00a-Front: 00a-Front
Aluminum Smelter in Mozambique
Download 5.17 Mb. View original pdf
|
Morley, David - The Cambridge introduction to creative writing (2011) - libgen.li
- Navigate this page:
- Diamond Polishing
| Aluminum Smelter in Mozambique Mozal, one of the largest aluminum smelters in the world, is located near Maputo, the capital of Mozambique. It was constructed in two phases with approximately $2 billion in funding and $1.1 billion in nonrecourse project funding from international enterprises. Shareholders in the enterprise are BHP Billiton of Britain (47 percent owner, and the smelter operator, Mitsubishi Corporation of Japan (25 percent, Industrial Development Corporation of South Africa (24 percent, and the government of Mozambique (percent. The factors that have led to Mozal’s success include a competitive and inexpensive power supply, based on Mozambique’s connection to neighboring countries through the intraregional power grid training of efficient labor and a good supply of raw materials. Mozal has contributed to a doubling of Mozambique’s exports, providing in excess of $400 million in foreign exchange earnings per year and adding more than 7 percent to GDP. Moreover, a goal of Mozal is to recruit and train staff directly from the local community. At its peak, it is anticipated that 65 percent of the Mozal labor force will be Mozambican. The Mozal project has also contributed to significant spillovers. These include upgraded roads, bridges, water lines, and hazardous-waste facilities. In addition, numerous contracts have been awarded to local small and medium enterprises (SMEs). Diamond Polishing Today, most commercially viable diamond deposits are in Africa, notably in South Africa, Namibia, Botswana, the Democratic Republic of Congo, Angola, Tanzania, and Sierra Leone. The diamond value chain is highly concentrated. De Beers runs most of the diamond mines in South Africa, Namibia, and Botswana that long produced the bulk of world supply of the best gemstones. The Diamond Trading Company (DTC) is a subsidiary of De Beers and markets rough diamonds produced both by De Beers, who produces more than half of worldwide production of rough diamonds, and other mines. DTC performs sophisticated sorting of rough diamonds into over categories, and then sells bulk lots of rough diamonds to a limited number of invited clients or “sightholders” at nonnegotiable prices. Once purchased by sightholders, diamonds are cut and polished in preparation for sale as gemstones. The cutting and polishing of rough diamonds is a Continues on the following page.) 06-Chap6:06-Chap6 10/9/06 2:39 PM Page 297 298 AFRICA ’ S SILK ROAD : CHINA AND INDIA ’ S NEW ECONOMIC FRONTIER BOX 6.1 (continued) specialized skill that is concentrated in a limited number of locations worldwide. Traditional diamond cutting centers are Antwerp, Amsterdam, Johannesburg, New York, and Tel Aviv. Recently, diamond cutting centers have been established in China, India, and Thailand. Cutting centers with lower costs of labor, notably Surat in Gujarat, India, handle a larger number of smaller carat diamonds. India, where 900,000 people are working as basic polishers, produces 90 percent of all cut and polished diamonds by number. Partly in an effort to break the market concentration, several diamond trading companies have started establishing polishing plants in Africa. In June, Lev Leviev Diamonds, the Israel-based second-largest diamond trader in the world, opened Africa’s first diamond-polishing factory in Namibia, employing 550 workers. In September 2004, Eurostar Diamond Trader, a Belgian-based diamond company, broke ground in Botswana for the construction of anew diamond cutting and polishing factory, employing more than 1,000 workers. However, the viability of such polishing plants in Africa is still in question. In Namibia, for example, just a few hundred people work as polishers and cutters. There are few skilled workers, the scale of production is small, and wage costs are roughly 10 times those of India. In South Africa, because skilled labor is in relatively short supply, the estimated cost of cutting and polishing diamonds there is $40–60 a carat, compared with $10 a carat in India and $17 a carat in China. However, there is also anew movement from India to make it the global hub for the diamond market. The Indian Department of Commerce set off in Augusta series of initiatives with major diamond producing countries, including South Africa, Namibia, Ghana, and Angola. The shortage of skilled workers in South Africa has hampered the country’s advantage in diamond polishing. However, India’s policymakers identify this as a potential for providing skills training to South Africans so that South Africa could move up the value chain. Two models were suggested to South Africa under which a joint venture of diamond jewelry (including cutting and polishing of diamonds) could beset up in Mumbai with roughs coming up from South Africa and jewelry being exported to South Africa. The second one pertains to setting up a joint venture in South Africa. Source: World Bank staff. 06-Chap6:06-Chap6 10/9/06 2:39 PM Page 298 INVESTMENT - TRADE LINKAGES IN AFRICAN - ASIAN COMMERCE 299 Worldwide, there appears to be a natural progression in a country’s participation in networks, reflecting the country’s development path. 12 Because buyer-driven commodity chains usually involve less capital- and technology-intensive production processes, they are typically the networks through which developing countries enter the global production system. Developing countries often start with unskilled-labor-intensive exports, such as apparel, agricultural products, and natural resources. Overtime, rising wages and improved human and physical capital allows them to move up the value chain. Ideally, this process of upgrading shifts the export mix toward skilled labor- and capital-intensive exports conducted through producer-driven networks, such as those in the automotive and information technology industries. This has important implications for understanding the evolution of the linkages between trade and FDI flows by China and India with Africa. Download 5.17 Mb. Share with your friends:
|