Mittal wrapping up Africa? As the pace of Asian investment in African raw materials begins to pick up, India's Arcelor Mittal, the world's largest steel producer, has announced new investment in West African iron ore mining. What are the implications for Africa? Report by Neil Ford

African Business, March, 2008 by Neil Ford

Yet this is at least a better position than the one Liberia, with its economy in tatters, found itself in a few years ago. The iron ore deal is also helping to fund vital infrastructural rehabilitation work and will provide the government with much needed financial resources to fund other parts of its budget. In addition, as long as other elements of the economy emerge over the next few years, iron ore exports can certainly form part of a more balanced economy.

The IMF has announced that it has agreed a three-year $920m loan programme with Monrovia. The IMF mission chief to Liberia, Robert Powell, commented: "This in principle agreement, which is subject to the approval of IMF management and executive board, is a key step towards clearing Liberia's arrears to the IMF and the commencement of debt relief. Effective implementation of this programme will be critical to achieving the government's economic goals, including continued strong and sustained growth and obtaining comprehensive debt relief on the full stock of outstanding debt."

Most of the IMF money will be used to fund the standard economic reform package of poverty reduction, job creation and economic reconstruction.

The national debt currently stands at $4.5bn but Johnson-Sirleaf's experience of working in senior positions within multilaterals should ensure that the country moves through the heavily indebted poor countries (HIPC) process as quickly as possible.

Economic growth is expected to reach 9.6% this year, while inflation should decline, so real headway is already being made, but it is vital that further foreign investment is secured if the high level of growth is to be sustained.

RELATED ARTICLE: Kenya

Insecurity threatens Tiomin investment

Plans by Canadian company Tiomin to invest in the Kenyan titanium sector could be at risk because of the serious political and security instability in the East African country. Following Jinchuan Group of China's decision to buy a 20% stake in Tiomin, the company has pressed ahead with its Kenyan ambitions. It hopes to produce 330,000 tons of ilmenite, 75,000 tons of rutile and 40,000 tons of zircon a year from the Kwale reserves in Coast Province for at least the first six years of the mine's 11-year estimated life.

Jinchuan's investment has been welcomed by Tiomin. Chief executive Jean-Charles Potvin commented: "This financing begins what we hope is an accelerated development programme with potential cost savings by maximising Chinese content. Jinchuan is a world class mining company with extensive project development experience and it is an ideal partner for Tiomin and Kenya."

However, Tiomin project coordinator, Joyce Misoi, says that the company is concerned about both financing and the uncertain state of the Kenyan government She commented: "We want to resolve the issues in Kenya permanently, which may include developing the Kwale project ourselves."

Misoi highlighted the extent of Tiomin's fears over the violence in Kenya by comparing it with the firm's other main interest, Peru, which itself has suffered from violent conflict in the past. She said: "Peru is a mining friendly country and the challenges there are of a more normal technical nature."