Cover Image
close this bookMining in Africa Today - Strategies and Prospects (UNU, 1987, 91 pages)
close this folder6. The strategies of transnationals
View the document(introduction...)
View the documentTechnological strategies
View the documentInvestment diversification strategies
View the documentCollective investments
View the documentFinance strategies

Collective investments

The new strategies of the Western and Japanese enterprises are not limited to sectoral diversification and geographical relocation. The systematic association of different investors for any big investment project in mining is another important aspect of these strategies, as is the partnership with the state of the host country.

The investment partnership between foreign investors and host states characterizes all important mining projects in the recent period in Africa. All big iron mining projects in the 1970s included a host government capital share, which varied from 5% as in Mount Klahoyo in Ivory Coast, to 50% as in Mifergui-Nimba in Guinea. The Zairean copper project of Tenke-Fungurume also included a minority government share, as well as the uranium projects of Niger and those of Guinea for bauxite.

More important from the point of view of mining projects' management was the partnership between competing big enterprises developed in Africa during the 1970s. For iron ore and bauxite, the consortia which have been formed by different investors are usually limited to enterprises of the same industry but from different countries. The firms that invest in iron ore are the big steel makers of Europe, Japan and the USA, and those interested in developing bauxite production are the main leaders of the aluminium industry in the advanced capitalist countries. By contrast, for copper, and especially for uranium, consortia are inter-sectoral and international associations. Here, indeed, we have mining enterprises from different developed countries but also industrial firms, oil groups and state energy agencies. In all cases, the partnership facilitates the entry of new foreign investors and opens up the traditional zones of influence of the colonial era.

All planned investments in iron mining associate different big steel enterprises of Europe, Japan and the USA with the host state and sometimes minor operators from other African countries. Here, for example, is the capital structure of the companies which manage some of the biggest projects:

Mount Klahoyo (Ivory Coast)



British Steel

20%


Usinor (France)

10%


Nippon Steel

10%


Mitsubishi and Sumito

35%


Oremco (W. Germany and Holland)

10%


Ivorian State

5%

Faleme (Senegal)



Krupp

24 %


Kanematsu (Japan)

24%


BRGM (France)

24%

Mekambo (Gabon)



Bethlehem Steel (USA)

20%


German firms

10%


Finsider (Italy)

4%


French firms

10%

Collective investment in African iron ore fields is not actually a new phenomenon. In the 1950s and 1960s an association of US or European steel firms existed for the development and management of iron mines in Liberia and Mauritania. Before it was nationalized, the capital of the MIFERMA company in Mauritania was shared between French, Italian, German and British steel makers, French banks and the French Bureau of Geological and Mining Research. The ore produced was taken by the different partners in proportion to their capital share to be processed in their respective plants in Europe. Such associations were, however, usually limited to either US or European firms, while present investments associate the European enterprises with their American and Japanese rivals.

These firms' traditional strategy of having their own mines in the Third World has, therefore, been substituted by co-operation with their competitors to secure supplies of raw materials. This evolution is all the more remarkable in that it is paralleled by a growing competition on the international steel markets between the same investors. Meanwhile, the Japanese concerns that originally limited themselves to financing mining investments in the Third World are now more directly involved. The generalization of the partnership through the setting up of mining consortia reflects the relative weakening of the European firms' position in the exploitation of African mineral resources to the benefit of the US and Japanese investors.

The strategy of co-operation for mineral supplies between Western industrial groups also applies for bauxite, although the big projects here are concentrated in only one country, that is, Guinea. The North American aluminium concerns which were traditionally absent from the African continent, are now involved in bauxite mining and processing in partnership with the European leaders, such as Alusuisse and Pechiney, and with new investors from Germany, Britain and Italy. Japanese firms are not yet interested in African bauxite, but they are involved in copper mining, in association with UK, US and Canadian mining enterprises.

There is still more systematic co-operation between foreign investors in uranium prospecting and extraction. Here, foreign investors come not only from different countries but also from different sectors. In Namibia, Niger and Gabon, the UK, US and Canadian mining groups invest in uranium in association with US and European oil firms, state energy agencies of Japan and Western Europe and even the leading aluminium firms. Among the mining groups, the British, US and South African are predominant in Southern Africa, but for uranium prospecting they operate in Cameroun and in Sudan. US (Mobil, Exxon, Conoco) and European (Total, Shell, British Petroleum, ENI) oil groups are at present involved only in prospecting, in Sudan, Botswana, Zaire, Somalia, Niger and Gabon. The Japanese and European state agencies for nuclear material are associated either with the UK, US and Canadian mining groups, as in Southern Africa, or with the local state, as in Niger and Gabon. Japanese companies have simultaneously an individual prospecting policy, as in Mali and Zaire, or, as in Niger, in association with the French Commissariat for Atomic Energy. The aluminium 'majors' are also involved in uranium prospecting: for example, Pechiney in Algeria, or Alusuisse in Central Africa. Lastly, the French state, through its Commissariat for Atomic Energy is extremely active in the Sub-Saharan French-speaking countries, Niger, Gabon, the Central African Republic, and the Congo. It has an important role in prospecting, as well as in production and in uranium mining development in general. Thus, the COGEMA company, which is a subsidiary of the commissariat in Niger, participates to between 25% and 70% in all local enterprises founded for uranium prospecting and/or extraction. Although the number of partners is greater and their national and sectoral origins more diversified than for other minerals, co-operation between the main operators is, however, not very close. For example, the UK and US mining groups predominant in Southern Africa are involved neither in prospecting nor in production of uranium in Western and Central Africa. Conversely, the French Commissariat for Atomic Research, which is leading the development of the uranium sector in Niger and Gabon, is totally absent from Namibia and South Africa. State agencies for nuclear material are associated with either the former or the latter operators but participate to only a minor extent, except for the Japanese agencies in Western Africa. As for the oil and aluminium companies, with the exceptions of Conoco in Niger and Total in Namibia, their involvement is limited to prospecting.

The new investment strategies of the advanced capitalist countries' industrial, mining and oil enterprises tend to suppress the national and sectoral barriers which earlier delimited closed competition spaces. A new and larger competition space is developing which encompasses a great diversity of minerals and where foreign investors of different nationalities and industries are involved. We have seen that the concentration of capital decreased markedly during the recent period within individual mining industries because of nationalizations and the entry of new investors. But the development of co-operation between the big industrial, mining and oil enterprises of Europe, Japan and the USA can be interpreted as an increased concentration of capital within a unified world mining and metallurgical industry. From this point of view, collective investment in Africa's mineral resources implies the setting up of joint Western and Japanese transnationals' control over African mineral fields.