Word: copperizing
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Addressing a political rally a year ago, Zambian President Kenneth Kaunda insisted that he had no intention of nationalizing the foreign-owned copper mines that account for 95% of his country's export income and half of its government revenues. Said Kaunda: "The copper mines are big business...
...substitute 25-year leases for their existing leases "in perpetuity," and replace the present 44% royalty and export tax with a 51% mineral tax. The nationalized companies' holdings have a book value of about $784 million. Kaunda expects to pay shareholders for their loss entirely out of future copper profits. These are already so heavily taxed that even if dividends are maintained at their present level, the Zambian government can hope to realize only $5,000,000 a year from the two companies' $1.1 billion-a-year sales of copper. Thus the final payoff could be delayed...
...abrasive tensions between Zambia's blacks and whites (who constitute 1.5% of the population), are on the rise. Recognizing the importance of the mines to his country, Kaunda met two years ago with Chile's President Eduardo Frei to discuss an arrangement to help maintain world copper prices and quotas. Although no price-fixing agreement resulted from their talks, Frei's nationalization of the Chilean copper industry, beginning in 1967, probably stimulated Kaunda to take a similar step in Zambia...
...Kaunda's action entails serious risks for his country. Zambia has neither the capital nor the skills to run the mines by itself. Kaunda must rely heavily on both the companies and their remaining 5,000 white miners to keep operations going. Only the steadily rising price of copper, now at a high of 740 per pound, has enabled Zambia to maintain a favorable balance of payments in recent years. Any decline in copper prices as a result of an end of the war in Viet Nam, the discovery of new sources, or the increased use of other minerals...
...expropriated American firms for their losses in three years, foreign investors have been understandably slow to sink new funds into operations there. Peru's military junta has frightened outside investors by its seizure of International Petroleum Co.'s properties last October. The U.S.-owned Southern Peru Copper Corp., which was ready to invest $350 million to develop its copper ore concession a year ago, now seems less interested in expansion, and is refraining from committing itself until it has a better idea of the junta's plans...