THE IMPORTANCE OF ZAMBIAN COPPER

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01003A002400200001-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 12
• Document Creation Date: December 16, 2016
• Document Release Date: April 28, 2005
• Sequence Number: 1
• Publication Date: November 1, 1965
• Content Type: BRIEF

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INTELLIGENCE BRIEF
CIA/RR CB (5-70
November 1965
Copy No.
THE IMPORTANCE OF ZAMBIAN COPPER
DIRECTORATE OF INTELLIGENCE
NO FOREIGN DISSEM GROUP 1
Excluded fro" outomatic
downgrading and
declassifwcation
SECRET
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Office of Research and Reports
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THE IMPORTANCE OF ZAMBIAN COPPER*
Copper is in exceedingly tight supply throughout the world and
prices have increased substantially in the past year. = 25X1
ext year's entire output is already
committe ; Free World commercial stocks of copper are at an all-
time low and the US strategic stockpile is the only sizable Free World
reserve. Even before President Johnson ordered the release of
200, 000 short tons (181, 400 metric tons) from the stockpile on
17 November 1965, US government-held reserves were barely above
the minimum strategic requirement of 775, 000 short tons (703, 100
metric tons). Earlier this year, 200, 000 short tons were released
from US government stocks -- about half for coinage requirements,
the rest for domestic consumers. The November release of an addi-
tional 200, 000 tons will cover present industry needs, but next year
the supply situation is likely to be even tighter than at present, in
relation to demand.
In the face of an increasing shortfall of copper, the threatened re-
duction or total stoppage of Zambian production - - nearly 650, 000
metric tons in 1964 -- has been described in both government and
industry circles as a very grave prospect. Producers report that they
cannot, during the next several years, expand output from other copper
mining areas rapidly enough to replace Zambian output. The possi..
bilities of substituting aluminum or plastic materials for copper are
limited,and the use of these materials would not materially ease the
shortages already existing in the copper market, at least in the short
run. The tight supply existing in world copper is likely to be greatly
intensified by the current strike of the workers in the Chilean-American-
owned companies. Thus, if Zambian shipments were cut off, the world's
importers would be faced with a scramble for very scarce supplies of
copper and a sharp increase in price unless worldwide rationing and
price controls were devised.
In any event, certain countries are likely to be hit harder than
others. About 45 percent of Britain's annual imports of copper, which
total over 500, 000 metric tons, come from Zambia; the other major
suppliers are Canada, Chile, and the United States. These three coun-
tries, plus Zambia, usually provide 80 to 90 percent of Britain's
* The estimates and conclusions in this brief represent the best judg-
ment of this Office as of 19 November. The term copper, unless other-
wise qualified, denotes blister and refined copper, roughly comparable
to the UN SITC classification "unwrought copper, "
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copper imports. erhaps 50 British
export firms are now critically epe ian copper. The
metal is particularly important to the electronic, transportation, and
communications industries. Reduced or suspended shipments of
Zambian copper to the United Kingdom would adversely affect British
exports and could bring the pound sterling under severe pressure.
By 1963, Zambia had become the Free World's second largest
producer, second only to the United States. In 1964, Zambian copper
accounted for nearly 15 percent of the Free World total; exports were
681, 700 metric tons, valued at over $415 million. More than half the
country's copper production comes from the British-dominated Anglo-
American Corporation (Central Africa), Ltd. mines; the rest comes
from mines of the Roan Selection Trust, which has substantial US
ownership. Copper accounts for about 90 percent of Zambia's exports,
supplies over half the government revenue, and accounts for nearly
40 percent of the country's wage bill. Virtually all of the mines are
found in the Copperbelt, a strip about 100 miles long and 30 miles
wide extending northwest from Ndola to Bancroft.
The United Kingdom is the most important market for Zambian
copper exports and buys over a third of the total. West Germany,
Japan, Italy, and France are the other major purchasers (see Tables 1
and 2). The importance of Zambian copper to these countries varies
considerably, as indicated by Table 3. Zambian copper accounts for
nearly two-thirds of Japan's copper imports, nearly one-half of those
of the United Kingdom, one-fourth of those of Italy, about one-fifth
of those of West Germany, and about one-sixth of those of France.
