Quoting from the Bong Mining Co. Technical Information Booklet (1980), "As consequence of
drastic rise of energy costs in 1974/75 and further in 1978/79 BMC -mining an extremely low
grade crude ore with an ironcontent of only 37% Fe on average- has lost its economic basis as
of 1979." Heroic cost cutting measures and increased capital to provide more economic
facilities never restored Bong to any worthwhile profitability. A small profit was projected
for 1990 but the operation terminated in May 1990 by the civil war. In the 1960s Bunker C Oil
could be obtained, often in distressed cargoes on the world market for 3 cents to 4 cents a US
gallon. It was around 40 cents at the end of Bong´s life. Power and pellets depended on oil.
The loss position of Bong requires some further explanation. The last year of total
profitability, meaning covering all direct and indirect costs was 1977 and the most
profitable was 1975. In 1978 and 1979 Bong was in a loss position on all costs both direct and
indirect.Operating Costs for Typical Years
From 1980 to 1989 revenue from sale of products covered direct operating cost but only a part
of depreciation, amortization, interest on borrowed funds and the like. In 1973/74 a minimum
royalty was introduced that assured the Liberian Government of some minimum revenue. At the end
of the operation the total investment in Bong was US$ 312,600,000. In addition, the European
partners took care of the considerable losses of the company by supplying non interst-bearing
stockholder loans. In time Bong could have worked its way back to profitability due to what was
happening to sinter plants in Germany. These sintering plants were coming under increasing
enviromental pressure and in time they might have no alternative but to return to Bong pellets
with the possible restarting of pellet plant number one.
The tables at the end of this section give some typical operating costs. Data for all the years
was not available, but the figures should be of much to those readers in the iron ore industry.
They show the steady march of inflation. The years shown in the first table have specific
reference to the manner in which costs at Bong development. The first full year of production
was 1966. In 1974 OPEC started to influence the cost of oil, which continued to 1981. The
final year of full production was 1989. Mining costs were affected by increasing haulage
distance to the crusher and concentration cost was affected by higher power costs resulting
from higher oil prices. Pelletizing costs were held in check by the stabilization of oil
prices. Heroic cost cutting efforts were put in place and oil consumption for pellets was
reduced from 17 kg/mt to 10 kg/mt.