Mittal brothers slug it out in Liberia courts

Lakshmi Mittal, owner of the world's biggest steelmaker, is embroiled in a legal wrangle with a company run by his brother over attempts to develop Liberia's run-down iron-ore industry.

Mittal Steel says it approached Liberia's government last year to develop via a joint venture -- the Liberian Mining Corporation, which encompasses iron ore deposits, a railway and the port of Buchanan.

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But a court case filed against the government by rival steel company Global Infrastructure Holdings Ltd, run by Lakshmi's younger brother Pramod Mittal, has pushed back talks over possible investment in the multi-million dollar project.

GIHL and its partner Provider Ltd claim they have the rights to the project after signing a memorandum of understanding with Liminco in November 2003.

Both Mittal Steel and GIHL are keen to develop the project in the face of rising global prices for iron ore. Mittal Steel needs raw materials for its mills in Algeria and South Africa. GIHL needs more resources to feed the giant Ajaokuta steel mill and the Delta Steel Company in Nigeria.

GIHL and Provider say a letter seen by the Financial Times and signed by Jonathan Mason, Liberia's mines minister, on August 30, 2004, states that a motion to engage GIHL in contract negotiations was agreed by Liminco's board after considering proposals from other companies, including Mittal Steel.

GIHL and Provider said the decision by Gyude Bryant, Liberia's interim president, to halt any further negotiation in October 2004 -- so the project could be more widely advertised -- was a violation of Liberian law.

Jacob Varnam, a Provider director, said Mittal Steel's discussions were spurred on by John Blaney, US ambassador to Liberia.

In a letter to Mr Blaney in September 2004, Inland Ispat, a US-based Mittal Steel company, said that sourcing cheap iron ore from Liberia for its US operations would "safeguard in excess of 30,000 jobs in the Chicago area through direct and indirect employment".