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close this bookMining in Africa Today - Strategies and Prospects (UNU, 1987, 91 pages)
View the document(introduction...)
View the documentAcknowledgements
View the documentPreface
View the documentIntroduction
Open this folder and view contents1. Deficit in the north, specialization in the south
View the document2. Africa in world mining geography
Open this folder and view contents3. Trends in mineral specialization
Open this folder and view contents4. Control of the world mineral industry
View the document5. The technology of mining and metallurgy
Open this folder and view contents6. The strategies of transnationals
View the document7. Control of African mineral fields
View the document8. Mine rents and mineral prices
Open this folder and view contents9. Mining or industrialization specialization?
View the document10. The myth of relocation
View the document11. Conclusion

7. Control of African mineral fields

Contrary to what happened in South America, for example, the nationalization of mines in most African countries has been limited in scope and formal in content. Many fields are still the exclusive property of the Western mining or steel enterprises which have been present for decades. The joint venture has, however, become the most prevalent form of ownership following nationalization or state participation in the capital of local mining enterprises which were full subsidiaries of foreign groups.

The oldest mining company in Liberia, the Liberia Mining Company, is still owned by the US based Republic Steel and US Steel. But the three other mining companies: Liberian American Swedish Minerals Company (LAMCO), The National Iron Ore Company (NIOC), and Bong Mining, are joint ventures. LAMCO runs the biggest mine of the country, and is jointly owned by the Liberian government (37% of its capital), the US firm Bethlehem Steel and other American and Swedish investors. NIOC, which runs the Mano River mine, is jointly owned by the government (50%), the Liberian Mining Company and private US investors. Bong Mining, which exploits the Bong Range field, is owned by the state (50%), the Italian steel firm, Finsider, and West German steel makers.

In Mauritania, the nationalization of MIFERMA gave birth to the Industrial and Mining National Society (SNIM), jointly financed by the government (70%), and Arab financial institutions.

For copper extraction, the joint venture is now also the predominant form of ownership. In Zaire, the 1967 nationalization of the Union Minière du Haut Katanga resulted in the setting up of Gecamines, which is a state firm, but the companies which were created later are joint ventures. The Société de Developpement Industriel et Minière du Zaire (SODIMIZA) is an association between the Zairean government (20%) and a consortium of Japanese firms led by Nippon Mining. The Société Minière de Tenke-Fungurume (SMTF) which was set up to run the Tenke Fungurume project, was jointly owned by the state (20%), the US oil firm Amoco, the British mining enterprise Charter and an industrial Japanese group which has since withdrawn. The state mining holding of Zambia, Zambia Industrial Mining Corporation (ZIMCO) holds 60% of the capital of Nchanga Consolidated Copper Mines (NCCM) with which the South African group Anglo-American is still associated, and 60% of the capital of Roan Consolidated Mines (RCM), in association with the US enterprise Amax and private shareholders. But in 1981, NCCM and RCM merged.

The same ownership structure is observed for bauxite and uranium. In Guinea, the oldest bauxite mine of Fria is owned in a proportion of 49% by the Guinean government, in association with European and North American aluminium enterprises (Noranda, PUK, Alusuisse, British Aluminium). The Guinea Bauxite Company (CBG) is also jointly owned by the government and a consortium of Western firms. The foreign enterprises sold 49% of the capital to the Guinean state in 1973 but retained responsibility for management. In Niger, the three main uranium companies have one-third of their capital held by the local state, the remainder being shared between the French Commissariat for Atomic Energy and Western firms.

Local governments' involvement in the ownership of the mining companies was facilitated by the world economic and political situation of the 1970s marked by the OPEC success and the Third World's global claim for a new international order. In Chile, the nationalization of copper was initiated in 1967, when the government took over 51% of the capital of Kennecott's El Teniente mine, and completed in 1971. In Venezuela, the iron ore mines run by US steel firms were also nationalized at that time, as well as the bauxite fields of Jamaica and Surinam.

The state's access to the ownership of the mines and the on-site processing facilities ended the colonial monopoly whereby foreign private capital and foreign governments organized the plundering of natural resources. In the present conditions, state ownership is clearly a prerequisite for asserting the nation's control over its mineral riches. Private national capital is, for historical reasons, unable to ensure the development of the mining sector. In some countries of South America and Asia, private local capitalists are involved in mining activity but on a very modest scale and they are usually minor associates of foreign enterprises. Moreover, the increasing size of the average mining investment makes it less and less possible for national capitalists to invest in this activity.

The colonial pattern of ownership is, of course, still in force in Namibia and South Africa. The biggest copper company of Namibia, the Tsumeb Corporation, is owned by a consortium of British and North American mining groups (Amax, Newmont, Selection Trust). This company runs four mines in the north-east of the country, the returns of which are the highest in the world! Tsumeb Corporation which employs 5,000 African workers on the basis of temporary contracts, has the highest profit rates of the world copper industry. These results are due more to the very harsh conditions under which African labour is exploited, than to the high grade of the ore (4.5%). The big uranium mine of Rossing is a joint subsidiary of the British mining group Rio Tinto Zinc (RTZ), a South African state agency, the French oil enterprise Total and a West German firm. The UK and US mining groups have a strong presence in South Africa, either alone or in association with private or public local capital. The main copper mines, of O'Okiep and Palabora, are jointly owned by Newmont, Amax and RTZ. Kennecott and US Steel also participate in the copper industry as does the Canadian Falconbridge Nickel. Furthermore, US Steel is involved in the production of chromium and maganese.

In fact, if this colonial pattern of ownership has almost disappeared in independent Africa, the nationalization of foreign assets and the state participation in the capital of local mining companies did not ensure real control of the mineral industry by the governments.

