Diversified resources firm Delta Mining Consolidated is taking legal action against the government of Liberia, challenging its decision not to award a $1,6-billion iron-ore concession to the company, despite having earlier declared it the provisional winner.
Delta has launched an application in the Liberian Civil Law Court for the Sixth Judicial Circuit for judicial review of the government's refusal to award Delta the Western Cluster Iron Ore Deposit concession, and has applied for an order preventing the government from reopening a bidding precess for the concession, the company announced last week.
The firm has been granted an interim stay with regard to the bidding process, but a final stay order will only be issued once the Liberian government has had an opportunity to respond to the application.
Delta is also seeking a review of a ruling handed down by the Independent Complaints, Reviews and Appeals Panel of the Liberian Public Procurement and Concessions Commission regarding the government's refusal to award Delta the concession.
“Delta argues that the government's purported reasons for not awarding Delta the concession have no basis in law,” the firm said in a statement.
The company also asserts that Liberian law does not permit the government to cancel a bid “without due process” once a provisional winner has been declared.
In February 2008, the government declared Delta the provisional winner of the $1,6-billion concession.
However, on September 14, the Ggovernment announced that it had unilaterally taken a decision not to award the concession to Delta and to bar Delta from participating in a re-bid for the concession
The company then submitted a formal complaint to the panel, which ruled last month that, while the exclusion of Delta from the rebid was unlawful, the cancellation of the original bidding process was allowed.
In early October, Delta CEO Heine van Niekerk said that the company remained "in the dark" about its exclusion from the bid.
At the time, he commented that the company's status in the bid appeared to have changed after a meeting of Liberian President Ellen Johnson-Sirleaf's Cabinet and inference by Liberia Information Minister Lawrence Bropleh of possible "impropriety".
Before its civil war, Liberia was the world’s fifth-largest producer of iron-ore, and, in a separate iron-ore project, Arcelor-Mittal, the world’s largest steelmaker, is developing a ferrous orebody in north-west Liberia, the reserves of which were estimated at 500-million tons.
South Africa’s Kumba Iron Ore is also contesting an ousting from a Senegalese iron-ore concession in favour of ArcelorMittal.