$Unique_ID{COW04174} $Pretitle{267} $Title{Zaire Chapter 4D. Heavy Industry} $Subtitle{} $Author{Donald P. Whitaker} $Affiliation{HQ, Department of the Army} $Subject{percent production mining tons copper government shaba early output umhk} $Date{1978} $Log{} Country: Zaire Book: Zaire, A Country Study Author: Donald P. Whitaker Affiliation: HQ, Department of the Army Date: 1978 Chapter 4D. Heavy Industry Mining Mining in the late 1970s was largely centered in the southeastern and eastern parts of the country with the exception of petroleum production, which was found in the far west in Bas-Zaire Region (see fig. 9). The greatest concentration of minerals was in Shaba where large resources of copper, cobalt, zinc, and manganese were located; gold, silver, cadmium, and other minerals were obtained as by-products. Shaba also had deposits of tin and contained most of the known coal. Major diamond deposits were found in the two Kasai regions; Kivu had tin, tungsten, gold, and rare earths; and the northeastern part of Haut-Zaire was a main source of gold. Zaire was the world's largest producer of cobalt and industrial diamonds, and ranked seventh in mine production of copper in the mid-1970s. The mining sector became an important growth factor in the monetized sector of the domestic economy beginning from the early colonial period, especially after the start of copper mining and production in the first and second decades of the twentieth century. After independence in 1960, the drastic drop in commercial crop production, coupled with the rather general stagnation in the agricultural sector-which continued into the late 1970s-gave mining an even greater significance. Mining products in the mid-1970s accounted for about 75 percent of export earnings, and the mining industry (primarily GECAMINES) provided close to 45 percent of ordinary annual government revenues. The sector's contribution relative to GDP and to wage employment, however, was smaller, amounting to about 24 percent of monetary GDP in 1975 at constant 1970 prices and accounting for about 12 percent in fulltime equivalents of the wage labor force (in 1973). Development of the Shaba (Katanga) Mining Industry, Late 1800s to 1960 The presence of copper ores in Shaba was known to Africans at least as early as the first millennium A.D. Belgian explorers in the 1890s, however, concluded that the deposits were of little value. Influenced by their reports, the Compagnie du Katanga, a holding company of the Belgian financial group Societe Generale de Belgique (SGB), chartered in 1891 and given huge land grants in the Congo, including about one-third of Katanga, generally ignored the area throughout the 1890s (see The Belgian Period, ch. 1). In 1900, dissatisfied with this lack of activity, King Leopold II established the Comite Special du Katanga (CSK) to pursue active exploration and development of the southern Katanga region, with two-thirds of any profits going to the state and one-third to the company. CSK in the same year granted prospecting rights in its holdings to the British firm Tanganyika Concessions, in which both SGB and the Compagnie du Katanga had interests, and which itself had concessions in Northern Rhodesia to the south. In 1901 a British expedition found evidence of rich copper ores in the region, a finding confirmed the following year by a Belgian engineer. Leopold then decided that a railroad should be built entirely within Belgian territory to evacuate the anticipated mining output; in part this was also intended to increase Belgian control and forestall a push into Katanga by the British from the south. As it turned out, work on the first section of the railroad, which originally was envisioned to run from Katanga to Matadi in present-day Bas-Zaire, did not actually begin until 1911, when its construction was undertaken by the Compagnie du Chemin de Fer du Bas-Congo au Katanga. This section, completed in 1918, was part of the Chemin de Fer Kinshasa-Dilolo-Lubumbashi (KDL) in 1978 (see Railroads, this ch.). Meanwhile, in 1906 what was to have far-reaching consequences extending to 1978 for the development and exploitation of the Katangan mining region occurred in the formation of the mining company Union Miniere du Haut-Katanga (UMHK), headquartered in Belgium. CSK was the principal stockholder-through which part of the profits regularly passed to the state-followed by Tanganyika Concessions and SGB. In 1911 the first UMHK smelting plant went into operation, producing 1,000 tons that year. By 1914 production had risen to well over 10,000 tons. New equipment continued to be installed and new mines opened, and in 1928 UMHK produced over 100,000 tons, which was 7 percent of world production for that year. The worldwide depression of the early 1930s brought heavy cutbacks, but in the late 1930s and through the 1940s output averaged over 150,000 tons annually. Production was over 200,000 tons in 1952, and in 1960, the year of Zairian independence, it reached more than 300,000 tons. Until 1928 copper exports went both via Rhodesia and Mozambique to the port of Beira, and through Tanganyika to Dar es Salaam. In 1928 transport also began via the internal rail-river-rail route, known today as the Voie Nationale (National Way), from Elisabethville to Port Francqui, Leopoldville, and the ocean port of Matadi. With the opening of the railroad to Lobito in Angola in 1931, movement via Dar es Salaam stopped. From the early 1930s to 1959 