First, nationalization was not imposed on the Western groups, it was negotiated, progressive and accompanied by generous compensation. Before it was taken over by the government, MIFERMA in Mauritania had made a profit of more than eight billion CFA francs between 1965 and 1973 and had a foreign debt of six billion but it received compensation of 20 billion CFA francs. Nationalization has meant, in fact, Third World governments' partial buying of foreign participation in the local mining companies' capital. More important is the fact that nationalization did not affect the foreign enterprises' control of the mining concerns' management. Thus, in Liberia, management of the joint ventures that run the iron mines is the responsibility of foreign enterprises, which usually participate in the capital. LAMCO is run by a Swedish firm which is one of its shareholders. Bong is administered by a West German enterprise on the basis of a management contract, and NIOC is administered by a US firm. In all these enterprises, half of the qualified personnel is comprised of expatriates (about 1,000 out of 2,000) and, according to official government documents, the salaries of these expatriates, who constitute only a tenth of the total labour force, amount to half the total wage bill.

The nationalization of MIFERMA in Mauritania left the management to the expatriates. At that time, the nationals represented barely 5% of the managerial staff, and only 25% ten years later. An expatriate is paid three times more than his local counterpart, who is himself paid nine times more than the local miner. Moreover, the national managerial staff usually occupy administrative rather than technical positions within the enterprise.

The picture is much the same in Zaire, where the management of Gecamines has been left to the Union Minière in spite of the nationalization of its local subsidiaries. Recruitment, production and investment decisions, blister refining, marketing, supplying and technical changes are still controlled by Union Minière Likewise, in the joint ventures which were set up later, the government systematically leaves management in the hands of its foreign partners. Here, too, the Africanization of the managerial staff is very limited, especially for technical functions.

The situation is slightly different in the Zambian copper industry. The 'Zambianization' of the managerial and technical staff is more developed owing to a training policy related to the needs of the mining sector and to the existence of well-organized and powerful workers' unions. When nationalization took place in 1970, the expatriates represented one-tenth of the total staff, but only one-twentieth ten years later, although the number of employees had increased. In the early 1980s, all foremen, two-thirds of the mine captains and three-quarters of the qualified workers employed in the mining industry were Zambian. Many engineers had been trained but the higher technical staff was still foreign. The US firm, Amax, and the South African one, Anglo-American, have been partly nationalized but they remain important shareholders and retain real control of the production process. Thus, of 21 members of the management council of NCCM, ten are expatriates who occupy the strategic technical positions and represent Amax and Anglo-American.

In Guinea, Niger and Gabon, management of the nationalized mines is also left to the expatriate partners, and the nationals are either unqualified workers or bureaucrats.

So nationalization has nowhere significantly affected the control of the Western enterprises over the mining sector. Decisions about the output level, amount and type of investments, technical choices, or the recruitment and redundancy of workers, are all made by the foreign enterprises which run the mining concerns. Zambia no longer has a formal management contract with its foreign partners but these still hold most of the strategic technical positions, although many expatriates are directly hired by the government.

Initially, nationalization was seen as reflecting the governments' will to control mining activity but it has since acquired another significance. Meanwhile, the Western enterprises which saw nationalization as a constraint effected by the world political context quickly understood that it could actually be very useful to them. As long as the state has only a rentier position, like that of a small shareholder, its intervention does not threaten the effective power and influence of the Western enterprises in the African mining sector. At the same time, government participation in the capital of the mining companies decreases the financial risks for the foreign investors, because the government guarantees their investment. Lastly, state involvement in ownership maintains the illusion of a national management of the mining sector and puts a sort of screen between the foreign enterprises and public opinion.

Western groups' continued control of mining activity in most African countries allows for the persistence of a colonial type labour process, two decades or more after political independence. In South Africa, the labour process in the mines is structured by the apartheid system, which organizes racial segmentation of the labour market. Nine-tenths of the labour force in the South African mining industry is comprised of generally unqualified and underpaid Africans, a high proportion of whom come from neighbouring countries on the basis of temporary job contracts, living in quasi-military compounds in very harsh conditions. This system has also been applied on the Rossing and Tsumeb fields in Namibia.

Of course, the labour process in independent Africa differs from that in South Africa, although in most cases, it is also based on the temporary hiring of migrant workers who are still partly dependent on their rural activities and incomes. The wages paid by the mining companies to these workers cover only part of their needs and underpaying the miners is the rule. We have noted that in Liberia the expatriates, who represent a tenth of the total labour force receive half the total wage bill of that country's mining sector. In Zaire, however, 1,000 expatriates receive half the total Gecamines wage payments, the other half is distributed between 37,000 African workers! Once again, Zambia stands apart on this matter. The wages of Zimco's 58,000 workers in 1983, varied from 65 to 400 pounds per month, they also receive premiums, and are housed in townships with low rents, free water and electricity for the poor, and free medical care.

Whether their management is authoritarian or paternalistic, the mines in most African countries are characterized by the negation of the workers' union rights, except in Zambia, where the history of the union movement is unique and where the mines have an original organization of labour. Representative bodies, in the form of Works Councils, which allow some worker participation, were set up by the government in 1976, comprising two-thirds workers' delegates and one-third employers' delegates. Members of these bodies are elected for a two year period and designate 'Works Committees' and an 'industrial and mining council', composed of representatives of the employers and of the unions. This council negotiates wage agreements and redundancies, among other things. Although the workers' participation through the unions is limited to the staff management, it has improved industrial relations, and the Zambian mining sector experienced no major social conflict from the 1960s to the mid-1980s. The Zambian miners' union is a powerful and independent organization.