Editorial - Foreign Minerals - Our Security

DEPENDENCY on foreign sources for many mineral raw materials is a characteristic of our economy which is becoming painfully evident. Although investment in foreign mining projects has increased, it has not kept up with the growing demand for foreign minerals. The sphere of American investment capital in mining ventures abroad has been severely limited by the rise of nationalism in many underdeveloped countries. Consequently, we can look back over half a century in which mining investment, exclusive of petroleum, has increased by 50 pct whereas other American investments abroad have multiplied by better than 300 pct. Investment in foreign mining or petroleum encounters different problems than capital investment for other industries. It is rarely invested in industrialized nations. Most of it goes to countries with expanding frontiers, like Canada, or to underdeveloped nations like Liberia. It must be used for building communities, recruiting and training labor, and establishing lines of communication and transportation. These complications are an accepted part of the mining game. However, the most complex problem is in those countries which consider mineral exploitation a usurpation of the people's natural heritage. This is a characteristic of the young government existing by a tenuous balance of power in an underdeveloped nation. American mining capital understandably has shunned these nations as being poor investment risks. However, they possess minerals which are needed by industry. Our government has attempted to stimulate mineral supplies beyond those provided from abroad by private capital. ECA, now under DMPA, makes loans to foreign mining companies. Since the ECA program cannot be expected to continue indefinitely, Point IV seems to be the logical next step to encourage foreign countries to fill our shortages. However, only 1 pct of the $35 million budget provided in the first year for Point IV was alloted for mining programs. Considering the need for minerals and the difficulties of procuring them by private investment, a larger share is needed and justifiable. Those who have been engaged in foreign mining can vouch for the fact that it takes many decades to teach the complex technology and economics of mining to the natives of under-developed countries. For this reason Point IV must be considered a long range program. Mineral requirements for the present must be met by more direct measures. Encouragement of private investment in foreign mining by such incentives as tax relief on profits from foreign sources, international bank-borrowing facilities for private capital, and diplomatic assistance in encouraging foreign countries to cooperate are imperative for our future mineral security.