conditions of the developing economies.
E/CN. 14/1 »INo 80/5 Page 24
6B The proposals outlined here an^ highlighted elsewhere in the paper have been put forward to form a: basis for the conference to discuss. They are a "first-step" type solutions for as all develop ment phenomenon, appropriate adjustments and refinements may be
needed in the long run. ■
7. A major area where African developing countries need specific policies relates to economic diversification of the economies of mineral producing countries. Too much dependence on a few, sometimes only one mineral in exports, government revenue and overall growth is not a healthy pattern of development as it exposes the economies of these countries to undesirable fluctua tions and vulnerability in the development process. As noted in the main body.of this paper large shares of mineral output in total GDP might be a weakness resulting from the lack of integra tion of the economy - a usually critical problem in underdeveloped mono-commodity economies. It is therefore very important that developing mineral producing African countries try to integrate
their mineral projects into the whole economy by making efforts to utilise, as much as is possible, the mineral products they produce. Only in this way could the mineral industry have an appreciable ano long-run multiplier effect in the developing African economies. It is therefore strongly recommended that a first step mineral producing countries should undertake mineral
processing projects.
3. A second area requiring some policy action relates to the development of appropriate managerial and technical skills to enable the mineral producing countries to run their mine projects and thereby reduce the outflow of a lot of resources repatriated by foreign firms and experts. Even at the present time it is strongly felt that mineral producing countries should take, an active part in the running of mineral projects together with, foreign mining ,companies, through, perhaps well-conceived and organised mining corporations. Similarly the whole question of manpower development in the field of mineral resources develop ment in developing Africa as a whole needs to be loofeect into and policy solutions adopted to alleviate this constraint.
Q It was at one point notec1. that there has been a tendency, in African developing countries, to establish large mining^
projects which are capital intensive and using highly sophistic
ated technology,, Usually, the capacity of these projects far
exceeds the needs of the producing countries and, m addition, these projects create a dualism in the economy thus hinaerxngequitable distribution of income and, often, the whole process of
integrated development. Thus it is to be emphasised that for■ mineral projects not to become enclaves, appropriate scales^
should always be sought. Small-scale mines exploiting metal _
resources an?, industrial minerals and utilising these products xn construction, ceramics etc. could add significantly to the
technical growth and overall development.
£/CN.U.MIN.80/5
Pa?e 25
10. Financing is: as noted earlier, a critical.area.in. mineral industries development. Presently mineral exploration in develop ing Africa is at the lowest level, 'That then, candeveloping Africa do to atti-act the needed funds for exploration? It is suggested that developing Africa should vigorously take advantage of the financing available from bilateral sources and international agencies sc as to r.-\vr*- cut bcMn ^-.pioratiorj work to delineate arear. of mineral potential»'
11. The financ?-^ of the more detailed exploration work involv ing drilling and chemical analysis to determine the grade and si;.e of the deposit as well as carrying out metallurgical tests to determine the best and economically viable method to extract the required mineral or metal from the ore, the establishment of infra-structure necessary to wake mining feasible, is the most costly phase in mine development and carries very heavy risks and has very often long gestation periods extending from 5 to 10 years before returns can be realisedc In actual fact this is the area in mineral development which the majority of countries in developing Africa'"are" unable to finance,, Until now the necessary financing for this phase of mineral exploration has come from the industrialised countries of particularly the West and as has been pointed out this source of mine financing has increasingly become difficult to respond to the needs of developing Africa. It is proposed that the rich petroleum producing countries should rise to the occassion to help developing Africa to implement their mineral development strategies,, Of course the assistance should aim at being mutually beneficial to both parties. For instance, a petroleum rich country could finance the mining of phosphate roc!; as well as the processing of it into fertilizers to be utilized in the production of food which in turn can be sold to the petroleum rich country at pre-determined prices. 5uc> invest ments in developing Africa could be advantageous since they are not likely to be tied to procurement conditions nor given in package deals including equipment,, teclmology anc: management
personnel, as is often the case with financing made available from the industrialised countries, which raises the cost of borrowing considerably developing Africa could then have the option to purchase the equinment and technology from the cheapest and most
appropriate sources.
