America is losing one of its most basic industries
Just south of Tucson, a two-lane highway rolls through the desert to Mexico. Along one 26-mile stretch, it skirts five open-pit copper mines amid the saguaro cactus, mesquite, and ironwood. This is U.S. 89, known as el camino de la muerte – “road of death” – for the toll it has taken on drivers zooming north of Nogales. But the macabre name might just as easily refer to the mines that line this lonely road. Once the workplaces of thousands, they are now either closed or up for sale – a stark reminder of the sad state not only of U.S. copper companies, but of most of the rest of the North American metals mining industry.
The recovery of the 1983-84 largely bypassed producers of copper, iron ore, nickel, lead, zinc, and molybdenum. Now, after a prolonged period of painful losses, these companies are reeling from what are clearly chronic problems: shrinking markets, huge debt, and depressed prices. Three or four major metals producers may even be forced out of the business over he next few years. In a very real sense the industry is dying.
The pangs of mining are the latest example of what may be an industrial megatrend: the inexorable shift of the production and processing of all basic materials from the industrial countries to the Third World. Like steelmaking, metals mining is vulnerable to some fundamental forces. It is an industrial activity in which, these days, the developing nations have an almost unbeatable pair of economic advantages: cheap labour plus very low cost reserves.