Liberia sees Bong iron ore output in 18 months

By Alphonso Toweh

MONROVIA (Reuters) - The first production of iron ore pellets from China Union's $2.6 billion Bong development in Liberia is expected within 18 months, Liberian National Investment Commission Chairman Richard Tolbert said.

Tolbert told Reuters the full $2.6 billion capital investment by the Chinese company, the biggest single foreign investment in the poor West African state, would be disbursed over a period of between eight to 10 years.

The contract signed this week between China Union and the Liberian government foresees 25 years of iron ore production from the Bong deposit, which is estimated to contain 300 million tonnes of low grade ore, he added.

"Within 18 months, we will see the first one-million-tonne pelletising plant up and running," Tolbert said in an interview following the signing on Tuesday.

He added China Union had also been granted a licence to explore for ore in an area adjoining the Bong deposit, which would open the possibility of increasing the ore resource.

The deal, which beat nine rival bids, went ahead at a time when many firms have scaled back or postponed African mining projects as metals prices have crashed in the past six months.

Most analysts believe a severe global recession will cut demand for industrial minerals for years to come, and there are fears this will also hit resource investments in Africa by China, which has announced multi-billion-dollar deals.

At a ceremony to mark the signing, Liberian President Ellen Johnson-Sirleaf said she hoped the China Union deal would encourage other investors to come to Liberia, which is still struggling to recover from a destructive 1989-2003 civil war.