Announcement of Liberia to Rehabilitate Iron Ore Mine with World Bank Assistance on January 11, 1982

. . f OR IMMEDIATE RELEASE . . ·e\!Vorld Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 82/36 Contact: Pushpa Schwartz January 11., 1'982· (202) 477-5306 LI_ B_ERIA TO REHABILITATE IRON ORE MINE WITH WORLD BANK ASS!STANCE One of Liberia's three operating iron ore mines will be rehabilitated with World Bank assistance. The project will help Liberia maintain its export earnings and will preserve some 2,000 jobs. Financial assistance for the $67.1 million project is to be provided by two World Bank loans, totalling $20 million. Other finances are expected to come from the African Development Bank, $11.4 million; the OPEC Fund, $8.3 million; the Netherlands Finance Company for Developing Countries, $3.5 million, and a group of commercial banks, $14.5 million. The government is making an equity contribution of $7.1 million. The remainder of ~he financing will be provided by the National Iron Ore Company (NIOC). NIOC's existing debt -- amounting to about $16 million • at the end of 1980 has been rescheduled and subordinated to the new loalJ . The project to rehabilitate the Mano River mine was initiated in 1978 at the government's request. To finance the necessary consulting studies and engi- neer'i ng work, the ·wor 1d Bank made ava I i ab 1e $1 mil Yi on in advance fund i'ng. A management contract for carryir,g out· the project has al ready been negotiated ·wrth Met Chem Consultants of Canada, a wholly owned subsidiary of U.S. Steel. The immediate objective is to improve the operational facilities of the mine, including the transport linkage with the port at Monrovia. As major share- holder, the government will benefit from taxes and dividends over the 12-year con- firmed life of the mine following the rehabilitation. Because the eventual closing of the mine is certa.in, the rehabilitation project includes economic studies and pilot projects to determine alternative :_economic activities for the mining area. At completion, iron ore production from the concentrating plant will be 3.25 million tons a year, an increase of 30% over the present capacity. One World Bank loan of $8.3 mill ion is to the Republic of Liberia; the other of $11.7 million is to the National Iron Ore Company, with the Republic as guarantor. Both loans are repayable over 13 years, including five years of grace, with annual interest of 11.6% . • NOTE: Money figures are expressed in U.S. dollar equivalents.  T E C H N I "C A L DAT A PROJECT: COUNT,RY: TOTAL COST: Iron Ore Rehabilitation Liberia $6 7. 14 mi 11 ion • . BANK FI NANC I NG : $20 million OTHER FINANCING: African Development Bank, $11.4 million Netherlands Finance Company for Developing Countries, $3.5 million The OPEC Fund, $8.3 million Commercial Banks, $14.5 million IMPLEMENTING ORGANIZATION: National Iron Ore Company, Ltd. P. 0. Box 54b Monrovia, Liberia PROJECT DESCRIPTION: It will improve the railroad to the port at Monrovia, repair the St. Paul River railway bridge, and provide additional mining and miscellaneous support equipment; management and technical assistance will be • provided to execute the project and improve the Company's operations. PROCUREMENT: All goods and services financed under the Bank loans will be procured in accordance with Bank guidelines. The bridge re- habilitation ($6.3 million) will be executed by contract awarded after international com- petitive bidding. Spare parts ($3.2 million) will be procured by limited international tendering or, in the case of items which need to be compatible with existing equipment, and up to a value of $2 million, from the original suppliers. The economic studies {$250,000) will be commissioned in accordance with Bank guidelines. CONSULTANTS: Consultants will be employed not later than December 31, 1982, to carry out economic studies of the Mano River area . ECONOMIC RATE OF RETURN: ES,TIMATED COMPLETION DATE: 26.5% 1984 - 0 - •