Mining in an Underdeveloped Country of Africa

CHAIRMAN

Sir Ronald is a man of interests that not only span all aspects Of the natural resource industries but extend as well to banking and agriculture.

Perhaps best known for his contributions to the copper industry, he was raised by a family prominent in the nitrates industry and serves our own International Nickel Company as a Director and the Mond Nickel Group as an adviser.

His interests are world-wide and his prominence in the mining world unchallenged. It is for all these reasons plus the combination of Chilean birth and English schooling that have served to bless the Rhodesian Selection Trust Group with such an outstanding Chief Executive.

A Central African industrialist with a world-wide perspective--it is now my pleasure to present to you--Sir Ronald L. Prain, O.B.E.

SIR RONALD PRAIN:

I should like to express my appreciation to your Club for inviting me to address you, a special occasion in a way, since it is St. George's Day. I am only too aware Of the distinguished list of speakers whom you have invited over the years, and in particular in recent weeks. My association with Canada is a long and happy one, extending Over a period of twenty-five years, and bringing me into contact with many of your provinces and people. Today, however, I have chosen to address you in my capacity as chairman of one of the great Rhodesian mining groups, and it is of Africa in general, and of Rhodesia in particular, that I shall address you.

Canada and Rhodesia have this in common, that they are the two greatest copper producing countries in the Commonwealth. But this copper is produced against two widely differing backgrounds; in your country it is only a part of a varied production of many commodities, agricultural and mineral, in what is regarded as a highly developed country; in Nor-them Rhodesia it is produced as the main product, in fact overwhelmingly the main product, of an underdeveloped country.

We live in a world which has so far failed to bridge the gap between the "have" nations and the "have not" nations. It is a twice-divided world: one which is divided politically into east and west, and economically into rich and poor, the north-south division of which Sir Alec Douglas-Home spoke to you in February. I believe that this economic division of the world is more important than the political division, and that the solving of the economic problem is more important than the solving of the political problem.

The creation of opportunity in vast areas of poverty and the fulfilment of hopes of millions of poor are the most important tasks of mankind today. That these opinions have gained some degree of universal acceptance is evidenced by the mere existence of the terms "developed" and "under-developed". There has been some extension of the social conscience from the local and national to the international level. It has not gone very far yet. For example, in the advanced countries it is generally accepted that the richer sections of the population pay a heavier share of such public and social services as universal free education. But at the international level, we still have a long way to go before, say, a child from the poorest Ethiopian family is able to have as good a start in life as a child in this country.

The magnitude of the problem, the enormous effort required in its solution, can be more readily recognized by considering the generally accepted list of developed coun tries. These are the United States, Canada, Japan, Australia, New Zealand, South Africa, the U.S.S.R. and the countries of Eastern and Western Europe. The rest of the world is under-developed. Two-thirds of the world's population is poor, and the poor are multiplying twice as fast as the rich. Two-thirds of the world's population has an average income in cash or in kind of $100 a year; for the other third, it is $1,000.

These are general statistics that cannot count the particular plight of the illiterate peasant whose income is largely composed of the often inadequate food he grows and eats; whose forbears knew nothing else, but whose children are awakening to the injustice of this divided world. In the whole continent of Africa there is only one country classified as developed and that is the Republic of South Africa. The rest are classed in varying degrees of underdevelopment.

I should like to consider in more detail the country of Northern Rhodesia, with which I have been associated for more than thirty years. It is a large, land-locked country. In 300,000 square miles it has a population of only 31/2 million people. Until recent times it was even more sparsely populated by Africans who were mainly forest-dwellers, subsisting on grain and root crops, supplemented by hunting and fishing. It was an existence in which man was dominated by his environment and in which his only link with the industrial transformation of the outside world was through the dubious agency of Arab slavers. Droughts and locusts, malaria and hookworm, slavers and warfare combined to keep the population numbers static. Great areas were, and some still are, uninhabitable through tsetse fly or water shortage.

In the fashion of most peasant communities, the social organization was then, and still is very largely, a small closely-knit community where politics, religion and society are based on kinship, and where work is a family or clan function for defined and limited ends, regulated by the sun and the seasons. These colonists who came from Europe moved from a continent where progress was accelerating in an industrial society into an area in which time had in most respects stood still. There was a gulf of misunderstanding between the two cultures and though there are bridges across this gulf today, some of them still carry only light traffic.

