Brazil: Let Them Eat Minerals!
Miliman, Marsha
In contrast to its position prior to World War II as a major world exporter of raw materials, the United States presently depends on imports for almost half of its raw material needs. The...
...interests began pressuring the Brazilian government to allow the U.S...
...5 -Manganese Brazil is the world's third largest producer of this militarily strategic mineral...
...and EMJ, op...
...46-57...
...For the U.S...
...On December 13, 1968, Marshal Costa e Silva promulgated Institutional Act No...
...Realidade, pp...
...Although minerals now account for only 10 percent of exports, 6 the regime claims that minerals will replace coffee as Brazil's major export within the next decade...
...The United States is dependent on foreign sources for over 95 percent of its manganese needs...
...For more information on the Hanna Mining Co...
...5) The most ambitious timber operation in the Amazon is part of a $300 million project undertaken by billionaire shipping tycoon DANIEL K. LUDWIG, reportedly one of the world's six wealthiest men...
...2 2 Within a few months of the coup, on December 24, 1964, Marshall Castelo Branco promulgated a presidential decree which reversed the previous Goulart administration's trend toward a government mineral monopoly, and endorsed private development of Brazil's iron ore reserves...
...The New York Times, January 14, 1973...
...cit., p. 144...
...Realidade, October, 1971, pp...
...A third planned highway will cut across the northern part of Brazil, linking the territories of Amapa and Roraima and the states of Amazonas and Acre...
...MBR is 51 percent owned by EMPRENDIMENTOS BRASILEIROS DE MINERACAO (EBM) and 49 percent by HANNA-controlled ST...
...365-368...
...The United States currently depends on foreign sources for over 80 percent of its tin needs...
...foreign investment by insuring certain foreign investments against losses caused by expropriation, war, and currency regulations that might restrict the remittance of profits to the United States...
...Tin Brazil is estimated to have the world's largest tin reserves -- 10 million tons compared to the rest of the world's 7.8 million tons...
...The USAF surveys were of little help in the tropical Amazon Basin because aerial photography could not penetrate the cloud cover which shields large portions of the area...
...In December, 1966, Rio's Jornal do Brasil published statements by an Army colonel, claiming that North Americans used the survey in getting mining concessions in Minas Gerais and that the government agencies involved in the scandal refused to talk...
...Cimento Portland Itau, controlled by National Lead Company...
...STEEL's Brazilian subsidiary CIA...
...2) AMAZONAS MINERACAO is a new $500 million joint venture between CVRD (51 percent) and U.S...
...The ore is located in a 160,000 hectare Amazon concession in the state of Para...
...The backbone of the PIN is a 5,000 mile network of four main highways, the longest of which is the Transamazon Highway, stretching 3,000 miles from Belem o 5 the Atlantic coast to the Peruvian border...
...4 7 But what does foreign control of its mineral resources mean for the Brazilian people...
...They argue that the money in the regional lending agencies should be earmarked for projects that benefit the depressed areas moredirectly -- such as food processing industries and other domestically consged goods -- rather than for export industries...
...What emerges is a picture of huge foreign corporations aligned with local Brazilian capitalists, all scrambling to stake out and control the riches of the area with no regard for the general economic development of the area or Brazil as a whole, and total disregard for the environment and local Indian population...
...It consolidates the HANNA MINING/ST...
...Certain stages of the lead, zinc, and aluminum industries receive an income tax advantage in the form of an accelerated depreciation on their machinery and equipment...
...Semi-Controlled SLAR Mosaics for Project RADAM," by Rogerio C. de Godoy, Ministerior da Minas e Energia, and Jan W. van Roessel, Earth Satellite Corporation, 1971...
...Nationalists within Brazil successfully resisted these pressures, until the April 1964 military coup...
...cit., "Iron Ore in Brazil: The Experience of The Hanna Mining Company," pp...
...Niobium, formerly known as colombium, is a rare metal of the vanadium family used in alloys for jet engines, gas turbines and rockets...
...AMAZONAS MADEIRAS E LAMINADAS, a subsidiary of the world's second largest timber company, GEORGIA PACIFIC, has a 1.5 million hectare concession...
...Ibid...
...Another strategy for battering down the nationalistic Brazilian mining legislation was undertaken by U.S...
...ALCOA, for example, insured its alumina operations for $27 million against convertibility problems (alumina is the second stage of manufacturing aluminum from bauxite...
...The major bauxite operations in Brazil include: 1) ALCAN ALUMINIUM, a Canadian spinoff of ALCOA, is Brazil's largest aluminum producer...
...41 There is basis for this fear: as one Brazilian official threatened, "We are an imperialist power now, and we are letting the rest of Latin America know it...
...3. For an excellent discussion of the role of raw materials in imperialism see Harry Magdoff, The Age of Imperialism (New York and London: Monthly Review Press, 1969), and Magdoff, "Is Imperialism Really Necessary...
...it has the second largest known deposits...
...Steel's alignment with CVRD protected it from charges of total foreign control over the rich iron ore deposits, while at the same time giving it virtual control over much of the mining operation...
...Most deposits are in Minas Gerais and are worked by CIA...
