Deliberate Flaws : Facts Consciously Ignored By Govt.'s Mineral Committee
With the small South African mining company, Delta Mining Consolidated (DMC), still firmly holding to its chest the preliminary award of the Western Iron Ore Deposit for harvest ahead of post-bidding due diligence exercise, Public Agenda has obtained the “Criteria Matrix” of the “Qualification Selection Process” used by the Inter-Ministerial Mineral Technical Committee to determine the winner of the bid. Editor-In-Chief J. Lyndon Ponnie perused the leaked document and points out a clear paradox--myriad contradictions and disparities--between the findings of the Committee and the subsequent selection of DMC as the winner of the bid.
Ahead of its selection of the then would-be mineral company to mine the Western Iron Old Cluster, the Inter-Ministerial Mineral Technical Committee (IMMTC) sent out public bids replete with requirement template that the winner must meet and fill.
This template included the bidders' qualification profile, its manpower and facilities owned and financial capacity statement as well as experience of the company in iron ore mine development and operations, amongst others.
Several companies went for the bid with a return of their statements of qualification and experience. The IMMTC dissected the applications and provided summaries into what it called criteria matrix.
The facts captured showed various capacities and experiences of the companies, amongst whom were the forerunners, Sinoesteel, Tata Steel Limited, Delta Mining Consolidated, amongst others.
Facts sheets obtained by this paper include those of Tata Steel Limited, SinoSteel and Delta Mining Consolidated (PTY) LTD.
According to facts captured by the IMMTC from Sinosteel proposal, the company has 76 subsidiaries, amongst which 53 are in China and 23 abroad. The revenue from main businesses reached about US$8.1 Billion in 2006. The company has successfully established six iron ore and chrome ore mines in Australia , South Africa and Zimbabwe .
Regarding its facilities to do the job, Sinosteel said it has an equipment manufacturing company that produces equipments for iron making, steelmaking, refining, continuous casting, steel rolling machinery in casthouse and mining.
It also said it has a geological, metallurgical and environmental institute of its own and an environmental protection research institute.
The registered capital of Sinoteel is US$160 million. The total capital of the company in 2006 was about US$3.4 billion of which fix asset is about US$740 million. The turn-over of the company stood in 2006 at US$8.1 billion.
The Inter-Ministerial Mineral Technical Committee also captured facts from the reports of Tata Steel Limited, another bidder that it turned down.
According to the criteria matrix of the Committee, Tata Steel indicated that it has more than 13,905 employees on the payroll of its raw material and mining Division. It has eleven mining Engineers, nine Geologists and five qualified Surveyors along with other technical staff.
Tata also told the IMMTC that it has 182 assorted mining and mine-related equipment. The company's report show a consolidated profit of the company after tax of US$961 million, consolidated annual turn-over of US$6.3 billion, a combined turn-over of 25 billion and consolidated balance sheet as of 31 st March 2007 indicating the total asset value of US$9.678 billion.
Tata according to IMMTC criteria matrix has an experience of over 90 years in iron ore and coal mining in India .
The IMMTC flaws were exposed mainly because the credential of the junior South African company named winner of the bid, DMC, does not in any way match the two companies stated above.
According the IMMTC's criteria matrix, the company does not have manpower of its own but referred to the Industrial development Corporation (IDC) of South Africa and Cape Lambert Iron Ore and Controlled Entities of Australia.
Regarding facilities to do the job, Delta also referred to IDC of South Africa and Cape Lambert as affiliating entities. All information provided by MDC was on IDC and Cape Lambert .
Referring to Delta Mining, the IMMTC stated, “The bidder does not provide specific information on exiting manpower directly involved with iron ore mining activities; however, it refers to Industrial Development Corporation (IDC) of South Africa and Cape Lambert Iron Ore and Controlled Entities of Australia as affiliating entities.”
The company provided a comfort letter from Canacord Adams, the company which according to our investigation had refused to give a loan of US$1.5 billion to Delta until the Liberian Government approves the bid and officially turns the Western Cluster Iron Ore over to it.
“The bidder's proposal relies on the experience of its partners, IDC of South Africa and Cape Lambert Irone Ore and Controlled Entities of Australia,” said the IMMTC in its summary report.
“The bidder did not specify current concession in iron ore mining; however, it says it has rich history in the mining past of Southern Africa, with operations and interests in South Africa , Botswana and the DRC.”
The company, according to the IMMTC, claimed to have indirect experience through its subsidiary interest in Mittal, BHP and Kumba Iron Ore ltd. Delta failed to state its own profit but relied on IDC and Cape Lambert financial records which were not also good to allow them win the bid as compared to experienced and more capable bidders.
Our investigation revealed Delta is worth less than US$50 million.
Based on the facts sheets of the three companies, experts say, the IMMTC needs to explain in details why the bid was awarded to such a low class entities.
Reliable sources linked Lands, Mines and Energy Minister Eugene Shannon and his Deputy, ECB Jones to influencing the IMMTC decision to award the bid to Delta.
According to our sources, Delta is broke to operate the western cluster iron ore deposit. Information maintained that the company is finding it difficult to pay for services local Liberian entities have rendered it, including advertisements placed in local newspapers to the extent that one of the papers reached the brink of filling a lawsuit to force the company to pay.
The flaws that characterize the evaluation of bids by the Inter-Ministerial Mineral Technical Committee (IMMTC) has raised serious credibility problems and has been exposed with the acquisition of the facts sheets used to award the operation of the Western Cluster Iron Deposit to a low class South African company, the Delta Mining Corporation (DMC ).
The result of the bid for the Western Cluster Iron Ore Deposit to DMC by the IMMTC has sparked reactions from several quarters, with some stating that the work of the IMMTC might have been propelled by kickbacks.
