Liberia’s ministry of finance has said that the country aims to generate $260 million a year in tax revenue from iron ore mines by 2014. This is equivalent to 17 percent of gross domestic product. The statement was made today by the country’s Ministry of Finance/
Shipments of iron ore from the country are expected to commence in 2011. Meanwhile around $5 billion is being spent on new iron ore projects in the West African country.
China Union has a $2.6 billion iron ore project currently in the planning stages while Israel’s Elenilto was recently awarded the contract to develop the Western Cluster iron ore deposit in a project that is estimated to cost $2.4 billion.
Showing posts with label liberia. Show all posts
Showing posts with label liberia. Show all posts
Thursday, February 25, 2010
Tuesday, February 16, 2010
Elenilto To Spend $2.4 Billion On Liberia's Western Cluster
Israeli miner Elenilto, a unit of Israel’s Engelinvest Group, will spend $2.4 billion developing Liberia’s Western Cluster iron ore deposit, the Liberian Ministry of Lands, Mines and Energy said on Monday.
Production from the Western Cluster is estimated to be as much as 1.1 billion tons of iron ore.
Last month Elenilto was awarded the rights by the Liberian government to develop the Western Cluster project. The project consists of three deposits and two idled mines, which were closed during Liberia’s civil wars.
Production from the Western Cluster is estimated to be as much as 1.1 billion tons of iron ore.
Last month Elenilto was awarded the rights by the Liberian government to develop the Western Cluster project. The project consists of three deposits and two idled mines, which were closed during Liberia’s civil wars.
Monday, February 1, 2010
Israeli Firm Wins Liberian Iron Ore Licence
Liberian President Ellen Johnson Sirleaf has announced that after a year-long tender process the country has granted a 25-year license for the country’s Western Cluster, one of the largest iron ore mining sites in the world to Elenilto, part of the Engelinvest Group, controlled by Israeli businessman Jacob Engel.
The Western Cluster includes a group of three mines, with reserves of over 1.1 billion tons of iron ore. Major companies have mined at two of the sites in the past.
Other applicants included Sociedade de Fomento, Industrial Private Limited from India, and Capital Steel Global Company from China (a part of the Shougang Corporation), which was represented in Liberia by Neil Bush, brother of former US President George Bush.
In return for the license, Elenilto will pay Liberia an advance payment of $25 million with annual payments and a social donation, of $3 million a year upon commencement of production. In addition Elenlito will pay 21% of the projects’ profits after return of investment, with a 22.5% yield for Elenilto.
As part of the development, Elenilto will build a railway line track, improve the port and invest in other infrastructure. With the sites between 65km and 150km from the port this is a significant advantage with regards to transport costs compared with similar mines in West Africa.
The company is in preliminary contacts for the creation of a consortium of several international financial bodies which expressed interest in funding and investing in the project.
Amir Nagammy, CEO of Elenilto's activities in Liberia, who led the tender process, said: "This site, which we selected after meticulous testing, is one of the most attractive mining sites in Africa, both in terms of quality and access.
"It should be stated, that in other similar mines in Liberia which have been geologically researched, it was discovered that the actual reserves are several times greater than the initial estimated quantity, as the China Union Company announced two weeks ago, in regard to a reserve scope three times greater than the planned quantity.
"If, and as we expect, these mines will also be similar in this sense, then Elenilto is expected to hold even greater reserves of between 3 and 4 billion tons, approximately, under the license."
The Western Cluster includes a group of three mines, with reserves of over 1.1 billion tons of iron ore. Major companies have mined at two of the sites in the past.
Other applicants included Sociedade de Fomento, Industrial Private Limited from India, and Capital Steel Global Company from China (a part of the Shougang Corporation), which was represented in Liberia by Neil Bush, brother of former US President George Bush.
In return for the license, Elenilto will pay Liberia an advance payment of $25 million with annual payments and a social donation, of $3 million a year upon commencement of production. In addition Elenlito will pay 21% of the projects’ profits after return of investment, with a 22.5% yield for Elenilto.