It was against this background that copper was discovered in the 1920's and a highly complex modern industry was developed which has become the foundation of the country's economy. In the 1920's Northern Rhodesia was a poor country which barely maintained even a skeleton of administrative and social services. The mining companies had to provide from their own resources almost everything that was needed.

After a quarter of a century of development, much of it under primitive pioneer conditions, we reached an almost complete social and administrative self-sufficiency within the industry. The presence of a very large primary industry brought a number of small secondary industries and services, and the development of commercial townships. Today the Copperbelt is by far the biggest urban area in the country; it has about half a million people, or a seventh of the population. It is the largest single industrial concentration in tropical Africa, and the most concentrated copper mining industry in the world.

The social and economic upheaval in Northern Rhodesia was very nearly strangled soon after birth by the depression of the 1930's. The perils and privations of this period were then followed by the controls and taxation of the war period and after a quarter of a century of activity we could say as the 1940's went out that the investors' money might have been more profitably invested in government bonds.

The great turning point in the fortunes both of the industry and the country was the devaluation of sterling in 1949. The exchange rate between the pound sterling and the U.S. dollar changed from $4.02 to $2.80, that is by about 44 per cent, and the price of copper went up in £ sterling by roughly the same proportion. The Copperbelt was instantly transformed from an interesting exercise in the pioneering of heavy industry in a backward country into an economic asset meriting substantial expansion. It profoundly influenced the formation of the late Federation of Rhodesia and Nyasaland when it became clear that Northern Rhodesia was no longer a poor and backward dependency but a worthy partner for its relatively more developed and sophisticated neighbour, Southern Rhodesia.

The fifteen years of relative prosperity have coincided. very largely with the rise to political consciousness of the African people. It is true that the stirrings of this movement could be observed long before. One of the pioneer administrators of the mines' African labour force wrote nearly thirty years ago the following words: "There is a restlessness among the more enlightened natives today which might be called the growing pains of the race; they are seeking a means to voice their opinions and have a say in their own destiny." This was a far from commonplace opinion of that time, but even its author would have been startled to know that thirty years later Northern Rhodesia would be on the brink of independent nationhood under an African government.

This rapid evolution has brought many new considerations to the mining industry. The first and most important discovery was of the remarkable adaptability of the African into an industrial society and his urgent desire to enter as fully as possible into the pains and pleasures of our western culture. This, I think, is in marked contrast to some other developing countries where the indigenous people have fought against, and retreated from, the encroachment of a new culture.

It followed naturally that there was a craving for the education and training that are the passport to a better life and to advancement in it. The prosperous years of the cop per industry have not yet enabled Northern Rhodesia to make up for the poor years in providing schools. The most recent census showed that nearly seven out of ten Africans in Northern Rhodesia have never been to school, and less than one in 200 has reached high school entrance standing. Only 13,000 in the whole country have the not very demanding minimum education for entry into the territorial army.

The mining companies began, very properly, by providing training and education for their own employees. However, with an increasing ability to accept broader responsibilities to the community than would be expected in a developed country they have extended help to a much wider field of education. As a simple example, during last year 20,000 employees or dependants of employees of our group alone took part in educational and training programmes ranging from adult literacy upwards. In the national field the copper mining companies have contributed about 10 million U.S. dollars towards training and education institutions.

This is not a wholly altruistic gesture. Whilst we recognize and accept our responsibilities to the country as a whole, through education and training we also serve our own industry. We hope, in fact, that through Our contribution to education we shall reap a harvest in the future in the shape of tomorrow's engineering and managerial staff, for mining is not an over-crowded profession in any part of the world. All Over Africa in the emergent countries there is fierce competition for the services of a still painfully small elite of educated men and women, not all of whom, of course, are suited to industry. For a long time to come, we shall have to compete with politics, the civil service, the foreign service, the medical, legal and teaching professions for recruits into the sciences and posts of responsibility.

A balance sheet of Northern Rhodesia would show on the credit side high exports on a per capita basis, higher in fact than those of many more developed countries; a domin ant industry which provides the mainspring of all economic progress; an agricultural potential which still has to be realised; an orderly transition from colonial to self-governing status; and good race relations. The debit side would show an imbalance of wealth as between the employed and the unemployed; an undue concentration in the urban areas both in terms of wealth and people, to the detriment of the rural areas; great arrears to be made up in the field of education; and lack of capital.

