The Gulliver RTZ Dossier

529 RTZ

In the Summer of '89, ex-President Ronald Reagan visited London to deliver the annual Churchill lecture. His theme was democratization through high technology. "I am convinced that the world is moving our way," he declared. "Breezes of electronic beams blow through the iron curtain as if it were lace ... They shall know the truth and the truth shall set them free" (1).

Less remarkable than anything Reagan said, is the fact that he was sponsored by a British corporation, with no apparent interests in communications. Yet the association between the grand old Republican and Rio Tinto Zinc goes back a long way. In the 1960s, the middle-aged actor fronted a highly successful TV series boosting "20 Mule Team" borax (2). Soon afterwards, US Borax was bought out by Rio Tinto-Zinc, or RTZ as it now prefers to be called.

It was one of the first acquisitions in a long line, which has made RTZ the world's most powerful mining corporation; with joint venture mines in forty countries (3). According to investment analysts Morgan Stanley Capital International, RTZ's market capitalization stood at US$5,711 million in June 1988, putting it head and shoulders above all the competition. In addition, RTZ's 49%-owned Australian associate, CRA (Conzinc Rio Tinto of Australia) occupied sixth position in the league table, with assets of just under four billion dollars (4).

As if this were not sufficient, the following year RTZ bought up most of BP Minerals' mines and prospects (5). At a stroke the British company acquired Kennecott Copper, with its plum asset the Bingham Canyon copper mine in Utah, as well as several important north American and Asian gold interests. RTZ is now one of the most important gold producers outside of South Africa (5).

RTZ produces around 15% of the world's copper and, according to Metals and Minerals Research Services of London, will soon assume "a quite astonishing degree of importance" - owning copper operations "in all the world's major areas of production.

By 1993 it could be "supplying 44.5% of the world supply of custom copper concentrate" (6).

In 1988 the Economist magazine estimated that the company was producing 11 % of the world's aluminium, 8% of its iron ore and 11% of its uranium (4). RTZ's wholly-owned subsidiary, US Borax, is by far the world's most important supplier of borates, while the Argyle diamond mine in north-west Australia is the world's largest single producer of gem and industrial diamonds. Thanks to gaining the BP Minerals portfolio, RTZ has taken control of QIT Fer et Titane in Quebec and with it, half of Richards Bay Minerals in Natal, South Africa. Claimed the US Engineering and Mining Journal in August 1989: "... the company [now] accounts for 90% of world production of titanium dioxide slag and 40% of titanium dioxide feedstock".

This gives it a pre-eminent position in the supply of mineral sands and the output of strategic minerals and rare earths (7). (Four years ago, CRA also announced the discovery of one of the world's biggest mineral sands deposits, at Horsham, in the Australian state of Victoria (8).)

There is no continent (with the possible exception of Antarctica) where RTZ has neglected to establish its presence - whether it be selling iron ore to the Chinese state steel corporation (9); digging-up uranium at Elliot Lake, Ontario; running gold mines, nickel matte and ferrochrome plants in Zimbabwe; earning rich pickings from its Palabora copper and uranium mine in the South African Transvaal; taking 30% of the equity in Chile's controversial Escondida copper mine; or planning future exploitation of the sea-bed, through its majority-owned Kennecott Deep Sea consortium (10).

As the Financial Times modestly put it in 1988: "RTZ is the dominant supplier of minerals to the world's manufacturing industries with an extensive portfolio ranging from aluminium to zinc". The paper went on to note that: "[T]he sheer scale and profitability of the complementary industrial assets are sometimes forgotten" (11).

Certainly, the company's interests in aluminium products - through its Pillar subsidiary in western Europe and Indal in the USA - have consistently maintained a cash-flow to see the company through hard times. However, RTZ's extraordinary forays out of mining - into chemicals, oil and gas, cement, uranium enrichment and other non-mining concerns, which typified the late 1970's and early 1980's - have come to an end. In 1989, the corporation yielded up the last of these rather lumbering interests, by selling RTZ Chemicals and ISC Chemicals to Rhone- Poulenc of France (12). (Not a moment too soon in the eyes of some of its critics: ISC is Britain's second biggest producer of ozone-destroying CFC's. After intense shareholder denunciation of this aspect of RTZ's operations in 1988 and 1989, an RTZ spokesperson admitted that "the company has been made to squirm") (13).

Off-loading the chemicals boosted the company's income by more than half a billion pounds (�8 million) in 1989 - enabling it to reduce its debt-gearing (which had soared to 135% with the BP Minerals purchase) to a more manageable 34%. For the first time RTZ joined that elite of corporations which can boast pre-tax annual profits of more than a billion pounds (around 1.6 billion dollars) (14).

How has RTZ arrived at this unrivalled position: not only the world's biggest mining conglomerate, but the most globally extended and (with the possible exception of Anglo-American of South Africa), the most product-diversified as well?

The answer lies partly in RTZ's origins, and partly in the unique "cover" provided for its investments and operations, by the British state.

