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the 1965 - 1977 period represented 5 per cent of the mining
company's aggregate sales income in this period, considerably
less than in the case of L.M.C, and also below the Government's
share of the sales proceeds of both LAMCO and Libeth, This is
explained by the fact that the ore of the Bong Range is a low
grade ore (with an Fe-content of less than 40?) which needs
upgrading before it is fit to be shipped to Europe. B.M.C. thus
operates at higher costs than the two mining companies referred
to above, which mine ore of an extremely high Fe-content and of
direct shipping quality.
Another difference with L.M.C and the LAMCO J.V. is the fact
that B.M.C. forms a captive mine for its private owners. The ore
mined by the two former companies is sold on the international
market (with the exception of the ore bought by Republic Steel
from L.M.C. and Bethlehem Steel's share of the production of the
LAMCO J.V.). Practically all of B.M.C.'s production, on the
other hand, is supplied to the German and Italian owners of the
mine, in proportion to their shareholding in the mining company.
Though profits remain a yardstick for the efficiency of the
mining operations the driving force behind these European
investors' coming to Liberia was not the desire to make
profitable investments but that of ensuring a continued and
independent supply of raw materials for their steel works. To
illustrate this, interest payments - which are tax-deductable -
alone amounted to $ 92.7 million in the years 1965 through 1977,
B.M.C. having financed the greater part of its investments with
borrowed funds (mainly from the "Kreditanstalt fur Wiederaufbau",
a German lending institution which consequently occupies one
seat in B.M.C.'s Board of Directors). Before B.M.C. T s major
expansion programme of 1975 - 1977 which involved investments of
over I 120 million - also partly financed with funds from the
Kreditanstalt fiir Wiederaufbau - the Kreditanstalt fur
Wiederaufbau had lent a total of $ 120 million to B.M.C. as of
December 1974 (90).
Some of the loans which were contracted to finance this
expansion programme have exorbitantly high terms. In December
1975 the Kreditanstalt granted a $ 32 million loan which has an
interest rate of 10.25? per annum and which will be due for
repayment by December 1982. In June 1976 another loan was taken
out from the same institution, this time amounting to I 23
million, with an interest rate of 9-75? and due for repayment by
August 1986. The second of these loans had been granted in U.S.
dollars in which currency it will have to be paid back; the
former loan had been made in Deutsch Mark.
B.M-C. had been able to finance its investments of the first
half of the 196O's with disguised equity although this practice
had then already proved to be detrimental to the interest of the
Liberians (by LAMCO's way of financing the mining of the Nimba
ore deposits). However, the same financing methods were used
with respect to the financing of B.M.C.'s expansion programme of
the 1970's. As of December 31, 1976 the Italian Finsider Group
had granted loans totalling $ 37 million with respect to the
expansion programme. Of this amount $ 12 million had been
obtained through the E.E.C. In March 1976 Finsider channelled