Crisis Over Copper

Congo President Joseph Mobutu last week nationalized the Union Miniere du Haut-Katanga, the Belgian company that provided a living for 100,000 Congolese, accounted for about one-half of the government's revenues and 70% of the nation's foreign exchange. He thus took revenge on an institution that he held responsible for Moise Tshombe's Katanga secession in 1961, and that he charged with bilking the Congo out of its rightful share of the company's profits.

Mobutu turned all the company's copper-mining installations and other assets over to a new Congolese company, gave it a ten-man board of directors composed entirely of Congolese, and made the Congolese government the majority stockholder. He thus precipitated a crisis that, if allowed to develop, could plunge the Congo into economic and political chaos. "If we have to go hungry to be free and independent," he said, "then we'll go hungry. We prefer to remain poor and free to being rich slaves."

Pointed Question. The Congo will indeed be poor unless it can keep Union Miniere's mines, which produce more than 6% of the world's copper and 60% of its cobalt, running efficiently. In Brussels, the company reacted by withholding more than $10 million in royalties that it owes the Congo and ceasing its tax payments, which amount to about $2,000,000 a month. It also declared that it would regard any of the copper that is purchased from Mobutu's company by other countries as stolen property to be recovered in the courts, pointedly asked each of its 2,000 European employees in the Congo whether they would be leaving for home by month's end. Tanganyika Concessions Ltd., the British company that owns a share of Union Miniere and 90% of the railroad that ships its ore through Angola to the sea, also refused to go along with Mobutu's plan.

For all the rancor from past struggles, however, neither side is anxious for a real crunching showdown. While Nasser may have succeeded in running Suez without the British, Mobutu knows that keeping Union Miniere's complex operations going himself would be almost impossible. He has appealed to young Belgian technicians "of good will" to stay on the job, and the company is asking its managers to cooperate for the time being in running the mines. If nothing else, Union Miniere is anxious not to drive Mobutu into nationalizing other extensive enterprises in the Congo owned by its parent company in Belgium, Societe Generate de Belgique. Mobutu, who made no provisions for compensating the thousands of European stockholders in Union Miniere, is demanding an additional $150 million from Union Miniere as money he claims the Congo has been cheated out of.

Ideal Solution. The Belgian government stayed out of the affair, fearing that racial strife could break out and endanger the 45,000 Belgians in the Congo. The ideal solution to the impasse would be an agreement by Union Miniere that the nationalization was the legitimate action of an independent nation, and by the Congo that compensation is a part of any legitimate nationalization. If that should happen, Union Miniere could probably be recruited to continue marketing Congolese copper at a healthy profit to itself. If an agreement cannot be reached, the Congo is in for some hard times in 1967.

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