...During these hearings in 1968, General Albuquerque Lima, Minister of the Interior, representing nationalist sectors of the Army, gave extensive testimony exposing the sale of Brazil's land to foreigners, bribery -4of Brazilian officials, and extraction of contraband ores...
...LITTLE BY LITTLE, BETHLEHEM IS HAULING BRAZILIAN LAND BACK TO THE UNITED STATES...
...Hanna Mining Company led the way, attempting to gain control over rich iron ore deposits in Minas Gerais: in 1956, Hanna purchased an old English gold mining company which had mining rights to the land where the iron ore was located long before the 1954 code was passed...
...EBM, in turn, is 61 percent owned by Antunes CAEMI, 19 percent by Daniel Ludwig's UNIVERSE TANKSHIPS and 20 percent by a Japanese group comprising six steel works and five trading companies.b Through management contracts HANNA has control of these manes...
...John d'el Rey, a Hanna Mining Company subsidiary...
...This mine lies adjacent to the ALCAN and ALCOA mines mentioned above...
...4. All U.S...
...3) KAISER ALUMINUM was the first American aluminum company to explore the Amazon (in the 1950's...
...But to the giant U.S...
...Chile nationalized copper and other U.S...
...One is that it will facilitate colonization of the Amazon to relieve political and economic tensions in the heavily populated and poverty-stricken Northeast by stimulating migration movements from the Northeast to the Amazon...
...Monthly Review, November 1970...
...The PIN calls for colonization of 50,000 families along these roads, and offers land at almost no cost, technical assistance and medical care...
...Brazil imports 40 percent of its aluminum needs but plans to be self-sufficient by 1985...
...1 23...
...companies in Brazil had taken out OPIC insurance totaling over $618 million...
...4) MADEIRAS GERAIS DA AMAZONIA, owned by Robbin Hollis McGlohn, operates a 300,000 hectare lumber concession next to GEORGIA PACIFIC...
...3) Import duties on machinery and equipment are waived for projects approved by the regional development agencies...
...4 0 Even though most of Brazil's neighbors -which include all South American countries except Chile and Ecuador -- have agreed to connect their road networks with the PIN system, some fear that the roads will facilitate BrazilIan economic and military invasions...
...Second-class postage paid at New York, N.Y...
...For more information on the use of satellites, see article by Nancy Stein, Chicago Sun Times, February 14, 1973...
...Edie Black, "Flying Think Tank Over the Amazon," NACLA Newsletter, October, 1969...
...But the people who have paid the highest price for Amazonian "development" are those who are closest to it -- the Indians, the miners, the colonists...
...2) Imperatriz, on the Tocantins river in Maranhao (site of diamond, manganese and iron ore deposits...
...and its U.S...
...investment in Brazil's raw materials industries totals over one billion dollars, the majority in the mining sector...
...Brazil will probobly receive substantial foreign exchange earnings from mineral exports -- but most of this money will never be seen by the majority of Brazilians, since it will be fed back into the U.S...
...A BITTER HARVEST From the preceding discussion, it should be clear that foreign mining investors and their Brazilian partners have been among the main beneficiaries of the policy decisions made by the military dectatorship which has ruled the country since 1964...
...From an interview with an Earth Satellite geologist in Berkeley, California...
...In addition, the CPRM established a fund from which mining companies can borrow money at low rates for investment in their various projects...
...Hanna Industrial Complex, 2o...
...27 As in the case of Hanna's joint venture with Antunes, U.S...
...builder of naval vessels...
...3) Altamira, at the junction of the Transamazon Highway and the Xingu river in Para, (just north of lead and copper deposits...
...unpublished paper, 1970), University of California, Berkeley...
...6 -from exploiting any of the new mineral resources it discovers...
...The rich mineral deposits, especially those in the recently opened Amazon Basin, help make Brazil a miner's cornucopia: the country has the world's second largest iron ore deposits, the third largest bauxite reweserves, the largest tin deposits, and abundant supplies of colombium, tantalum, nickel, cobalt, tungsten and other militarily strategic materials...
...Skillings Mining Review, 1971-1972...
...3 4 Nevertheless, the problem of gaining access to the resources remained, and in 1970 the Brazilian government unveiled its National Integration Plan (PIN) which drew heavily on the original Hudson Institute plans...
...The United States currently depends on foreign sources for at least 85 percent of its bauxite...
...See article on foreign aid to Brazil elsewhere in this issue...
...37 In addition to these new port facilities, the two existing ports in Hanaus and Belem will be renovated...
...The Goulart administration and the Brazilian Congress had resisted U.S...
...The refining of bauxite requires the largest amount of hydroelectric power of any major mineral, thus most refining and smelting operations must be located near major power sources...
...Thus, U.S...
...Presently, there are at least two other surveying programs with heavy U.S...
...It recently announced a $90 million Amazonian bauxite mining project on a 100,000 hectare concession near the Trombetas River in the state of Para...
...A private company spokesman in Rio reflected foreign investor approval of CPRM when he told the Engineering and Mining Journal, "We thought it was all over for private mining ventures when CPRM was created, but CPRIN has turned out 1 o be a very positive factor for the industry...
