Strategic Metals, Critical Choices

Worries over dependence on dubious suppliers

The rising use of trade sanctions around the world has demonstrated how economic warfare is now diplomacy by other means. Since 1973 oil producers have openly used their petroleum weapon to further their Middle East political objectives. Last year Nigeria introduced natural resources trade-offs by threatening to cut oil exports to the U.S. if the Carter Administration lifted the American boycott on chrome imports from racially troubled Zimbabwe Rhodesia. Both the possibility of other OPEC-type raw material cartels and Soviet economic retaliation against the U.S. have begun to worry the experts. Warns Harry J. Gray, chairman of United Technologies: "The minerals situation is similar to oil. Without an intelligent national minerals policy now, we will become increasingly vulnerable."

The U.S. is already alarmingly dependent on imports for many of its most critical industrial raw materials. In all, 98% of America's manganese, 97% of its cobalt, 93% of its aluminum and 91% of its chromium come from foreign ores. More than 50% of its tin, nickel, zinc and tungsten ores are also imported. The supply of several of these materials is susceptible to interruption because they come from either the Soviet Union or from unstable southern African nations that suffer serious internal troubles. The most important minerals include:

Cobalt. A white metal used in jet aircraft engines as well as mining and machine-tool bits, cobalt is supplied mainly by Zaire, which has 65% of the non-Communist world's reserves. Recurrent civil wars over the past three years have kept the price dancing between $6.40 and $50 per Ib. Other producers include the U.S.S.R. and Cuba. Reports Charles River Associates, a consulting firm in Boston: "The cobalt situation is one of the most serious problems facing consumers of critical materials today."

Manganese. The Soviet Union and South Africa provide more than 60% of the world's supply of this metal, which is essential in steel production. Australia is a major exporter, but its potential for expansion is limited. Other non-Communist exporters, such as Brazil and Gabon, have either declining exports or unstable internal politics. The Boston consultants call the manganese situation "a cause for some concern" because the possibility of finding substitutes is "extremely limited."

Chromium. The major deposits of this material, used in stainless steel, ball bearings and surgical equipment, are in South Africa, Zimbabwe Rhodesia and the Soviet Union. Says Allen G. Gray, technical director of the American Society of Metals: "A cutoff of our chromium supply could be even more serious than a cutoff of our oil supply. We do have some oil, but we have almost no chromium."