Mining - U. S. Government Support to Mineral Industries of Latin America

Any discussion of outside support to Latin American mineral industries must concede at once the pre-eminent role of U. S. industry and business. American capital has developed the great copper resources of Chile and Peru, the lead-zinc of Peru and Mexico, the bauxite of Surinam and Jamaica, the petroleum and iron ore of Venezuela. American consumers have provided the market for their products. U. S. companies operating south of the border have trained Latin American geologists, engineers, chemists, and skilled labor—including metal, mineral, and fuel technicians—to new and greater competence. The industrial demands of World War II drastically altered world economics and concepts of U. S. foreign mineral requirements. In this country discovery of vital mineral resources fell far behind the alarming depletion rates, and there was new appreciation of the actual and potential importance of the world's less extensively explored areas. During the war and afterward, the task of supplying the nation's mineral requirements became greater than private industry could carry alone, and the Government assumed a position of continuing support. In Latin America, as elsewhere, this support applies in three categories: banking, procurement, and technical assistance. The first two are now generally accepted as necessary Government functions; the third has often been misunderstood and misinterpreted, although it has given rise to legitimate controversy. There have been major accomplishments in all three categories, as well as some errors of judgment. Since the beginning of World War 11, U. S. Government financing, procurement, and technical assistance have been applied on a large scale to a wide range of commodities and services throughout the free world. The present discussion—under the separate headings mentioned—will concern only the support related to a single industrial group in a single geographic area. During the War Federal banking was conducted on an emergency scale by temporary agencies created to meet the abnormal circumstances. Unfortunately, there are no readily available data on these activities that would permit evaluating loans and credits extended for mineral projects in Latin America. The only agency operating in this field since World War II is the Export-Import Bank, under its own authority and to some extent from credits authorized by the Office of Defense Mobilization. The Bank can offer more capital—on more favorable terms—than is available from most Latin American banks, and its staff of engineers evidently can appraise loan applications more favorably than commercial banks in this country are willing to do. The risks seem to be justified, as defaults have been well under 1 pct of total loans. From V-J day 1945 to the end of 1957, mineral loans to Latin America have been authorized for projects totaling $541.63 million in eight countries. In order of magnitude of credits, they have been made to Brazil, Peru, Chile, Mexico, Argentina, Venezuela, Guatemala, and Bolivia. In order of magnitude by industries. they are for development and expansion of steel mills, copper, manganese, nitrate plants, iron ore, zinc plants, sulfur plants, cement plants, tungsten, coal, and lead. Loan Distribution: By far the largest loans have been $307.9 million for iron and steel projects in Brazil, Chile, Mexico, Argentina, and Peru: $100.4 for developing the great low-grade copper deposits of southern Peru; and $55.3 million for developing manganese deposits in the Territory of Amapa, Brazil. Others range from $20.8 million for a zinc smelter in central Peru to $19 thousand for iron-mine trucking equipment in Chile. It has been noted that 59 pct of the loans have been to foreign companies, 14 pct to companies of mixed foreign and American capital, and 27 pct to American mining companies. About 40 pct of the total authorizations has been disbursed so far. In addition to these amounts, the Strategic Materials Division of the Economic Cooperation Admin-