demand and diversify its product mix to increase its export share of overseas markets (LISCO, 2006).

In 2003, a year earlier than the lifting of the US embargo, Global Infrastructures Holding Ltd. [GIHL], currently known as Global Steel Holdings Ltd. [GSHL], signed a five-year agreement with LISCO to manage the 2.0-million metric tons per year [Mtpy] mill in Misurata complex.

In 2004, LISCO commissioned the Industrial Research [IRC] Centre to prepare the feasibility studies for the plant expansion scheme to a capacity of 3.0-Mtpy of liquid steel and commenced the Phase 1 implementation in Steel Melt Shop 1 to achieve a capacity of 1.14-Mtpy. Steel Melt Shop No. 1 [SMS-1], which processes billets and blooms, is comprised of three 90-ton electric arc furnaces [EAFs], two (2) 6-strand billet casters and one (1) 4-strand bloom caster (LISCO, 2006). The installation of the EAFs in SMS-1 was expected to increase the facility’s capacity to 1.1-Mtpy from 630,000 metric tons per year [mtpy] (Mobbs, 2007) In 2005, LISCO embarked the expansion of strip pickling line and a new acid-regeneration station (LISCO, 2006). In 2006, work continued on the addition of three EAFs, presently designated as Steel Melt Shop No. 2 [SMS-2] for slabs, a ladle furnace, and two (2) 1-strand slab caster. LISCO commissioned Dastur Engineering International that same year to upgrade the 2004 IRC study and prepare a new Master Plan to achieve an annual capacity of 4.168-Mtpy of liquid steel. Approved in August 2007 by LISCO’s General Board, the Master Plan’s implementation is currently underway (LISCO, 2006). New 0.400-Mtpy wire drawing, 0.080-Mtpy galvanizing and 0.040-Mtpy colour-coating lines were subsequently commissioned in 2007 (LISCO, 2006).

According to 2006 USGS minerals report, LISCO’s capacity of its facilities are: 0.650-Mtpy hot-briquetted iron [HBI] and 1.100-Mtpy for Sponge Iron. Total crude steel production capacity amounted to 1.250-Mtpy. Rolled steel, in the form of bars and rods, at 0.800-Mtpy, Cold-Rolled Strip at 0.140-Mtpy and Hot-Rolled Strip at 0.580-Mtpy. (Mobbs, 2007). In 2003, Libya produced 1.336-million metric tons [Mmt] of direct-reduced iron [DRI]. In 2004 and 2006, the country produced 1.6-Mmt, respectively; and for both 2005 and 2007, it produced about 1.7-Mmt of DRI, respectively (2008).

For the next five year since GSHL signed the 2003 management contract with LISCO, there were no reverberation of any sort from the so-called Camp Libya, the moniker for Indian expatriates employed by GSHL in Libya. Note that although the law provides for freedom of speech “within limits of public interest and principles of the Revolution,” the Libyan government strictly limits freedom of speech as well as freedom of the press. All print and broadcast media in Libya are state-owned and state-controlled (Library of Congress, 2005).

A New Delhi-based publication, LiveMint (2008) exposé on non-payment of salaries in Nigeria and Bulgaria, moreover, also mentioned similar predicament for Camp Libya.

“In Libya, where the company was awarded a management contract to run the 2 million tonne Libya Iron and Steel Co. Ltd, salary arrears run into five months, down from seven months after the company paid two months’ backlog in the first week of this month [April], confirmed a dozen employees of 120-odd Indians currently located in Libya. At least two former employees said they’ve received their payments but only a year-and-a-half after leaving the company. … According to several executives, the Libyan plant is running smoothly and faces little of the troubles at the other plants. … Employees in Libya earn $1,500-5,000 a month apart from $400 paid in local Libyan dinar. Workers say the local payments — partly made by the Libyan government — have been made, however. … Employees confirmed that, like in Nigeria and Bulgaria, salaries are made by the company’s office [GSHL] in Dubai, but routed through a dollar account of Bank of India’s Singapore branch before being credited to their bank in India.” (Handique, LiveMint, 2008)

As of 06 December (2008), LISCO is headed by Dr. Mohammed A. Zaidan, President and Chairman of the Board of Directors, and assisted by a management team, mostly of Libyan executives.

The following year, two such complaints from Libya-based GSHL employees—the so-called Camp Libya—surfaced on the Web. One such open letter, dated 15 May (2009), addressed to the Ambassador of India in Tripoli, itemized the developments after a meeting on 15 March 2009 with the latter. The letter also addressed the revocation of the termination of four GSHL-Libya employees and the payment of all salaries due the concerned. About 95 employees stopped the work on 28 March 2009 “in view of this unfortunate frustrating incident.

A follow-up letter, dated 19 May (2009), announced that the same employees “resorted to General shift duty from 23rd May 09 to 31st May 2009 and subsequently stopped going to plant. … from 1st June 2009.”

The second letter, moreover, contained rather peculiar and familiar statements:

“The Libya contract between GSHL and LISCO is basically profit sharing on productivity improvement basis. There was no investment made by company [GSHL] (except gift of Lime coating and Oxygen Injection system for DRI plant). GSHL earned millions of dollars owing to hard work put up by employees only. By any calculation, salary to be paid to employees may be less than 10 % of earning. Mr Katiyal (President Operation) himself being a salaried employee always shows his concern, but he is not backed up by corporate at all regarding payment of salaries. Mr Pramod Mittal has earned so much money from Libya site itself that he could purchase his personal plane and a house worth 90 million ponds in UK but surprisingly has no money to pay to employees. Now May month is also completed and salary dues has increased to six months. Management is busy in breaking employees moral instead of arranging funds for payment (Letter, 2009).” [Emphasis added.]

Interestingly, although the management contract was good for a five-year duration, with issues such as the above surfacing until this time, it means that the contract was still extended?


Notes:

Federal Research Division (2005). Country Profile: Libya. Washington, D.C.: Library of Congress, 15 April 2005. p. 3, 14. back to text

GSHL-Camp Libya [All employees of GSHL] (2009). Letter titled Non-payment of salary to Libya Plant of GSHL employees by Mr. P.K. Mittal. Camp Libya: Consumer Complaints, India, 15 May 2009. back to text

GSHL-Camp Libya [All harassed employees of Global Steel Holding Limited] (2009). Letter titled Non payment of salaries to employees. Camp Libya: Consumer Complaints, India, 19 May 2009. back to text

Handique, Maitreyee (2008). Global Steel workers in Libya too say they are owed money. New Delhi: LiveMint, The Wall Street Journal, 18 April 2008. back to text

International Iron and Steel Institute [IISI] (2008). World Steel in Figures 2008. Brussels: International Iron and Steel Institute, June 2008. p. 25. back to text

Libyan Iron and Steel Co. (2006) (March 20). Expansion: Libyan Iron and Steel Co.. On-line: Libyan Iron and Steel Co., 20 March 2006. back to text

Moghrabi, Yasmine (2008). Libyan Iron and Steel Company Officers, Middle East Business Information. On-line: ABQ Zawya Ltd, 06 December 2008. back to text

Mobbs, Philip M. (2007). The Mineral Industry of Libya, USGS 2006 Minerals Yearbook . Place: U.S. Geological Survey, November 2007. pp. 25.1-25.4. back to text

World Investment News [WINNE] (2002). Interview with Dr. Mohammed A. el Mabrouk. Tripoli: World Investment News, June 2002. back to text

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1 Comment »

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