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1. Deficit in the north, specialization in the south

Mineral specialization in Africa
Mining countries and mineral specialization

Long before the Second World War, economic development in Western Europe and in the United States was based on mineral imports. Yet only since the 1960s have these imports become the main component of domestic supply, in the framework of a growing demand for metals. For example, domestic iron ore production in the early 1970s provided 60% of the needs of Western Europe (against 99% in 1913) and 68% in the USA. In Japan, where mineral resources are totally absent, dependence on imports is much greater. For the non-ferrous metals, imports also provide a very large percentage of the domestic needs of developed countries, ranging from 35% for the USA to 74% for Japan, at the end of the 1960s. These proportions actually increased in the 1970s except in the United States, as is shown in Table 1.1 for 1979:

Table 1.1 Consumption covered by imports (1979) (%)

Source: The Ministry of Industry and Trade of Japan.

Japan and West Germany, where economic growth has been faster than elsewhere in the developed world, are totally dependent on imports for all minerals; the picture is almost the same for Great Britain. The domestic supply of iron ore and bauxite in France is important but dependence on imported minerals is quite considerable. Even in the United States, where mineral resources are abundant, dependence on external sources is by no means negligible, especially for bauxite. The imports of these countries are mainly from the Third World on the one hand, and from Australia, Canada and South Africa on the other. The US is a big producer but an even bigger consumer, and among the West European countries, only Sweden exports a significant quantity of iron ore. The socialist countries' participation in world mineral trade is still minimal, except for bauxite and alumina of which they are buyers rather than sellers. Thus, the Third World provides between 40% and 75% of the mineral imports of the major capitalist economies. Table 1.2 shows the percentage of non-ferrous metals and iron ore imported from the Third World around the mid-1970s:

Table 1.2 Mineral imports from the Third World (1970s) (%)

Source: Estimated from Annales des Mines.

Long before Third World producers associations were set up and the successful negotiations of OPEC carried out, the importing countries attempted to diversify the sources of their mineral imports in order to reduce their dependence on Third World countries.

From the 1950s to the 1970s, the Third World's share in the imports of nine minerals to the US, Western Europe and Japan fell from 80% to 72%, while Australia's and South Africa's share increased from 3% to 12%. Due to the significant increase in imports, however, the Third World's share of exports for the nine minerals rose from 32% of domestic consumption in 1950 to 43% in 1970!

In the early twentieth century some South American and African countries had already been induced (or forced) to specialize in mining in order to serve the 'second industrial revolution', based on steel, electricity and chemicals, which heavily increased the demand for minerals in Europe and North America. But specialization for export became effective only after the Second World War. From the early 1950s to the mid-1970s, metal consumption in industrial countries expanded well beyond their domestic mineral endowments. And free access to Third World minerals was a major element of the economic dynamism of these countries throughout that period.

Mineral specialization in some Third World countries implied a new international division of labour between importers and exporters. This specialization was, of course, imposed on the Third World by the importing countries, and they became increasingly dependent on the availability of cheap mineral imports. Consumption of metal-intensive manufactured goods increased, and industrial activities based on the processing of imported minerals developed. As long as there is no true political autonomy in the exporting countries, this dependency on the part of the importing countries is not even perceived. But as the oil story of the 1970s has shown, once the producers are able to renegotiate the conditions of the availability of their minerals on the world market, the dependency of developed countries on these external sources is sharply revealed. But as we shall see, in the medium term, the OPEC story is not likely to be repeated for minerals.

As a rule, the United States is mainly dependent for its mineral supplies on Latin America, Western Europe on Africa and Japan on Asia and Oceania. Yet new trade flows developed during the 1970s which alter this picture somewhat.

Table 1.3 Distribution of Third World imports as a proportion of total imports (%)

Source: Annales des Mines.

The geographical concentration of imports appears quite clearly in some cases. Africa provides 43% of France's iron ore imports, Latin America supplies 60% of US nonferrous imports and Asia 24% of those of Japan. These flows reflect the persistence of the traditional relations established in the past between the metropoles and their peripheral areas. But there has been some diversification. For instance, one-quarter of French iron ore imports are from Latin America and one-fifth of the Japanese nonferrous imports are from Africa. Africa, however, remains the main supplier of France and Western Europe in general.

