to those who think that there is too much of this or too little of that in the pages ahead I apologise in advance. However, I hope that those who read this book will find it both interesting and illuminating, a good read and a useful reference work. I have attempted to use the experience gained over many years to put together a substantial history of this great industry, to make comments on how the industry has evolved and to draw conclusions as to its importance in economic development over the centuries, and its role in the future. It is for you to judge how well I have succeeded.
A note on currencies and metals prices
Most metals are priced in US dollars, which is also often the currency of share prices and corporate earnings reports even if the reporting company is sometimes not a US company. The reader, however, should be aware that other currencies, not all of them still used today, creep into the text. This is deliberate and is often as a result of the way historic information has come to me. The dollars referred to in the text are usually US, but keep an eye out for the Australian and Canadian versions. Sterling is often used in keeping with the UK’s position, both historic and current, at the centre of international mining, and at times the old pre-decimalisation system is also refered to. But the euro does not intrude very much in these pages.
As to weights and measurements the book reflects the real world, not the bureaucrats’ version, so imperial/American and metric are both used and often in the same breath. Thus a gold mine’s reserves are measured in grams per metric tonne (tonne) but the gold in those reserves is valued on the basis of troy ounces. Similar examples of mixing measurements can be found with base metals such as copper, nickel and zinc where metric tonnes and lbs exist easily together. As regards tonne/ton, the former is the metric measurement and the latter is a short ton in North America and a long ton usually in colonial South Africa and Australia.
M.C.
Introduction
“Those who decry mining are ignorant of history. If they knew anything about metals, they would know that all business, all industry and all human progress depend on mines.”
William Sulzer, Governor of New York 1938
Film buffs will surely remember the opening minutes of Stanley Kubrik’s 1968 classic 2001: A Space Odyssey. Prehistoric man picks up an object from the ground and starts to use it to break up a skeleton in front of him. In that moment man first discovers the tools and weapons that will enable him to move from a simple and precarious existence to one where he shapes his future through his own technological development. The opening frames of the film then give way to the picture of a futuristic space ship on its journey into the unknown, underlining the technological development of centuries that has enabled man to leave his planet and venture into outer space.
Back on Earth, technology continues to revolutionise the way we live. All of these developments and advances would have been impossible without the use of the raw materials which lie beneath our planet’s surface in the form of metals, minerals and energy.
However, in the last two decades of the 20th century interest in raw materials faded as economists looked to new industries such as mobile communications and the internet to be the sunrise activities delivering growth and prosperity way into the future. Raw materials would take a backseat and become sunset industries, generating below average growth with supply more than adequate to satisfy demand for the foreseeable future. Turning this development on its head again, in the last ten years there has been a sensational surge in demand for and interest in raw materials. The reason for this has been explosive economic growth from China, primarily, and also India. These are developments that should have been foreseen but which were not fully recognised until the new millennium was well underway.
These last few years have therefore seen a major revival in interest in mining both as an industry and as an investment sector, and though information sources have now begun to expand, publications in the early years of the 21st century were rather thin on the ground. The literature on the sector has also been getting rather long in the tooth, with only the odd specialist work published during mining’s dog years.
In addition, the financial sector had materially reduced its mining coverage in the later years of the 20th century and many practitioners steeped in the industry had disappeared from the scene, although in recent years the trend has reversed as the financial and media sectors have begun to rebuild their interest. With this revival the time seemed right to consider a comprehensive history of the mining industry from its earliest beginnings to provide context for some of the industry’s exciting developments, and also to provide background for those coming new to the subject of mining.
Those who have read my earlier book on mining, An Insider’s Guide to the Mining Sector, will be aware of the importance that I place on history when following events in the mining industry, particularly where these events are unfolding, and where predicting their path may have a critical impact on investment returns or corporate decisions. So another idea behind this book is creating a work that will provide an historical backdrop allowing readers to observe the mining industry’s long-term trends, draw conclusions, and apply those to present and future developments.
An example of this would be the revival of gold since 2002, having been largely dormant in price terms since 1980. Those who lost patience and interest over this period might have gained heart by studying the flat period that followed the end of World War II until the start of the 1970s, when western gold production outside South Africa virtually disappeared as the price was officially locked at $35/oz, a price established in 1934 during the Great Depression.
A similar lesson can be learnt from the substantial revival in capital-raising for junior exploration stocks in London, which has been a feature of the last ten years or so. In the period before that, exchange controls, regulatory market hurdles and low levels of activity in grassroots exploration had left London as a wasteland for all but the funding of big ticket mining developments. Those who knew their history would have been aware of the central role played by London in mining exploration in Australia, South Africa and Latin America in the 19th century, and when restrictions were loosened in the aftermath of the Thatcher Conservative government in the UK in the 1980s they could have anticipated a revival in junior activity in line with historical tradition.
But although I think a history of the mining industry is useful in its own right I have also aimed in the book’s concluding sections to look forward to what future historians might have to chew on in terms of the direction that the industry might take over the next few decades. On the geopolitical front we have begun to see fast growing countries like China doing an increasing number of deals to secure long-term access to raw materials in areas such as Africa, Australia and Latin America. Will these deals really secure the Middle Kingdom’s long-term access to metals and minerals, energy and possibly even agricultural products, or will they eventually come to be seen as exploitive arrangements akin to past British deals in Africa and American deals in Latin America?
We also now find ourselves in an age of rising environmental concern and this is an area where the exploitation of raw materials is centre stage. Mineral deposits are becoming increasingly low grade, requiring very large quantities of ore to be mined to produce worthwhile amounts of metals. This is bound to have an impact on the environment; perhaps ocean mining can play its part in the future in opening up new sources of raw materials which are less environmentally damaging. These are all areas for analysis and comment and they are likely to make a large mark on the mining industry in the future.
Mining has always created political issues for countries rich in resources anxious to maximise returns, sometimes for the good of the people, too often just for the good of the rulers. In terms of how mining companies square up to political pressure, some have a much better record than others. In the past, especially in colonial times, the mining industry had the
