The_Open_Door_deel1

The Triton - affair
-220-
Though LAMCO is not a captive mine for its owners (unlike
Bethlehem's participation in the Joint Venture) the financial
involvement of certain members of the Swedish LAMCO Syndicate in
a foreign steel company which purchased ore from the Nimba
Mountains Mine would seem to induce a clash of interests. In 1963
a major long-term sales contract for LAMCO's iron ore had been
concluded with the S.A, Metallurgique d'Esperance-Longdoc, a
Belgian steel company, which was then in need of additional
capital to finance an expansion programme. In early 1964 the
Belgian company contacted Granges for a participation in these
investments and in consideration of a $ 7.5 million Swedish
participation in its equity capital the Belgian firm agreed to
extend its initial five years'sales contract with LAMCO beyond
the expiration date of 1968 to 1974, with an option to renew the
contract in 1974, and during this period to double the quantity
of LAMGO ore it already had agreed to buy viz.,450,000 tons.
The importance of having a secured market for a (substantial)
portion of its ore is an obvious and understandable feature of a
mining company, or a company responsible for its sales.
Therefore this factor, in combination with others, resulted in a
positive response of Granges to the invitation of the Belgians.
The Swedish Triton Syndicate was subsequently formed, in which
Granges AB, the S.E.B. and Atlas Copco (also a member of the
Swedish LAMCO Syndicate) participated. This Swedish investment
consortium was to deal with Esperance-Longdoc. As a result of
this arrangement a ten years' sales agreement was in 1964
signed with the Belgian steel company. The full background of the
following decision is not known but LAMCO, i.e. its participants,
then decided to pay the Triton Syndicate an additional (and much
higher) sales commission on the quantity of ore sold to
Esperance-Longdoc in the 1964 - 1974 period.
Although LAMCO's supply of ore to the Belgian steel company was
delayed because of the construction of a second pelletising plant
in Buchanan and the effective delivery did not start until 1967,
LAMCO in the remaining period 1967 through 1974 sold to Esperance-
Longdoc (which meanwhile had merged with another major Belgian
steel company, Cockerill, into Betr-Cockeril) some 8.1 million
tons of ore with a total value of about $ 67.7 million.
Consequently LAMCO paid sales commissions amounting to
$ 1,355,000.00 to Granges (in accordance with the sales agency
agreement) and | 4,174,000.00 to the Triton Syndicate. To the
Swedish participants in the Belgian company this income
represented more than 50? of their investment in this company,
but above all it meant for the Liberian Government a loss of
potential revenue amounting to over $ 2,000,000.00 as increased
(sales) costs had resulted in a corresponding reduction of the
net profits in which it shared fifty per cent. After 1974 Betr-
Cockerill bought additional quantities of ore from LAMCO but
sales commission paid on these sales were restricted to
payments to Granges proper (42).