The dependence of Western Europe and Japan for non-ferrous metals is even more blatant if we take individual exporting countries. Thus, for copper: Zaire and Zambia, 40% to EEC countries, with Zambia alone providing 30% of British imports and Zaire 62% of Belgian imports. Liberia provides 17% of EEC countries' iron ore and Mauritania 6%.

Western countries' dependence on Africa for Uranium and for rare and precious metals is even greater. With the exception of the US, which is self-sufficient, the uranium needs of the main capitalist countries depend very much on African resources. Africa as a whole provides about 65% of Western Europe's and Japan's uranium (40% excluding South Africa), a situation comparable to the West's heavy dependence upon OPEC for oil during the 1970s.

South Africa is obviously of great strategic importance for the Western system, if only because of its mineral resources. Twenty-five per cent of the uranium resources of the capitalist world are located in South Africa and Namibia, and exports represent 40% of world capital requirements. South Africa is also rich not only in gold, but in such rare metals as platinum, chromium, vanadium and manganese. These metals, for which there is as yet no substitute, are essential for the development of electronic, aeronautic, space and nuclear industries. South Africa's share of the whole world's resources for these minerals is: platinum 73% chromium 68%; manganese 37%; and vanadium 19%. The USSR and Eastern European countries possess a large proportion of world resources of these minerals (for example, platinum 25%; vanadium 74%); South Africa therefore has a quasi-monopoly of these metals within the capitalist world. Other African countries, however, also possess a not inconsiderable proportion of the world resources, such as chromium in Zimbabwe and manganese in Gabon.

The extent of the main industrial countries' dependence upon South Africa for chromium, manganese and platinum is illustrated in Table 1.4.

Table 1.4 South Africa's share of imports, 1977 (%)

Source: The minerals industry in South Africa, Washington, 1979.

South Africa's share of chromium exports is much greater than that of other producers: USSR, Philippines, Turkey, Brazil and Madagascar. France imports considerably more manganese from Gabon than from South Africa, and the USA's imports of this metal from Austrialia, Brazil and Gabon are higher than those from South Africa. Britain, Germany and Japan, however, depend upon South Africa for most of their manganese. The figures for platinum imports for West Germany and France are distorted by the fact that they import the refined metal via Britain and not the raw metal direct from South Africa.

Western countries' deepening dependence on Africa's minerals has been matched by a growing export-oriented specialization on that continent.

Mineral specialization in Africa

Copper

In 1923, the British government granted exclusive concessions to US and South African mining groups over large areas of Zambian (then Northern Rhodesian) territory. Copper extraction began in 1927 at the Chambisi mine in the 'copperbelt'.

Mining development in Zambia was on the agenda from the first years of colonization. The British South Africa Company was set up in 1889 to 'extend the railroad and the telegraphic network to the north, up to the Zambezi River, to develop emigration and colonization and to promote trade and mining concessions'. Until 1923 Zambia was maintained under the company's direct rule. During that period, a large number of small enterprises were created for mineral prospecting and extraction. Many prospectors thought Zambia was a second South Africa, with an abundance of precious metals, but they soon had to limit their ambitions to copper exploitation. In 1902 the Rhodesia Copper Company was established and began to develop the copper mines of Kafue and Bwana Mkubwa. In 1920, two other firms which were associated with Rhodesia Copper set up the Copper Ventures Company, to which British South Africa granted exclusive prospecting rights on an area of 80,000 square kilometres, located on the frontier with the Belgian Congo (now Zaire). Another mining company, the Tanganyika Concessions, established as early as 1899, had been given prospecting rights in Zambia by British South Africa, and in Zaire by the King of the Belgians. In 1906, this company in association with the Belgian state, founded the Union Minière du Haut Katanga, which much later was to become involved in the Katanga secession after the independence of the Congo. Two companies then emerged: Rhodesian Selection Trust and Rhodesian Anglo-American Corporation, which were to control Zambian mines for more than 40 years.

