* Mining draws billion dollar investments
* Liberia remains a tough, frontier market
By Tim Cocks
MONROVIA, May 4 (Reuters) - Mining and agriculture companies are preparing to pour billions of dollars into Liberia, but the battle-scarred nation faces big hurdles if it is to turn these investments into a robust post-war recovery.
After 15 years of near constant conflict that killed tens of thousands and left its infrastructure in tatters by the time it ended in 2003, the small West African nation is opening up to foreign investment, especially into its rich iron ore deposits.
Since coming to power in 2006, President Ellen Johnson Sirleaf has tried to restore stability and woo investors to a country that was more often associated with child soldiers and conflict diamonds than billion dollar projects.
"This country is so rich," national investment commission chairman Richard Tolbert told Reuters in an interview.
"Iron ore, gold, diamonds, rubber, coffee, cocoa, timber, oil palm. We've got the land, labour and natural resources. We need the finance, knowhow and access to markets. Better jump on this band wagon, because it's moving fast."
Top steelmaker ArcelorMittal and the world's biggest miner BHP Billiton have large concessions in Liberia, as does Russia's Severstal. Officials are in talks with Brazilian miner Vale , the world's biggest iron ore producer.
The largest single investment in the country is China Union's $2.6 billion iron ore project, which officially opened towards the end of last month.
Asian palm oil companies are seeking plantation concessions in the well watered countryside. Production of rubber, still Liberia's biggest export until iron gets underway, is on the rise.
Such things were unthinkable during war-wracked reign of former President Charles Taylor, ousted by rebels in 2003, and now on trial for war crimes in neighbouring Sierra Leone.
"FRONTIER MARKETS"
The numbers look impressive, but transforming Liberia from a broken into a prosperous nation is a huge task.
Around three quarters of Liberia's 3.5 million people are unemployed, Tolbert said, and the country is heavily dependent on donor aid to help run almost every aspect of government.
Liberia hosts the second largest U.N. peacekeeping mission in Africa, after Democratic Republic of the Congo.
U.N. police vehicles ply the streets of Monrovia on routine patrols for which Liberian police lack the resources. Outside the capital, warlords are kept at bay largely by U.N. troops.
Diplomats say the mission even helps draft legislation.
Few jobs will be created by the iron ore projects. Tolbert estimates each project will create between 2,000 and 3,000 direct jobs, though farming would have more of an impact on employment: a palm oil project signed with Sime Darby will bring 30,000 jobs. Another being negotiated with Indonesia's Golden Agri Resources would create 40,000.
While mining giants have been welcomed, smaller businesses complain of red tape, high taxes, corruption and harassment.
"This is not a very investor-friendly place," said Harry Greaves, a local businessman and former head of the national petroleum refinery.
"The legal system is tough, laws are too favourable to debtors, people in government constantly harass business, doing all kinds of inspections. Corruption is a big problem."
Officials say efforts have been made to tackle this, pointing out that registering a business now takes 27 days, instead of 90, and that the nation has been praised by the World Bank for its reforms, moving it up the ease of doing business index to 149th this year from 173rd in 2008.
But poor roads and power shortages remain a big deterrent.
"The biggest challenge we have is the cost of electricity, which has made people uncomfortable about business here," Deputy Commerce Minister Frederick Norkeh told Reuters.
"But still, the potential is high. We're one of the last frontier markets." (Editing by Giles Elgood