...As a result of this and similar charges, the Brazilian Congress launched an investigation into foreign concessions...
...Steel Serra dos Carajas project in Para is constructing a 400 mile railroad from the iron ore mine te to a new port at Itaqui, south of Belem...
...1 2 In the mid-50's, U.S...
...2. The Journal of Commerce, February 1, 1973...
...The U.S...
...The United States depends on foreign sources such as Brazil for over 30 percent of all its iron ore needs...
...The Northeast has 33 pereent of the country's population living on 15 percent of the land, while the Amazon has only 8 percent of the population living on 59 percent of the land...
...These corporations need to control supply, and thus prices and profits...
...305-306...
...For more detailed accounts of the Hudson Institute Study see The Washington Post, June 6, 1965...
...For more on the Brazilian Indians see Brazilian Information Bulletin #9, January, 1973...
...However, before underwriting these risks in a given country, the U.S...
...mining corporations, the Brazilian operations mean new sources of raw materials and their ready availability at a good price, as well as high profits and tighter control over Latin America's total resources...
...GRACE also mines tin in Rondonia in a joint venture with Brazilian interests called CIA...
...4) A subsidiary of Daniel K. Ludwig's NATIONAL BULK CARRIERS is opening a bauxite mine at his huge two million acre Monte Dourado complex in the territory of Amapa, 250 miles from Belem...
...Most of Brazil's manganese deposits are located in the Territory of Amapa, just north of the Amazon river...
...8Tax Incentives The following examples illustrate some of the tax incentives granted: 1) Companies established in the Northeast or Amazon regions before the end of December 1974, are totally exempted from taxes if the state development agencies, SUDENE and SUDAM,rule that they contribute to the region's economic development...
...This is how the Brazilians of the interior Amazon region have experienced the acclaimed "economic miracle...
...Brazilian Bulletin, March, 1972, p. 5. "16...
...A ROYAL DUTCH SHELL subsidiary (BILLITON) operates a $3 million 720,000 acre tin concession in Rondonia under the name of CIA...
...Meanwhile, Hanna Mining Company, U.S...
...Another source of information for this article was a Hudson Institute document, "April 24, 1967Hudson Institute Special Conference, Preliminary Evaluation - South American 'Great Lakes' Concept," September 15, 1967...
...businessmen...
...As one journalist forecast, if the government colonizes thousands of nordestinos along the Transamazon highway, the "poverty of the North ast will become the misery of the Amazon...
...FERUSA).c The Transamazon Highway network and the government's planned new port at Porto Velho will greatly benefit FERUSA and the 11 other big companies exploring for tin in Rondonia...
...In contrast to the political uncertainties that plague U.S...
...Seguranca e Desenvolvimento, op...
...BRASILEIRA DE METALURGIA E MINERACAO, a joint venture between INTERNATIONAL MINING CORPORATION (49 percent) and CIA...
...Little by little," wrote one jounalist describing the operations of a large U.S...
...Niobium Brazil has 60 percent of the world's known niobium reserves...
...Though the CPRM is governmentcontrolled, private investors hold a large bloc of its stock...
...Their close relationship to the Brazilian government also opens up the possibility of further investments in Brazil and more profits in the future...
...For example, the CVRD and U.S...
...Though iron ore is Brazil's principal mineral export, it still imports steel...
...148 ff...
...State Department negotiates an investment guarantee agreement with the foreign host government...
...Business Abroad, November 14, 1970...
...5) RIO TINTO ZINC has filed for 47 bauxite claims in Brazil...
...A Wild- Plan for South America's Wilds," Fortune, December, 1967, pp...
...Two years later, after U.S...
...It also envisioned an extensive highway network along which an agricultural colonization program could be created...
...Most Brazilian reserves are located in the Amazon Territory of Rondonia...
...Business Latin America, August 5, 1971...
...5 which dissolved Congress, thereby closing the investigation and precluding the possibility of any further such inquiries...
...Caterpiller, for example, has sold over 770 pieces of - 12 - machinery worth over $47 million to the builders of the Transamazon Highway, and its Brazilian subsidiary now controls an estimated 70 percent of the country's earth-moving equipment market...
...The Brazilian government has helped clear the way for large tin mining companies by outlawing garimpeiros, the individual prospectors...
...EMJ, op...
...Geological Survey Bulletin 1185-D, U.S...
...Many have already left the Amazon claiming the government has not come through with its promises for technical aid and medical care...
...46 Once again, the overriding reason for the PIN emerges: the need to open the Amazon's natural resources to exploitation, that is, to facilitate the transportation of people and machinery required to extract the riches and to ship them out of the region for final processing and manufacturing...
...DE MINERACAO FERRO UNION S.A...
...4) Itaituba, 12 kilometers from the 9 -Brazil in Perspective ?essoa HINA - 10 - LEGEND - Transamazon Highwa related road system SPorts * Brazil's Capitol * Other major citiesTransamazon and Cuiaba-Santarem Highway junction on the Tapajos river (just north of tin and gold deposits...
