The_Open_Door_deel1

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These statements of the two successive Liberian leaders
illustrate the development which took place in the Liberian
attitude towards foreign investors between the arrival of
Liberia's iron ore mining pioneer, Lansdell Christie, and the
expected pulling out of this company, the Liberia Mining Company,
in 1973. The experience gained throughout nearly thirty years
certainly did not only result from L.M.C.'s activities in Liberia
but also the public attitude particularly towards the mining
companies had been greatly influenced by the operations of the
country's first iron ore mining company which finally closed its
gates on March 31, 1977.
Liberian resentment over L.M.C.'s performance usually focusses on
the company's not even leaving a paved road, leading to Bomi
Hills which since the closing of L.M.C. turned into a ghost town
and the subsequent departure of over two thousand of its workers,
who were laid off, and their families. However, major questions
such as
"How much revenue did the Government get from the. exploitation
of the Bomi Hills ore?",
which ore was classified in the 196O's by the U.N. as the highest
grade iron ore in the world,
" Uhai did L./t.C. contribute to the development of the area?" ,
"How did its mining operations affect local economic activities
and employment", and "Did the company have an impact
on the development of a mining policy of the Government?",'
- to mention only the main ones - have never been satisfactorily
dealt with. The closing down of L.M.C. in the last year of the
period under investigation (1977) provides a unique opportunity
to look in detail into the affairs of the first company to enter
the country under the economic Open Door Policy as fashioned by
President Tubman after the war.
Legal and fiscal aspects of L.M.C.'s operations.
During the 1951 - 1977 period L.M.C.'s production of iron ore
resulted in an aggregate sales income of $ 540,000.00 (see
Table 6). The total revenue of the Government of Liberia from
L.M.C. which resulted directly from the mining and subsequent
sales of the ore amounted during these 27 years to
I 84,000,000.00 (excluding rentals), or approximately 16? of
sales income.
The two chief sources from which the Government derived its
income from L.M.C.'s mining operations were: (a) a royalty on the
iron ore exported, and (b) corporate income taxes (though this
had not been included in the 1945 mining concession agreement).
Initially only a basic royalty of 5 cents for each long ton of
iron ore exported had been provided for but given the purity of
the ore mined in Bomi Hills this had been an extremely favourable
arrangement for the owners. The Government realized this after
only one year of production and, following the introduction of a
general income tax legislation in 1951, in March 1952 arranged
for a collateral agreement to the 1945 mining concession