The original Rio Tinto mining company was already Britain's largest mining outfit by the close of the nineteenth century. (Some sources claim it was the biggest in the world). Rio Tinto was founded in 1873 by Hugh Matheson - "an earnest Scot who devoted his life mostly to the virtuous accumulation of money. In his spare time he endowed churches and threw himself ... into the reclamation of London prostitutes," according to financial journalist Jeremy Stone (15) . Matheson floated Rio Tinto, based around the copper deposits of the Iberian mineral belt in Andalusia, with a London share offer of 200,000 shares at � each. Even RTZ's official archivist, Dr. David Avery, later acknowledged that this "... appeared to many to be fraudulently optimistic". However, Matheson was - in Stone's words - "a master in the use of red ink and carefully chosen typefaces". Despite saddling the company with onerous bank loans and heavily discounted bond issues, the canny Scot was allowing a profit in the first six years. Thousands of women, children and men laboured to construct a port, lay down many miles of costly railway, and open up the vastest mineral workings ever seen. (Several hundred also died in the first ten years from silicosis, pulmonary disorders and downright starvation - a fact attested to by L Gil Varon's documentary study of the mines between 1877 and 1887, published in Cordoba in 1981) (16).

Assisted by the leading role which it played in the Secretan copper corner of the 1880s ("Rio Tinto was adept at the making and breaking of cartels", comments Stone) (15), the company rode high into the twentieth century. But, with competing mines coming on stream, a certain diversification was necessary. Now chaired by another Scot, Sir Auckland Geddes, Rio Tinto sealed a pact with Sir Earnest Oppenheimer, founder of Anglo-American. Between them they gained control of the Rhokana Corporation, the major exploiter of the northern Rhodesian copper belt. "In brief," declares Stone, "Geddes and Oppenheimer appear to have arranged the development finance of Rhokana in such a way as to dilute the minority shareholders into insignificance". In 1926 Geddes took Rio Tinto into a new cartel along with Asarco, Union Miniere, and Kennecott. Called Copper Exporters Incorporated, this band of robber barons withheld supplies as it chose, cornered the world market, and swelled the warchests of its members by an astonishing 84.4% in its first two years (17).

Throughout this period, however, the Rio Tinto mines were rocked by unrest. In 1920, many left-wing miners were sacked after going on strike for fifteen weeks. Discontent, combined with the traditional strength of anarchosyndicalism in Andalusia, made the Huelva mines a stronghold of the Republicans. A workers' rebellion was crushed in 1934 and many miners were sent to prison. Although the Popular Front came to power in 1936, and Rio Tinto was forced to re-employ the jailed men, their's was a short-lived victory. Fascist troops invaded the province and put down the Republican units with unexampled ferocity (18). Sir Auckland Geddes was far from displeased. He told the company's shareholders at its 1937 annual general meeting in London: "Since the mining region was occupied by General Franco's forces, there have been no further labour problems ... Miners found guilty of troublemaking are court-martialled and shot" (19).

Geddes' optimism did not last for long. Rio Tinto was ordered by Franco to provide ore for the Nazi re-armament programme, the second world war brought prices to a new low-ebb and, by the late forties, the pressure to "Hispanise" was growing too great. In 1954, the company brought in business whizz-kid, Sir Val Duncan, to sell off two-thirds of the Rio Tinto mine and later the Rhodesian investments (18, 20).

Duncan graduated into Rio Tinto from training as a lawyer, a period with the Foreign Office, and two years selling coal for the National Coal Board. He was well-suited to the task of re- deploying RTZ's investments to the Commonwealth: to politically more secure, but relatively untapped, new resources. Above all, he was soon to prove extremely adept in unlocking the finance required for what were to become some of the world's most formidable mines. Duncan charted regions, rather than minerals. But there was one exception that was to prove a masterstroke. Sometime in the early 1950s (as Duncan later recalled) the head of Rio Tinto was called to the British Atomic Energy Commission. He was (so he claims) ordered "to go forth, find uranium and save civilisation!" (21). And this he did, with a zeal and application not seen before or since. First, Rio Tinto bought out Algom Uranium Mines in northern Ontario, from Samuel Hirschorn (22) (who later used the proceeds to set up the eponymous Museum in Washington DC). Then, Duncan gambled on a prospect in South Africa which had been turned down by several domestic companies - the Palabora copper and uranium lode in the Transvaal. By the 1970s the gamble had paid off spectacularly, with Palabora providing 55% of South Africa's internal copper needs (18, 23), and being the only uranium producer in the apartheid state to market its output independently of Nufcor, the state agency (24).

In Australia, Mary Kathleen Uranium (MKU) fell into the company's lap: for most of the next two decades this was to be the country's only provider of yellowcake (some of which ended up in both British and US nuclear warheads). It was from "down under", too, that Duncan was able to pull off what may fairly be regarded as one of the most spectacular coups in western mining history. Consolidated Zinc was a British company with a smelting complex in Britain, and large-scale holdings of iron ore, bauxite and zinc in Australia. Both Conzinc and Rio Tinto had cash to invest. But, while Conzinc had relatively more money than expertise or a spread of investment opportunity, Rio Tinto, by the early 1960s had rather more mines than the capital to develop them: it was also attracted to the prospect of moving "downstream" into processing. The fit was almost perfect. As the Engineering and Mining Journal commented in August 1989: "This merger [in 1962] formed the basis of, and provided the impetus for, RTZ's subsequent development into an international mining giant. Throughout the 1960s, capital intensive, technologically innovative mega-projects were being developed with RTZ and its subsidiaries at the forefront" (7).

