LIBERIA: Steel giant plans to resuscitate iron ore exports

[ This report does not necessarily reflect the views of the United Nations]

MONROVIA, 23 Aug 2005 (IRIN) - Mittal Steel, one of the world's largest steel companies, has signed a deal to develop some 1 billion tonnes of iron ore reserves in northern Liberia, government officials told IRIN on Tuesday.

The company was one of four multinationals that submitted bids back in January to develop mines in Nimba County, close to the border with Guinea.

"Mittal Steel envisages approximate total spend of US $900 million during the lifetime of the project," the company, which is listed on the New York and Amsterdam stock exchanges, said in a statement issued on Monday.

"This cost will cover development of the mines, related railway and port infrastructure and provides means for community development," it said.

The deal is expected to span 25 years, according to officials from the Liberia's Mines and Energy Ministry, but first it must be ratified by Liberia's parliament.

In March, the same ministry signed a ten-year deal with a previously unheard of company, WAMCO, to export diamonds, but the government was eventually forced to cancel the deal after it caused international uproar.

The iron ore mines to be developed by Mittal have been closed since 1990, shortly after Liberia plunged into a 14-year civil war.

The Liberian-American Minerals Company was originally given a 70-year concession to mine the ore in the Nimba Mountains by the Liberian government back in 1953. Two years later, a Swedish group joined the consortium and the company was renamed Liberian-American-Swedish Minerals Company, known as LAMCO.

LAMCO built the 120 km railway that links the capital Monrovia to the port city of Buchanan and worked the mines, which lie close to much larger and still unexploited reserves over the border in Guinea, for over 30 years.

But the concession was surrendered in the civil war and during the fighting the infrastructure LAMCO had put in place was either looted or simply fell into disrepair.

Before the civil war began in 1989, iron ore provided half of all government revenues along side rubber, timber and diamond exports. But now only the rubber industry is active.

Exports of diamond and timber are still banned under UN Security Council sanctions imposed on Liberia between 2001 and 2003 to deprive former president Charles Taylor of a means of raising funds to buy arms.

Taylor went into exile in Nigeria in August 2003, helping pave the way for an end to the civil war. A transitional government, made up of representatives from the warring factions and civil society, has been running the country since then but Liberians are due to go to the polls on 11 October to choose a new president and parliament.

[ENDS]