As part of the development, Elenilto will build a railway line track, improve the port and invest in other infrastructure. With the sites between 65km and 150km from the port this is a significant advantage with regards to transport costs compared with similar mines in West Africa.
The company is in preliminary contacts for the creation of a consortium of several international financial bodies which expressed interest in funding and investing in the project.
Amir Nagammy, CEO of Elenilto's activities in Liberia, who led the tender process, said: "This site, which we selected after meticulous testing, is one of the most attractive mining sites in Africa, both in terms of quality and access.
"It should be stated, that in other similar mines in Liberia which have been geologically researched, it was discovered that the actual reserves are several times greater than the initial estimated quantity, as the China Union Company announced two weeks ago, in regard to a reserve scope three times greater than the planned quantity.
"If, and as we expect, these mines will also be similar in this sense, then Elenilto is expected to hold even greater reserves of between 3 and 4 billion tons, approximately, under the license."
Thursday, December 31, 2009
Liberia To Restart Iron Ore Production In 2011
Liberia is set to restart its ore mines in 2011 after the easing of political instability in the country, the International Monetary Fund (IMF) has said in a report on Liberia.
According to the report, growth is to be boosted through positive spillover effects on other sectors as iron ore production restarts in the country. Meanwhile, tax revenues from the two largest iron ore projects that are projected to start in 2011-12 are expected to reach about $260 million by 2014, accounting for 17 percent of the country's GDP.
The country is expected to grow 7.5 percent in 2010 and in two-digit numbers from 2011 until 2013. Although the medium-term prospects for Liberia remain favorable, the economy is heavily dependent on the restart of iron ore production in 2011 and on continued political stability. Accordingly, delays in iron ore investments are seen as constituting a financial risk for Liberia, the report concludes.
Source: Alibaba
According to the report, growth is to be boosted through positive spillover effects on other sectors as iron ore production restarts in the country. Meanwhile, tax revenues from the two largest iron ore projects that are projected to start in 2011-12 are expected to reach about $260 million by 2014, accounting for 17 percent of the country's GDP.
The country is expected to grow 7.5 percent in 2010 and in two-digit numbers from 2011 until 2013. Although the medium-term prospects for Liberia remain favorable, the economy is heavily dependent on the restart of iron ore production in 2011 and on continued political stability. Accordingly, delays in iron ore investments are seen as constituting a financial risk for Liberia, the report concludes.
Source: Alibaba
Wednesday, September 16, 2009
ArcelorMittal To Resume Operations At Liberia Iron Ore Mine In 2010
ArcelorMittal, the world’s biggest steelmaker, will resume full operations at its Liberian iron- ore mine next year, Arthur Massaquoi, public relations officer of the company’s Liberia unit, said.
Acelormittal in March scaled down operations at its Nimba mine in Liberia by half, firing 80 percent of its expatriate workers because of the global financial crisis.
The first iron-ore exports from the plant will now leave in 2011 and not next year, Massaquoi told reporters in the capital, Monrovia, today. In December last year, Liberian President Ellen Johnson-Sirleaf said the company would not be able to meet its deadline of shipping its first ore from the mine in 2009.
AccelorMittal signed a $1.6-billion iron-ore exploration agreement with Liberia in 2007. The company is redeveloping the mine after it was abandoned in 1992 during a civil war that engulfed the West African nation. It says it expects 12.5 million tons of ore a year, or 21 percent of the company’s production, from Nimba.
Source: Bloomberg
Acelormittal in March scaled down operations at its Nimba mine in Liberia by half, firing 80 percent of its expatriate workers because of the global financial crisis.
The first iron-ore exports from the plant will now leave in 2011 and not next year, Massaquoi told reporters in the capital, Monrovia, today. In December last year, Liberian President Ellen Johnson-Sirleaf said the company would not be able to meet its deadline of shipping its first ore from the mine in 2009.
AccelorMittal signed a $1.6-billion iron-ore exploration agreement with Liberia in 2007. The company is redeveloping the mine after it was abandoned in 1992 during a civil war that engulfed the West African nation. It says it expects 12.5 million tons of ore a year, or 21 percent of the company’s production, from Nimba.
