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Liberia: Significant New Investment Deals Signal Economic Turnaround
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INTERVIEW
18 October 2007
Posted to the web 18 October 2007
Monrovia
When Richard Tolbert was tapped by then President-elect Ellen Johnson Sirleaf to head Liberia's National Investment Commission in late 2005, many friends questioned why he would leave a lucrative career on Wall Street, where he spent two decades years working for Merrill Lynch, Payne Webber and UBS, to return to a country that was devastated by 14 years of civil conflict.
Tolbert fled Liberia in 1980 after he was jailed by young soldiers who had staged a coup in which both his uncle, then-President William Tolbert, and his father Frank were killed. But he always planned to return home when conditions on the ground made that possible, he says. Interviewed in his office earlier this month, Tolbert outlined the huge strides he believes Liberia is making.
How do you rate the current situation vis-à-vis investment?
The investment climate is looking brighter day by day. During the first year, we were really getting out the message – letting the world know that we are reopen for business. We made the point over and over that Liberia is a rich country which has been poorly managed. Now we are turning that around. We're seeing significant investments coming into the country.
What are some of the latest deals?
We have had the signing of the U.S. $20 million contract for the rehabilitation of the Ducor Hotel. We have had the signing of the U.S. $30 million Liberia Enterprise Development Fund backed by Bob Johnson [founder of the Black Entertainment Television network] and OPIC [the U.S. Overseas Private Investment Corporation].
We have recently witnessed this fantastic Buchanan Renewable Energies venture, which is potentially another U.S. $20 million deal that will create hundreds of jobs just in the next few months. Earlier this year, we renegotiated the terms of a U.S. $1 billion agreement with Arcelor Mittal, the largest steel company in the world, and renegotiations with Firestone are currently taking place – two major transactions that will significantly improve benefits for Liberia. So we are seeing a real tangible flurry of investment activity.
The mining, timber and diamond areas are only just now beginning to reopen – not to mention agriculture. The National Investment Commission along with the Ministry of Agriculture has been negotiating two deals involving palm oil, which has huge potential for cosmetics and biofuel, and we are one of the few countries that can produce palm oil, which grows only within five degrees of the equator. We've got the land and the labor, and many people now want some of that land because places like Malaysia and Indonesia, which are the two biggest exporters of oil palm, are pretty much saturated for production.
In addition, with less than 300 hotel rooms in the whole country and more than 300,000 Liberians in the USA and neighboring African countries in need of homes to return to, we have a tremendous need for housing, hotels and office space. (Our Ministry of Youth and Sports recently even moved into the newly-renovated sports stadium as its temporary office.). We have 350 miles of pristine beaches and oceanfront just ripe for fisheries and tourism. The next couple of years look very exciting.
Could you say a little more about Liberia's mineral wealth and the potential for increased export earnings from natural resources?
First of all, I don't believe in any mineral curse. I think everything can be a blessing, and we are blessed with natural resources. The curse is in the management. It all depends on how you use what you've got. This is a wealthy country that has been poorly managed, as we've said many times. The president is determined to change that.
Liberia has three to four billion tons of iron ore still available for extraction. Much of it is medium grade, not the high grade (65 percent Fe) that we had a few years ago. But with the new technology and the high price of iron ore and steel today, it has become extremely valuable.
When the former Lamco Mines were put up for bid three years ago, only one group was interested. That was Mittal – two brothers who both bid for the same asset [Editor's note: this was prior to Mittal's merger with Arcelor in 2006]. In the last couple of months we have put two other iron ore assets up for bid. One was what is called the western cluster of mines in the Bomi Hills, where we had 14 major companies come in and express interest – some of the biggest players in the mining world, including BHP Billiton, CVRD out of Brazil, of course Rio Tinto. They are all here on the ground.
The old Bong Mines, which we also had thought had been depleted of extractable ore, was recently put up for bid, and nine major companies, including several from the Far East, Europe, and America, immediately expressed interest. In addition, we have potential new mining areas that people are looking into, including Wologisi, where one billion tons of iron ore are still sitting in the ground untapped.
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Then we have growing interest in gold and diamonds. Just this morning there were people in my office telling me that they are prospecting for gold. There is a company that is going to be listing on the AIM market in London in the next few months, with an initial market cap of over U.S. $100 million based on its gold mining activities in Liberia. And of course Mano River Resources, a company with which I am affiliated, has also now unscrambled its gold and diamonds and says it has potential kimberlite diamond pipes with serious potential for industrial diamond mining.
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Thank you for the great insite into the recovery of liberia not a lot mentioned on the fishing frount, from my research there is a very good fishing resource and I would be keen to discuss the many opportunities and hear from others on any developements. Fish for the Future, all of us are only caretakers for our grandchildren. davewpooley@gmail.com
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