Fight Racism! Fight Imperialism! 116, DECEMBER 1993/JANUARY 1994
RTZ, as it now dubs itself, is the world’s biggest mining company and, justifiably, Britain’s most infamous multinational.
The Times once said it was ‘almost patriotic’ to own shares in Rio Tinto Zinc. The Queen was cited as a major shareholder; her private secretary sat on the board. The Financial Times described RTZ in 1988 as ‘the dominant supplier of minerals to the world’s manufacturing industries’. It operates some 700 subsidiary companies in over 40 countries. In the name of the ‘economic development of the free world’ it drives people from their land, poisons the air and the water, injures and kills its employees and supplies the ingredients for chemical and nuclear weapons, and their delivery systems. Rio Tinto Zinc Stinks!
The trumpeting of the virtues of the free market and competition under contemporary capitalism are a deceit. Whether it be privatisation in Britain, neo-liberalism in the Third World or the opening up of the former socialist countries to ‘competition’, all are examples of the global policies of a handful of transnational monopoly companies. Just 500 companies control 70 per cent of world trade, 80 per cent of foreign investment and 30 per cent of the world’s annual product. Fifteen companies, including RTZ, control 21 of the world’s key commodities. They plan the poverty on this planet and its pollution. At the 1992 Rio Earth Summit they threw out the proposal for strict controls on hazardous waste.
In his book Imperialism, The Highest Stage of Capitalism, Lenin stated a truth that all apologists for capitalism attempt to evade.’ The rise of monopolies as the result of the concentration of production is a general and fundamental law of the present stage of development of capitalism.’ Once this law is recognised then the illusions of the democratic facade of capitalist society and its complement market competition, evaporate and in their place stand the brute power of RTZ and similar concentrations of industrial and banking capital that dominate global resources, production and distribution. RTZ produces nearly 15 per cent of the world’s copper, over 20 per cent of its industrial diamonds and talc, 13 per cent of molybdenum, 33 per cent of titanium dioxide feedstock, 50 per cent of borates and it per cent of uranium. RTZ is the world’s biggest marketer of uranium. It has substantial holdings in gold, silver, bauxite, coal, zircon and iron ore.
‘High quality, low cost mining’ is RTZ’s avowed philosophy. In his analysis of capitalist production Karl Marx pointed out that ‘The rate of profit depends partly on the good quality of the raw material. Good material produces less waste. Less raw materials are then needed to absorb the same quantity of labour… The labourer needs more time when using bad raw materials to process the same quantity’. Further, given that machinery is composed of former raw materials and consumes raw materials in the process of production, changes in the prices of those materials affect the rate of profit directly. ‘Other conditions being equal, the rate of profit, therefore, ‘fall and rises inversely to the price of raw materials.’ Capital Volume 3.
RTZ’s mining operations are governed by these inescapable features for capitalist production. The wages it pays, the conditions it provides its workers, the mining and leaching methods employed, its treatment of the environment, where it locates, are all governed by the need to produce high quality, low cost materials. Hence, its terrible reputation in Third World countries. However, mining today entails high exploration and development costs and large scale investments over a long period when markets are liable to be unpredictable. In these circumstances the tendency towards monopoly and joint ventures to dilute the burden of the costs is reinforced. Anglo-American Corporation, Union Carbide, Kaiser, Mitsubishi, Sumitomo, Shell and BP are some of the major transnationals that have undertaken joint ventures with RTZ. Joint ventures also allow the participants to control supplies and prevent competition from new entrants into the market. They may be used to co-opt a new entrant into the monopoly structure of the industry, while drawing on their capital which would not otherwise be available to the established dominant firms. RTZ frequently colludes with German and Japanese companies and is a major mineral and energy supplier to these countries.
RTZ is a key component of British imperialism and its operations govern foreign policy thinking. In 1992 it had a turnover of £4.6 billion from a workforce of 68,298, yielding a profit of £537 million. So broad are the range of RTZ’s mining operations and so strong its monopoly position that in the first half of 1993 when average metal prices fell 11.5 per cent, RTZ recorded a 15 per cent increase in profits.