But, true so far as it goes, this comment glosses over the very real geo-political problems confronted by the new Rio Tinto- Zinc, even in countries considered stable a decade before. The growth of independence movements in Africa and Asia, a mounting world revulsion at doing business under apartheid, the trend towards nationalisation in Britain under a Labour government, the advance of international labour organising, the increasing substitution of newer metals for old - all these would have given cause for company concern. The threat of substitution was perhaps the easiest to deal with. The 1962 merger made RTZ a major aluminium producer, and this metal has tended to keep strong when copper weakened. Coal has picked up, even while uranium has slumped.

The other potential obstacles on RTZ's upward path have required more radical strategies. These have ranged from brow-beating opponents, leaning on governments and price-fixing, to violating international law, union-busting and management of one of the world's biggest commodity cartels in recent times: the uranium "club".

None of these ploys could have succeeded, had they not been conceived at the highest levels of RTZ management and gained the assent (sometimes the active complicity) of successive British governments. Nor, of course, is licensed ruthlessness sufficient in itself. Geologists on the ground, and lower-level managers in outlying areas, must be sure that - when they are encroaching on an Aboriginal sacred site, for example, or entering discussions with a dubious potential partner - they will be supported right through the chain of command. When RTZ's head of public relations tells the author of this book: "Of course, money- making is RTZ's bottom line!" (25), it is a sentiment that must be conveyed all the way from the company's head offices in plush St. James's Square, to Larry Mercando, manager of Flambeau mining in northern Wisconsin, or Mike Quigley, head of Canning Resources in the Western Desert of Australia.

To do this, RTZ has developed what the Engineering and Mining Journal calls: "a very flat [organisation structure] with short, direct lines of communication. RTZ does not believe in intermediate holding companies or geographical structures" (7). Adds Derek Birkin, the company's Chair: "We like to encourage local loyalties, and the companies are managed, as far as possible, by nationals of the country concerned. Most do not even have RTZ in their name. This is a difficult form of management, but the rewards are marvellous". (What Birkin does not mention is that several subsidiary and associate companies have been given names which specifically disguise their ultimate ownership by RTZ. One example is Flambeau Mining, whose lightning change of appellature - from Kennecott Minerals - occurred within weeks of Kennecott's takeover by RTZ. Commented the Wisconsin Resources Protection Council: "RTZ and Kennecott want to avoid costly lawsuits arising from the groundwater and surface water contamination that is bound to occur ...") (26).

RTZ's supposed devolution is, in crucial respects, a pretence. All the company's core mining assets are managed to suit a central design and "London" is soon ready to intervene, when these assets appear threatened. Thus, RTZ abandoned its Cornish tin mines, throwing hundreds of miners and their dependents onto welfare, soon after the collapse of the International Tin Council in 1985 - partly because cheaper tin was available from Rio Algom's East Kemptville mine in Nova Scotia. And, even though CRA was eventually "Australianised" in 1986, with RTZ holding on to 49% of the share, that same year "when CRA had troubles with industrial action" (as the British Financial Weekly put it), "there is no question that the men from London were very instrumental in settling the dispute" (27).

The main "man from London" for the past decade and more was Sir Alistair Frame, although he surrendered his position as Chair in 1991. Yet another "phlegmatic Scot" (as the Times described him in 1983) (28), Frame joined RTZ in the 1960s from the Atomic Energy Agency, where he was a director. His skills as an engineer, and his highly conservative views on trade unions, South Africa and nuclear power, may not seem ideal qualifications for leading RTZ through the 'eighties. But they suited the board when it chose to embark on a whirlwind of industrial acquisitions in the 1970s, and when the company increasingly faced flak over its deepening commitment to apartheid. Although little known outside of mining circles, Frame's advice and analysis has been coveted by (among others) Prime Minister Thatcher. She wanted him to head the National Coal Board and emasculate the British mineworkers' union - but he declined, and Ian McGregor of Amax got the job instead (29).

Frame typifies that mix of shrewdness, effrontery, gambler's instinct, and cultivated amorality, which has distinguished RTZ luminaries for a hundred years. It is significant that, though the board drafted-in leading banker Sir Anthony Tuke, from Barclay's International in 1981, as a boost to its fortunes, he was clearly not par for the course. Two events precipitated his resignation as chair in 1985. The first occurred in 1981, when RTZ was manoeuvring to take over a company called Thomas Ward. Ward was a traditional family firm, with a fair reputation among its workforce, and just the kind of company which Tuke (a born Quaker and supporter of regional enterprises) in other circumstances would zealously defend. He pointedly stayed away from the press conference held by RTZ to announce its bid (30). The second event was Tuke's incompetent handling of dissident shareholders at the 1982 annual general meeting, when police were called (for the first time ever at a British public company meeting) to eject an Aboriginal delegate and thirty supporters. (Commented Hamish McRae of the Guardian, the morning afterwards: "Sir Anthony should never forget that his duty, as an employee of the shareholders ... demands that he sit pat, answering questions until the sun comes down, if necessary ... What happened yesterday at RTZ struck at a form of institution that is central to our way of life") (31).