...Raymond Mikesell, "Bethlehem's Joint Venture in Manganese," in Foreign Investment in the Petroleum and Mineral Industries (Baltimore and London: The John Hopkins Press, 1971), pp...
...As one Earth Satellite geologist stated, "EarthSat is probably the largest amount of lid the mining companies are getting...
...Mineracao Brasileira Reunidas (MBR), an iron ore company with 49% shareholding by St...
...ICOMI), a manganese operation which is 49% owned by Bethlehem Steel and 51% by the Brazilian Antunes group...
...In January, 1972, the Woods Hole Institute of Massachusetts obtained a surveying contract from Brazil to look for mgganese, titanium, gold and other minerals...
...If this nation has survived the financial drain caused by the Brasilia project, nothing proves that it will be capable of surviving another gigantic financial bleeding...
...In addition to the road network, the National Integration Program provides for construction of new port facilities and renovation of old ones...
...Export-Import Bank, U.S...
...As a Manchester Guardian correspondent prophesied, "Every road now being driven through the tropical forests of the States of Amazonas and Mato Grosso is a nail driven into the coffin of the Brazilian Indian...
...1 0 Again, "in respoy e to the war effort and postwar requirements" the United States Geological Survey (USGS) undertook a massive series of studies of the mineral and water resources of the Amazon Basin during the 1940's and '50's...
...Brazil's bauxite reserves, believed to be the third largest in the world, are located primarily in the state of Minas Gerais (65 million tons) and Para in the Amazon (250 to 980 million tons...
...They have used their political influence with the Brazilian government to gain lush concessions (which they may sit on for years, awaiting proper market conditions), tax incentives and financing, in addition to a massive public works program of building roads, ports and hydroelectric facilities which will benefit their interests...
...Shortly thereafter, in the 1920's, U.S...
...Business Week, April 14, 1970, p. 35...
...8. EMJ, op...
...industrial base, see The Hanna Industrial Complex (NACLA, 1969...
...3 8 Most of the railroad projects currently underway are to be used by the iron ore exporters in both the Amazon region and the State of Minas Gerais...
...For the relatively few industrialists who have allied themselves with U.S...
...Previous attempts to cultivate the Amazon have yielded crops for two or three years, after which time the soil was exhausted of its mineral wealth...
...3 To compensate for the blows against U.S...
...2 5 The deposit covers an area of some 160,000 hectares (1 hectare equals 2.47 acres) but existing mining laws authorized a maximum of 5,000 hectares per concession to any one company...
...Brazilian Business, July, 1972, p. 10...
...Steel attempted to circumvent this obstacle by taking out one concession in the name of its Brazilian subsidiary and thirty-one concessions in the name of directors and old employees of the company.26 The Brazilian Ministry of Mines granted the first concession but held up the others for "further study...
...Report of the Parliamentary Commission on Investigations About Transactions Between National and Foreign Firms," Chamber of Deputies, Brasilia, September 6, 1968...
...enterprises 4 -- the United States has effectively installed a "friendly" military government in one of the world's last remaining unexploited areas of raw materials-Brazil...
...Smaller loans financing regional infrastructure projects are available from the Amazon and Northeast regional banks, the Mineral Resources Research Co...
...The other sources for this chart included the Engineering and Mining Journal, articles in Peruvian Times, Business Latin America, BOLSA Review, Brazilian Trends (Editora Abril), Brazilian Bulletin (Brazilian Government Trade Bureau), corporate annual reports, and especially Guia Interinvest Guide (Rio de Janeiro).Meridional de Mineracao, discovered what proved to be one of the world's richest iron ore deposits in the Serra dos Carajas mountains, in the state of Para...
...For the complex voting and non-voting stockholding arrangements which retain government control but allow private investment in CPRM, see Seguranca & Desenvolvimento, "A Compahia de Pesquisa de Recursos Minerais (CPRM)," Dr...
...Grace insured its Amazonian tin venture for $1 million (convertibility...
...government pressure...
...These benefits, in addition to the abolition of a law restricting profit remittances abroad, have all been obtained since the 1964 military coup...
...Originally he owned the land currently held by GEORGIA PACIFIC and exploited it for rubber...
...7. BOLSA Review, August, 1971...
...The fourth highway will connect Belem, at the mouth of the Amazon, with the federal capital, Brasilia...
...There are hints that once the road and port network is completed, construction will begin on a vast railroad network linking roads, ports and mineral deposits...
...kilometers in the Amazon and Northeast regions...
...Where previously barred from mining, now they have not only found and gained control of rich deposits, but have also been granted lucrative tax, financing, and infrastructure benefits by the government...
...Brazilian Information Bulletin, Berkeley, California, No...
...participation...
...oil operations in the 1930's...
...The government gives several justifications for the PIN plans...
...4 4 Fourth, a criticism that has come from groups all over the world, the construction of the Transamazon Highway and the colonization program have caused either the death or forced relocation of thousands of Brazilian Indians...
...investors in other countries, Brazil has gone out of its way to attract foreign investment...
...economy as a whole, the Brazilian mining boom means increased exports, especially in machinery and transportation equipment...
...The Brazilian military dictatorship is more concerned about gaining foreign exchange by increasing mineral exports than with gaining control of the country's natural resources...