Source: Bloomberg
Tuesday, August 4, 2009
Mano River Announces Billion Tonne Iron Ore Find
TSX Venture Exchange- and Aim-listed Mano River on Monday announced an initial independent mineral resource estimate of 1,08-billion tons of iron-ore at its 38,5%-owned project in Liberia.
Russian steelmaker Severstal’s mining subsidiary owns the majority stake of 61,5% in the Putu Range project, in which it had invested $30-million.
The Putu resource had potential to grow as its exploration programme advanced, Mano president and CEO Luis da Silva reported.
“We are delighted to announce this initial one-billion ton mineral resource estimate, especially as the resource covers less than one quarter of the 12 km strike length of the Putu iron-ore project in Liberia,” he said in a statement.
Da Silva said that Mano was in discussions with the Liberian government for a 25-year mining licence.
Mano and Severstal Resources are working towards a prefeasiblity study during 2010.
Source: Mining Weekly
Russian steelmaker Severstal’s mining subsidiary owns the majority stake of 61,5% in the Putu Range project, in which it had invested $30-million.
The Putu resource had potential to grow as its exploration programme advanced, Mano president and CEO Luis da Silva reported.
“We are delighted to announce this initial one-billion ton mineral resource estimate, especially as the resource covers less than one quarter of the 12 km strike length of the Putu iron-ore project in Liberia,” he said in a statement.
Da Silva said that Mano was in discussions with the Liberian government for a 25-year mining licence.
Mano and Severstal Resources are working towards a prefeasiblity study during 2010.
Source: Mining Weekly
Wednesday, May 27, 2009
Delta Quits Liberia Iron Ore Project
Delta Mining Consolidated Ltd. said it quit plans to develop the Western Cluster Iron Ore project in Liberia after the government added bidding terms it couldn’t meet.
“One of the requirements was a large cash guarantee, which wasn’t do-able in the short time we had available,” Delta director Bernard Swanepoel said by mobile phone today. “This specific project is now out of our hands.”
While Liberia previously named Delta as preferred bidder, it reversed the decision last year, saying on Sept. 15 that the bidding process may have been compromised. The government last month cleared the Johannesburg-based company of all alleged improprieties, prompting Delta to withdraw a legal order preventing the government from re-tendering the project. Companies had until May 15 to bid.
“Liberia remains a country with iron ore opportunities,” Swanepoel said, adding the government has “pointed out one or two projects” Delta may be interested in.
The Western Cluster project consists of three deposits and two idled mines. The mines on the deposits closed in 1976 and 1985 and their equipment was sold as scrap during Liberia’s two civil wars, the last of which ended in 2003.
Source: Bloomberg
“One of the requirements was a large cash guarantee, which wasn’t do-able in the short time we had available,” Delta director Bernard Swanepoel said by mobile phone today. “This specific project is now out of our hands.”
While Liberia previously named Delta as preferred bidder, it reversed the decision last year, saying on Sept. 15 that the bidding process may have been compromised. The government last month cleared the Johannesburg-based company of all alleged improprieties, prompting Delta to withdraw a legal order preventing the government from re-tendering the project. Companies had until May 15 to bid.
“Liberia remains a country with iron ore opportunities,” Swanepoel said, adding the government has “pointed out one or two projects” Delta may be interested in.
The Western Cluster project consists of three deposits and two idled mines. The mines on the deposits closed in 1976 and 1985 and their equipment was sold as scrap during Liberia’s two civil wars, the last of which ended in 2003.
Source: Bloomberg
Wednesday, May 20, 2009
Four Bids For Liberian Iron Ore Project
Four companies have submitted bids to develop Liberia’s $1.6 billion Western Cluster iron ore project, Lands, Mines and Energy Minister Eugene Shannon said.
Delta Mining Consolidated Ltd., which won the initial bid to develop the deposit last year, was not among the bidders when the envelopes were opened in the capital, Monrovia, today, Shannon said.
The four companies that submitted bids are Israel-based Elenilto Mineral Mining Ltd., a unit of the Engelinvest Group, Capital Steel Global from China, Formento Ltd. and Global Steel Holdings Ltd.