As part of the Ward takeover, Derek Birkin moved into St. James's Square. He developed a close working relationship with Frame and was propelled with alacrity into key positions within the company. By the time BP Minerals came on the market in 1988 (largely as a result of a cash-poor British Petroleum needing to buy back an alarmingly large share of its equity acquired by the Kuwaiti Investment Office) (32), Birkin and Frame were unassailable. Between them, the waspish Scot and the avuncular Englishman brought off the largest unopposed, intra-company, deal then effected in British corporate history.

The take-over cost RTZ nearly four billion dollars (US$3,700 million) and was financed by the Group's existing cash, a syndicated bank loan and a rights issue underwritten fully by Kleinwort Benson of London, the merchant bank (33).

RTZ's new projects are usually financed by cash-flow (aided considerably by a favourable exchange rate in countries like South Africa), rights and share issues, and forward selling of production. (This is the manner in which it has financed its part of the Escondida mine in Chile, the huge capital costs of the Neves Corvo copper/tin mine, and expansion at Hamersley Iron). In its first decade the company needed to raise massive amounts of capital, at highly favourable rates. The company's first managing director, Sir Mark Turner, was a head of Kleinwort Benson: he employed an "old boys"' network which included Rothschilds, Morgan Stanley, and Model Roland and Company of the USA. "With its amazing attraction for American capital," commented the London Times in 1968, "RTZ has yet to drop any projects for lack of funds ... this stems from its early experience in Canada where it brought uranium mines to the production stage in two years and fought tooth and nail for finance. Its success astounded the Americans".

The link-up with Consolidated Zinc in Australia also brought RTZ into alliance with Conzinc's major overseas partners, the Kaiser family and, through them, First Boston bank.

It was the Bank of America, heading two syndicates of twenty- seven British, European and Canadian banks, which underwrote the development of the Bougainville copper/gold mine in Papua New Guinea in the late 'sixties (34). After only six months of production, Bougainville was raking-in no less than A$1 million a day (see CRA).

Such grotesque profits do not simply derive from generous project financing, or a knack at finding high-grade ore. (Certainly RTZ Group geologists tend to be found in more outlandish places than those from any other mining company, and they are more persistent than most. But their rate of discovery seems no higher than average, and many deposits are low in minerals or difficult to access. RTZ's genius lies in its ability to mine and market a range of minerals from one lode, and its sheer persistence in bringing problematic mines, like Rossing of Namibia, onto stream). RTZ's financial killings also depend on a low price of labour, negligible environmental costs, generous tax allowances, and leases which are literally dirt cheap.

The Palabora mine in South Africa relied for its development stages on a large, migrant, black labour force, whose average wage for many years was well below the minimum set by the South African Institute of Race Relations. (The SAIRR pitched it at �.1 a month for a family of five, when the company was paying only �.9). Between 1966 and 1971, RTZ paid its African miners just under �million: its profits for the same period were nearly �0 million (35). Not surprisingly, the Times commented in 1968 that "... at around �0 a ton, Palabora's costs per ton of copper produced makes it one of, if not the, lowest cost copper mines in the world" (35). It was not until 1985 that Palabora's management recognised the National Union of Mineworkers of South Africa - three years after Anglo-American did the same thing.

Similarly, the Rossing mine - which by 1980 had become the biggest uranium project in the world - was constructed by hundreds of Ovambo labourers, separated from their families and housed in what the Economist called "appalling temporary camps" (36). Even when a black township was constructed, conditions hardly improved: South African researchers Gillian and Suzanne Cronje, as late as 1979 (six years after mine construction started), found them "akin to slavery" (37). Under the spotlight of international pressure, RTZ cleaned-up its act over the following decade, but the surgery was still largely cosmetic. In a speech delivered in early 1989, the General Secretary of the Mineworkers Union of Namibia (MUN), Ben Ulenga, claimed that: "92% of all black and 51 % of all coloured workers still remain in the company's lowest income bracket [which does not] constitute a living wage ... black workers in the Exploration department have no house, no housing allowance. Their conditions in crowded army-style tents are, in fact, among the worst in the mining industry" (38).

The Rossing mine, at one point in the early 1980s, was RTZ's biggest money-spinner. For most of its life so far it has paid no taxes - and only then into a fund controlled by the South African regime. Likewise, the Bougainville copper mine enjoyed a five year tax-holiday (until the newly independent government of Michael Somare forced a re-negotiation in 1974). The Weipa bauxite mine in north Queensland, Australia (the world's largest of its kind) has functioned under an Act of Parliament which imposed a derisory royalty of 5 cents a ton - probably the lowest in the world: the rate was merely doubled in 1965, and not hiked-up to a more equitable figure until 1974. The initial "rent" for the mining lease was pitched at a throwaway L2 per square mile, only a one-hundred-and-sixtieth (sic) of the normal mining rental at the time. The Aboriginal people, whose land was seized, have never received one dollar in compensation.

Weipa's bauxite is converted into alumina in Australia and smelted at the Tiwai Point smelter in New Zealand (Aotearoa). Although RTZ and its partner, Kaiser, agreed in 1960 to build a power station to run the smelter, within two years they were pleading poverty. The New Zealand government, considering itself starved of industrial development, not only constructed the power station at the taxpayers' expense, but sold electricity to the two companies at a thirteenth of the rate charged to New Zealand private citizens, and one twentieth of that charged to other industries and farmers.

