The IBA and cartel problems : Prices, policy objectives and elasticities

The bauxite-aluminium industry structure is reviewed to illustrate the character of the threat posed by the formation of the International Bauxite Association (IBA). Bauxite price is a transfer price internal to vertically integrated firms, but Caribbean governments' fiscal revenue needs provoked a consistent tendency towards price increases. Australia is not interested in this or in a bauxite cartel, but rather in developing smelting capacity, exploiting its energy resources, and the elimination of barriers to Australian aluminium imports. Some elasticity estimates previously presented for demand and supply, together with their estimation method and policy implications, are strongly criticized.     

Bauxite and alumina: trends and prospects

During the past 25 years the bauxite and alumina industry has grown threefold creating major change in the industry structure and reducing the dominance of the majors. Australia has emerged as the leading producer with a major third party alumina market developed principally by Alcoa of Australia. Future growth while, less dramatic, is likely to be substantial requiring US$50 billion to fund new projects which will be concentrated in developing countries with large bauxite reserves and developed infrastructure.     

The role of the Australian minerals industry in world mineral supplies

Australia is one of the world's main producers and exporters of both fuel and non-fuel minerals. Among the main commodities produced for export are bauxite/alumina, iron ore, and nickel—Australia is also an increasingly important source of supply of black coal, especially for Japan, and is a significant producer and exporter of a number of base metals. Resources are adequate to support a substantial expansion of both non-oil fuels and other minerals. The potential for growth, both in terms of specific commodities and in the overall role of Australia in the world mineral industry, will depend to a very large extent on the cost competitiveness of Australian mining and on continuing inflow of capital.     

Welfare gains from aluminium recycling in the USA

In this paper we estimate a flexible form cost function of the aluminium industry in the USA and use our estimates to obtain derived demand curves for aluminium inputs such as electricity and bauxite. We then calculate the welfare gains arising from decreased energy use when the level of secondary recycling is increased. The process is repeated for several model specifications. All of our tests, however, yield similar results and indicate that substitution of scrap for only 5% of the bauxite presently used in US aluminium manufacturing would result in annual savings of close to a quarter of a billion dollars.     

World diamond industry: 1970–2000

The diamond cartel has remained effective in controlling diamond supplies and prices for a longer period than any other major minerals cartel in the twentieth century. This paper examines the diamond pipeline from mine to the jewellery market. Particular attention is given to the characteristics of diamonds and of the industry structure that make the long-term stability of the cartel possible. The strategies of De Beers Consolidated Diamond Mines in controlling rough gem supplies and prices are examined, and projections are made to 2000. The paper shows that in spite of a projected decrease in the share of total diamond production sold through the De Beers' cartel in the 1990s, the cartel is expected to continue effectively to control supplies and prices.     

Chinese resource security policies and the restructuring of the Asia-Pacific iron ore market

This paper reviews the restructuring of the Asia-Pacific iron ore market in the wake of the rise of the Chinese steel industry. Prior to the 2000s, this market was characterised by two key features—high firm-level concentration on both the producer and consumer sides, and price determination through annually negotiated benchmark pricing between Australian mining and Japanese steel firms. However, owing to rapid growth in the Chinese steel industry and its emergence as the region's principal iron ore consumer, the Asia-Pacific iron ore market has been dramatically restructured during the last decade. This process has been accelerated since 2005 by Chinese governmental resource security policies, which have sought to address current record high iron ore prices through the use of foreign investment to sponsor new market entrants and the formation of an import cartel amongst the Chinese steel firms. This paper evaluates how these policies have driven restructuring in the Asia-Pacific iron ore market, through an analysis of the growth of China's steel industry, Chinese resource security policies aimed at lowering iron ore import costs, and their effects upon the regional market's ownership structure and price determination mechanisms. It argues that while Chinese investment and cartelisation policies have catalysed significant changes to the ownership and pricing structures of the Asia-Pacific iron ore market, they have carried only mixed benefits for the Chinese steel industry's resource security.     

Is there a common metals demand curve?

Previous studies have identified a single, stable and strong correlation between the price of metals and their consumption, such that low priced metals are always used in large amounts and visa versa. Some have interpreted this as evidence that metals share a common demand curve so that a single price elasticity of demand exists. This paper reviews and tests this hypothesis against a number of other possible explanations, including the idea that the relationship is an empirical curiosity. Modifications to the demand curve were tested by allowing metals to have different intercepts and price elasticities. The results from this analysis suggest that metals do not share a common demand curve and that the correlation identified between the price of metals and their level of consumption is an empirical curiosity. As such, the singular price elasticities published in past papers should not be used for assessing future rates of metals substitution.     

Raw material problems of the Soviet aluminium industry

The Soviet Union possesses a huge hydro-electric power potential in southern Siberia, providing attractive sites for aluminium reduction capacity, but is poorly supplied with high-grade domestic bauxite resources. An early enthusiasm for the use of non-bauxitic domestic materials, notably nepheline and alunite, has waned in recent years, and Soviet aluminium planners have shown an increasing preference for imports of bauxite and alumina. By 1975 as much as 40% of Soviet aluminium production was derived from imported raw materials, indicating an unusual willingness to become dependent on foreign ore sources for this strategic metal. Future intentions are demonstrated by the abandonment of earlier plans for an expansion of non-bauxite based production, the construction of a large alumina plant on the Black Sea coast and proposals for a second seaboard plant on the Pacific coast, both using imported bauxite.     

