Just under a year ago the South African junior mining house Amalia Corporation landed a deal with the Liberian government giving it the right to develop Liberia's mineral wealth, and thus rival the giant corporations which dominate the international mining industry.
Initially its plans to resuscitate the conflict-damaged West African country's mining industry appeared to be making progress, but in a few short weeks, disaster struck, and it became clear that the Amalia dream has collapsed.
The share price of Amalia's gold division, Amalia Gold fell over 90% on the Johannesburg Stock Exchange before it was suspended, and on 10 March Amalia Gold went into liquidation after the Standard Bank of South Africa served papers on it claiming it owed R6.5m.
The share price of Amalia Corporation's UK offshoot, Commonwealth Gold, underwent a similar decline on the Offex index and the company has announced that a $7.5bn financing deal for the Liberian project has fallen through. The negative publicity saw African Minerals, the South African subsidiary of Canada's Ivanhoe Capital Corporation, cancel the preliminary agreement it had signed with Amalia in early March to explore ways of restarting Liberia's iron ore export business, once the third biggest in the world.
Liberia's government has now become impatient with Amalia's failure to find investors and is threatening to disband the Liberian Resources Corporation (Libresco), the joint venture it formed with Amalia to oversee the development of Liberia's mineral sector. The government owns 60% of Libresco while Amalia and Commonwealth Gold own the balance.
Amalia's liquidity problems began to worsen in February when it realised that an agreement with a group of putative investors known only as Trinity Alliance was not working out as expected. In November 1997 Amalia had announced...