Africa mining: Will mineral-rich countries start a cartel like OPEC?

[phantom power]

"I think we're at a turning point," says Bonnie Campbell, political science professor at the University of Quebec in Montreal and author of "Mining in Africa." "There's been a quarter-century where a certain investment-friendly road has been taken. there is a recognition that there needs to be another focus."

A cartel modeled after OPEC?The capstone of that push, at least for Wade, would be an international alliance of Africa's mineral-rich nations, modeled after OPEC – a pan-African body that could influence the price of metals like the cobalt in Chinese-made laptop and cellphone batteries, 90 percent of which comes from Africa, according to the business watchdog SwedWatch.

"It's an ambitious but feasible idea," says Mazou Yessouph Faudy, geological director for Niger's Mining Ministry. "Our economy is falling. As a producer of uranium, it would be good to involve ourselves in a union of producers that could set the price."

Already, according to estimates by gold mining company Randgold Resources, the continent produces 30 percent of the minerals required by the US and China.

http://news.yahoo.com/s/csm/20100504/wl_csm/298319

[Captain Hilts]

1. It's tough enough for OPEC or OAPEC to keep their cartel going. With, say, copper,

the temptation to cheat is pretty strong.

[phantom power]

2. I'm sure that cartel management is above my pay grade.

I'd hardly know where to begin!

[Captain Hilts]

3. It's actually really hairy.

I actually studied this stuff.

Within OPEC and even OAPEC they spend so much time under-cutting each other. Then Saudi Arabia floods the market with oil to punish Mexico's selling cheap and Mexico's economy collapses along with the price of oil in 1983, and so forth.

Copper prices have been really volatile and that's what helped sink Chile's economy in the 1990s.

[phantom power]

4. At that level, there really isn't a higher authority...

I assume it's pretty much like a cold war. Whatever people think they can get away with, while allowing everybody to to keep smiling for the reporters.

[Captain Hilts]

5. Yep. The rewards for being a 'free rider' are huge. nt