...Brazilian Trends, p. 24...
...8 NACLA'S LATIN AMERICA & EMPIRE REPORT (Formerly NACLA NEWSLETTER) * Vol...
...On a portion of this land he intends to plant the world's largest plantation forest (other sections will be used for the world's largest rice paddy, sugar cane, palm oil, cattle and a bauxite mine...
...Ibid., p. 139...
...The dependence is almost complete for minerals that are strategic to the sophisticated military and space industries, such as tin, nickel, asbestos, manganese and tungsten...
...But even the politically more "stable" Canada and Australia ari demanding greater control over their resources...
...And on June 15, 1966, a reconstituted Federal Court of Appeals handed down a decision favoring Hanna's right to exploit the ore deposit, 2 3 thus partially reversing the 1954 mineral code...
...Steel's iron ore...
...Belem, at the mouth of the Amazon, is Brazil's most strategically located port for reaching both the United States and Western European markets...
...News & World Report, December 4, 1972...
...3 0 Another incentive given to U.S...
...Ronaldo Moreira da Rocha, Revista da Associacao dos Diplomados da Escola Superior de Guerra, Ano XIX, No...
...For the U.S...
...mining companies was to gain control over them -- no small task given Brazil's nationalistic mining code of 1954, which classified subsoil rights as public domain...
...4 / April 1973 Published monthly, except May-June and July-August, when it is published bi-monthly, at 160 Claremont Ave., New York, N.Y...
...4 3 Second, serious problems have developed in regard to the provision of technical, financial and medical facilities for the colonists...
...for a general discussion of Brazil as a subimperial power see "Brazilian Subimperialism," Monthly Review, February, 1972...
...Brazil's Amazon: Paradise or Hell...
...Sources: a) Business Latin America, March 2, 1972, pp...
...MERIDIONAL DE MINERACAO which mines one of the richest iron ore deposits in the world...
...7 A look at recent developments in mining in the Amazon reveals some of the major forces behind the push to "open" the region...
...2 8 2) Existing enterprises in these regions and new ventures not eligible for the 10 or 15 year tax holiday enjoy a 50 percent reduction in income taxes on any money they spend on projects which SUDAM and SUDENE consider important for regional development...
...METROPOLITANA DE COMERCIO E PARTICIPACOES (51 percent...
...economy for expensive imported goods and for servicing the growing foreign debt...
...Principal sources for the U.S...
...BRUMASA), a $20 million joint venture controlled by BRUYNZEEL (Dutch), the world's largest timber company, has the largest timber operations in the Amazon...
...Copyright ( 1972 by the North American Congress on Latin America, Inc...
...The announced objective of this $7 million project was to uncover new mineral resources and to help plan the transportation of ores from already known deposits.15 The Brazilian government contracted the Washington- and Berkeley- based Earth Satellite Corporation to provide the technical guidance and interpretation of photographs for project RADAM...
...The London publication Latin America reported recently on the widespread conditions of slave labor: If the position of the average Brazilian employee is bad, the worker in the Amazon region is far worse off...For nearly a year rumors have been circulating in the Brazilian press that 'slave labour' conditions exist on certain vast development projects in the Amazon area, notably on the one and a half million hectare forestry and farming estate of the United States multi-millionaire Daniel Keith Ludwig...
...demands on the new military government was that it sign such an agreement, which it did in February, 1965.32 As of June, 1971, over 55 U.S...
...ALCAN announced the Amazonian bauxite project would be more than an adequate substitute for its recently nationalized bauxite mines in neighboring Guyana...
...Some of the most important areas for raw materials are also the areas of intense struggle for national liberation - Southeast Asia, the Middle East, Africa and Latin America...
...and Cia...
...3 -UP THE AMAZON: A BIRDSEYE VIEW The U.S...
...Overseas Private Investment Corporation (OPIC)3 removes much of the risk of U.S...
...Address all mail to Box 57, Cathedral Station, New York, N.Y., 10025, or Box 226, Berkeley, Cal...
...Government Printing Office, Washington D.C., 1967...
...But this inquiry, combined with mounting popular mobilizations and demonstrations around the issues of political freedom and social welfare, proved to be too much for the dictatorship...
...3 6 The other ports along the Amazon will be constructed at 1) Santarem (near ALCOA's and ALCAN's bauxite concessions and Daniel Ludwig's Monte Dourado complex...
...Unlike Petrobras, the state owned oil company, the CPRM is prohibited (Continued on page 7)- Whdo's Minding The Mines?Bauxite Bauxite is the ore used for making aluminum...
...Department of Interior confidential report, "Political and Commercial Control of the Mineral Resources of the World: Manganese," estimated manganese ore reserves in the Brazilian states of Minas Gerais, Bahia and Mato Grosso...
...The Amazon venture, called MINERACAO RIO DO NORTE, lies adjacent to ALCOA's and Daniel Ludwig's Monte Dourado bauxite concessions...
...VII, No...
...In addition, the government claims it must populate and develop the Amazon for military security reasons - to establish Brazilian control andto provide easy access to the hinterland in case of "foreign encroachment...
