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of "Globex Minerals (inc.)", and the "African Mining and
Resources Company". The latter had in early 1972 obtained
^permission from the Government to explore for gold in five
counties over a one year period, excluding areas already
licensed and/or given away under concession agreements, and
in 1973 was negotiating a concession agreement with the
Liberian Government when it discovered that an area it was
interested in was already occupied by Globex. As the
"African Mining and Resources Company" had failed to
specify the areas it was entitled to under the Exploration
Agreement with the Government, and as a reconnaissance survey
permit gives no right to any mineral exploration in any area,
the question was - rightly - decided in favour of Nisco (31).
After a difficult start due to staff problems Globex in the
middle of 1973 commenced exploration activities - with old and
worn-out equipment which" was taken over from the previous
concessionaire. In 1974 the company was very successful and
reported a diamond production worth nearly half a million
dollars. Production could have been higher but the company was
faced with problems of illicit diving within its concession
area and theft of diamonds by labourers. In 1975 the company
discovered that gold was an important co-constituent of the
Lofa diamond gravels and decided to undertake a gold exploration
programme within its concession area. However, in 1975 reported
production of diamonds was disappointing, being only I 50,000
in value. Hoping to improve its performance Globex diverted the
Lofa river in 1976/1977 (which was allowed under the concession
agreement) in order to pump water out of the dippers and mine
gravel but the carat yield per cubic yard of gravel mined was
below expectation and diamond production in these years was
valued at $ 35,000 and ? 13,000 respectively. When the Lofa
river on two occasions flooded the company sustained heavy
losses.
According to the concession agreement Globex was to pay income
taxes at a rate of 50? of its profits but the large losses which
the company has reported have resulted in a lack of tax revenue
for the Government, and though an excise tax on output was
payable in case diamonds were exported the company has sold
virtually all its output in Liberia, leaving the excise tax to
be paid by the exporter (32).
The accounting methods which Globex used were deplorable: its
administration was not sufficiently structured to handle e.g.
cost-accounting, and further it was dubious whether it lived up
to its obligation not to exceed the allowed debt-equity ratio
(3 : 1). In 1973 employment of Liberians averaged about 85
xtrorkers, earning an average salary of about $ 55 a month (but
the four ex-patriates on the company's payroll received an
amount which was equal to the wages paid to all Liberian workers
together in that year i.e. over J 50,000), In 1974 the employment
figure rose to over 100 labourers but never more than 150
Liberians were hired as that would have necessitated the
financing of a dispensary by Globex. As the company only paid
for a short time for one teacher in one of the villages in the