All these examples illustrate an extraordinary capacity on the part of RTZ and its partners or subsidiaries, to influence domestic power-brokers in the regions where it operates. When Comalco (the joint RTZ and Kaiser company formed to exploit Weipa) was publicly floated in 1970, for example, only 19% of the shares were offered to the Australian public. However, a significant proportion had been secretly offered the day before to friends of RTZ in high office in Queensland: these included the state Treasurer, the Ministers of Aboriginal Affairs, Industrial Development, Local Government and Electricity, and the Premier of Western Australia. The acting-Premier of Queensland, Gordon Chalk, distributed his ill-gotten gains to the entire Chalk family, leading one journalist to comment that: "only the dog" hadn't benefitted! Thanks to the hype surrounding the share-issue, these politicians saw their investment more than double in the space of a day. RTZ and Kaiser cleaned-up ten times richer.

Again, when New Zealand Prime Minister Muldoon, in 1977, sought the assistance of US Secretary of State for Energy, Schlesinger, in renegotiating the power price paid by Comalco at Tiwai Point, he found himself out-classed and out-gunned. Cornell Maier of Kaiser "briefed" Schlesinger in Washington, while Lord Shackleton of RTZ intervened with the British government. The upshot was that, though Comalco agreed to pay around four times its previous rate, this was still only 60 per cent of what it had feared. (The Tiwai Point pricing agreement remained a secret one until late 1990, despite continuing demands by New Zealand citizens in recent years that it be divulged).

A bare two years later, another American company within the RTZ camp was exerting even greater pressure on public figures. US Borax had located a massive molybdenum deposit at its Quartz Hill property in.Alaska. To the company, Quartz Hill promised a "valuable diversification into a market where prices have continued to rise even during recession" (39). Unfortunately, for RTZ, the mineral lay solidly within part of the 56-million acres recently designated by President Carter as inviolable, under the Alaska National Interest Land Act. Despite opposition from the Sierra Club, Representative Morris Udall and Carter himself, RTZ/Borax mounted a well-funded, highly-geared, lobby of Congress, pleading "national interest" (40). By December 1980, the company's ministrations had prevailed: the National Interest Conservation Act (sic) was duly passed, giving RTZ access to Quartz Hill.

Remarkably, even while Congress was waving RTZ freely into a national park, a Congressional investigation had named the company, and several subsidiaries, as prime movers in the world uranium cartel, whose contract and price-fixing in the early 1970s boosted the mark-up for "free world" supplies of yellowcake by a factor of five. (One calculated result of this stratagem was that the Rossing mine, whose low-grade refractory ore had previously been considered uneconomic to mine, was now commercially viable).

The company's master-minding of what was cosily and euphemistically dubbed the "Uranium Producers' Club" by its members, consolidated and extended RTZ's influence over key government personnel in South Africa, Canada and Australia. RTZ sat as an equal among representatives of sovereign states leading one commentator, Stephen Ritterbush, at the UN Hearings on Namibian Uranium in 1980, to declare: "Rio Tinto Zinc [is] in the position or acting in many respects as a uranium producing and exporting nation" (41).

But its international "spread" - impressive though it is (RTZ, for example, is the only mining company to have had three representatives sitting on the "world management" Trilateral Commission) (42) - is overshadowed by the parastatal role it plays in the British political structure. "We are very politically minded," Val Duncan once commented: "not party politically minded, but on an international basis" (43). Duncan was determined to bring into the company, representatives of all three major British parties; and he succeeded. During Mark Turner's ascendancy at RTZ, the board could boast among its members: the Queen's private secretary (the monarch has regularly been cited as a major shareholder), Lord Byers of the Liberal party, Lord Shackleton (Labour's leader in the House of Lords) and the Tory, Lord Carrington. It was Carrington who forged the settlement of the Smith rebellion in Rhodesia, which brought Mugabe to power. Despite the new President's determination to curb the mining companies, Riozim - which had functioned during the entire period of UN and British sanctions - remained in Zimbabwe as one of the three most powerful multinationals.

The London Times once called it "almost patriotic" to own shares in RTZ (43), while the Daily Telegraph mused that, as well as supplying raw materials, the company could be in a "position to furnish a coalition government, if one were needed" (20). (This wry comment struck closer to the truth than the conservative paper might have been aware at the time. In 1975, as Britain was wracked with industrial unrest, Duncan called together Lord Robens of the National Coal Board, some army officers, and a few journalists, to plan a take-over of the national power grid, generating plant, and key media, should a revolution break out in England's green and pleasant land) (44).

In 1989, Prime Minister Thatcher visited the Rossing mine in Namibia and gave it her seal of approval: "It makes me proud to be British," she opined. This was hardly surprising, considering the protection which had been afforded RTZ to plunder Namibian uranium, by several British administrations, especially her own.

