The_Open_Door_deel1

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agreement signed with Lee Detwiler in 1953 provided for a
Government participation and in September 1958 a concession
agreement with DELIMCO had been concluded which gave the
Government also a 50? interest. However, Government-participation
in the equity capital of these two mining companies had been so
constructed that no cash payment by the Government was required.
In the case of N.I.O.C, however, the Government invested $ 5
million from public funds. -(Actually, the Treasury made a cash
payment of $ 500,000.00 and financed the balance of its
participation in N.I.O.C. with a $ 4,500.000.00 loan from the
National City Bank)(97).
If it would have charged the company's profits with a 50?
corporate income tax the Government's income from N.I.O.C. would
have been the same as it was now while it would still have had
the possibility of demanding the payment of the royalty and of
spending the $ 5 million investment on alternative projects or
development programmes. Another reason for the low income from
the Mano River mine is the mismanagement which has characterized
the company. The managing company contracted, M.M.A.L., had,
prior to its involvement in N.I.0.C., no experience with mining
operations nor was it familiar with the marketing of the ore.
This lack of experience had manifested itself soon after the
start of operations and had formed the basis for the consultancy
agreement signed with the neighbouring company in Bomi Hills in
1963 under which L.M.C.'s experienced ex-patriate personnel
worked with the Mano River mine.
Thirdly, certain excessive charges influenced the company's net
profits. Among these were the management fee paid to M.M.A.L.
and the sales commission paid to Wm.H.Muller & Company. The
fourth reason for N.I.O.C 's disappointing financial performance
was the quality of the Mano River ore, which was lower than was
originally expected, and which caused additional expenditures
before it could be sold in the international markets.
The concession agreement
Except for the differences referred to above the 1945 concession
agreement with Lansdell Christie and the concession agreement
with N.I.O.C. are virtually identical. One of the identical
Articles provided that any Corporation which may acquire the
N.I.0.C.-concession should be at least 60? owned by Liberian and/
or U.S. citizens, a remarkable feature of the 1958 concession
agreement after 14 years of an officially propagated economic
Open Door Policy (98). Minor differences between the two
concession agreements are found e.g. with respect to the duration
of the exploration period (extensible periods of 3i and 5 years
respectively), the sizes of exploration and mining areas (25,000
acres and 50,000 acres resp.), and the amount of annual surface
tax which in case of N.I.O.C. was fixed at 6 cents per acre for
the first ten years, 10 cents per acre during the next ten years,
and 20 cents per acre during the remaining years of the
concession which had an over-all term of 80 years. See Annex 12