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Mining strategies in the Middle East and North Africa

2014; Taylor & Francis; Volume: 35; Issue: 6 Linguagem: Inglês

10.1080/01436597.2014.907706

1360-2241

Eckart Woertz,

Extraction and Separation Processes

AbstractThis article provides a mapping exercise of the economic importance of non-hydrocarbon minerals (nhm) in the Middle East and North Africa (mena) and shows how governments in the region increasingly perceive them as strategic resources. The focus is on Saudi Arabia and other Gulf countries, Turkey, Morocco and Iran. nhm like iron ore, phosphates, aluminium and uranium are important for development models in the region, either as export commodities or as vital input factors. Since the 1990s, and as elsewhere in the world, the sector has witnessed privatisation and the promulgation of new mining codes. Yet governments have retained core capabilities and manage most key commodities themselves either directly or indirectly. Mining projects have met with opposition from labour representatives. They also have considerable environmental impact. The article discusses rentier state and resource curse theories, but argues that nhm have also increased development options and have contributed to economic diversification rather than being just a curse.Keywords: Middle EastNorth Africaminingmineralsenergyeconomic diversificationrentier stateresource curse AcknowledgementsI am grateful to Jean–François Seznec and Francis Ghilès for comments on the draft. A Marie Curie grant from the European Commision and the ocp Policy Center in Rabat funded part of the research.Notes1. For example, Beblawi and Luciani, The Rentier State; Hertog, Princes, Brokers, and Bureaucrats; Luciani, Resources Blessed; and Yergin, The Prize.2. Woertz, Oil for Food.3. Hilpert and Mildner, Fragmentation or Cooperation? and Lee et al., Resources Futures.4. For overviews of the debate and its application to the Middle East, see Luciani, "Introduction"; and Springborg, "gcc Countries."5. Revenue Watch, "2010 Revenue Watch Index."6. Luciani, "Introduction," 7.7. Bebbington et al., "Contention and Ambiguity."8. World Bank, "Key Topics of Mining"; and Revenue Watch and Transparency International, Revenue Watch Report 2010.9. Bridge, "Mapping the Bonanza."10. Luciani, Resources Blessed; and Hertog, "Defying the Resource Curse."11. Hilpert and Mildner, Fragmentation or Cooperation?12. Ibid., 18; and Lee et al., Resources Futures, 16ff.13. Lee et al., Resources Futures, 145ff.14. McNeill, "The Eccentricity of the Middle East"; and Issawi, The Middle East Ecomony.15. Public Record Office, "Shipping Arrangements for Transport"; and Lloyd, Food and Inflation, 87ff.16. US Geological Survey (usgs), Citation2011 Minerals Yearbook, 45.1; and Kvande, "The gcc Aluminum Industry."17. "gcc to Raise Global Share of Aluminium Output to 15%," Saudi Gazette, July 12, 2012.18. Seufert, "Turkey," 139.19. Grange Resources, "Southdown Magnetite and Kemaman Pellet Project, Project Update 2007," company presentation; and interview with the then chairman of Grange Resources, Anthony Bohnenn, Dubai, 2007. Coal-fired blast furnace production does not exist in the Gulf states. Metal Bulletin, Middle East Steel 2012.20. "Saudi Arabia Steel Industry Forecast 2017," May 16, 2013. http://online.wsj.com/article/PR-CO-20130516-906439.html; and ncb Capital, In Focus.21. Abdoulkarim, "Economics of Gypsum Production."22. Pradhan, "World Sulphur Industry Trends."23. Al Rajhi Capital, Ma'aden Phosphate Drives Valuation.24. Smil, Enriching the Earth; and Cordell et al., "Towards Global Phosphorus Security."25. Massot, "Chinese State Investments in Canada."26. "Qatar Becomes World's Largest Exporter of Urea," The Peninsula, December 12, 2012. http://thepeninsulaqatar.com/business/qatar-business/217730/qatar-becomes-world%E2%80%99s-largest-exporter-of-urea-.27. Lee et al., Resources Futures, 51.28. van Kauwenbergh, World Phosphate Rock Reserves, 33; and usgs, Mineral Commodity Summaries 2011, 119.29. David Blair, "US Finds 'World-class' Phosphate in Iraq," Financial Times, September 7, 2012.30. usgs, Citation2011 Minerals Yearbook, 45.2ff; and interviews with various Gulf mining executives, Dubai 2007–12.31. Woertz, The Role of Gold; and Saidi and Scacciavillani, The Case for Gold.32. World Gold Council, "World Official Gold Holdings."33. Nawab, "Mining as a Pillar of Economic Diversification."34. Twitchell, Saudi Arabia, 245. His personal paper collection is at the Seeley G. Mudd Manuscript Library at Princeton University.35. "Private–Public Cooperation is Key to Economic Growth," Khaleej Times, February 27, 2013.36. "Global Auto Giant Plans Assembly Plant in Saudi Arabia" and "'Made in Saudi Arabia' Isuzu Truck Makes History," Arab News, September 1, 2012 and December 13, 2012.37. "China Considers Manufacturing Cars in Saudi Arabia," Arab News, January 14, 2014.38. Correspondence with Jean-François Seznec, Managing Partner, Lafayette Group, August 17, 2013.39. Luciani, "Domestic Pricing of Energy"; and Kvande, "The gcc Aluminum Industry."40. Interview with executive of Australian mining company, Dubai, July 2007.41. John Everington, "Mubadala Seals $971 Million Deal for Iron Ore Port in Brazil," The National, February 27, 2014.42. Interviews with Alexander Burns, Managing Director of Sphere Investments, and Husein Murrar, Business Development Manager of qasco, grc Economic Research Bulletin (Dubai), no. 6 (June 2007).43. Simeon Kerr, "Dubai and Abu Dhabi Create $15bn Aluminium Champion," Financial Times, June 3, 2013.44. Robert Espey, "Saudi-Arabien bietet Chancen für hochwertige Baumaterialien" [Saudi Arabia offers Opportunities for Hiqh Quality Buiding Materials], Germany Trade and Invest, June 28, 2011, http://www.gtai.de/GTAI/Navigation/DE/Trade/maerkte,did=76378.html.45. usgs, Citation2011 Minerals Yearbook, 45.6; and "Saudi Arabia: Taking Mining Offshore," Oxford Business Group, January 31, 2013, http://www.oxfordbusinessgroup.com/economic_updates/saudi-arabia-taking-mining-offshore.46. Hertog, "Defying the Resource Curse."47. Al Rajhi Capital, Ma'aden Phosphate Drives Valuation.48. J. P. Morgan, ipo Prospectus Maaden.49. Hertog, National Employment, Migration and Education.50. Vitalis, America's Kingdom.51. Simon Hall, "Saudi Arabia to Drill for Shale Gas this Year," Wall Street Journal, March 18, 2013.52. Telephone interview with consultant to Saudi ministries, September 17, 2012.53. Vengosh et al., "High Naturally Occurring Radioactivity."54. "Ma'aden Signs Contract for 500 km Pipeline to Supply New Gold Mines," January 15, 2012, http://www.maaden.com.sa/en/news_details/54.55. imf, "World Economic Outlook Dataset."56. International Trade Center, "Trade Map Statistics"; and Seufert, "Turkey," 139.57. Seufert, "Turkey," 141.58. US Department of Energy (doe), Critical Materials Strategy; and US Department of Defense (dod), Rare Earth Materials in Defense Applications.59. Seufert, "Turkey," 139.60. Ibid., 140.61. Mining contributes by between 7% and 9% to Chile's gdp, according to conventional accounting methods. Bebbington et al., "Contention and Ambiguity," 894. In Peru the mining share of gdp stands at 11%, in South Africa's at 9.6%, in Brazil at 4.2%, in the USA at 1.9% and in Saudi Arabia at 0.2%. See http://www.revenuewatch.org/countries/latin-america/peru/overview, accessed November 17, 2013; and Hilpert and Mildner, Fragmentation or Cooperation? 38, 118, 25, 50.62. van Kauwenbergh, World Phosphate Rock Reserves, 33; and usgs, Mineral Commodity Summaries 2011, 119.63. Croset, L'ambition au coeur de la transformation.64. Correspondence with Jean-François Seznec, August 17, 2013.65. Heuty, Can Transparency Transform Mineral Wealth?66. Ibid; and Sofian al-Raqiqi, "What Tunisia's Phosphate Crisis Says about its State of Affairs," Al Monitor, May 2013, http://www.al-monitor.com/pulse/business/2013/05/tunisia-phosphate-crisis-politics.html?utm_source=&utm_medium=email&utm_campaign=7370#ixzz2V8HukFFD.67. "Les émeutes du phosphate" [The Phosphate Revolts], Telqel, July 30–August 5, 2011.68. Defever-Kapferer and Gaston-Breton, ocp; and interview with ocp executives, Rabat, April 5, 2013.69. Harris, "The Rise of the Subcontractor State."70. Interview with former Iranian diplomat, Barcelona, March 14, 2013.71. International Organization of Motor Vehicle Manufacturers, "World Motor Vehicle Production."72. Monavar Khalaj, "Iran's Car Industry Output Falls Sharply," Financial Times, January 23, 2013.73. "Iran's Copper Output will Increase 3.5-fold: Official," Payvand Iran News, November 20, 2011, http://www.payvand.com/news/11/nov/1204.html.74. Vaez and Sadjadpour, Iran's Nuclear Odyssey, 4, 21.75. US dod, Joint Chiefs of Staff, "Tehran to State Department"; and Vaez and Sadjadpour, Iran's Nuclear Odyssey, 5.76. Vaez and Sadjadpour, Iran's Nuclear Odyssey, 14ff; and Tim Worstall, "Iran Announces New Uranium Deposits: Don't Panic!," Forbes, February 23, 2013, http://www.forbes.com/sites/timworstall/2013/02/23/iran-announces-new-uranium-deposits-dont-panic/.77. See the interview with Salehi, "Iran's Nuclear Programmeme 'Is Peaceful'," Financial Times, September 9, 2004.78. For an overview of strategies see Kamrava, The Nuclear Question.79. Jordan has committed plans; Turkey has signed contracts; Saudi Arabia and Egypt have well-developed plans and Israel and Morocco are developing plans. Other states in the mena are only considering nuclear power as a policy option so far. World Nuclear Association, "Emerging Nuclear Energy Countries."80. The Australian, August 1, 2012; and "UAE Advances with US Backed Nuclear Plan," Financial Times, August 15, 2012.81. Interview with consultant of Jordanian government, Amman, 3 November 2007; usgs, Citation2011 Minerals Yearbook, 49.1; and World Nuclear Association, "Uranium in Africa."82. World Nuclear Association, "Supply of Uranium."83. Telephone interview with executive of Saudi mining company, Dubai, March 2007.84. Telephone interview with former consultant of Saudi ministries, August 3, 2012.85. Mark Hibbs, "Saudi Arabia's Nuclear Ambition," Carnegie Endowment for International Peace, July 20, 2010, http://carnegieendowment.org/2010/07/20/saudi-arabia-s-nuclear-ambitions/2fq6#4.86. oecd Nuclear Energy Agency and International Atomic Energy Agency, Uranium 2011, 101.87. Energy Watch Group, Uranium Resources; and van Leeuwen, Secure Energy.