Liberian authorities Tuesday said they have agreed a mega US$2.5billion natural resource exchange deal with China.
Under the agreement various infrastructure projects will be financed across the country in the next five years, Finance and Development Planning Minister Samuel Tweah said at a news conference in the capital Monrovia.
“This is very revolutionary for our country,” Tweah said.
“This is not a loan. We are expanding our resource space.”
The technical details of the mineral for the development agreement with China have not been concluded according to the Minister. It is therefore not clear at this moment; the type and quantity of minerals that will be surrendered to the Chinese.
According to a US publication (export.gov), Liberia has rich mineral deposits and that the major minerals mined are iron ore, diamonds, and gold, all of which are mainly exported in a raw or semi-finished form.
In addition to large iron ore deposits, there are substantial diamond and gold deposits as well as indications of manganese, bauxite, uranium, zinc and lead deposits.
China uses a bartering scheme where its trading partners use their natural resources to pay for their infrastructure projects. In addition, China uses infrastructure developments, which are direly needed in Africa as an incentive to attract economic, diplomatic, and political cooperation from African countries, writes Ali Mohamed, Co-founder of the US-based Horn of Africa Freedom Foundation.