In 1930, copper production in Zambia was around 6,000 tons per year, and by 1940, 266,000 tons per year. Copper extraction decreased with the Second World War but in the 1950s production rose from 280,000 to 568,000 tons per year. New mines were opened, such as Chibuluma in 1951, Baluba in 1952, Bancroft and Kansanshi in 1953, and Nchanga in 1955. During the 1960s growth in the mining sector continued but much more slowly, and copper output increased by 30% between 1960 and 1970. Here the growth of production reflected world demand for copper which increased very fast then tended to stabilize. When, in the 1970s, the mining companies were nationalized copper output was at its peak, at more than 750,000 tons per annum. Such a level was never to be reached again during the 1970s, a decade that marked the crisis of copper specialization in Zambia despite the existence of huge reserves. In the early 1980s, copper output was only around 550,000 tons.

In many respects, Zaire's experience was similar. As in Zambia, mining development had been the basis of a colonization led by finance capital since the beginning of the century. The first copper mills go back to 1911 in Lubumbashi. During the 1930s, Belgian financial groups invested heavily in mining. But unlike in Zambia, copper extraction in Zaire grew relatively more rapidly in the 1960s and 1970s than it had in the 1940s and 1950s. Between 1958 and 1974, copper output rose from 237,000 to 500,000 tons. Several mines were opened during the 1960s, such as Kipushi in 1962, and even more during the 1970s: Mupine and Musoshi in 1972, Dikuluwe in 1975, Kisenda and Mashamba in 1977. After 1974, however, production fell steadily because of the world crisis, and never again reached its former levels. As in Zambia, copper specialization entered into a permanent crisis after 1974 in spite of the big reserves still available.

In Namibia, the Tsumeb deposit has been exploited since 1910 by the same companies that intervened in Zambia, notably Amax and Selection Trust, but copper output never reached the same levels as in Zambia or Zaire.

In South Africa, copper production, which amounted to 210,000 tons at the end of the 1970s, comes from three relatively old deposits, Palabora, which is the biggest, Messina and O'Okiep, which have been exploited since 1862, but also from two more recent fields, Prieska and Aggeney.

In the interwar period, copper specialization in Central and Southern Africa was already well developed, as these areas provided about one-fifth of world output, until 1970 when it began to fall. Among other metallic minerals, only chromium was as important during that period, since Africa also provided one-fifth of world production. Iron production developed much later, during the 1950s and 1960s.

Iron

As early as the 1930s, British companies began the exploitation of the Marampa deposit in Sierra Leone which soon reached a yearly average output of two million tons of concentrated ore, which was exported to Great Britain and Germany. Two decades later iron ore extraction in Liberia was developed on a large scale. In 1951 the Bomi field was developed by the US companies US Steel and Republic Steel, at an average rate of three million tons of ore per year. Two years later the Liberian government granted a 60-year concession for the exploitation of the extensive Nimba deposit to another US company, Bethlehem Steel, and to Swedish steel firms. This concession gave foreign companies exclusive rights for prospecting, extracting, processing, transporting and marketing iron ore.

In the early 1960s, iron ore output recorded a yearly average of ten million tons, making Liberia one of the world's main producers. The whole of this output was exported and was absorbed by the steel industries of Western Europe and the USA; major German and Italian steel companies also became involved. In 1958 the Liberian government granted Thyssen of West Germany and Finsider of Italy a 70-year concession for the exploitation of the Bong deposit, the output of which is exported to the investors' steel mills. Finally, in the 1960s, US Steel and Republic Steel in association with other US interests and the Liberian government, developed the Mano River deposit.

These combined projects resulted in a significant iron ore production capacity and in 1974 output reached 26 million tons. But after 1974, Liberia faced the same situation in respect of iron ore as did Zambia and Zaire in respect of copper: production fell steadily and the output level of 1974 will never be restored. In the 1980s, iron ore production is well below 20 million tons per annum.

In South Africa, iron ore production increased sharply in the 1950s and 1960s up to the level of 12 million tons per annum in 1975. This was not due to mineral specialization but to the growing needs of the local steel industry. South Africa is by far the foremost steel producer on the African continent, with an average yearly production of eight million tons, mostly for export. Since the late 1960s, steel exports have replaced iron ore exports. The growth of the local steel industry accounts for the fact that unlike what happened elsewhere, iron ore output actually increased after 1974 despite the world crisis.