the Voie Nationale carried roughly 45 percent or more of copper exports, with Beira transshipping some 30 percent and Lobito about 20 percent. The Zairian Mining Industry after Independence Independence had little effect on the status of holdings in the mining sector. Certain changes, however, occurred with respect to the three so-called Concessionary Powers that had been given broad rights by the colonial administration to grant on their own mining and other concessions over vast areas of the Congo; roughly half of the country's entire area had been granted to companies and individuals by those powers before independence. One of the three, CSK, holder of a substantial block of UMHK shares, was dissolved on the eve of independence by a Belgian decree, but it was not until 1965 that the Compagnie du Katanga, which held the stock, reached agreement with Prime Minister Moise Tshombe on its distribution. Another, the Comite National du Kivu (CNKI), was transformed into the Societe Belgo-Africaine du Kivu (SOBAKI), which retained the right to exploit its predecessor's mines. The third organization, Compagnie de Chemin de Fer du Congo Superieur aux Grands Lacs Africains, simply lost its power to grant mining concessions, which was assumed by the government. The situation otherwise remained undisturbed by government action through 1965. After the takeover of the country by the army and installation of Joseph-Desire Mobutu (Mobutu Sese Seko) as president in November 1965, however, relations between the government and UMHK deteriorated, in part because Mobutu suspected that UMHK was loyal to Tshombe (see Political Developments, 1965-78, ch. 2). In April 1966 UMHK announced a rise in the price of copper in line with those of other world copper producers. The government was not consulted in advance, and UMHK was accused of being a state within a state. Two months later a law was promulgated canceling in effect all land, forest, and mining grants and leases made before June 30, 1960, and requiring current holders to reapply for the reissuance of their titles. A second law required all companies operating mainly in the Congo to transfer their headquarters there; this law appears to have been directed specifically at UMHK. UMHK applied for reissuance of the titles to its concessions and proposed establishment of two companies. One, owned equally by UMHK and the government, and with headquarters in Kinshasa, would handle Congo operations. The other, in which the government would also hold a share, was to be located in Brussels and assume all other UMHK interests. Discussions apparently were amicable, but in early December President Mobutu announced failure to reach an accord and demanded transfer of UMHK headquarters to Kinshasa as a requisite for renewal of the mining concessions. UMHK refused, and in late December the government formed the Generale Congolaise des Minerais (GECOMIN), which took over all UMHK assets in the Congo. In January 1967 UMHK was officially abolished, and the government took over its rights in thirteen subsidiary companies in the Congo. The country did not have the qualified technicians and managers to carry on operations on its own, and in early 1967 a three-year agreement was signed with the Societe Generale des Minerais (SGM), the former Belgian agent for UMHK, to assume responsibility for mining, processing, marketing, and procurement and for recruiting and providing foreign staff. SGM received 6.5 percent of GECOMIN's gross revenues in return. In 1969 a twenty-five-year extension of the agreement was signed providing for an annual payment to SGM of 6 percent of the value of the GECOMIN output for fifteen years, which covered compensation for the expropriated property and technical assistance. During an additional ten years the payment was to be 1 percent of the annual gross revenues; this would cover the cost of technical assistance and related expenses. In 1971, in connection with Zaire's new "authenticity" program, the company was renamed Generale des Carrieres et des Mines (GECAMINES). In 1974 a revised agreement was made with SGM to clear all remaining compensation through a payment of 4 million Belgian francs, then equivalent to approximately US$100 million, by March 1975; this sum reportedly was almost completely paid by early 1977. SGM also agreed to assist in the expansion of the Shaba copper refining operation and in the establishment of casting facilities in Bas-Zaire Region. It was also to provide for a time technical help in the operation of the Zairian marketing organization, Societe Zairoise de Commercialisation des Minerais (SOZACOM), set up in 1974 to handle GECAMINES production. The government from the late 1960s took the position that expansion of copper production was highly desirable from the standpoint of increasing foreign exchange earnings. It not only pressed for the expansion of GECAMINES operations and facilities but also granted exploration and mining rights to two new companies. The first of these, known since 1971 as the Societe de Developpement Industriel et Minier du Zaire (SODIMIZA), in which the government took a 15-percent interest with the remaining 85 percent held by a consortium of Japanese companies, was set up in 1969. The concession of over 93,000 square kilometers lies in the Zairian section of the Zambian copperbelt, southeast of the GECAMINES holding. Production of concentrates, which were shipped to Japan for refining, began in