MAC: Mines and Communities

Vertical control and growing scandals

Published by MAC on 2001-05-01

Vertical control and growing scandals

In this context, it cannot be stressed too much that the uses of cement for small-scale, village-centred, development (homes, schools, health centres, local roads) are very limited in contrast to the opportunities provided by massive publicly-funded (unilaterally and multilaterally) infrastructure.

Not only are huge dams, bridges, four-lane highways, office blocks and ports a source of scandalously excess profits for some national elites (as recent revelations of corruption between politicians and the Japanese construction industry illustrate). It is clearly also in the self-seeking interests of multinational contractors bidding for mega projects to diversify "backwards" (or "upstream") into cement production, in order to control both the availability and the price of the raw materials. Over the past twenty years, a number of mining multinationals have themselves invested heavily in limestone quarries, gypsum, rock products and cement. In 1981, Rio Tinto (then RTZ), the world's biggest mining company, took over Tunnel Cement, which controlled some 20% of the lucrative British market. One of RTZ's ploys was to control the supply and price of cement for its expanded mine construction worldwide. (Rio Tinto sold out its cement interests six years later. (4))

Other big mining companies have increased vertical control and ownership over construction raw materials. The world's second biggest mining conglomerate, Anglo-American of South Africa, through its subsidiary MINORCO, owns major limestone and rock interests. HANSON is one of the world's most aggressive acquirers of quarry and construction materials (through ARC, and its bricks and cement division). MITSUBISHI of Japan - one of the world's biggest investors in mining acquires nearly 20% of its group sales from supplying construction materials. PASAR in the Philippines also has important interests in gypsum, granulated slag and calcine.

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