Iron ore development in Africa has also been concentrated in Mauritania. As in Liberia, prospecting and exploitation of iron deposits were initiated by Western steel companies. In 1952 the Société Anonyme des Mines de Fer de Mauritanie (MIFERMA) was established as an association between French, British, Italian and German interests and the French Bureau of Mining and Geological Research (BRGM). In the early 1960s the exploitation of the Kedia d'Idjil deposit began producing growing quantities of ore, with an output of 12 million tons in 1974. But, as in Liberia, production fell considerably after that year to stabilize around eight million tons in the 1980s.

Bauxite and Uranium

The production of these metals was developed mainly in the 1970s, while copper and iron sectors entered into a deep crisis in the African producing countries. Thus, while its old specialization in the classical base metals became more and more problematic, Africa was given a new mineral 'vocation', based on bauxite and uranium.

In 1960, Africa's bauxite production was about 1.5 million tons, or 6% of world output; in 1974 it was about 8.5 million tons, or more than 10% of world total. Paradoxically, the volume of output continued to increase during the years of world crisis, reaching 13 million tons in 1980, which represented 15% of world production. Most of this remarkable growth has been concentrated in Guinea, where 32% of world reserves are located and which became the second largest world producer, after Australia. Bauxite extraction in Guinea was developed, on a very limited scale, in the early 1960s by the Western aluminium companies, on the Fria deposit. Ten years later, however, large scale exploitation began with the development of the Boke field with 9 million tons annual capacity. As in the case of Fria, the Boke deposit exploitation was initiated by Western aluminium companies, in association with the Guinean state, and the bauxite produced is sent mainly to the processing plants of these companies, in North America and in Western Europe.

Uranium development, in Namibia, Gabon and Niger, illustrates a new pattern of mineral specialization. In Namibia, production began in 1976 on the Rossing deposit in the Namib desert. Ten years earlier the British mining group, Rio Tinto Zinc (RTZ) had acquired the rights on this deposit which were then owned by a prospecting syndicate founded by Captain Peter Louw in 1928, after the discovery of radioactive minerals in the area. Another mineral zone near the deposit discovered by Louw had been identified in the 1950s, but it was not developed until RTZ had been convinced that the exploitation of open pit extensive low grade deposits was profitable if undertaken on large scale. Then, in 1969, RTZ announced its intention to develop an open pit mine on the Rossing deposit with an initial output target of 2,500 tons of uranium concentrates per year. This received the support of the South African government, the big German banks, and the state agencies of Great Britain, France and Japan which signed long term supply agreements even before the project was implemented.

In Niger, in 1955 the French Commissariat for Atomic Energy conducted geological surveys which in 1966 resulted in the discovery of uranium concentrations in the area of Arlit, north of Agades. The Société des Mines de l'Air (SOMAIR) was set up in 1968 as a joint venture between the Nigerian government, the French Commissariat and French, German and Italian firms, for the exploitation of the Arlit deposit. Its production increased progressively, reaching 2,000 tons in 1980. Two other enterprises were founded in 1974, the Compagnie Minière d'Akouta, which in 1980, after only two years of operation, produced 2,000 tons; and the Tassa N'taghalgui company, also with a capacity of 2,000 tons. These two enterprises were constituted along the same lines as SOMAIR.

Some African countries' uranium specialization in the recent period illustrates a pattern which had so far been limited to South Africa. Mineral prospecting and extraction are undertaken by joint ventures in association with the local state, the big mining companies and the state power agencies of the Western countries. The output is to supply the nuclear power plants of Western Europe and Japan through long term agreements, and the big European banks participate in financing the investments. Such a model has been in operation in South Africa since the beginning of the 1950s, with the difference that uranium there is a by-product of gold extraction and its production is controlled by the big gold-mining companies founded at the turn of the century. The uranium processing plants have been built thanks to loans from Great Britain and the USA, both of which also offered guaranteed outlets. Most projects for uranium development are tied to marketing agreements that imply importing states' participation in financing investments.

In common with iron ore and copper, a high proportion of South Africa's uranium output is for domestic consumption. With the assistance of the United States, France and West Germany, South Africa acquired uranium processing technology and is thus able to produce fuel for its own power stations and for export. Moreover, such technology also provides the country access to nuclear weapons fabrication.