late 1972 and in 1976 amounted to some 36,000 tons of contained copper. A second mine opened in late 1977. The agreement included a provision that when output reached 60,000 tons of contained copper, the Japanese interests might buy the entire output, but refining facilities would then have to be built in Zaire if adequate electricity were available. The second venture was by parallel, commonly owned exploration and mining companies established in 1970, in which the government held 20 percent and an international consortium of American, British, French, and Japanese interests held 80 percent. Exploration rights were granted to an area totaling some 30,700 square kilometers-all but 5,000 square kilometers of this were later given up. A large deposit, reportedly having a high copper and cobalt content, was found west of Likasi in the area of the towns of Tenke and Fungurume. The mining company, since 1971 called the Societe Miniere de Tenke-Fungurume (SMTF), initiated development work in the 1,425-square-kilometer concession it received in the area, but financial difficulties caused by increased costs and the closing of the railroad to Lobito, the use of which was essential to make the operation profitable, led to suspension of the project in early 1976. Information on renewal of activities was unavailable in early 1978. Mineral and Metal Production Copper, Cobalt, and Zinc The mining and processing of copper, cobalt, and zinc were synonymous with the operations of GECAMINES until the start of production of copper concentrates in 1972 by SODIMIZA (see The Zairian Mining Industry after Independence, this ch.). The GECAMINES concession in southern Shaba covered about 18,000 square kilometers extending in a southeasterly-northwesterly direction for 360 kilometers and averaging about fifty kilometers in width. Mining operations were carried on in five open-pit and three underground mines in early 1978; however, some apparently minor damage occurred to the open-pit mines, and one underground mine was flooded in the Kolwezi area during the invasion of Shaba in May 1978 (see The Shaba Invasions, ch. 5). The company had rights to any minerals in the concession and processed a number of by-products from its copper mining operations, including zinc, cobalt (about three-fifths of the world's annual output), cadmium, germanium, gold, and silver. Half or more of the annual GECAMINES copper production was refined by the company domestically, and the remainder was shipped to Belgium for processing by SGM for the account of GECAMINES. In 1970 GECAMINES began a five-year expansion program (1970-74), which increased copper production by 100,000 tons to a total output of 460,000 tons. Cobalt production capacity was also increased from 12,000 tons to 16,000 tons annually. This first of what was to be a series of five-year undertakings was generally completed during 1975. The second plan (1975-79), estimated in early 1976 to cost overall about Z270 million (of which roughly half was to be financed from the company's own resources), aimed at a total production goal of 570,000 tons of copper and 20,000 tons of cobalt at the end of the plan period. The downturn of copper prices in late 1974 and 1975, reflected in the average copper price of Z530 per ton in 1975 against Z906 in 1974, had strong adverse repercussions on GECAMINES. In 1976 the company's production of copper, cobalt, and zinc was substantially below that for preceding years (see table 12, Appendix A). The drop in production was due largely to shortages of spare parts and supplies, including such essential items as coke, special fuels, gasoline, and the like, caused in turn by the sharp decline in foreign exchange to purchase these requirements. The loss of income also affected implementation of the expansion program. In 1975, accordingly, the government waived export taxes and duties amounting to Z47 million, and substantially larger amounts were remitted in 1976 and 1977; the remission helped greatly in meeting the self-financing aspects of the expansion projects. Equally important, from May 1976 the government also granted GECAMINES the right to retain and use directly half of its foreign exchange earnings. This permitted the company to settle its accounts with foreign suppliers and to reopen vital paralyzed supply channels. GECAMINES has carried on an active program to Zairianize its regular salaried staff. In late 1973 a Zairian African was appointed general manager for the first time. Africans, who constituted only 11.6 percent of the total in 1966, increased to 38 percent in 1973 and to 56.5 percent in 1976. Their numbers among the technical staff (mining and metallurgical operations), although increasing, remained relatively low, however, making up only about a third of the total in this category. Manganese Manganese is found at two locations in southwestern Shaba Region near the Angolan border. Only one deposit, near Kisenge, was exploited in the 1970s, by the Societe Miniere de Kisenge (SMK), in which the government had one-half controlling interest and a three-fifths profit share. Ore, from two open-pit mines, averaged between 40 and 42 percent; some three-quarters of this was upgraded to about 50 percent manganese; the remaining fines had 46 to 48 percent content. Annual production was over 300,000 tons in the early 1970s. The ore was exported via the Benguela railroad to the Angolan port of Lobito until the Angolan conflict closed the railroad