Buying goodwill
RTZ has the distinction of being the first British public company to call police to eject participants in an annual general meeting, when, in 1982, an Aboriginal delegate and 30 supporters were thrown out for protesting against RTZ’s trampling over land rights in Australia. Events such as this and protests at RTZ’s role in South Africa and Nambia have made the company sensitive to the need to ‘tidy-up’ their image.
Today’s RTZ sponsors The Big Issue magazine for the homeless in London. In 1985 it made a generous donation to the Ethiopian famine appeal. Its magazines and annual reports tell of training schemes and overseas scholarships in Namibia, of sponsoring the arts. Such activities neatly project the notion that RTZ is socially responsible, putting something back in, and budget allocations are made accordingly. However, more strategically significant is its policy of appointing local managers in different countries and selling shares locally: buying goodwill where it counts, cutting off potential routes of opposition. Where a local community objects to RTZ’s mining proposals RTZ will attempt to buy one section of the opposition off, be they radical student leaders in Namibia co-opted into the management or Aborigines rehoused in Queensland and then presented as examples of how RTZ commands local support. Such are the political skills acquired by a colonial ruling class.
Around 80 per cent of RTZ’s shares are British owned. The many subsidiaries are monitored and directed from St James’ Square, London. During the 1970s RTZ’s board of directors included former Conservative Foreign Secretary and NATO Chief Lord Carrington, Labour’s House of Lords leader Lord Shackleton and Liberal Party Chair Lord Byers.
In 1968 RTZ’s director, Sir Val Duncan was appointed by the Treasury to report on reforms needed in the diplomatic service. In 1975 Sir Val called together Lord Robens of the National Coal Board, some army officers and a few journalists to plan a takeover of the national power grid, generating plants and media in the event of insurrection in Britain.
Until 1991 Chair of the RTZ board and now a nonexecutive director Sir Alistair Frame, previously director of the Atomic Energy Agency, was an adviser to Mrs Thatcher. He was her first choice to manage the destruction of the miners and the coal industry, but he declined and McGregor was appointed from the US metal multi-national Amax instead. Ronald Reagan’s 1989 trip to London to deliver the Churchill Lecture was sponsored by RTZ. These are a few samples confirming Lenin’s observation that: ‘A monopoly, once it is formed and controls thousands of millions, inevitably penetrates into every sphere of life, regardless of the form of government and all other “details “.’
The current directorship reflects the degree of concentration of power and wealth in Britain accomplished by the fusion of banking and industrial and expressed through interlocking directorships. A mere handful who dominate the City and industry are represented in RTZ. Sir Alistair Frame is also chair of Wellcome and British Steel. Alexander is chair of National Westminster Bank, Trustee of the National Gallery, Chairman of the Council of Justice and President of the Institute of Fiscal Studies. Lord Armstrong is the former ‘economically truthful’ Secretary to the Cabinet and Head of the Civil Service and currently a director of Shell, BAT Industries, Inchcape and a Trustee of the V&A Museum. Richard Giordano is a director of BOC Group, Reuters and Georgia Pacific Corporation in the USA as well as being Deputy Chairman of Grand Metropolitan. Sir Denys Henderson is Chairman of ICI and director of Barclays Bank. Sir Martin Jacomb is a Deputy Chairman of Barclays and Commercial Union Assurance, a director of Marks and Spencer and the Bank of England. He is also Chairman of the British Council. ‘A very close personal union is established between the banks and the biggest industrial and commercial enterprises, the merging of one with another through the acquisition of shares, the appointment of bank directors to the Supervisory Boards … of industrial and commercial enterprises, and vice versa’ Lenin, Imperialism.
