Liberia's foundation for economic development

Liberia, foundation, for, economic, developmentLiberian President Ellen Johnson Sirleaf opens her second term with a Nobel Peace Prize and strong outside investment following an election that observers say was free and fair
She is moving to sooth the divisions of a contentious election season that included the main opposition party boycotting her run-off against former justice minister Winston Tubman over allegations of vote fraud. President Sirleaf says reducing poverty and unemployment in her second term will help unify the country.
We spent the last six years putting in the foundation for peace and economic development,” she says. “We now have those things in place. What we have to do is to respond to the basic needs of the people, particularly the young, the youth who have been bypassed by education, who don't have the skills for jobs. Our concentration and our challenge and our emphasis in the first couple years of the new administration is to focus on them.”
President Sirleaf says Liberian prosperity can be greatly enhanced by better management of natural resources. “Now it's delivery time and I'm confident that delivery will be there," she says.
In her first term, President Sirleaf raised civil servant salaries and arranged for the elimination of Liberia's foreign debt. With $16 billion in foreign direct investment since 2006, her growth strategy is based on diversifying rubber-dominated exports, in part, by restoring Liberian mining.
Growth in steel
For the first time in 20 years, Liberian iron ore passed through the port of Buchanan in 2011 – the product of ArcelorMittal's $1.5 billion-dollar Yekepa concession in Nimba County which was formerly run by the Liberia American-Swedish Minerals Company.
Five years after taking charge of the site, the world's largest steel company expects to ship four million tons of iron ore in 2012 and as many as 120 million tons by 2015.
I believe that we are making a very valid contribution,” said owner Lakshmi Mittal at a ceremony in which he congratulated President Sirleaf for embracing “the challenge and responsibility of your position with such energy, passion and commitment.”
Mittal said the resumption of iron exports shows Liberia is back on course with recovery, growth, and private-sector partnership. He recommitted his firm to social development in Nimba, Bong, and Grand Bassa counties while protecting the ecosystem of one of West Africa's last wet-zone montane forests.
ArcelorMittal partnered with conservation groups on a biodiversity study of the Nimba mountain range that identified several new species unique to the area.
"We cannot pretend that the steel that is so vital to a good, modern human environment can be produced without any consequences on the environment,” says ArcelorMittal Liberia environment manager John Howell. “Much of the harm can be avoided or repaired. And what cannot be avoided or repaired - such as extracting resources from the ground - can be compensated for."
A consortium led by China Union has a 25-year, $2.68-billion-dollar concession at the formerly German-owned Bong Mines north-east of Monrovia. The 352-square-kilometer site has been only partially explored and may hold as many as 300 million tons of low-grade iron ore.
The Chairman of China Union, Xiong Xinhai, says holding company Wuhan Iron and Steel (WISCO) attaches great important to the Bong Mines concession and will honor its commitment to provide jobs and other basic social services such as schools and hospitals.
He told Liberia's Lands, Mines and Energy Minister Roosevelt Jayjay that China Union has already drilled more than 90 holes, each of at least 20,000-meters.
Australia's BHP Billiton has a $3-billion-dollar iron ore project centered on four major leases along the existing 250-kilometer rail line from the Guinea border to the Liberian coast.
Combined with the nearby Nimba deposit in Guinea, these leases have the potential to form the backbone of a world-class cluster of mines around integrated rail and port infrastructure, much in the way the Western Australian iron-ore operations started in the 1960s,” says BHP Billiton CEO for ferrous and coal Marcus Randolph.
Oil producers
The government of Liberia has demonstrated that it is open for business,” Randolph says. “We intend to expedite development of these resources.”
Early hopes of Liberia joining Ghana and Sierra Leone as new West African oil producers dimmed when Tullow Oil abandoned its Montserrado-1 exploration well because drillers found only non-commercial quantities. The project is jointly owned with the Texas-based Anadarko Petroleum and the Spanish firm Repsol.
Anadarko found Ghana's massive Jubilee field – which holds up to 1.8 billion barrels of reserves – and had the first commercially-viable strike off Sierra Leone in 2009. The  Australian firm African Petroleum is drilling off the southeast coasts of Grand Bassa and River Cess counties.
The U.S. Geological Survey estimates that the 1,000-kilometer Cretaceous trend that stretches from Sierra Leone to Ghana through Liberia and Ivory Coast holds about 3.2 billion barrels of oil and gas and could satisfy as much as one-quarter of U.S. oil demands by 2015.
So despite the Montserrado-1 disappointment, the National Oil Company of Liberia says there will be 13 offshore hydrocarbon blocks available for licensing in the second quarter of 2012.
President Sirleaf says she is inspired by Angola's example of using oil revenue to rebuild a war-ravaged economy. Signing a series of agreements with President Jose Eduardo dos Santos in Luanda, President Sirleaf said it is important that Angolan and Liberian state oil companies are “able to talk and work together.”
President Sirleaf says she will make sure Liberia avoids the “oil curse” associated with windfall revenue. But a coalition of Liberian civil society and the international watchdog group Global Witness says the young energy sector is already vulnerable to abuse through weak oversight and outdated laws.
With uncertain oil and still-recovering iron ore, rubber remains the economic king. After 86 years in Liberia, Firestone's more-than-500-square-kilometer plantation is still the world's largest single natural rubber operation.
Firestone was one of the first firms to start rehiring after 14 years of civil war and says it is now replanting 5,000 acres a year. The productive life of a rubber tree is about 30 years. Because there was no significant replanting during the war, Firestone estimates that its overall harvest will not fully recover until at least 2014.
Rubber plantations
Malaysia's Sime Darby has a 63-year, $800-million concession to rehabilitate the Guthrie rubber plantations, cultivating 220,000 hectares of oil palm and rubber trees and producing oil palm and rubber products for domestic use and export by June 2015. The company expects crude palm oil production in 2015 to open at more than 10,000 tons.
Sime Darby says it will provide 20,000 jobs over ten years, building a vegetable oil refinery and providing housing and medical facilities in Grand Cape Mount, Bomi, Bong, and Gbarpolu counties.
Sime Darby chairman Tun Musa Hitam says two previous investments that were abandoned because of fighting have not diminished his company's appetite for Liberia.
Risks can happen anywhere even if you go to the moon,” Musa says. “We expect a fully operational upstream capacity in West Africa will provide Sime Darby Plantation with greater access to markets on the Atlantic Rim, Europe and Africa thus offering significant savings in logistics and distribution.”

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