The bids will now be scrutinized by a committee, which will decide on the awarding of the contract, Shannon said.
The Western Cluster project consists of three deposits and two idled mines. The mines on the deposits closed in 1976 and 1985 and their equipment was sold as scrap during Liberia’s two civil wars, the last of which ended in 2003.
Source: Bloomberg
Delta Mining Consolidated Ltd., which won the initial bid to develop the deposit last year, was not among the bidders when the envelopes were opened in the capital, Monrovia, today, Shannon said.
The four companies that submitted bids are Israel-based Elenilto Mineral Mining Ltd., a unit of the Engelinvest Group, Capital Steel Global from China, Formento Ltd. and Global Steel Holdings Ltd.
The bids will now be scrutinized by a committee, which will decide on the awarding of the contract, Shannon said.
The Western Cluster project consists of three deposits and two idled mines. The mines on the deposits closed in 1976 and 1985 and their equipment was sold as scrap during Liberia’s two civil wars, the last of which ended in 2003.
Source: Bloomberg
Monday, May 4, 2009
Tata Shelves Liberia Iron Ore Bid
Tata Steel said on Monday that it has shelved its plans to re-bid for the USD 1.6 billion Western Cluster iron ore project in Liberia.
"The company has decided not to participate in the re-bid for the property," a Tata Steel spokesperson told the Press Trust Of India.
Asked about the reasons for it, he said there was nothing specific.
Industry sources, however, said the unpleasant experience the steel major had during the initial course of bidding for the Western Cluster mineral assets when they were charged of "acts of impropriety", have culminated into its walkout.
In 2008, the world's sixth largest steel producer was barred from bidding for the project for its alleged acts of impropriety, as reported in a section of the media. The Liberian government later absolved the company of the charges and allowed it to re-bid.
In response to Tata Steel&aposs letter of remonstration against media reports, Liberia's Ministry of Justice informed that investigations did not show the company's involvement in acts of impropriety as these have not been substantiated by the investigation panel of the country&aposs Public Procurement and Concession Commission.
The Western Cluster project consists of three deposits and two non-functional mines. Tata Steel was considering to acquire the property to feed the iron ore requirement of its European arm Corus.
Source: Indopia
"The company has decided not to participate in the re-bid for the property," a Tata Steel spokesperson told the Press Trust Of India.
Asked about the reasons for it, he said there was nothing specific.
Industry sources, however, said the unpleasant experience the steel major had during the initial course of bidding for the Western Cluster mineral assets when they were charged of "acts of impropriety", have culminated into its walkout.
In 2008, the world's sixth largest steel producer was barred from bidding for the project for its alleged acts of impropriety, as reported in a section of the media. The Liberian government later absolved the company of the charges and allowed it to re-bid.
In response to Tata Steel&aposs letter of remonstration against media reports, Liberia's Ministry of Justice informed that investigations did not show the company's involvement in acts of impropriety as these have not been substantiated by the investigation panel of the country&aposs Public Procurement and Concession Commission.
The Western Cluster project consists of three deposits and two non-functional mines. Tata Steel was considering to acquire the property to feed the iron ore requirement of its European arm Corus.
Source: Indopia
Thursday, April 30, 2009
Delta Claims Liberia Allowing It To Bid For Iron Ore Deposit
Delta Mining Consolidated Ltd., a company partly owned by South African investor Bernard Swanepoel, has said that Liberia will allow the company to bid for the Western Cluster iron ore deposits.
In September, Liberia cancelled the award to Delta of a $1.6 billion contract to develop the deposit and barred it from participating in a new tender, citing alleged “impropriety.” The matter “is now closed and we can move forward to a more constructive engagement,” Johannesburg-based Delta said in an e-mailed statement today.
Tata Steel Ltd., India’s biggest steelmaker, was also barred last year by Liberia from bidding for the deposit.
Delta has interests in coal and iron ore. Its biggest shareholders are Avalon Trust, based in Johannesburg, and Swanepoel, a former chief executive officer of Harmony Gold Mining Co.