12. Another difficulty as pointed out earlier i- in the
acquisition of technology even with the availability of financing.
It is therefore important for developing Africa to be realistic enough to know that the developed countries will not carry out research and development leading to all kinds of technology just to make it available to whomsoever asks for it. However, the industrialised countries are likely to be willing to part with the
technology provided they are part and parcel of the venture to be
established in the developing country.
/cn.H/min.8o/5
26
13• As noted earlier, not only are mineral resources non-renewable but there is a possibility that the present patterns in mineral production and trade could change as a result of technological advancement such as to make present mining
operations in developing Africa uneconomical to continue* For instance the mining of manganese nodules from the seabed arc likely to create a glut :.n the markets of manganese, copper, cobalt, nickels chror.ivm etc. — ?. situation that could make present land-based mining exploitations for these minerals uneconomical Also technological breakthroughs in mineral substitution is another aspect tha<: could make present high-priced minerals of today the low—high-priced minerals of tomorrow.
Furrhexmore> secondary recovery and recyling as well as more efficient applications. pf_ minerals and conservation are other aspects which could result in a reduction in mineral demand leading to a lowering in mineral priceso These aspects of the mineral industry emphasise further the necessity for the mineral producing countries in developing Africa to consider seriously the question of diversifying the economic bases of their
countries,
14. The possibility of establishing producer cartels should be considered by groups of mineral producing countries in develop ing Africa on the same lines as Inter-governmental Copper
Producing and Exporting Countries (CIPEC), Organisation of Petroleum Exporting Countries (OPEC) or International Bauxite Association (lBA)«. Countries producing the same mineral
commodity could form a study group to see whether or not, they, as a group are likely to command a significant share of the world market for a particular mineral to enable them take unilateral action^ if need be, to increase prices. For instance, the International Bauxite Association has since 1974 managed to extract substantial increases from their bauxite unlike CIPEC whose copper prices have been declining. Some of the reasons that have made CIPEC to fail to increase copper prices are because of lack of political cohesiveness in the members of the group and of marked differences in copper ore grades found in the member countries and of differences in the costs of exploiting copper in the member States* It means therefore that before considering cartel-like action in developing Africa the prospec tive mineral producing countries in the group should strive to increase the share of a particular mineral in the world., co-ordinate their tax policies and integrate some of the common activities such as mineral processing and or research and develop ment related to the minerals they produce, and should aim at producing the required inputs in mining and mineral processing so as to establish similar costs in mineral production,1 one of the pre—requisite in the establishment of producer cartels*,
3
