Liberia, trying to revive an economy shattered by a 14-year civil war, canceled the award of a $1.6 billion iron ore mine contract to Delta Mining Consolidated Ltd. and barred the company and Tata Steel Co. from participating in a fresh round of bidding.

“The cabinet took the decision based on reports that the initial bidding process could have been compromised by external influence or impropriety,” Lawrence Bropleh, the country’s information minister, told reporters in the capital, Monrovia, today. “Because of the acts attributed to Delta Mining Consolidated and Tata Steel, brought to the attention of government, the two companies are disqualified from participating in the rebidding.”

Delta hasn’t been informed of the decision and therefore cannot comment, Lizane van Rooyen, the company’s legal adviser, said in an interview from Johannesburg, where the company is based. Delta had a provisional contract that was undergoing a due diligence study, she said. Sanjay Choudhry, a spokesman for India’s Tata, said he couldn’t comment until they had received a statement from the government. Officials at Tata’s office in Abidjan, Ivory Coast, a neighboring state, declined to comment.

Liberia is trying to develop its iron ore deposits and diversify away from rubber, which accounted for 88 percent of the country’s exports of $104 million in 2005.

Western Cluster

The so-called Western Cluster iron ore project consists of three deposits and two idled mines. Iron ore once accounted for 64 percent of Liberia’s exports, according to Delta’s Web site. The company proposed developing mines on the Mano River, Bomi and Bea deposits to produce 20 million metric tons of the steelmaking raw material a year.

Delta is “an exploration and development company, aiming to become a big mining operator,” Van Rooyen said. The company had “big players” that would have partnered it in the development.

ArcelorMittal, Sinosteel Corp., Cia. Vale do Rio Doce and companies named as Xing Xing Group and Bahlodi Africa also submitted bids with Sinosteel’s bid coming in second, Bropleh said.

Arne Langner, a spokesman for Arcelor in Luxembourg, declined to comment.

The decision to scrap the contract was made after closely held Deloitte & Touche LLP submitted its findings in a review commissioned by the government, Bropleh said. The new round will be completed before the end of the year.

The mines on the deposits closed in 1976 and 1985 and their equipment was sold as scrap during the civil war.

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