The_Open_Door_deel1

-258-
railroad or port (138). As may be recalled the port of Buchanan
was initially constructed by LAMCO.
Another factor hampering the development of the Wologisi deposits
was the slump in the steel industry in the mid-1970's. This can
only be considered as a factor postponing the opening of the
Wologisi Mine, As soon as the recovery of the international
economic situation is a fact this will no longer play a role in
the postponement of the investment decisions.
A last obstacle is the position of the U.S. dollar, Liberia's
currency. As from the early 197O's the downward trend of the
U.S. dollar contributed to the postponement of a final decision
to launch with the investments in the Wologisi Project. Certainly
the incentives offered by the Liberian Government will not
have provided any reason to postpone the investments. Among
these incentives one notes:
- a depletion allowance with a maximum of 50? of Gross Income.
- a contractual freedom of exchange control regulations
- freedom from custom duties, excise taxes, etc.
- tax-deductions of all payments to the Government except
corporate income taxes
- a Government controlled Trade Union organization
- the absence of an obligation to supply a portion or the whole
of the production to a Liberian steel company.
The growing impatience as well as the continued uncertainty as to
when the ore deposits of the Wologisi Range would, if ever, be
exploited stimulated a number of Liberians in the second half of
the 197O's to propose exploitation by a State-owned company, to
be financed with funds from international development banks.
This opinion was no doubt influenced by the developments in
Mauretania, Africa's second most important iron ore producer.
In November 1974 the Government of Mauretania had nationalized
the largest iron ore mining company in the country, MIFERMA. In
January 1978, however, it was announced that the Mauretanian
State was to develop the enormous iron ore deposits of Guelbs
(total of initial investments: $ 460 million) through the Stateowned
company of S.N.I.M. - Societe Nationale Industrielle et
Miniere - and with the financial support of Western (I.B.R.D.,
E.I.B. ) and Arab capital. The external capital, amounting to
$ 360 million, combined with $100 million which would be
provided by the S.N.I.M., would be used to mine a low grade ore
(38? Fe-content) and concentrate this to a saleable product
with an Fe-content of approximately 65? (139). The similarity
to the Wologisi Project is obvious, though the latter would
require double this amount of investments, but the opinion was
held in Liberia that the Liberian Government should be able to
attract financial capital from outside, the more so as it had
never nationalized any corporation in the country (140).