...This meant gaining generous tax holidays, export duty exemptions, investment guarantees and financing from state agencies and having the government finance the major infrastructure costs -- ports, roads, railroads, and hydroelectric power plants, which are essential to the exploitation of minerals...
...Heavy rains can turn the largely unpaved roads into quagmires and trains can transport heavy ore cargoes quicker and cheaper than can the largest trucks...
...Nationalists have criticized the priority these government lending institutions give the exportoriented (mainly foreign controlled) industries...
...Steel venture in Brazil are Brazilian Trends, Editora Abril, 1972, and Skillings Mining Review, July 15, 1972...
...First and foremost, they feel the more than $1 billion which is scheduled for the roads and resettlement scheme could not only have been better spent on agrarian reform projects in the Northeast, but places a severe drain on the Brazilian economy...
...investors in Brazil, the investment guarantee program, involves both the U.S...
...The Exploitation of Mineral Resources in Brazil: A Case Study on the Manganese Industry," Ari Thaler et al...
...also see Raymond Mikesell, op...
...Even the Xingu Park National Reservation, set aside as a sanctuary for the Indians, was violated as the government secretly instructed road crews to change publicly announced plans and drive one of the major highways right through the reservation...
...Over 90 percent of Brazil's manganese is exported to the United States and the mineral ranks as Brazil's second most important mineral export (after iron ore...
...participation in Brazil...
...The original agreement also specified that these negatives were not to be made public...
...10027...
...2 4 In 1967, a Brazilian geologist working for U.S...
...1, 1971...
...According to the Brazilian magazine, Realidade, the port planned for Itaqui, on the island of San Luis, will be the shipping port for U.S...
...12 per year for institutions ($22 for two years...
...Even though this Hanna mining venture incorporated local Brazilian mining magnate Augusto Antunes, it was successfully blocked by nationalists at many levels of government...
...182-183...
...ALCAN has been allowed to retain majority ownership of MINERACAO RIO DO NORTE as well as management control (its negotiations with Guyana had broken down over the issue of management control).a 2) CIA...
...These deposits also contain two thirds of the known world supply of radioactive thorium used in the apace industry as a high strength steel alloy...
...investments in 1970, and Guyana expropriated ALCAN's bauxite operation in 1971...
...Air Force (USAF) to make a full anial photographic mapping survey of Brazil...
...4) Expenses incurred for surveying natural resources may also be deducted from income taxes...
...News Bulletin, Brazilian-American Chamber of Commerce, Inc., p. 2. 26...
...As one reporter observed, "Manganese is a vital hardening alloy metal without which warships, tanks and armor plates would yield to high powered shells like butter to a hot knife...
...CPRM), SUDAM and SUDENE...
...investor in Brazil, "Bethlehem [Steel] is hauling Brazilian land back to the United States...
...These Brazilians have also criticized a 1971 law which diverts 50 percent of SUDAM and SUDENE funds in the regional banks to finance the National Integration Plan (see below) and colonization plan along the new Transamazon Highway -- projects which also help the foreign investors more than local residents...
...and Brazilian governments...
...69-70...
...The two principal known iron deposits are in the famed "Iron Quadrangle" in Minas Gerais and in the Serra dos Carajas mountains in Para...
...It called for dams which would flood large areas of the Amazon basin to facilitate access to the region's resources and provide hydroelectric power for extractive industries...
...JOHN D'EL REY...
...LUDWIG has acquired about 2.4 million acres of land near the mouth of the Amazon which he controls through JARI FLORESTAL E AGROPECUARIA...
...The three companies that have U.S...
...mining corporations, this diminishing access to some areas means more than scarcity of resources...
...Agency for International Development) and multilateral (World Bank, Inter-American Development Bank) lending agencies to the Brazilian government...
...A 1919 U.S...
...Business Week, August, 1972...
...Steel's local subsidiary, - 7 - 3) SUPERFINAS MADEIRAS LTD., a subsidiary of TOYOMENKA, the world's fourth largest timber group, has built a large $18 million plywood and laminated wood factory at the mouth of the Amazon...
...The Hudson Institute plan, however, was dropped from public discussion after it caused a furor of nationalist opposition...
...What the Brazilian government calls integrated growth is merely an international dispersal of Brazil's national wealth...
...One Brazilian journal observed that as a result of the agreement forming Amazonia Mineracao in 1970, "about a dozen Americans today form part of the top management supervising the work of about six hundred Brazilians...
...Not surprisingly, the major miner and purchaser of Brazilian manganese is BETHLEHEM STEEL, the leading U.S...
...4 2 PIN critics focus on several aspects of the program...
...Although the Brazilian government now has maps covering this entire area, the actual RADAM studies will not be made public for three or four years -- except, of course, to interested investors...
...Latin America, March 9, 1973...
...Mexico, for example, refused to sign despite intense corporate and U.S...
...b) Skillings Mining Review, January 27, 1973, pp...
...For more on the Overseas Private Investment Corporation, see Yanqui Dollar (NACLA, 1971), p. 51...
...345-364...