Source: Bloomberg
In September, Liberia cancelled the award to Delta of a $1.6 billion contract to develop the deposit and barred it from participating in a new tender, citing alleged “impropriety.” The matter “is now closed and we can move forward to a more constructive engagement,” Johannesburg-based Delta said in an e-mailed statement today.
Tata Steel Ltd., India’s biggest steelmaker, was also barred last year by Liberia from bidding for the deposit.
Delta has interests in coal and iron ore. Its biggest shareholders are Avalon Trust, based in Johannesburg, and Swanepoel, a former chief executive officer of Harmony Gold Mining Co.
Source: Bloomberg
Monday, April 27, 2009
ArcelorMittal Delays Liberia Iron Ore Exports
Global steel giant ArcelorMittal announced late on Monday that it is delaying plans to export iron ore from Liberia because of the global economic crisis and that some 1,200 contractors will be laid off.
The company, the first to start a big foreign investment in post-war Liberia, is investing more than $1.5 billion in the iron ore industry and was set to start exporting ore this year, said Joseph Mathews, chief executive officer of ArcelorMittal Liberia.
Mathews told The Associated Press that the company has almost halved its global steel production in the current economic downturn, and that in turn has reduced the demand for iron ore.
Mathews said the company originally had planned to ship iron ore out of the West African nation later this year but that the company will now "postpone that to maybe 2010, 2011."
Some 1,200 workers who were employed by a contracting company to build a railway to transport iron ore from the mining site will have to be laid off because "the contract has been terminated."
"We put a stop to our construction activities," he said, adding that the termination of the railway contract "is definite."
Liberia's Lands, Mines and Energy Minister Eugene Shannon said the company's management needs to explain whether the slowdown also will affect money the company was due to pay to the Liberian government.
Shannon wants ArcelorMittal Liberia to state when the company will start exporting ore and what happens to the portion of the agreement relating to exports this year.
"The Mineral Development Agreement also talks about employment opportunities for our people; he needs to explain what happens to this," Shannon said.
The concession agreement grants the right to ArcelorMittal to export 12 million tonnes of ore a year for 25 years.
Liberia was ravaged by civil wars for years until 2003. The drawn-out conflict that began in 1989 left about 200,000 people dead and displaced half the country's population of 3 million.
Source: Associated Press
The company, the first to start a big foreign investment in post-war Liberia, is investing more than $1.5 billion in the iron ore industry and was set to start exporting ore this year, said Joseph Mathews, chief executive officer of ArcelorMittal Liberia.
Mathews told The Associated Press that the company has almost halved its global steel production in the current economic downturn, and that in turn has reduced the demand for iron ore.
Mathews said the company originally had planned to ship iron ore out of the West African nation later this year but that the company will now "postpone that to maybe 2010, 2011."
Some 1,200 workers who were employed by a contracting company to build a railway to transport iron ore from the mining site will have to be laid off because "the contract has been terminated."
"We put a stop to our construction activities," he said, adding that the termination of the railway contract "is definite."
Liberia's Lands, Mines and Energy Minister Eugene Shannon said the company's management needs to explain whether the slowdown also will affect money the company was due to pay to the Liberian government.
Shannon wants ArcelorMittal Liberia to state when the company will start exporting ore and what happens to the portion of the agreement relating to exports this year.
"The Mineral Development Agreement also talks about employment opportunities for our people; he needs to explain what happens to this," Shannon said.
The concession agreement grants the right to ArcelorMittal to export 12 million tonnes of ore a year for 25 years.
Liberia was ravaged by civil wars for years until 2003. The drawn-out conflict that began in 1989 left about 200,000 people dead and displaced half the country's population of 3 million.
Source: Associated Press
Thursday, April 16, 2009
Tata Cleared To Bid For Liberian Iron Ore Project
The Liberian government has cleared Tata Steel of financial wrongdoing, clearing the way for the Indian firm to bid for a $1.5 billion iron ore project in the West African country, it said on Thursday.
Last year Liberia disqualified the world's sixth biggest steelmaker from participating in a bidding round for the Western Cluster deposit. It cited "acts of violation" in an earlier bidding process which it said may have been compromised by "external influence or impropriety".
The Justice Ministry said on Thursday that a subsequent investigation had exonerated Tata.
