Mr. Heine Van Niekerk, Chief Executive Officer of Delta Mining Consolidated earlier this year announced an investment package of US$1.6 billion once a concession agreement is signed.

Since the revelation, the government announced the disqualification Delta which was the announced winner of the bid in the preliminary round of the Western Cluster Iron Ore bid.

Ironically, a due diligence by Deloitte and Touche recommended that Delta lacked a large-scale iron-ore mining and infrastructure development or operating experience. However, IDC does have operating experience through its subsidiaries like Kumba Resources, Foskor; and commits its specialist skills to the Western Cluster project,” the Report disclosed.

It notes that DELTA sees its role as the integrator of the development of Africa ’s resources. “DELTA’s bid document development plan for the Western Cluster project is graded by Deloitte as “sound and practical” resulting in the high provisional ranking). As regard the 1st Runner-up, Sinosteel, it has an increasing debt/equity ratio (from 5.9 as at December 2006 to 8.4 as at December 2007) & would deteriorate further with the proposed US$1.4 billion Western Cluster investments. This implies that the debt/equity ratio may get even higher and more loan repayment pressure would be noted in the future. The Report further notes that its largest investment to date is less than US$500 million

The Report furthers that it has no direct large-scale iron ore mining and infrastructure development or operating experience; as such further investigation should be made to understand Sinosteel’s proposed partnering strategy to bridge any gaps in their operational mining experience

The Report furthers that it has no direct large-scale iron ore mining and infrastructure development or operating experience; as such further investigation should be made to understand Sinosteel’s proposed partnering strategy to bridge any gaps in their operational mining experience

Despite the Due Diligence report and the disqualification of Delta, the controversial firm issued a statement Wednesday suggesting that the decision to halt the re-bid was effected by the Liberian Public Procurement and Concessions Commission, which ordered the Government of Liberia to stay "all proceedings" or "action" in the re-bidding of the Western Cluster Iron Ore  project in Liberia. 

The statement reads:

 

Supporting Documents: "Project Cluster": Deloitte's Due Diligence Report Review of Due Diligence Report Tata Letter Tata Consultancy Services

In February 2008, the Government announced that Delta Mining Consolidated (Delta) was the provisional winner of the Western Cluster Iron Ore concession in Liberia.  In September 2008 the Government unilaterally took the decision not to award the concession to Delta despite the fact that, after undergoing an independent due diligence process conducted by Deloitte and Touche and required under Liberian law, Delta was found to be the most suitable bidder.  Following the due diligence process the Liberian Ministry of Lands, Mines and Energy recommended that Delta be awarded the US$1,6bn concession.  

Despite a formal request by Delta's lawyers, Webber Wentzel, the Liberian Government failed to provide Delta with detailed reasons for its actions and instead relied on the Government's alleged discretion to cancel any bid and commence a new tender process at any time.

On 27 October 2008 Delta submitted a formal complaint to the PPC Commission claiming that the Government's conduct in failing to award the concession to it was unlawful and lacking in due process.  The Commission, created under the Public Procurement and Concession Act 2005, is empowered to review and set aside decisions taken by the Government in contravention of this Act.  Delta argued in its complaint that the Government's conduct contravened the PPC Act as the Government, without due process, had relied on allegations which, by the Government's own admission, were not supported by any evidence.  Delta also argued that the Government does not have an open ended discretion to cancel a tender and restart the process. 

Delta's complaint has now been referred to the Complaints, Appeals and Review Panel of the PPC Commission for consideration.  In a letter to the Government dated 30 October 2008 (attached), the Commission has ordered the Government to "stay all or any proceedings/action, such as re-bidding of the Western Cluster (sic)" pending finalization of the review process.  The Commission is expected to hand down a decision within the next two weeks. 

Delta will continue to pursue all legal avenues available to it to resolve this matter.

In the aftermath of the controversy Delta expressed concerns that it had not received an official explanation from the government of Liberia regarding its reported disqualification from the bidding process for the Western Cluster Iron Ore.

FrontPageAfrica meanwhile learned late Wednesday that two senior government officials may have received compensation from Delta to facilitate the smooth process of the deal. An unimpeachable source closed to the ongoing bidding process, declined to named to officials involved but confided to FPA that the officials were from the Ministry of Lands and Mines and the National Investment Commission. Delta, according to the source has in its possession documents and financial trail showing payments to the two officials. Calls placed to the government’s chief spokesman Dr. Lawrence Bropleh were not returned Wednesday. It is not clear how the two-weeks halt on the bidding will affect that ongoing investigation into the Knuckles-Gate II probe.

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