Substantial shareholdings in RTZ are held by Commercial Union, Norwich Union Insurance, Provincial Insurance, Prudential and Sun Alliance. Historically, RTZ has developed close financial links with Barclays Bank, Rothschilds, Kleinwort Benson, Morgan Stanley and the First Boston Bank. RTZ is finance capital, the merging of industrial and banking capital which Lenin identified in Imperialism, that strengthens the domination of a financial oligarchy on all of society. When the residents of Camelford in Cornwall found their pink towels
RTZ – the international lawbreaker
turning blue and bleached hair going green, with 20,000 people seriously afflicted by aluminium poisoning, the name RTZ barely figured. Yet it was a RTZ subsidiary that had poured 20 tons of aluminium sulphate, accidentally, into the local water supply.
Barely a ripple seems to have been caused by Timothy Renton’s revelation to the Scott Inquiry on British arms sales to Iraq that RTZ had sold hydrogen fluoride (HF), a principal ingredient in nerve gas, via Egypt on to Iraq, in 1986. Renton explained that his original objections on hearing of the proposed deal were overcome by his consideration of RTZ as ‘a reputable company’ and besides HF was ‘widely traded elsewhere’.
In the early 1970s in the context of a global boom in nuclear power station orders, the US Justice Department, inspired by the Westinghouse Corporation, investigated RTZ and a uranium trust designed to push up prices. RTZ executives ‘took the Fifth Amendment’ at hearings at the US Embassy in London. The Law Lords then ruled that US court orders requiring executives to give evidence were an infringement of British sovereignty. Not surprising, given that RTZ directors occupied commanding positions in the House of Lords and throughout the organs of state.
‘Go Forth… Save Civilisation’
Rio Tinto was forced in 1873 in Britain as a Mining finance house to benefit from Andalusian mineral de its. In the first 10 years of its oper ation hundreds of Spanish miners died of silicosis, pulmonary disorders and starvation. By the end of nineteenth century it was Britain’s biggest mining company. In 1924 Rio Tinto joined Sir Ernest Oppenheimer, founder of Anglo-American Corporation, in the exploitation of Northern Rhodesian (Zambian) copper. The two collaborated with two other firms to form a copper cartel. which raised copper prices and the cartel’s income by 84.4 per cent in two years. Thus began a partnership between Rio Tinto and Anglo American which continues to this day.
The Andalusian mines became a stronghold of Spanish Republicans, with communist and anarcho-syndicalist workers. A workers’ rebellion in 1934 was violently crushed and many workers were imprisoned. When Franco’s fascists invaded the province, Rio Tinto’s chair told the London Annual General Meeting: ‘Since the mining region was occupied by General France’s forces, there have been no further labour problems … Miners found guilty of troublemaking are court-martialled and shot!’
Franco instructed Rio Tinto to supply ore to the Nazi rearmament programme, which it did.
Sir Val Duncan joined the company in 1954 after serving at the Foreign Office and National Coal Board. He recounted how the head of Rio Tinto was called to the British Atomic Energy Commission and told to ‘go forth, find uranium and save civilisation’. Rio Tinto obliged, with government assistance, and bought deposits in Canada, Australia and the infamous Rossing in Namibia.
Before he took control of Lonrho in 1961 (see FRFI 112) Tiny Rowland had ties to Rio Tinto, arranging for it the purchase of emerald and gold mines in Southern Rhodesia (Zimbabwe). Rowland remained a paid consultant to RTZ from 1961-69. Rio Tinto merged with Consolidated Zinc in 1962 to form Rio Tinto Zinc and thereby add holdings of Australian iron ore, bauxite and zinc to the portfolio. By 1983 RTZ had become Britain’s fourth largest overseas producer with output valued at £3.44 billion. When RTZ bought up BP’s mineral operations in 1989 for $3.7 billion they accomplished Britain’s biggest ever intracompany deal and almost doubled RTZ’s size, adding to it the US Kennecott concern. This year RTZ has bought up 5 per cent of the US coal industry with the purchase of Nerco and the Sun Oil Company’s Cordero Mining. RTZ is British imperialism personified.
Trevor Rayne
(This report owes much to Plunder by Roger Moody, published by PARTIZANS and CAFCA. PARTIZANS are People Against RTZ and its Subsidiaries, 218 Liverpool Road, London N1 1LE)
To be continued…