...The Brazilian government set a goal of doubling Loading Manganese ore at Bethlehem's ICOMI mine the value of the country's 1969 mineral output by the end of 1973...
...investments in Cuba were nationalized after the Cuban revolution in 1959...
...In this article we attempt to reconstruct the story of the exploitation of Brazil's mineral riches, especially in the Amazon region, and touch upon some of the political and economic consequences of the drive to make that region "the mineral province of the '70's...
...After giving up on a site just 30 kilometers from today's ALCAN concession they are currently surveying "all over the states of Para and Amazonas...
...The executive decree establishing CPRM in August, 1969, charged it with encouraging and cooperating with the private investors in the basic geological research and exploration of new mineral deposits...
...c) Los Angeles Times, October 12, 1970...
...Steel was given mining rights for 80,000 hectares and an equal concession was granted to CVRD...
...5. Engineering and Mining Journal (EMJ), February, 1972...
...Reports have it that the various companies use armed guards to dissuade workers either from protesting or trying to escape, and it is even suggested that torture is used to keep the workers in line...48 Already the familiar social tensions of "boom" towns are part of the Amazon reality -- widespread prostitution, armed conflicts between small landholders and large ranchers, and a tremendously inflated economy (prices are often three times as high as elsewhere in Brazil...
...EMPRENDIMENTOS DE MINERACAO(CAEMI...
...OPIC private internal document, "Cumulative Report of All Political Risk Investment Insurance Issued Since the Beginning of the Program in 1948 Through June 30, 1971," Washington D.C...
...This tax exemption is valid for 10 years, but may be extended to 15 years if the industry is relatively unprofitable or if it uses particularly large quantities of local raw materials...
...According to Foreign Commerce Weekly (January 2, 1959), 'Manganese is a vital hardening alloy metal without which warships, tanks, and armor plates would yield to high powered shells like butter to a hot knife...
...45 Finally, the PIN critics point out that the road, railroads and ports which have been - 11 -planned will mainly provide for the export of Brazil's wealth, primarily to the United States...
...The production from his forests of fast-growing gmelina arborea trees is destined for export to Europe and the United States...
...The second one is being done by the Brazilian government-controlled CPRM (Mineral Resources Research Company) which has 60 surveying projects underway in Brazil...
...This incentive plan is valid until 1978 in the Northeast and until 1982 in the Amazon region...
...Steel began developing manganese deposits in Minas Gerais and exporting most of the ore to the United States...
...Ibid...
...investment and has usually been rejected by nationalist governments which fear it would jeopardize their sovereignty...
...SUBSCRIPTIONS: $6 per year for individuals ($11 for two years...
...6. "Brazil: Land of the Present," European Brazilian Bank Ltd., London, May 15, 1972...
...Timber The Amazon Basin contains one-sixth of the world's timber and is thus a primary target of exploitation and control for major international forest products companies who already control over 60 percent of Brazil's timber industry...
...Steel when faced with restrictions on how much land a mining concession could encompass...
...Steel and Union Carbide were also surveying in Brazil...
...amost all the ore mined by foreign companies is for export...
...2 0 Three of the six most important stock holders are companies with large U.S...
...This, much more than the colonization schemes and military security objectives, provides the economic justification for vast expenditures, particularly in the eyes of the World Bank and other foreign lenders who are supplying the primary financing for the project...
...94701...
...SUBSIDIZING U.S...
...For Brazil's military role in the Bolivian coup that overthrew the progressive Torres government in 1971 see Brasil en Bolivia: Lecciones de un golpe militar, Ramiro Sanchez, Ediciones Letras, Cuadernos Brasilenos 2, August, 1972: for discussions on the Sete Quedas hydroelectric facility on the border of Paraguay and Brazil, see "Brazilian Designs on Paraguay," Direct from Cuba (Prensa Latina), March 15, 1972...
...The other major iron ore mining projects include: 1) MINERACOES BRASILEIRAS REUNIDAS (MBR) a $90 million joint venture by several major companies in Minas Gerais...
...Under the original contract between the USAF and Brazil, the photographs were to be processed in the United States, but the negatives were to be returned to the Brazilian government...
...Iron Ore Brazil has 25 percent of the world's known iron ore reserves...
...Marsha MilimanReferences 1. U.S...
...These USGS surveys were one of the earliest foreign assistance programs to Brazil...
...as one geologist put it, they are prospecting "different levels of the same subsoil...
...and...
...It takes no prophet to see that such conditions foment social discontent, and ultimately, broad-based political resistance...
...Thus, in October 1970, the Brazilian Army Joint Chiefs of Staff, with support from the Ministries of the Navy, Health, Interior, Agriculture, and the Brazilian National Space Research Institute, launched Project RADAM (for Radar Amazon), one of the world's largest remote sensing projects...
...For more information on tin deposits near Porto Velho see Los Angeles Times, October 12, 1970...
...1) BRUYNZEEL MADEIRAS S.A...
...and 5) Porto Velho, along the Madeira river in Rondonia (site of extensive tin exploitation...
...A complementary highway runs 1,000 miles from the northern city of Santarem to Cuiaba in the South...
...Simon G. Hanson, Five Years of the Alliance for Progress (Washington: The Inter-American Press, 1967), pp...