in 1975. Production continued at a reduced rate, however, and ores were stockpiled; shipment through other transportation channels was too costly. In early 1977 the Shaba incident brought all operations to a halt at the mines, and they had not restarted as of early 1978. Tin Deposits of cassiterite, the chief source of tin, are found in a broad zone extending from near Bukama in Shaba northeastward through Kivu as far as Lake Mobutu Sese Seko. Associated with the cassiterite are ores of columbium, tantalum, and tungsten in commercially exploitable quantities. In the Shaba area, the main mining operation was of the open-pit type and was carried on by the Compagnie Zairetain (ZAIRETAIN), 50 percent of which was owned by the government and 50 percent by the Compagnie Geologique et Miniere des Ingenieurs et Industriels Belges (GEOMINES), which operated it. The deposits had been worked for more than a half century and in the 1970s were approaching exhaustion with reserves estimated sufficient to last only until sometime in the 1980s. The company's production of cassiterite concentrates has been declining-it dropped from over 2,500 tons in the mid-1960s to about 1,800 tons in 1972 and to about 1,100 tons in 1976 when it constituted roughly one-fifth of the country's total output. ZAIRETAIN also operated the nation's only tin smelter and was eager to exploit other deposits in the Shaba area. In this case, however, the cassiterite ore was in hard rock and would require a substantial investment in new equipment to extract. In late 1977 there were reports that the company was seeking financing for the project, which would also fund extraction of associated lithium. Tin mining in the Kivu area was conducted until 1976 by a half dozen companies. The ore deposits were rather widely scattered, and equipment was overage and had deteriorated. This situation was compounded by the distance of the mines from good transportation facilities, and costly haulage by truck was required. Well over 20,000 persons were employed by the mines, however, and in view of the large ore reserves, the government appeared desirous of keeping the mines in operation. As a measure to improve management, the several companies were merged in 1976 into the Societe Miniere et Industrielle du Kivu (SOMINKI). Cassiterite concentrates from the area, and those of tungsten, columbium, and tantalum, were exported for refining abroad. Gold Gold is found in Haut-Zaire, Kivu, and Shaba in minable quantities, but the only major gold mining operation in the late 1970s was by the state-owned Office des Mines d'Or de Kilo-Moto (KILO-MOTO). This company worked both alluvial and underground deposits, chiefly in Ituri Subregion in Haut-Zaire where the largest known deposits were located. Gold production by all sources was 2,684 kilograms in 1976, about one-sixth of the high point of 16,000 to 17,000 kilograms attained in the late 1930s and early 1940s. During the 1950s output had stood at about 11,000 kilograms annually, but after independence a number of companies stopped production, partly because of a drop in ore grade. During the 1960 decade output was maintained at between 5,000 and 6,000 kilograms a year. A further decline in the early 1970s brought the initiation of a ten-year prospecting program in 1975 by KILO-MOTO; a new mine was reported opened in the Ituri area in 1977 producing about two kilograms of gold a day. Diamonds Zaire mines both gem quality and industrial diamonds. It was the single largest producer of the latter, averaging about 12 million carats annually through the mid-1970s (11.5 million carats in 1976) and accounted for about one-third of the world's total yearly output. Industrial diamonds, known locally as lubilashi, came almost entirely from the area of Mbuji-Mayi in Kasai-Oriental where they occurred in kimberlite pipes relatively easily workable with mechanized equipment; a small percentage of gemstones were also recovered there. Mining was carried on by the Societe Miniere de Bakwanga (MIBA), which has been a fully government-owned company since 1974. Gemstones were mined in Kasai-Occidental near Tshikapa. They were found chiefly in alluvial deposits, which were worked both by MIBA and by individual diggers who secured licenses from the government. Production of gemstones at the beginning of the 1970s averaged about 1.7 million carats annually. From 1972 the reported output began to drop steeply, and production in 1973 was little more than half the earlier average. By 1975 only 385,000 carats were mined, and production declined to 305,000 carats in 1976. The Banque du Zaire concluded that the explanation for this drop was an increase in illegal sales abetted by the higher prices obtainable in bordering countries, compared with those offered by the national purchasing agencies, and the ease with which diamonds could be transported. Manufacturing Industries The country's modern manufacturing sector had its beginning in the decade after World War I, when plants for the production of cement, soap, textiles, and beer were established. The initial impetus was largely blunted by the effect of the worldwide depression of the 1930s. A new stimulus arose during World War II when Zaire's isolation from suppliers of manufactured goods in Europe encouraged the domestic production of consumer goods and spare parts. Some of these local manufacturers did not survive the reintroduction of competition after the war, but new plants