Revegetation Strategies for Bauxite Refinery Residue: A Case Study of Alcan Gove in Northern Territory, Australia

Alumina extraction from bauxite ore with strong alkali produces waste bauxite refinery residue consisting of residue sand and red mud. The amount and composition of refinery residue depend on the purity of the bauxite ore and extraction conditions, and differs between refineries. The refinery residue is usually stored in engineered disposal areas that eventually have to be revegetated. This is challenging because of the alkaline and sodic nature of the residue. At Alcan Gove’s bauxite refinery in Gove, Northern Territory, Australia, research into revegetation of bauxite residue has been conducted since the mid-1970s. In this review, we discuss approaches taken by Alcan Gove to achieve revegetation outcomes (soil capping of refinery residue) on wet-slurry disposal areas. Problems encountered in the past include poor drainage and water logging during the wet season, and salt scalding and capillary rise during the dry season. The amount of available water in the soil capping is the most important determinant of vegetation survival in the seasonally dry climate. Vegetation cover was found to prevent deterioration of the soil cover by minimising capillary rise of alkalinity from the refinery residue. The sodicity and alkalinity of the residue in old impoundments has diminished slightly over the 25 years since it was deposited. However, development of a blocky structure in red mud, presumably due to desiccation, allows root penetration, thereby supplying additional water to salt and alkali-tolerant plant species. This has led to the establishment of an ecosystem that approaches a native woodland.     

BAUXITE LAND-USE POLICY AND RESETTLEMENT PROGRAMMES IN JAMAICA

The Government of Jamaica has just completed agreements with four of the five bauxite and alumina companies operating in Jamaica, Kaiser, Reynolds, Alcoa, and Alcan. The agreements went into effect on 1 February 1980. One of the results of these new agreements is the acquisition of all company-owned bauxite lands by the government, and the rationalization of bauxite reserves. This article examines the bauxite resource management approach being taken by the government of Jamaica, considers the provisions of the new agreements, describes some of the problems associated with resettlement and relocation of people and structures to make the bauxite available for mining and details the formulae being pursued to deal with them. Le Gouvernement de la Jamaïque vient de conclure des accords avec quatre des cinq compagnies de bauxite ed d'alumine qui travaillent à a Jamaïque: Kaiser, Reynolds, Alcoa et Alcan. Ces accords sont entrés en vigueur le 1er février 1980. L'un des résultats de ces nouveaux accords est l'acquisition par le gouvernement de tous les terrains de bauxite possédés par les compagnies et l'utilisation rationnelle des réserves de bauxite. Cet article montre la politique suivie par le gouvernement en matière de ressources de bauxite, étudie les clauses des nouveaux accords, décrit quelques-uns des problèmes posés par la réinstallation des gens et la remise en ordre des structures pour permettre l'exploitation de la bauxite et indique les mesures qui ont été prises en liaison avec ces problèmes. El Gobierno de Jamaica acaba de concluir acuerdos con cuatro de las cinco compañías de bauxita y aluminio que operan en Jamaica: Kaiser, Reynolds, Alcoa y Alcan. Los acuerdos entraron en vigor el primero de febrero de 1980. Algunos de los resultados de estos acuerdos son la adquisición por el gobierno de todos los territorios de bauxita poseídos por las compañías y la nacionalizacíon de las reserves de bauxita. Este artículo examina el enfoque seguido por el Gobierno en la gestión del recurso de bauxita, analiza las provisiones de los nuevos acuerdos, describe algunos de los problemas asociados con la relocación de habitantes y detalla las fórmulas que se están siguiendo para resolverlas.     

Recent advances in econometric estimation of materials substitution

Interest in substituting reproducible inputs such as capital and labour for non-renewable materials is principally motivated by two factors — the short-run concern about supply disruptions on the part of producing countries and the long-run concern about the exhaustion of depletable natural resources. In this paper, techniques for estimating elasticities of substitution between inputs (ie between different materials or between material aggregates and other input aggregates) from production and cost functions are discussed, and the recent literature that makes use of these techniques is reviewed.     

Transforming China's coal mines: A case history of the Shuangliu Mine

China is the largest coal producer and the largest coal consuming country in the world. Approximately half of China's coal comes from small‐scale mines. The sustainability of China's coal industry would be improved if a greater share of the coal come from larger‐scale mines. This article presents a case history of the Shuangliu Mine in Shanxi Province and discusses the issues and benefits of the transformation of this mine. Significant gains were observed in worker safety and benefits, and in more efficient exploitation of the coal resource. Problems included loss of employment opportunities for local labourers, and reduced revenue for local townships. The wider implications of a shift of China's coal supply from small‐scale to large‐scale mining operations are discussed in relation to economic, social and environmental aspects.     

