The_Open_Door_deel1

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equity participation (unlike in the case of N.I.O.C. with which
a Concession Agreement was signed In the same year 1958). This
partnership with the European investors entitled the Government
to elect five of the eleven members of DELIMCO's Board of
Directors. The Government was to receive 50? of the net profits
as a corporate income tax but would receive no dividends (unlike
the arrangement with LAMCO).
In consideration of the Government's right to levy a 50?
corporate income tax on DELIMCO's net profits the Liberians
waived any and all royalty under the Agreement (with the
exception of the provisions of Article 12) and in addition
exempted the company from import and export duties, excise taxes
or any other tax, charge or duty for the entire life of the
Agreement (70 years), with the exception of an exploration tax
and a surface tax. These tax exemptions also applied to the
company's private shareholders, the managing company, contractors
etc. Article 12 of the Agreement provided that if during the
first ten years of operations the income tax payments to the
Government would not be equivalent to 25 cents per ton of ore
exported the concessionaire would in any event pay a minimum
royalty equivalent to 25 cents per ton thereby deducting the
income tax payments made (85).
Early in 1962 the management of the mining operations as well as
related activities were - by agreement - given to another
company, the Bong Mining Company (B.M.C.), in which Gewerkschaft
Exploration participated 67.5 per cent and Italian steel
producers which had joined in 1961, 'the Finsider Group, 32.5 per
cent. For (German) tax purposes the German investors created the
"Konsortium Liberia" which held their interest in B.M.C. Through
this construction the Liberian Government was excluded from the
management decisions, as in the case of the exploitation of the
Nimba ore deposits, since it was not represented in B.M.C.
Also in this case records available in the Government's files do
not provide an explanation as to what made the Government accept
this situation. One suggestion mentions the granting of five
shares in B.M.C (each worth $ 1,000.00) to President Tubman
which alleged "pay off" would have facilitated this arrangement
(86). Not clear in this respect is the role of the Government's
chief negotiator with the private investors, the Secretary of
the Treasury Charles D. Sherman, who together with his older
brother Arthur, the Director of the Bureau of Natural Resources
and Surveys, had had the main responsibility of "daily"
negotiations with the German (as well as with the Swedish)
investors.
After the signing and the Legislative Approval of the Concession
Agreement the financing of the Bong Project was ensured,
step by step. A major obstacle - in raising funds - was the expected'
low profit margin of the mine. The ore deposits of the
Bong Range, then estimated at some 400 million tons, were of a
low Fe-content making upgrading imperative before it could be
shipped to the steel works abroad. This upgrading involved
considerable investments in a concentrator whereas the costs of