"The government wishes to inform the company that the disqualification placed on it is hereby lifted," it said in a statement.
"Tata Steel is now eligible to fully participate in the re-bidding process for the Western Cluster iron ore deposits."
The bidding round is scheduled to close on May 15 and mining industry officials said 9-10 firms had shown an interest so far.
Since winning post-war polls in 2005 as Africa's first elected female head of state, Liberian President Ellen Johnson-Sirleaf has vowed zero tolerance for corruption as she attempts to rebuild the country after a 1989-2003 civil war.
Her government has looked to foreign investors to boost the reconstruction effort, including exploitation of Liberia's estimated 3.4 billion tonne iron ore reserves -- top in Africa and seventh in the world. Several mining projects in Africa and elsewhere have been delayed or scaled down in the past six months as metals prices have fallen dramatically. Industries that use steel and metals are among the worst hit by the global financial downturn.
In a separate iron ore project, Arcelor Mittal, the world's largest steelmaker, is developing a huge, high-quality iron ore deposit in northwest Liberia with reserves estimated at 500 million tonnes.
Before its civil war, Liberia was the world's fifth largest producer of iron ore.
SourcE: Reuters
Last year Liberia disqualified the world's sixth biggest steelmaker from participating in a bidding round for the Western Cluster deposit. It cited "acts of violation" in an earlier bidding process which it said may have been compromised by "external influence or impropriety".
The Justice Ministry said on Thursday that a subsequent investigation had exonerated Tata.
"The government wishes to inform the company that the disqualification placed on it is hereby lifted," it said in a statement.
"Tata Steel is now eligible to fully participate in the re-bidding process for the Western Cluster iron ore deposits."
The bidding round is scheduled to close on May 15 and mining industry officials said 9-10 firms had shown an interest so far.
Since winning post-war polls in 2005 as Africa's first elected female head of state, Liberian President Ellen Johnson-Sirleaf has vowed zero tolerance for corruption as she attempts to rebuild the country after a 1989-2003 civil war.
Her government has looked to foreign investors to boost the reconstruction effort, including exploitation of Liberia's estimated 3.4 billion tonne iron ore reserves -- top in Africa and seventh in the world. Several mining projects in Africa and elsewhere have been delayed or scaled down in the past six months as metals prices have fallen dramatically. Industries that use steel and metals are among the worst hit by the global financial downturn.
In a separate iron ore project, Arcelor Mittal, the world's largest steelmaker, is developing a huge, high-quality iron ore deposit in northwest Liberia with reserves estimated at 500 million tonnes.
Before its civil war, Liberia was the world's fifth largest producer of iron ore.
SourcE: Reuters
Thursday, January 22, 2009
Liberia Expects Bong To Produce In 18 Months
The first production of iron ore pellets from China Union's $2.6 billion Bong development in Liberia is expected within 18 months, Liberian National Investment Commission Chairman Richard Tolbert said.
Tolbert told Reuters the full $2.6 billion capital investment by the Chinese company, the biggest single foreign investment in the poor West African state, would be disbursed over a period of between eight to 10 years.
The contract signed this week between China Union and the Liberian government foresees 25 years of iron ore production from the Bong deposit, which is estimated to contain 300 million tonnes of low grade ore, he added.
"Within 18 months, we will see the first one-million-tonne pelletising plant up and running," Tolbert said in an interview following the signing on Tuesday.
He added China Union had also been granted a licence to explore for ore in an area adjoining the Bong deposit, which would open the possibility of increasing the ore resource.
The deal, which beat nine rival bids, went ahead at a time when many firms have scaled back or postponed African mining projects as metals prices have crashed in the past six months.
Most analysts believe a severe global recession will cut demand for industrial minerals for years to come, and there are fears this will also hit resource investments in Africa by China, which has announced multi-billion-dollar deals.
At a ceremony to mark the signing, Liberian President Ellen Johnson-Sirleaf said she hoped the China Union deal would encourage other investors to come to Liberia, which is still struggling to recover from a destructive 1989-2003 civil war.