河南省铝土矿开发利用中的问题与对策

河南省具有十分丰富的铝土矿资源，其储量居全国第三位，由于人们认识不足，缺乏科学的统筹规划，加之技术工艺落后，目前铝土矿资源已遭受到严重浪费和破坏，资源回采率仅３０％，引外，不合理的开发利用已导致严重的环境污染和破坏生态等问题，其中分布广泛的民采是廷民诸多问题的主要因素，本文对此进行了分析，并提出了有关对策。     

The shadow price of substitutable sulfur in the US electric power plant: a distance function approach

Given restrictions on sulfur dioxide emissions, a feasible long-run response could involve either an investment in improving boiler fuel-efficiency or a shift to a production process that is effective in removing sulfur dioxide. To allow for the possibility of substitution between sulfur and productive capital, we measure the shadow price of sulfur dioxide as the opportunity cost of lowering sulfur emissions in terms of forgone capital. The input distance function is estimated with data from 51 coal-fired US power units operating between 1977 and 1986. The indirect Morishima elasticities of substitution indicate that the substitutability of capital for sulfur is relatively high. The overall weighted average estimate of the shadow price of sulfur is -0.076 dollars per pound in constant 1976 dollars.     

Sustainable development and environmental technology: a comparison of policy in Japan and the European Union

Summary The concept of sustainable development, is increasingly being proposed as a means to avoid the impasse between economic development and environmental protection. In this paper, the incorporation of the concept of sustainable development into policy-making in both Japan and the European Union is examined. A particular variation in response between the two has been in relation to encouraging the development of environmental or clean technologies, a key element in achieving sustainable development. The benefits of an early lead in environmental technology may result in gains to the economy. In this paper, the potential commercial gains from the integration of environmental policy with industrial, development are also examined.Dr David Gibbs is a Reader and Dr James Longhurst is Director of the Atmospheric Research and Information Centre within the Department of Environmental and Geographical Sciences at Manchester Metropolitan University.     

The Influence of Loss Aversion on Mountain Bikers’ Behavioral Intentions

Public involvement in management decision making has received increased attention from researchers in recent years. These studies, however, have rarely considered differences in behavior resulting from gains and losses, despite ample evidence that individuals’ behavior is not the same across situations. Individuals are often more sensitive to losses than gains, which research suggests is related to ownership (real or perceived) of the item lost. We present evidence from a within-subjects quasi-experimental design to test whether mountain bikers’ reported intentions differ between gain based and loss based conditions. These data were analyzed using a multi-step repeated measures analysis of variance and repeated measures analysis of covariance. The results suggest that losses are more powerful than gains in motivating public engagement in management decision making. Further, the type of action was also shown to influence behavioral intentions. Additional analyses provide support to the claim that, centrality, used as a proximate measure of ownership, moderates the contextual effects on behavioral intentions. Thus, loss aversion, moderated by ownership, is a plausible explanation of stakeholder involvement.     

Use of embodied energy and ecological footprinting to assess the global environmental impact of consumption in an Irish city-region

The objective of this paper is to compare the carbon emissions produced as a result of product consumption by the residents of an Irish city-region, that is Limerick City and its environs. The resulting carbon footprints are used to compare imports of food items, manufactured products and construction materials with domestic production as well as changes between 1996 and 2002. The total ecological footprints (EF) associated with product consumption are also calculated by aggregating the theoretical land required to sequester carbon emissions and the terrestrial land area appropriated for agricultural production and industrial activity. It is suggested that this approach be used to allocate producer or consumer responsibility for environmental impacts from trade.     

Bauxite and alumina - Jamaica's reach for the future

Jamaica has developed a new strategy designed to allow it to expand its bauxite and alumina production, to diversify both its markets and its sources of investment and, to move downstream into the production of aluminium and semi-finished products. Some benefits of this new strategy are already evident, several bauxite mines are being expanded, alumina plants are being re-opened while others are adding additional capacity, and the countries of Europe, Asia and North America are showing renewed interest in investing in Jamaica. With its new strategy, Jamaica intends to participate more fully in the world economy.     

An Assessment of Future Energy Demand in Developing Countries

The statistical data show that the rapid growth in oil and energy demand in less-developed countries (LDCs) can be attributed to the rapid growth in gross domestic products (GDP) and the relatively high energy intensity in LDCs. The statistical analysis confirms that the GDP elasticities of aggregate energy and oil demand are high and the energy price elasticities are relatively low for the 15 LDCs studied. The projection shows that the future oil and aggregate energy demands are likely to increase at fairly rapid rates in LDCs. Furthermore, there are reasons to believe that these high growth rates may be sustained.     

Market structure and bargaining power: A study of three international mineral markets

This paper considers how differences in the structure and arrangements between the international markets for bauxite, iron ore and copper affect the bargaining strength and division of benefits between buyers and sellers. After describing the characteristic features of each market, and noting the absence of appropriate economic theory to disentangle the issue at hand, an attempt is made to clarify the problem by considering the difference between the markets in terms of five factors - degree of concentration, ability of the parties to inflict losses on each other, varying shares of the raw material in final product prices, structure of the market in which the final products are sold, and the process of trade negotiation.