According to Zambian figures, Zambia provides about three-fourths of
the Netherlands' copper imports, but Dutch figures indicate that only
one-tenth of the total comes from that country. This difference, and
similar differences encountered for Switzerland and Austria, probably
can be explained by intra-European diversion of shipments. In any
event, Zambia supplies a large share of European and Japanese im-
ports of copper.
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Value of Zambian Copper Exports by Destination and Type a/
1964
-
Thousand US
Electrolytic
Destination
Blister
Wire Bars
Cathode Form
Bar and Ingot
Total
United Kingdom
27,833
104,224
5,122
7,762
144,941
West Germany
33,317
22,794
3,934
291
60,336
Japan
2,116
38,532
8,889
93
49,630
Italy
918
31,427
377
507
33,229
France
21,715
1,063
2,266
25,044
Republic of
South Africa
3,952
12,692
666
1,806
19,116
Netherlands
2,136
12,865
467
1,261
16,729
United States
2,972
9,078
12,050
Sweden
10,221
215
10,436
Belgium
Luxembourg
7,231
307
'7,538
India
1,407
3,677
1,774
6,858
Poland
3,578
1,713
407
5, 698
Rhodesia
3,438
3,438
Spain
684
2,626
3,310
Finland
3,069
3,069
Communist
China
1,220
11828
3, 048
Greece
2,173
2,173
Czechoslovakia
292
1,499
1,791
Australia
1,496
1,496
Switzerland
849
360
:L,2o9
Portugal
877
877
UAR
722
118
84o
USSR
651
651
Argentina
501
501
Denmark
490
490
Austria
381
-
381
Hungary
199
199
Iran
174
174
Kenya
100
100
Mozambique
31
31
Total
87,587
288,590
23,446
15,76o
415-, 383
a. Free on rail, Zambia.
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Volume of Zambian Copper Exports by Destination and Type
1964
Metric Tons
Blister
Electrolytic
United Kingdom
48,067
187,831
235,898
West Germany
58,324
43,592
101,916
Japan
3,562
77,154
80,716
Italy
1,626
51,798
53,424
France
3),763
39,763
Republic of South Africa
7,049
24,451
31,500
Netherlands
3,810
24,010
27,820
United States
5,690
14,663
20,353
Sweden
16,850
16,850
Belgium/Luxembourg
12,1395
528
13,423
India
2,495
8,860
11,355
Poland
6,299
3,477
9,776
Rhodesia
5,638
5,638
Spain
1,220
4,162
5,382
Communist China
5,078
5,078
Finland
4,877
4,877
Greece
3,489
3,489
Czechoslovakia
559
2,438
2,997
Australia
2,541
2,541
Switzerland
1,930
1,930
Portugal
1,506
1,506
UAR
1,369
1,369
USSR
1,Ol6
1,016
Argentina
859
859
Denmark
783
783
Austria
609
609
Iran
322
322
Hungary
305
Kenya
178
178
Mozambique
51
153,602
528,122
681,724
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Importance of Zambian Copper
to Selected. Countries of the Free World
1964
Total Imports
Imports
Country
of Unwrought Copper
and. Copper Alloys a/
(Metric Tons)
Imports
from Zambia b
Metric Tons
from Zambia
as a Percent
of Total
United Kingdom
529,475
235,898
44.6
West Germany
488,513
101,916
20.9
United. States
468,626
20,353
4.3
Belgium/Luxembourg
321,929
13,423
4.2
France
259,620
39,763
15.3
Italy
199,512
53,424
26.8
Japan
122,418
80,716
65.9
Sweden
62,342
16,850
27.0
Switzerland.
38,681
1,930
5.0
Netherlands
36, 79.0
27,820
75.6
Spain
29,213
5,382
18.4
Austria
24,868
609
2.4
Total
2,581,996,
598,084 J
23.2
a. "Unwrought copper and. copper alloys" is essentially the same cate-
gory as that used. by Zambia in reporting exports and corresponds to
the UN SITC 682.1 classification. Alloys play a relatively unimpor-
tant role in total imports of this type of copper.
b. Based. on Zambian data.
c. Total Zambian exports were 681,724 metric tons.
Analyst:
Coord:
25X1A
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