Suburbia in the Jungle

In the matted green jungles of Brazil's primitive Amazon valley territory of Amapa sits a surprising little town. With its broad, paved streets, ranch-style houses, well-stocked supermarket and air-conditioned club, it looks more like a suburb of New York or Los Angeles than a settlement in the wilderness. It is the town of Serra do Navio (pop. 2,200), and it is run by a company that has become a Latin American model of profitable cooperation between local and foreign capital.

The company is ICOMI (for Industria e Comercio de Minerios), which is owned 51% by Brazilians and 49% by Bethlehem Steel Corp. ICOMI owns the exclusive rights to one of the world's biggest known reserves of manganese ore, discovered in the Amazon Basin in 1946. By careful planning, efficient management and plain luck, it has not only launched a highly successful mining operation but completely avoided the abuse that Brazil's ultranationalists have heaped on other mining firms that have foreign interests.

ICOMI has been so successful, in fact, that it is beginning to make its presence felt all over Brazil. It recently joined with Sweden's SKF to build a ball bearing plant near Sao Paulo, is making plans to expand into the sugar, plywood and palm-oil businesses. With world manganese prices once more moving up after a slump, ICOMI expects soon to have even more money for seed capital and diversification.

Looking to Bethlehem. After manganese was discovered in the Amazon, a mineowner named Augusto Trajano de Azevedo Antunes obtained the mining rights and began looking for foreign help to swing the operation. A number of U.S. companies turned him down, insisting on 100% of the business or nothing at all. Finally, in 1949, Bethlehem Steel agreed to supply Antunes with financing and technical know-how in return for a minority interest. The arrangement has proved so successful that it has been imitated of ten by other mining, oil and industrial companies getting started in Brazil.

ICOMI laid a 122-mile railroad through the jungle, dredged a stretch of the Amazon so that it could handle ocean-going ships, built docks and roads. The World Bank helped out with a $35 million loan; the Export-Import Bank provided $67.5 million. Major construction was finished in 36 months instead of the projected 48 months, and the first big shipments began moving down the river and out to sea in 1957, enabling ICOMI to cash in on the unusually high manganese prices caused by the Suez crisis. Since then, ICOMI has shipped 5,900,000 tons, grossed $224 million in all and netted between $12 million and $15 million each year. Moreover, it was able to repay its Export-Import Bank loan three years ahead of schedule.

Long-Term Commitment. Through revolution and expropriation ICOMI has remained unscathed. The main rea sons are that Bethlehem decided to stay in the background, commit its investment in Brazil to the long term and leave the management to Antunes. Antunes, now 58, is known as one of Brazil's most able and enlightened businessmen. He has started Brazil's first private foundation to support agricultural research, push education and development in backward areas. He has provided ICOMI workers with modern homes, built a fully staffed hospital, set up some of the best schools in Brazil. And all this has been done with little on-the-spot American help: Bethlehem has only one U.S. representative in ICOMI's top management.

This file is automatically generated by a robot program, so reader's discretion is required.