successfully emerged that were largely staffed by expatriates and used modern competitive capital-intensive methods. Among them were enterprises processing domestic materials, such as palm oil for export, and import-substitution industriesproducing consumer items, such as textiles, beer, or goods having high transportation costs, such as cement. Growth continued during the 1950s, much of it accounted for by increased production in already established plants. At independence it was estimated that about one-half of the requirement for manufactured goods was made domestically, and value added accounted for about 6 percent of GDP. The manufacturing industries were in general less affected by the civil disturbances of the early 1960s since most plants were situated in either Kinshasa or Lubumbashi. At the same time, however, the reinvestment of profits declined, and investment funds from Belgium initially came to a virtual halt. Production of consumer goods, nonetheless, continued to expand during the 1960s stimulated by increasing demands from a growing urban population and aided by import restrictions and other measures that were designed by the government to encourage import substitution. In line with promoting industrial development, a new investment code was passed in 1969 (amended in 1974) that provided benefits equally to local entrepreneurs and foreign investors through various tax exemptions, deferrals, and the like. The applicable provisions of the code were decided on a case-by-case basis. An analysis made in the mid-1970s of actions taken concluded that the decisions to that time had tended to promote the establishment of relatively capital-intensive industries that used mainly imported materials to fabricate end goods. Significantly, among the new industries that began operations after 1969, a number of large-scale manufacturing plants, which included several automobile assembly plants, a flour mill, steel works, a and tire and tube factory, used imported raw materials and intermediate goods almost exclusively. In this respect, a government survey of businesses made in 1969 and 1970 had determined that at the time the country's manufacturing firms imported about 50 percent of their material inputs. An estimate in the mid-1970s suggested that the total had risen to almost 80 percent, and there were indications that the proportion was growing. It would appear, therefore, that although industrial expansion has taken place and the range and volume of domestically produced goods have grown, the new development has actually increased Zaire's import dependence. During the early 1970s the manufacturing sector grew at an average annual rate of about 6.5 percent. Growth increased to about 8 percent in 1974, only to be followed by a decline of over 8.5 percent in 1975 as the financial crisis, which had developed during the preceding year, resulted in shortages both of imported and local raw materials and intermediate goods for processing, as well as of equipment replacement parts. According to a report of the Banque du Zaire issued in 1976 little improvement in sectoral output could be expected during that year. The sector's relative contribution to GDP in constant 1970 prices, however, remained at about 9 percent in 1975, approximately the average for the 1970-74 period. Most of the country's manufacturing plants were found in two principal areas, the first including Kinshasa and Bas-Zaire and the second Shaba. A government survey of enterprises in 1969 and 1970 showed that at the time over one-third of all manufacturing establishments were in the first area and an additional one-quarter in Shaba. Later detailed data were unavailable, but on the basis of government investment projections of the mid-1970s it would appear that the vast majority of new manufacturing plants was being centered in the Kinshasa-Bas-Zaire region. The survey also showed that large- and medium-size manufacturing enterprises employed about 107,000 persons on a fulltime basis in 1970, while small establishments, many of them owner operated, had an additional approximately 23,000 workers. Industrial employment was estimated to have grown at over 8 percent annually during the first years of the decade, reaching over 150,000 in large- and medium-size plants in 1973. The most active areas of manufacturing in the late 1970s were food processing, textile manufacturing, metalworking and wood-working, and motor vehicle assembly. Among the large, more important plants in the food and beverage industry was a flour mill at Matadi having a capacity of 115,000 tons annually (1976 production, 94,300 tons). American interests owned 72 percent of the enterprise, the government 20 percent, and private Zairian interests the remaining 8 percent. Wheat for the mill was all imported, and the flour produced was destined almost entirely for Kinshasa, where bread and other wheat-flour products were used in place of cassava among many members of the urban upper and middle classes. Several sizable maize mills were located in the main maize growing areas in Shaba and Kasai-Oriental regions. Beer was produced in Kinshasa by three large breweries-two built in the 1920s, the third in 1973-and two smaller installations. Branch breweries belonging to the large companies were also found in the urban centers of the rest of the country. Most of the raw materials used by the industry were produced in Zaire. Sugar refineries were located in Bas-Zaire and Kivu