This
assignment is all about identifying a regional network of production and
analysing this network using at least two of the concepts presented with
particular attention to the linkages of the regional with the non-local actors.
Another point of attention is to make clear how the network constrains and/or
enables actors to work towards closing material loops. First of all I will
however introduce the case so that afterwards we can apply theory and analyse
it in depth. I chose this case as my wife is Chilean and part of her family
used to work and live near the mine and in the period they used to work there
we’ve visited the site. An experience that truly leaves you in aw in terms of
scale, but also makes you think about the tremendous environmental impact of
the mining industry. It really felt like a visit to Mordor from the Lord of the
Rings.
If you
are not in the mining industry most likely you might have
never heard of the
company, but there is a very high chance that you have used products that
contain something from Codelco as it is the largest copper mining company in
the world that produced 1/3rd of the world mined copper. Codelco, Corporación
Nacional del Cobre de Chile, is a state
owned copper mining company that was formed in 1976 after the foreign owned
copper companies were nationalized in 1971. Codelco sits on the world’s biggest
copper reserves and therefore will remain of importance in the future. Codelco
was born out of many different copper mines that were forced together by
nationalisation and therefor forms its own network. In country that is 4200 km
long, similar to from Lisbon to Moscow, it is almost difficult to call it a
regional network, but it is all within one country and one company. Recently
they have been developing some activities outside Chile in Ecuador, but that so
far has been the only venture they had abroad. However in this assignment I
will mainly focus on the copper production from the Chuquicamata mine near
Calama in the north of Chile.
Codelco
is not a footloose company and is highly dependent on where its minerals can be
found in the earhts crust, they locate where the resource is located creating a
whole economy around itself and even whole cities. A good example of such a
city is Calama or its predecessor Chuquicamata. Chuquicamata, shortened as
Chuqui, was where it all started. Iin 2008 they gave the now abandoned, or
better said evacuated city, a facelift as a final goodbye leaving written
parting messages on the homes, as it has by now disappeared below the mountains
of rubble (detritus) that come out of the mine. As it is too costly to
transport the waste rubble over long distances, the shortest distance is
preferred and that unfortunately is where the old city that once was home to
over 20.000 inhabitants used to be marking the end of over 90 years of its
existence. All people left, around 4000 as already years before Codelco started
shutting down the town, moving to Calama. Here housing was no longer provided
by Codelco, but the employees had to find their own houses. Calama currently houses around 150.000
inhabitants in the middle of the dessert that are completely directly or
indirectly dependent on the vicinity of the biggest copper mine in the world.
With a
brief explanation of the case let’s now move towards the application of theory.
Focussing on the mining of copper only and mainly near Calama, the company of
Codelco formed a whole industrial complex with a highly asymmetric dependency.
Codelco is the party with control over the resource, Copper, whereas all the
surrounding industries and service economy depends on it. As for instance
working conditions are extreme, incomes are very high. Dump truck drivers for
instance belong to the highest paid trucking jobs as their job requires a lot
of precision, patience and concentration and is key to the operation of a mine.
As miners usually work in shifts of 1 week up and 1 week down they do have
plenty of time to spend all their freshly earned money creating a whole
industry of consumption around it. There is not much to do in the desert so LAN
Chile, Chileans national airline company, in guaranteed plenty of flights to
handle from and to Calama. Furthermore the main form of entertainment in town
is the main mall where they more than happily receive a percentage of those
high salaries, etc. Furthermore there are many other services that are related
to the mining industry such as human resources companies, or environmental
impact companies that are contracted by Codelco to work for them. In this
sector my family in law worked, in capacitating humar resources and trying to
minimize environmental impact of the mine. Many things however where still
missing as for instance the protected animal called Vicuña are frequently run
over by trucks and left to die in the desert, while a simple animal ambulance
could save many of them. Another area where big investments are made by Codelco
is in going underground as the open pit is about to run out of copper.
Acquiring all sorts of knowledge and machinery needed to go underground as a
consequence is another industry thriving in the area. As one can see Codelco
Chuquicamata creates all sorts of jobs and directly and indirectly related
industries and services around it.
Applying the theory of Burt on the different types of networks I would
argue that the network I described would be a one with a high centrality as all
interaction takes place through one central actor (Codelco).
The
theory of Gordon and McCann on the types of regional network would classify the
regional network as an industrial complex as there is one central firm that
decides. They are the cause that their suppliers and customers co-locate. Of
course many of the big copper processing customers of copper are located
worldwide and they won’t co-locate as they also are not footloose in terms of
knowledge, cheap labour, etc., The high tech industry in China for instance is
a big buyer of Copper for all their products as only copper provides such high
conductivity that is highly sought after. So far no real alternative has been
found yet in this sense, but in construction for instance (another big user of
copper), plumbing has often been replaced by PVC so there they did manage to
replace it with other materials in some cases.
However the smaller industries that have to do with the mining
technology itself, or the wheeling and dealing of Codelco as such will
co-locate and be contracted by Codelco. The same goes for companies that
provide and maintain all the big machinery needed in the mine. The closing of
material and energy loops in the mining industry is mainly focussing on using
less energy and on efforts to generate renewable energy. In terms of closing
material loops in the mining industry that is sort of a contradiction in
terminus as mining as such only takes resources and pumps it into our society.
However they do focus on doing so in a less environmentally damaging way by for
instance investing in bio-leaching contrary to current more heavily chemically
and energy intensive ways. The government, which in some way is internal actor
as Codelco is a state company, but also can be seen as external, wants to
unhook the mining companies from the cheap energy they have been receiving from
the government and make them responsible to generate 20% of its energy in a
sustainable way. Currently Chile imports 70% of its energy and this with the
ups and downs in energy prices is an unwanted situation leading to miners in
Chile to build “independent solar, solar thermal, wind and geothermal power
plants that produce power at costs competitive with or lower than conventional
fuel supplies or grid-connected electric power”(http://www.renewableenergyworld.com/rea/news/article/2014/12/chiles-mines-set-hot-pace-on-renewables-australia-take-note). The actual main driver
that makes this all possible is the massive investment in renewables by China,
driving down the costs of these technologies and thus making them available at
a lower cost worldwide. Because of this currently the costs of energy generated
by renewables is lower than the costs of black electricity thus providing a
competitive advantage over other copper producing countries like Australia for
example that is lagging behind in terms of renewables.
Source: Paper written for the System Earth
course entitled “Copper at the foundation of our society” and conversations
with family in law, own experience, visit
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