TheroleofdevelopingAfrica,inyiqrl'lmineralgraduation,l$3&ln1?43&1958(continued)PageP. MII-1ERAL Petroled (Crude) 19381943 >forldDevelopingShareofTforlc1.DevelopingSharaof:Jorld'DevelopingChare°* ProductionAfricaOevelop.ProductionAfrica3evslo?.I¥pi:uctioaAfrica:^3velop0 intonnesProduction/^rica'intonnecProductionAfricaintonnesProductionAfrica ^:clu-'incintonnecinthedeludingintonnesintheExcludingintonnesinthe CPU:iorldinCPE:iorldinCP1Tfcrl-?.in Dcrce:itper'cent?^rcent ?29,5OO 4,^91,000
14S0,£00,000T.,105,0090.A5 .417,100,0005,083.0003L'»^
4,1:19,000 Ull3} diamonds (Gemin Carats) Diaiaonv'.o (in...act- rialin carats)
ifJjL'.J (a)ITcteC?"--CentrallyplannsdEconomicProductionofC^Trica(liaridbiaxgnetinclude"indeveloping. AfricaProduction GourcessUnitedNationsStatisticalYearBook195'-1973 Jnitc:nationsEconomicCor.imissionStatisticalDivisionData-Juiy0
~:o? */"1. 03"■tori'* Production intoiinec jbtclu'ingZ?"L
"■-■evslooins
.. Africa ^
Pro^action. intonnas"hajpe.of ."■eveloping Africa inthaT-jorl. inoercant
::ori'" "^o-.TKtion intonnoa ■?-:clu*in;;: Cobalt ^nroiaiu::: ironOr Copper Lead C-:.c) .in
(■:■
(Bauxits) Gol"1. (l/ietal) Antimony(■:.-?)_
Uranium7,750,000 654,9^0 3,i20,000 5,530,000 57,^:1,000 jif—i,OJu <OA°2
1,133,500 3,705 l,?9S,5oo 219,100 ?65,OO0 43,157 400
7.7 15-3 1.3
47",174,000 9,470,000 639,300 390,/; 20.0 6.4 4.3 3.4
7,373*300 ,313,300 237,100 34,147,200 1,315,300 3.4
53,949
13739S"
Production in.tc:iiGO 13,258
..ns.roo^- "?3ve.lo-^in3 Africa i'-1t'i3T'JOFi. i:ioercont 1,430,200 157,335 1,370,500 173,350 25^,500 12,500 13,110,500 33,300 ?-,47O 3,5OO
15-5 7.7 40 17.4 4.9 3.7 10.4
Theroleofc>yelopingAfricain-jorl-\mineralproduction,1970£1973(continue-!) 03 Petroleum (Cru-e) Hiosphatas (Cru:'e) Asbestos Tforl-"1 Production intonnes
1970 >?.?,000 (in carats)
"hareof Africa"developing ProductionAfrica intonnesinthsworlc*. inpercent 2,275,160,000294,'053,000 >3,535,0002O,^?.0,OOO ?-?.?-,300
yOOO ""7,094,000
Tori-' Production' intonnes 5,130,000 55.010,169,000
pageA 197S Tevelopin-r"hareof 37,059,000 ?-0£,OOO 3,999,000ProductionAfrica intonnesintheuorl' inpercent 10.3 3?..7 0.0."? (Industrie.?, incarats)
17,^53,00037,551,000H,594,000 Ilote?
• C.3- - Centrally planned 3cononic Production of -. Africa (i-Iamibia is not inclu
.evelopin.^Africa^ro^uction.e-*inthe sourcesz:^ite-'HationsGtatieticalTearBook Units:,nationsEconomicComiiiiGsionStatistical,"ivision-'.ata-JulyTable 2:
'shape of tuning and ar^-yriG n t ■ ?x^i cep d? ^p"ict';t ccxtttjes in per cent 1970, 1974 £ND 197B
C
(CCNSTSMT 1370 U7" FACTOR COST)
A. Sh^m of rrdning and -marrying in total rrp above 30% at sometima between 1970 and IS
1570 13 7 4 1978
B. Share of raining an^ quarrying in total GPP above 5% but less than 30% at sometime
between 1970 and 197^ ' —— __
arid quarrvina in total GDP time between 1370 and 197^
Cameroon
but less than 5% at
some-1.14
Table 2 (cont'd)
Share of ntininer an<5 quarrving in total 1970 and 197C
Sao Tone & Principe Sudan
OP all the time
0.35
( ) Denotes mineral exports qroups of table 4. :■■■""■
Sourcest -#CA Statistics Division coTrxator print-outs. Tables 3B of 11 January 1930 and 3D of 15 Januarv IP-T).
Table 3:
Proportions of the value of the major mineral contiodities exported frcm countries of developing Africa in ner o^nt .of oach country's total.exports
1: Countries with one mineral ocyrtrUty accounting for more than or about 50% .in.a country's total exoorts
Countrv/CcnnxU.ty Year
Value
000 USVvo
Proportion of mineral, value in country's exports in per cent
Petroleum-producers:
Table 3: (cont'd)