First, officials sympathetic to RTZ within the British Ministry of Technology signed a secret contract enabling Rossing to supply the country's uranium needs, even though the cabinet was told they would be met from Canada. The Minister of Technology at this time, Anthony Wedgwood Benn, later declared he had been completely "kept in the dark" about the "switch". Once Britain was locked into the illegal source, both Labour and Conservative governments defied a United Nations Decree on Namibia's Natural Resources, and numerous UN and other resolutions, in order to maintain the supplies. Her Majesty's government promulgated a Protection of Trading Interests Act, which not only prohibited British corporations from supplying documentation to a potentially hostile foreign interest (the Chicago court investigating the uranium cartel), but entitled British courts to seize the assets of any overseas power foolish enough to impound British corporate assets.

None of this evidence should suggest that the interests of RTZ and the British state are always compatible, let alone identical. When the company snapped-up nearly 15% of Enterprise Oil in 1984 - a newly-floated oil company intended to be a flagship for Thatcher's brand of "privatisation" - the government was infuriated (45). Yet, only two years later, the administration provided RTZ with � million in interest-free loans, and another ten million pounds at commercial rates, to bale out its Cornish tin mines - a move which made nonsense of Thatcher's avowed determination not to support industrial "lame ducks" (46).

The fair conclusion to make is that the British state needs RTZ more than RTZ needs to be subservient to changing governments. The company is not merely a "state within a state". For those who cherish the notion of a continuing British imperial domain, RTZ is the state.

If the Church of England is the Conservative party at prayer, then RTZ may fairly be described as the British gentry up the Klondike.

Resistance

RTZ's chair, Sir Anthony Tuke, in his 1984 Annual Report, made a rare admission: "We are conscious that some people hold deep and strong beliefs that our activities are in themselves damaging," he wrote (47). "Some people" have come to include the United Nations Commission on Namibia, President Mugabe of Zimbabwe in his first months of office, the Greater London Council, the National Federation of Aboriginal Land Councils, the Guaymi Congress of Panama, and a whole battery of community groups stretching from northern Ireland to New Zealand.

Many of them regard RTZ as impervious to all criticism, and the most intransigent of mining companies when it comes to modifying or abandoning new projects. However, this is a rather simplistic view which underestimates both the power of opponents, and the capacity of the company to manoeuvre around its core interests.

For example, RTZ was forced to put on-hold its huge Cerro Colorado copper project in Panama during the mid-1980s (48). International support for the Guaymi Congress in its struggle to gain land-rights (comarca), combined with opposition from Panamanian Bishops and CEASPA, the country's leading radical think-tank on development, proved too much for the top brass at St. James's Square. "We have had more opposition to this project than anything else we've done," confessed RTZ chair, Sir Anthony Tuke, to a private meeting with members of Survival International: "It is really astonishing". Nonetheless, RTZ continued to hold 49% of the mine's equity, pay the salaries of workers from the state mining company, Codemin, and keep a substantial contingent of its own staff in and around the "copper mountain" (48).

Similarly, RTZ is no slouch when it comes to fighting-off the demands of trade unionists in areas of marginal profitability but major, long-term, investment: at its Hamersley iron ore operations in north-western Australia, for example, which is probably the most strikebound of all Australian mining ventures over the past two decades. In contrast, its Canadian subsidiary, Rio Algom (along with Denison Mines) in 1981 negotiated a ground-breaking agreement with the United Steelworkers of America (USWA), empowering the union to appoint work safety inspectors at its Elliot Lake uranium mines. This followed the shattering revelations of the Ham Commission, that Elliot Lake miners were labouring regularly under radioactive exposures seven times what should be considered the maximum level. Even so, it took another three years of Union agitation before Rio Algom workers gained the right to refuse "unsafe work", and stand on the same footing as other Ontario miners.

Nor has this precedent been followed in other RTZ mines. Contacts have been forged between the USWA in Canada and the Mineworkers Union of Namibia, however, and it is likely that the new SWAPO-led government will insist on similar protection in the near future.

Undoubtedly it is indigenous land claims which have been the bane of RTZ's expansionist policies for two and a half decades. There are several major mines within the company's domain which have displaced native people or risked their lives. Constructing the north Queensland bauxite strip-mine at Weipa caused the forced removal of two entire Aboriginal communities in the early 1960s (50). Vast areas of Nasioi and Rorovana farmland and rainforest have been ravaged by the Bougainville copper mine in Papua New Guinea (18, 51). And the Elliot Lake uranium mines, while not situated on Indian territory, leach poisonous heavy metals and acids into lakes and rivers essential to the livelihood of the Serpent River Band (see Rio Algom).

The last decade has seen the encroachment and destruction proceeding apace. A sacred women's Dreaming site was levelled to uncover the lucrative kimberlite diamond pipe at Lake Argyle, Western Australia (49). Test-drilling for uranium has been carried out near life-giving water sources on Martu land in the desert to the south. CRA has constructed one of Asia's major new coal mines upstream of Dayak settlements in East Kalimantan, while both CRA and RTZ have been accused of engineering the removal of indigenous miners and their families, further inland (53). One of the Group's most important future mines - a wet- dredge mineral sands project in south-eastern Madagascar - looks likely to profoundly affect the coastal areas used by the Antanosy, one of the island's largest tribal communities (54). Hardly before the curtain was raised on the 1990s, CRA announced a 30% stake, later raised to 40%, in a gold mine on Igorot land, high in the Filipino Cordillera (55). Its partner here is Lepanto Mining- a domestic company which has banned organising by the broad-based National Federation of Labor Unions (NAFLU) and uses its own private army to attempt to silence dissidents (56).

