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9. Mining or industrialization specialization?

The unbalanced processing of copper in Africa
Bauxite processing and aluminium production in Africa
Iron ore export and steel production

The Third World no longer supplies raw products only and a not negligible proportion of the mineral production is now processed in the exporting countries, especially those of South America, the Caribbean and Asia. In addition, other Third World countries, such as South Korea or Taiwan, are importing large quantities of metallic ores in order to process them into metallic products.

Table 9.1 Third World's share in world production (1982)

Source: UNIDO and Metal Bulletin. Revue de la Metallurgie, etc.

Local ore processing developed mainly during the last decade. In 1974, Third World mining countries were processing one-third of their mineral output, that is, the same proportion as in 1950!

The extent of local processing varies according to the physical characteristics of the minerals. The purely technical necessity of processing is of course greater for copper ore, of which the metal content is between 0.5% and 4%, than for iron or bauxite ores, which have a grade of 50% or more. The processing technology also plays some role in location decisions. Thus, for copper and bauxite, processing technology is discontinuous, which makes possible the segmentation of the production process over different countries. But for iron ore, this segmentation is impossible as smelting and refining must be located on the same site. Yet the new technique of the direct reduction of iron ore by hydrocarbons now allows for only one production stage being located in the mining country, that is, the production of pre-reduced iron pellets which can be exported. The very specific technology related to uranium, however, requires its processing to be located in the consuming countries.

Other, non-technical, factors determine, of course, the degree of local processing of minerals in the Third World. As a rule, local processing for copper is much more developed than for iron ore and for iron ore more than for bauxite.

In 1980, Zambia processed 97% of its copper ore into blister and 90% of its blister into refined copper, while the corresponding figures for Zaire were 94% and 46%. These figures are relatively high by comparison to those of other Third World copper producers: 80% and 60% for Chile: 90% and 20% for Peru; and much lower percentages in the Philippines and in Papua New Guinea. Bauxite processing, however, is less developed in Africa, and there is only one alumina smelter, located in Guinea, which transforms only a small fraction of the locally produced bauxite ore. Lastly, the steel industry is totally absent in the main iron ore producing countries.

The unbalanced processing of copper in Africa

By the end of the 1970s, Africa's output of refined copper amounted to one million tons, or 10% of world output. A by no means negligible proportion but it should be compared to Africa's higher shares in the world output of blister (15%) and of ore concentrates (17%). There was, and still is, an important gap between the smelting and the refining capacity.

Refined copper is mainly for export, and local consumption is only 1% of world consumption, although it increased notably in the 1970s. It is, moreover, highly concentrated in such countries as South Africa, Zimbabwe, Algeria and Egypt, which are not big copper producers.

African exports of copper ore and concentrates represent only a small percentage of the world total (5%), which means that, unlike in the producing countries of Asia and Oceania, the ore output in Africa is, for the most part, locally processed. But African exports of blister represent between 45% and 55% of the world total, which implies that a good part of blister production is not processed locally. The smelting stage of copper processing is thus the most developed in relative terms in African countries, especially in South Africa, Namibia and Zaire.

Lastly, production of finished copper products (wire, tubes, sheets) is very limited and the existing facilities are in general underutilized.

Bauxite processing and aluminium production in Africa

Aluminium consumption is extremely low in Africa, outside South Africa, and is mainly concentrated in North Africa, Egypt and Nigeria. Consumption levels are, however, far from those of developed countries (22 kilograms per head in the USA, 15 in Japan, 7 in France and in the USSR).

Aluminium production in Africa is about three times higher than consumption, but while the former is, for the most part, exported, the latter is covered mainly by imports. Africa's relative shares in world output are 14% for bauxite, 0.02% for alumina and 2.6% for aluminium. Although exceeding the domestic needs, aluminium output is well below the level which could be reached by processing all local bauxite, and this applies to an ever greater extent to alumina. Also, the fact that aluminium production is higher than the production of alumina implies that the former depends on imported alumina. While the aluminium refineries of Ghana, Egypt, and Cameroun import alumina, the bauxite producers export their production in a raw form.

There are, however, important investment projects for aluminium, in Guinea, of course, but also in Cameroun, Nigeria, Sierra Leone, Zaire and Madagascar. The most advanced are on the bauxite fields of Tougue, Dabola and Ayekoye in Guinea. The size of each of these projects is equivalent to present African consumption, therefore even their partial implementation will increase the aluminium surplus of the continent and substitute the export of aluminium (and/or alumina) for that of bauxite.

Table 9.2 World production of aluminium: relative share in world output (%)

Source: Metal Bulletin and United Nations Economic Commission for Europe, 1985.

Production of alumina and aluminium is heavily concentrated in developed countries which are the main consumers. They import alumina to produce aluminium and they import even greater quantities of bauxite to produce alumina. Australia, Surinam and Jamaica, unlike Guinea, however, process a good part of their bauxite output.

Iron ore export and steel production

Africa provides about 7.5% of world iron ore output but its relative share of steel production is almost nil. Steel output in Africa amounts to some three million tons (excluding South Africa, which produces six to seven million tons) while the world output oscillates around 700 million tons. Steel production in Africa is concentrated in a few countries in the north and south of the continent. Elsewhere, we find only small electric furnaces fed with scrap which produce reinforcing bars for the construction industry. The main iron ore producing countries, Liberia and Mauritania, have no processing facilities, while the big investment projects are located in Algeria and Nigeria and although their implementation has begun they have suffered many delays. Other, less important, projects which have been considered in Liberia, Mauritania, Senegal, Ivory Coast, Zambia and Kenya have simply been abandoned. The US steel enterprises in Liberia considered building a steel plant of 150,000 tons for export to the neighbouring countries, but, like its predecessor of the 1960s, this project has not been carried out.

Unlike copper and aluminium, the consumption of steel in Africa is currently much greater than its production. African steel consumption (South Africa excluded) is about eight million tons, mainly covered by imports. The development of local processing in the iron ore producing countries would, therefore, imply the substitution of steel exports for iron ore exports for these countries, but not necessarily for the continent as a whole.

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