Under the conditions which I have so briefly outlined what are the responsibilities of management in such a situation? It is in the nature of mining management in any country that apparent conflicts have to be reconciled between the interests of the private sector and the public sector, but in the context I have given you these responsibilities lead to particularly acute problems.

There is the responsibility of management to watch the interests of the owners. Though we do have schemes to enable our employees to acquire a share participation in the companies, these owners are predominantly overseas.

There is next the general responsibility towards employees, in this case employees of two races, to provide adequate working, living, and social conditions which do justice as between the relative groups and at the same time justice to legitimate aspirations.

Next there is the responsibility of the industry towards government. Apart from paying its taxes, an industry such as ours has to take a very broad view of its responsibilities in helping government in many ways which industries in more developed countries do not have to consider. Industry has to work with government closely to ensure that industry itself does not create conditions which are likely to lead to the creation of disorder or inequality. In our case this co-operation is close and voluntary.

Then there is the responsibility of industry towards the community. There are vast communities whose interests depend ultimately on the mining industry. They include the secondary industries and the commercial services, all of whose interests can be damaged by thoughtless managerial policy.

There is the responsibility towards customers of the industry, in this case the users of copper throughout the world. It was probably natural in the past that management should think no further than in terms of receiving the highest possible price at any given time for its products. While this still remains one of the disciplines of efficiently run businesses, the highest possible price is not necessarily the best possible price, for industry has to take a longer view than in the past and has to think in terms of not only new markets but of maintaining old markets.

There is the responsibility towards other sections of the same industry throughout the world; this means primarily an acknowledgment that there are others engaged in the same business and that their actions must be viewed as a whole and not singly if the health of the whole industry is to be properly regarded.

Finally there is the responsibility towards the future. Nowhere is this more evident than in the mining industry which is concerned with a wasting asset. Not only does this mean the avoidance of reckless mining, but also the constant search for new reserves to perpetuate the industry.

A moment's reflection will show that the exercise of managerial judgment in our circumstances involves the risk of a clash of loyalties on a scale which finds no parallel in the developed countries. That the apparent dilemmas are resolved so frequently and so quickly often masks the true nature of the problem. Today these local problems however are attaining a wider importance and an extension into the international field.

There is as you all know at this moment a conference taking place at Geneva, the U.N. Conference on Trade and Development, which has an agenda such as can seldom have been presented to a world conference of this type. A study of this agenda shows that at Geneva there will be discussed questions which are vital to the under-developed countries and which between them add up to a catalogue of practically all the problems which are faced by countries such as Northern Rhodesia. Let me mention just a few of them. East-west trade, the question of stabilization of commodities, agricultural surpluses, regional grouping of the Lesser Developed Countries, the trade gap of these countries, the question of tariffs imposed by the developed countries, the investment of private and public capital, planning for development and industrialization of theLesser Developed Countries, access to markets, the problem of substitution, the general question of aid, and generally the measures necessary to close the increasing gap between the "have" and "have not" countries.

This list is so formidable that it may defeat its own objectives, and no One knows what may be the outcome of this conference. Yet the agenda is in itself an indication of the increasing consciousness of the world towards the underdeveloped countries and those which are reaching independence. Mining in an under-developed country is in the very centre of this world discussion; its success has created the problems, just as it has created the opportunities. The developed world cannot but take cognizance of these problems for, apart from any altruistic motives, the developed world is dependent in many cases for its material prosperity on the products and the political atmosphere of these Lesser Developed Countries. In the specific case of primary copper, very nearly half the world's supply comes from the underdeveloped sector. Violent and unpredictable fluctuations in the fortunes of the copper industry would have profound effects on the development of these countries, not only on the economic but on the political development and thus, in the long run, on the fortunes of the developed world.

In this great debate a country like Canada must be vitally interested. On the political front it must be interested in the orderly development of Africa, and in this context Northern Rhodesia is one of the two or three countries in sub-tropical Africa where the leadership of the continent may arise. Canada must be interested in the outcome Of any discussions on commodity stabilization agreements, both in the mineral and the agricultural sectors. And finally Canada with its position in the top group of developed countries must be vitally concerned in helping to close the gap between the "haves" and "have nots"; it must be ready to demonstrate its understanding of the problems and to make its contribution not only with financial aid but with technical assistance and sophisticated and sympathetic advice towards a solution of some of the problems which I have tried to outline today.

Thanks

Thanks of this meeting were expressed by Dean Macdonald of the Canadian Institute of International Affairs.