RTZ's Rossing uranium mine in Namibia enjoys the unenviable reputation of being the most condemned mining project of the twentieth century. No other mine has been the subject of United Nations resolutions, a UN-sponsored court case, and scores of demonstrations throughout Western Europe. Nonetheless, as already pointed out, the company's exploits in Namibia have gained a seal of approval from successive British governments. Given the degree to which the country's economic fortunes are dependent on mining, RTZ gambled that the longer it hung on in the territory, the more likely that it would be invited to remain after independence.

No such promises can be held out to indigenous people in regions where mining is seen as an unmitigated disaster. Indeed, it is remarkable that no indigenous community, anywhere affected by the Group's operations, has ever commented that life was improved by the company's presence. Ironically, it is in those areas where RTZ has pumped its costliest public relations and "good neighbour" efforts that local people are most ready to bite the hand that feeds them: Bougainville, the Australian Kimberleys, Wisconsin and New Zealand, for example.

RTZ has therefore had to expend a disproportionate amount of time and energy in counteracting the growing strengths of indigenous people. Certainly it has not flinched from violent threats. Not only did an RTZ board member once threaten to "squash Survival International like a fly, if we didn't get off their backs" according to Survival International President, Robin Hanbury-Tenison (57). But, an Aboriginal activist who helped expose CRA's links with Anglo-De Beers of South Africa over the marketing of Lake Argyle diamonds once swore, he was nearly run over in a Melbourne street by a company car (58).

However, these are exceptions to what has proved to be the general rule about RTZ Group dealings with land-based peoples: keeping the lowest profile possible, and opening-up as many fissures as it can within indigenous organisations themselves. It is a technique which was born in Cape York (where a company- sponsored Council has often been at odds with other Aboriginal people), honed at Lake Argyle (where a small family group was separated from the rest of the community and inveigled into signing away its land rights) and most recently attempted in Australia's Western Desert. As one close observer of events there summarised the company's ploys in 1989: "CRA early on established that the majority of the Western Desert people - the Martu - were adamantly opposed to uranium mining. Instead of sitting down with the Western Desert Land Council and discussing their fears, the company sought to undermine them, by signing deals with another community whose claims on the area were weaker, but whose organisation was stronger. This group also operated their own mining projects in the past and were therefore considered softer targets by the company" (59). CRA failed to get the go-ahead to open up the mine. Early in 1990, Australian Prime Minister, Bob Hawke, banned the project just before scraping home in the March Federal elections with "green support" (60). Later, the state government waved CRA back into Rudall River.

Paradoxically, a few years earlier, Comalco had developed a model for negotiations with Aboriginal people which some anthropologists view as the best yet. The "Pitjantjatjara model" enables Aboriginal communities to define areas which are sacred to them, without the need to divulge their exact location and risk their inviolability. However, the paradox is more apparent than real. The Pitjantjatjara people were in the process of gaining land rights with some real teeth when Comalco became interested in their land: the company needed to project itself as more liberal and beneficent than other contenders for the mineral deposits (61). RTZ and CRA's real view of Aboriginal aspirations is best glimpsed from a combative statement made by CRA chair, Sir Roderick Carnegie, at the 1984 annual general meeting of RTZ: "The right to land depends on the ability to defend it" (49).

Conflicts between the RTZ Group and indigenous peoples are bound to continue well into the twenty-first century, although the field of combat is likely to shift, as the company expands in the mainland USA and forages further into Asia. Thanks to the 1989 takeover of BP Minerals, just over half RTZ's investments are now to be found in America, although a mere 3% of its shares are held by North Americans (7). As the Mining Journal put it in March 1990: "... the group is aiming for a share listing on the New York Stock Exchange in June this year. This is expected to attract the institutional investors. The medium term target is for around 10% of RTZ's equity to be held in North America" (62). By summer 1990, the company had obtained its listing.

At the same time, the company's Chair, Derek Birkin, is determined not to let any opportunity slip in Asia: "The Pacific Rim is a region of growing importance," he said in 1990. "By the turn of the century ... there will be a southerly shift in world economic power, away from the old axis of Northern Europe and North America, while between 20% and 25% of current metals demand now comes from developing countries, especially those in South East Asia". Birkin forsees these nations "... performing the same function for overall growth rate, as Japan did in the 1960s" (63).

A few years ago, RTZ might justifiably have regarded these two regions as malleable propositions: North America as an area starved of new investment, where the power of the mining unions has been broken; South-East Asia as an eldorado of untapped reserves where pliable governments (such as Indonesia, the Philippines and even Vietnam) are content to leave the running to heavyweight outsiders.

Certainly it has made headway here which is the envy of many other miners: becoming the first multinational to conclude a mining agreement with the Beijing regime (63), manager of the biggest new coal mine in Indonesia, Kalimantan (64), and the company which broke a prolonged stalemate on iron ore prices to Japanese smelters (65).

