16 January 2013

Liberia: Putu Begins Shipment in 2017

The Minister of Lands, Mines and Energy, Patrick Sendolo, has disclosed that the first shipment of iron ore by Putu Mining Incorporated, a Russian-owned iron ore mining company, will begin in 2017.

Speaking about 1,948 feet on top of Putu Mountain, the company's production site in the town of Tiama, Grand Gedeh County, Minister Sendolo broke the news to our reporter on Saturday shortly after a brief meeting with Christian Mosurenko, Country Manager of the Putu Iron Ore Mining Incorporated. "They've basically told us what their production areas would be and where they intend to carry out the mining of ore," he said.

For his part, the company's manager also disclosed that the discovery of about 4.5 billion metric tons of iron ore by the Putu Iron Ore Mining Incorporated came after three years of pre-feasibility studies and continuous exploratory mining activities in the Putu Mountain.

"Putu has four and half billion metric tons of ore in it. That is 1,000 meter down into the mountain," said Mr. Mosurenko in an exclusive interview with our reporter.

"They've also informed us that they would be exporting ore from here (Putu Mountain) in 2017 because the railway and port have to be constructed," Minister Sendolo disclosed.

"They've also informed us (The Government of Liberia) that they need to construct the production area and several key things have to happen before the shipment of ore," Minister Sendolo explained further.

According to the Minister, the company is currently carrying out exploratory mining to determine the quality and quantity of ore that the mountain possesses. He described his visit to the site as a unique opportunity to have a practical understanding of what is transpiring in Liberia's mining environment.

Regarding the issue of acute skilled labor, a major challenge that faces Liberia's post-conflict development, Minister Sendolo said a host of programs has been developed by the government, including the MVTC, and other vocational training centers across Liberia. He believes that this initiative will help address the country's job market needs.

"Even if Putu were to be ready today to employ many Liberians, the question is: how many Liberians are prepared for the job market? We need to consider this seriously because more skilled laborers would be required for this kind of technical and professional job," Minister Sendolo said.

"You have to make sure that all these things are done because if you don't do that, it's going to be difficult to have a successful project," the Minister said.

After an hour long breath-cutting tour of the company's site, Mr. Mosurenko explained, "Most of what we're going to be mining here is DSO (Direct Shipment Ore) related. It's about 33% grade. However, we've discovered additional mountain whose grade is put at 59% iron."

The company's manager also described the discovery of the additional high grade ore as a welcomed development. As a result of this, Mr. Mosurenko said, "We completed exploration in September 2012 and submitted pre-feasibility study documents to the government and we're now in the feasibility phase of the agreement.

"It's a very low grade iron ore with 33% average. We have identified a high grade area on top of the mountain. This high grade portion allows us to direct ship materials with a very small upgrade plant that is required to get the correct grades. This high grade portion is in 59% of iron.

"It's not qualified for the market because generally, the market looks for 62% grade iron. But with these upgrade facilities; we're sure that we can make the specifications to improve the market," Mr. Mosurenko indicated.

He underscored community social development aspects as the biggest challenge facing the company when it comes to managing public expectations.

"We have to get out explaining what we're doing. We understand that we have to educate our communities, bring the picture to them. We're all technicians and we talk, we talk high technical terms, and this is very new to the region. Therefore, we have to go out there explaining the basis of the industry," Putu's Country Manager said.

With respect to job creation, Mr. Mosurenko conceded that his group would not be the biggest employer in the region. He, however, promised that the company would provide jobs for over 2000 Liberians.

"The community initially thought that we came to get the resources and get money and run away. But, it's not like that. Maybe, it was like that in the past. But for now, it's not going to work that way because the benefits for the community is very large, especially in the region like Grand Gedeh with limited population and limited infrastructure. We will change this whole region.

"It takes time for all these things to happen because we're talking about the construction of a 160 kilo meter railway; we have to brand new port and infrastructures in here (Tiama). We intend to build the port in Greenville.

"We've done pre-feasibility studies on this. We've defined all mineral resources. We've defined six port locations. Two locations are being reviewed in the Greenville Port area, and the other two locations are still being investigated," the company's manager confided in our reporter.

Putu Mining Inc. and the Government of Liberia signed a 25-year Mineral Development Agreement (MDA) in 2009 estimated at US$1.8 billion. It is one of several mineral deals reached between the government and several iron ore mining companies operating in Liberia.

In addition to the PUTU-GOL-Mineral Development Agreement, and, between 2008-2012, the government signed three separate iron ore mining deals, including China Union's 2.6bn MDA, Mittal Steal 1.8bn, as well as the Western Cluster's 1.6bn, initiatives which are geared toward increasing government's revenue generating capacity as well as providing employment opportunities for Liberians.

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