The Putu Iron Ore Company based in Grand Gedeh County, southeast Liberia has reportedly shut down operations in the county. Grand Gedeh County Senator G. Alphonso Gaye, who made the disclosure in plenary Tuesday, January 12, said the mining company has closed all its activities and subsequently, paid off all employees and contractors.
Sen. Gaye said the company is currently selling all assets both in Monrovia and Grand Gedeh County to leave Liberia. He added that due to the shutdown, many citizens in the county have become jobless and the economic situation in Grand Gedehhas become unbearable, especially for those who were in the employ of the Russian based multi-million dollars company.
Senator Gaye, who won on the ticket of the ruling Unity Party,described the situation as unfortunate for the people of Grand Gedeh County and the country at large. He also highlighted the fall in the sale of ore and crisis between Ukraine and Russia, adding many shareholders of the company areon travel ban in Russia, as a result,the investment has faced setback that led to pull off.
In September 2010, the leading Russian steelmaker announced that a Class A mining license for mining iron ore in the Putu Mountain Range has been granted to the Putu Iron Ore Mining Inc, which is a hundred percent owned subsidiary of Severstal.
The license was issued by the Government of Liberia through its Ministry of Lands, Mines and Energy, which followed a feasibility study submitted on 31 March 2014. “The issuance of the Class A mining license…indicates that the company’s feasibility study responded to the requirements outlined in the Mineral Development Agreement, or MDA.We believe that it will further improve the investment perspective of the project,” said Dmitry Sakhno, Severstal’s project department director.
Meanwhile, Senator Gaye has called on the Minister of Lands, Mines and Energy Patrick Sendolo, to immediately intervene in rescuing the situation. Severstal was planning to invest $66m in 2012 for the development of the project. First production was expected to start in 2017.
The Mineral Development Agreement for the project was formally approved by the Liberian Government in September 2010. Putu was earlier owned by Afferro Mining with 38.5 percent and Severstal Resources 61.5 percent.
In December 2011, Severstal’s indirect subsidiary Lybica Holdings entered into a purchase agreement with Afferro to purchase its 38.5% interest in the project. The agreement was approved by Afferro in January 2012.
By E. J. Nathaniel Daygbor-Edited by Jonathan Browne