regions (see Commercial Crops, this ch.). Cigarette manufacture was a major industry but dependent on substantial imports of foreign tobacco-up to 75 percent and more of the total raw materials consumed. The largest manufacturer was in Lubumbashi, with a branch in Kinshasa. The second largest producer had factories in Kinshasa and Kisangani. The textile industry included five major cotton spinning and weaving plants, facilities for turning out cotton prints-about three-fifths of the materials for which were supplied by domestic mills-and a plant producing material from synthetic fibers. The local textile industry dates from 1925 when a plant was established at Kinshasa; this expanded over time and in 1978 was the country's largest mill. In the post-World War II period, two other enterprises were started in Lubumbashi and a further one in Kalemie. The fifth major mill, located in Kisangani, began production in the mid-1970s. At that time domestic raw cotton sources were unable to meet the needs of the industry, and a substantial quantity of cotton was being imported annually. An important element in the textile industry was a plant in Kinshasa producing about 4.5 million jute sacks annually that were needed for bagging various commercial crops. Raw materials long had been jute-like fibers grown domestically, but in the mid-1970s local output had fallen substantially, and there was increasing dependence on imported jute. The domestic manufacturing of footwear started in a small way in 1948. Two large factories, one in Kinshasa, the other in Lubumbashi-operated by a subsidiary of the Bata international shoe manufacturers-produced about 90 percent of the total output in the late 1970s. The company turned out footwear made from leather, rubber, and plastic. All materials for plastic footwear had to be imported; domestic leather also was usually insufficient to meet manufacturing requirements. The wood and paper industry was less developed than other industries, and enterprises were comparatively small; they included a considerable number of small sawmills. Manufactures were veneer, plywood, furniture, and matches. The paper industry was in an embryonic stage, and paper products were made almost entirely from imported materials. Automobile, truck, and bicycle tires were produced by a Goodyear subsidiary in plants at Kinshasa and Kisangani using part of the domestic rubber output. Factories producing chemical and related manufactures turned out margarine, edible and industrial oils, paint, plastics, and the like. The largest operation in this sector was the GECAMINES chemical plant at Likasi in Shaba Region, which produced sulfuric acid; the output, however, was used entirely by GECAMINES. A number of foundries produced cast iron and bronze articles and various semifinished products from copper, zinc, aluminum, and brass. The largest metal fabricator was Compagnie Chanimetal, which turned out a wide range of items including daily use products and agricultural tools at its industrial complex at Kinshasa. The company was also a major ship repairer and the country's largest transportation equipment manufacturer fabricating barges and tugboats. Other important metalworking enterprises were located in Lubumbashi, Kisangani, and other urban centers. An iron and steel works more than three-quarters financed by German and Italian interests began operations in 1974 at Maluku in Bas-Zaire Region. The plant produced reinforcing rods for concrete, shapes, and laminated, galvanized and corrugated sheets. The plant's capacity of 125,000 tons a year was far from being attained, however; the combined output of all products totaled only some 9,400 tons during the first nine months of 1976. Dependency on imported materials was very high, the iron sheets, steel and scrap used by the plant coming almost entirely from abroad. In addition to the negative impact on the economy of large imports of basic raw materials, overdevelopment of industrial capacity has resulted in underutilized facilities. Explanations for the construction of excess plant capacity were not readily determinable, but at least in part it seemed to have arisen from a lack of adequate and coordinated overall development planning. A major case in point was the cement industry, which had a total plant capacity in 1978 of over 1 million tons annually, considerably in excess of domestic requirements. The two principal plants in 1978, both in Bas-Zaire Region, had a combined capacity of roughly 930,000 tons, and two smaller plants, located in Kalemie and Lubudi in Shaba Region, had a total potential of 125,000 tons. Most of the demand for cement was in Kinshasa and Bas-Zaire where shortages in production at the beginning of the 1970s, equivalent to about a quarter of the demand, led to an approximate doubling of the capacity of the then sole cement plant in the region to some 630,000 tons-this plant was operated by the Societe des Ciments du Zaire (CIZA) in 1978. At about the same time, however, construction of a new plant in Bas-Zaire having a capacity of 300,000 tons was also agreed on between the government (51 percent interest) and a West German firm (49 percent); this plant started up in 1974. In 1976 the two plants together produced about 465,000 tons (about half their capacity), a quantity that met general requirements in western Zaire, permitted shipment of an unknown quantity of cement to the interior, and also allowed some cement to be exported.