"I am pleased to see this agreement going ahead. What the Chinese have done today shows their level of support for our quest to bring in investors ... We are anxious to see operations start," Johnson-Sirleaf said.
Iron ore prices on world markets have fallen to around $80 per tonne from a high of almost $200 per tonne last February as demand, particularly from Chinese steel mills, has collapsed.
Before its civil war, Liberia was the world's fifth largest producer of iron ore, and foreign investment in the mineral is a centrepiece of Johnson-Sirleaf's strategy of economic recovery.
China Union's investment in Liberia will be bigger than a $1.5 billion iron ore mining project in the West African state being developed by the world's largest steelmaker, ArcelorMittal.
Under its contract to mine the Bong deposit, which lies to the north-east of the capital Monrovia, the Chinese company intends to recondition the capital's port and build a hydro power plant to supply the city with electricity.
The contract includes a $40 million cash signature fee to be paid to Liberia once its parliament ratifies the contract and it is promulgated. This was expected in the coming months.
A $300 million signature bonus paid by China National Petroleum Corp to Niger for an oil deal last year drew criticism from rights groups, who said there was insufficient transparency on how it would be spent.
President Johnson-Sirleaf has promised zero tolerance of corruption. In September, Liberia disqualified two companies from bidding for another mining project on grounds of previous "acts of violation" by the firms.
As well as iron ore, Liberia aims to develop offshore oil. Anadarko Petroleum, Hong Kong Tongtai Petroleum, Repsol and Woodside have signed exploration deals.
Source: Reuters
Tolbert told Reuters the full $2.6 billion capital investment by the Chinese company, the biggest single foreign investment in the poor West African state, would be disbursed over a period of between eight to 10 years.
The contract signed this week between China Union and the Liberian government foresees 25 years of iron ore production from the Bong deposit, which is estimated to contain 300 million tonnes of low grade ore, he added.
"Within 18 months, we will see the first one-million-tonne pelletising plant up and running," Tolbert said in an interview following the signing on Tuesday.
He added China Union had also been granted a licence to explore for ore in an area adjoining the Bong deposit, which would open the possibility of increasing the ore resource.
The deal, which beat nine rival bids, went ahead at a time when many firms have scaled back or postponed African mining projects as metals prices have crashed in the past six months.
Most analysts believe a severe global recession will cut demand for industrial minerals for years to come, and there are fears this will also hit resource investments in Africa by China, which has announced multi-billion-dollar deals.
At a ceremony to mark the signing, Liberian President Ellen Johnson-Sirleaf said she hoped the China Union deal would encourage other investors to come to Liberia, which is still struggling to recover from a destructive 1989-2003 civil war.
"I am pleased to see this agreement going ahead. What the Chinese have done today shows their level of support for our quest to bring in investors ... We are anxious to see operations start," Johnson-Sirleaf said.
Iron ore prices on world markets have fallen to around $80 per tonne from a high of almost $200 per tonne last February as demand, particularly from Chinese steel mills, has collapsed.
Before its civil war, Liberia was the world's fifth largest producer of iron ore, and foreign investment in the mineral is a centrepiece of Johnson-Sirleaf's strategy of economic recovery.
China Union's investment in Liberia will be bigger than a $1.5 billion iron ore mining project in the West African state being developed by the world's largest steelmaker, ArcelorMittal.
Under its contract to mine the Bong deposit, which lies to the north-east of the capital Monrovia, the Chinese company intends to recondition the capital's port and build a hydro power plant to supply the city with electricity.
The contract includes a $40 million cash signature fee to be paid to Liberia once its parliament ratifies the contract and it is promulgated. This was expected in the coming months.
A $300 million signature bonus paid by China National Petroleum Corp to Niger for an oil deal last year drew criticism from rights groups, who said there was insufficient transparency on how it would be spent.
President Johnson-Sirleaf has promised zero tolerance of corruption. In September, Liberia disqualified two companies from bidding for another mining project on grounds of previous "acts of violation" by the firms.
As well as iron ore, Liberia aims to develop offshore oil. Anadarko Petroleum, Hong Kong Tongtai Petroleum, Repsol and Woodside have signed exploration deals.
Source: Reuters
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