But two developments shook its confidence at the turn of the decade. The first, and most important, was the growth of a guerilla army on the island of Bougainville which, over the space of a few months, transformed itself from an apparent rag- taggle band of discontents into a potent fighting force. Led by Francis Ona, an ex-employee of the huge Bougainville Copper mine which RTZ established in the 1970s while Papua New Guinea was still an Australian protectorate, the Bougainville Revolutionary Army (BRA) campaigned for compensation to be given to traditional land-owners, dispossessed by the company's operations and suffering the effects of massive pollution. As Perpetua Serero, leader of the island's matrilineal landowners, told a visiting reporter in 1988: "We don't grow healthy crops any more, our traditional customs and values have been disrupted and we have become mere spectators as our earth is being dug up, taken away and sold for millions. Our land was taken away from us by force: we were blind then, but we have finally grown to understand what's going on" (66).

Regular attacks by the BRA against mine installations, mineworkers, visiting politicians and expatriates, forced the mine to close in May 1989 (67). The Papua New Guinea government of Robbie Namaliu was incensed: Bougainville copper generated up to 20% of the country's internal revenue, and was its biggest export earner. CRA, operator of Bougainville Copper, was only a little less disturbed. For while defaulted copper contracts could be fulfilled from other RTZ mines - business was more likely to go to competing companies, such as Freeport in West Papua. Other CRA projects in the country were also put in jeopardy.

Finally, in the closing days of 1989, as we now know, CRA packed up, told its Australian personnel to leave the island, and put the mine in mothballs. Only two months later, thanks to a political shift towards a non-military solution by the central government, a ceasefire was signed with the BRA. Sam Kauona, military chief of the BRA, urged his forces not to damage the abandoned mine, in case it could be "re-opened in an independent Bougainville" (67). The prospects of that happening are admittedly slim. The term "to bougainville" is now common currency among indigenous people in the Pacific region: it is synonymous with the increasingly militant stance being adopted by traditional landowners in the face of multinational mining and natural resource corporations, and what they see as the collusion of their central governments (68). (For example, major blockades were mounted by Highlanders in Papua New Guinea in 1989, to gain a renegotiation of the Ok Tedi mining agreement (68, 69) (see BHP).

Nor have the ripples from Bougainville ended on the Pacific rim. In January 1990, at a "shop window" called by RTZ to sell itself to institutional investors in New York, the company got a rough ride. Said an investment advisor: "They were expecting to talk gold and ended up talking rebellion" (70).

And it is from North America that the latest challenge to RTZ's well-laid plans has erupted. Kennecott Copper (through its subsidiary Flambeau Mining) tried to mine the lucrative Flambeau deposit in northern Wisconsin in the 1970s. Spurred by dairy farmers, the local government turned down zoning permits for the mine. Kennecott and Exxon then turned their attention to the state authorities and, between them, they developed a "consensus decision-making process" which, according to Al Gedicks of the Center for Alternative Mining Development Policy, has now opened the door to "resource colonialism" in this part of the USA.

Says Gedicks: "The approach involved an alliance between mining corporations and the state to neutralise potential opposition. The mining industry's enthusiasm for the consensus approach is hardly surprising - only those groups already in favor of mining are allowed to participate" (71).

When RTZ took over BP Minerals in 1989 and, with it, complete control of Kennecott, the Flambeaa mine swiftly came off the back burner. Kennecott and Exxon, according to Gedicks, "determined the precise wording of key pieces of legislation, while Exxon lobbyist James Klauser helped reframe the state's groundwater protection bill "to a policy of allowing the mining companies to pollute the groundwater to federal drinking standards". Asked if these standards are stringent, Gedicks responds curtly: "Hogwash!".

The farmers around Flambeau agree with Gedicks, and so do the Lac Courtes Oreilles band of Chippewa who, in an unprecedented move in 1990, joined protests against the mine as an official party.

For the first time in years, a coalition of farmers, environmentalists, Treaty rights supporters and indigenous people has mobilised to defeat a mining proposal in mainland USA.

It is a potent mixture that has derailed RTZ in the past, and is bound to do so again. As people around the world increasingly see this planet for the fragile, finite, but infinitely various and marvellously sustainable homeland it undoubtedly is, such coalitions are bound to grow.

Contact: PARTiZANS, 218 Liverpool Rd, London N 1 1LE, UK.


SOURCE: "The Gulliver File - Mines, people and land: a global battleground" by Roger Moody.

Published in 1992 by Minewatch, 218 Liverpool Road, London Nl ILE, UK, and WISE-Glen Aplin, Po Box 87, Glen Aplin Q 4381, Australia.

Distribution: Sales to bookshops: Pluto Press, 345 Archway Road, London N6 5AA, UK. Sales to the mining industry and libraries: Uitgeverij Jan van Arkel, A. Numankade 17, 357t KP Utrecht, the Netherlands.

***Note to electronic texts: selections from Minewatch are available to researchers on corporate and mining affairs. However, the detailed REFERENCES and CHARTS in the print version are not available in electronic form. You are encouraged to order the complete book from the sources above.***

All rights reserved. � Minewatch, 1992.


Page last updated December 1, 1997.
Back to the Gulliver Archivesor Back to the Beverley Archives

Copyright � SEA-US 1997