...Steel and the U.S...
...ESTANIFERA DO BRASIL (CESBRA...
...Though the joint venture, called Amazonia Mineracao, is 51 percent owned by CVRD, management control is in the hands of U.S...
...interests, it means additional wealth...
...The government has planned a 400 mile rail network from the HannaAntunes Aguas Claras iron ore mines in Minas Gerais to terminal and port facilities at Sepetiba Bay, 60 miles southwest of Rio de Janeiro...
...One of the most notorious was a 1964 "Great Lakes" plan devised by Herman Kahn's Hudson Institute...
...Extraction will require construction of a deep water port, a 400 kilometer railroad, an airstrip and housing for 2,500 miners...
...JOHN D'EL REY holding with those of Antunes' CIA...
...The major producer is INDUSTRIA E COMERCIO DE MINERIOS (ICO(I), a joint venture between Antunes' CAEMI (51 percent) and BETHLEHEM STEEL (49 percent...
...According to one account, this deposit contains enough ore to provide annual exports of $200 million for 200 years, for a total value of $40 billion...
...One of the first U.S...
...The survey itself was carried out by Aero Service Corporation, an affiliate of Litton Industries, and most of the equipment was supplied by Westinghouse.16 By using "side-looking" radar (SLAR) and such instruments as infrared scanners and "spectral" cameras, RADAM has provided a detailed cartographic description of both the soil and subsoil of over 4.5 million sq...
...In July, 1964, after a go-ahead from the new military regime of Marshal Castelo Branco, the USAF started flying low level photographic flights over areas of Brazil that were believed to contain rich mineral deposits...
...Although BETHLEHEM is minority shareholder it controls the mining through a management contract...
...Osny Duarte Pereira, A Transamazonica: Pros e Contras, Civilizacao Brasileira, 1971, pp...
...but it was soon obvious that they were being widely circulated among U.S...
...Financing As described in the article on foreign aid elsewhere in this Report, most of the financing for large infrastructure investments has been obtained through loans made by the major bilateral (U.S...
...pressure to sign an investment guarantee agreement prior to the 1964 coup...
...The road will cost more than a developing nation can afford," said a Brazilian official...
...unpublished paper, anonymous...
...it was on the verge of being finally quashed by the Supreme Court when the military coup of April 1964 saved the day for Hanna...
...control of raw materials in Latin America -Mexican, Cuban, Chilean and Guyanese expropriations of U.S...
...OPERATIONS After locating and gaining control of the raw materials deposits in Brazil, the foreign mining investors had to arrange for the state to subsidize their operations as much as possible...
...This guarantee establishes various protective measures around private U.S...
...2) CIA...
...government and private corporations first became interested in Brazil's mineral deposits around the time of World War I. They were looking primarily for manganese, one of the most important ores used in manufacturing military hardware...
...VALE DO RIO DOCE (CVED), 86 percent government owned, is Brazil's major ore producer...
...2 1 GAINING CONTROL OF THE MINERALS Once the mineral deposits had been located, the next step for the U.S...
...cit., p. 4 24...
...Two-thirds of the country's iron ore production is exported...
...It has bauxite mines, refineries and smelters in the state of Minas Gerais and a fabricating plant in Sao Paulo...
...interests are: Industria e Comercio de Minerios, S.A...
...This dramatic increase in dependence on imports means the economy is becoming much more vulnerable to external forces and to the rising tide of nationalism around the world which is threatening access to present supplies...
...Mexico nationalized U.S...
...BOLSA Review, January, 1972...
...4 9 And, as already described above, the Indians are being driven from their homelands and forcibly removed to reservations where they are not safe from further incursions -- that is, if they are not killed outright...
...and Hanna Mining took out a policy for $9 million on its Alcominas aluminum operations...
...The National Integration Plan Foreign interests have devised numerous schemes for transportation and colonization in the Amazon...
...Manchester Guardian/Le Monde (Weekly), December, 1972, "Cultural Liquidation or Final Massacre," by Timothy Ross...
...Third, only 1.5 percent of the Amazon has fertile soil suitable for agriculture, and even this small area must be constantly fertilized to compensate for the minerals washed away by heavy annual rains...
...138, 1970, Brazil G.B., p. 24...
...9. Foreign Conmerce Weekly, February 2, 1959...
...Steel agreed to develop the iron ore deposits jointly with the largest Brazilian iron ore company, the stateowned Companhia Vale do Rio Doce (CVRD), the Brazilian government changed the law: from then on, a company could hold one concession of 50,000 hectares and could form another subsidiary to mine an additional 30,000 hectares...
...The United States is 100 percent dependent on foreign sources for niobium...
...company has first option to buy half the projected output of the mine...
...MINEIRA DE ALUMINIO (ALCOMINAS) is a joint venture controlled by ALCOA (48 percent) and HANNA MINING COMPANY (20 percent) operating large bauxite mines in the state of Minas Gerais...
...With this kind of attention being given to infrastructure needs it is easy to understand how mining will become the largest export sector in Brazil within the next decade...
Vol. 7 • April 1973 • No. 4
