Countries of the World/COUNTRYS.BIN/dp/0417/04174.txt

Text File | 1991-06-25 | 34KB | 531 lines

$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. T