A Case For Greater Involvement Of The United Nations In Third World Mineral Developments

Our industry is in trouble. Real trouble. It has never been an easy, secure business. But to-day it is engulfed in revolutionary currents. No longer can there be reliance upon the checks and balances of market forces. Supply and demand largely dictated the economics of business enterprise in simpler days. To-day politics, in particular nationalism become increasingly dominant. And as governments expand and put out tentacles of interference in the direction of the mining industry, far too little understanding is evidenced as to how that industry works. Then there is something which is relatively new -stagflation. As the prices of minerals falls, the capital investment required for new extractive facilities soars at rates which far outdistance those which are cited by governments to indicate the magnitude of inflation. To illustrate; 1) In 1971 it was calculated that $355 million would be required to bring the Cuajone property in Peru into production. Five years later that stage was reached at a cost of $680 million. 2) With the Caridad mine in Mexico, estimated capital investment doubled between 1971 and 1976. 3) The requirements calculated for Cerro Colorado in Panama have risen in two years from $560 to $800. 4) The budget of $240 million for Sar Chesmeh in Iran in 1971 had become $500 million by 1976.