Mining countries and mineral specialization

Africa's mineral specialization is in fact based on very few countries: Liberia and Mauritania for iron ore; Zambia and Zaire for copper; Namibia, Niger and Gabon for uranium; Guinea for bauxite; and, of course, South Africa. The distribution of production for the four main minerals on the continent are illustrated in Tables 1.5 to 1.8.

Table 1.5 Iron ore, 1984 (m tons)

Source: Metal Bulletin, UNCTAD, and Annales des Mines.

*Algeria, Angola, Egypt, Sierra Leone, Swaziland and Zimbabwe are much less significant producers.

Among the small producers, Botswana's output has considerably increased since 1974, while Mauritania has reduced production. Uganda, Mozambique, Algeria and Morocco are marginal producers.

Table 1.6 Copper (blister), 1983 ('000 tons)

Source: Metal Bulletin, UNCTAD, and Annales des Mines.

Table 1.7 Bauxite, 1983 ('000 tons)

Source: Metal Bulletin. UNCTAD, and Annales des Mines.

These three countries account for approximately the total African output, but Ghana's production has decreased since the early 1980s.

Table 1.8 Uranium, 1983 (tonnes)

Source: Annuaire MINEMET, IMETAL group.

There are some reserves elsewhere on the continent, but at present these four countries are the only producers.

Thus Africa's mineral specialization rests upon a handful of countries, as is the case for such other primary products, as cotton, coffee, cocoa or oil. Also, Africa's position on the world market is better in respect of those minerals with the highest concentration inside the continent: bauxite, copper and uranium. The figures for the relative shares of the main producing countries in the world exports for these minerals are impressive: for copper, Zambia and Zaire represent approximately 13% and 10% of world exports; for bauxite, Guinea alone accounts for 25% of world exports; and for uranium, the corresponding figures are 25% for South Africa, 16% each for Namibia and for Niger. But for iron ore, which is much less concentrated on the continent, the relative share of Liberia, which is the biggest African exporter, is only 6%.

Apart from South Africa, all these countries are much more heavily dependent on mining activity than any others elsewhere in the Third World. In most cases, mineral specialization is what may be termed a mono-export situation: copper, for example represents 91% of Zambia's exports; iron ore 86.5% of Mauritania's exports; and bauxite 87% for Guinea. In these countries the export revenue resulting from mining has provided a consistent 15% of the gross domestic product (GDP) during the past decades. In these countries all aspects of economic and social life are clearly dependent on mining. During the 1970s the mining sector's share in the GDP declined, except in Namibia, but this reflects the impact of the world crisis rather than a diversification of economic activities. In only two African oil countries, Gabon and Libya, can a similar specialization in the extraction of raw materials be observed.

The heavy dependence of developed economies on African mineral resources is, then, matched by an intense mining specialization in a few African countries, especially for iron ore, copper, bauxite and uranium. The dependence of Western countries and Japan on African mineral resources can, in fact, be observed consistently during the last 30 years. Free access to Africa's metals, on the basis of land expropriation and cheap labour, have undoubtedly been one of the main factors behind the remarkable economic growth of advanced capitalist countries since the Second World War. Without the availability of the Third World's mineral resources, and Africa's in particular, the increased productivity and improved living standards which have marked the post-war period could not have been achieved. The specialization of some African countries in copper, iron and bauxite has, therefore, been a vital element in the metal-consuming growth pattern of Western countries over the past three decades. Other African countries' specialization in uranium production is a consequence of the policies of diversification of energy sources pursued by the industrial powers during the late 1970s and the early 1980s. The West's and Japan's dependence on the continued availability of African metals is, however, less potentially disruptive than their dependence on OPEC producers for oil - at least up to the mid-1980s. In most cases control of ore production, the mines' rent, and mineral processing are not in the hands of African states, and even less of their peoples.

Because of the industrial powers' strategies, Africa's mineral output is concentrated in 1) South Africa and Namibia; and 2) in a few countries heavily dependent on mining and weak in demographic and economic terms. Significantly, outside South Africa and Namibia the most intensive and promising specializations, such as in bauxite and uranium, are concentrated in a handful of small, weak countries such as Guinea, Niger and Gabon. If the possibility of disruption arising out of the dependence of industrial consuming economies on Africa's metals is only potential, this is because those countries involved in intensive mining are almost totally under the West's control.

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