87 
6. Political objectives and economic situations that are similar 
among producers, a condition which implies a relatively small 
number of producers. 
Using these criteria the State Department analyzed the market sit- 
uation for several industrial raw materials and found little likelihood 
of a serious threat to the United States. With regard to manganese ore, 
the principal sources for the United States are South Africa, Gabon, 
Brazil, and Zaire. India is another major producer. The likelihood of 
this group forming an effective cartel was considered small, but sup- 
pliers to the U.S. market were individually able to obtain substantially 
higher prices in recent negotiations despite releases from the GSA 
stockpile as a bargaining measure. 
A copper cartel, CIPEC, has existed since 1967, but thus far has 
failed to function effectively as a bargaining group. Copper prices 
reached a record high in the second quarter of 1974 due to factors 
unrelated to cartel action, and prices have been declining since. The 
United States is a major copper producer and would be less affected by 
a successful copper cartel than other industrialized countries. 
Cobalt is produced as a byproduct and cartel of cobalt exporting 
countries would have to depend to some extent on the mining and 
processing of iron, copper, and nickel. Among the developing coun- 
tries producing cobalt, that could possibly form a cartel, are Zambia, 
Zaire, Morocco, and Cuba. It is not considered likely that the United 
States would be significantly affected by a cobalt cartel of these coun- 
tries. Although we import essentially all the cobalt we consume, the 
total requirement is relatively small, and other producers are available. 
Exports from Canada account for most of the nickel consumed in 
the United States. Developing countries, primarily Cuba and Indo- 
nesia, produce only 13 percent of the world mine production of nickel. 
A nickel cartel that did not include Canada would hardly be con- 
sidered effective, especially against the United States. However, al- 
though Canadian and U.S. friendship has strong diplomatic, cultural, 
and strategic ties, Canada is becoming increasingly independent in 
foreign policy and economic diplomacy. Canada is reassessing its role 
as a raw mineral exporter and attempting to increase Canadian owner- 
ship of foreign investments. 
A report prepared by the Congressional Research Service titled, 
Domestic Raw Materials Resources, Production, and Demand vis-a-vis 
Imports From Abroad, concluded : 
In general, the situation regarding potential formation of materials cartels by 
Third World nations is unclear. Powerful arguments can be raised on both sides 
of the question * * * However, in view of the increasing dependence of the 
United States upon many of these cartel-candidate materials, it is clear that the 
possibility of cartels cannot be dismissed out of hand. ° 
Thus far, the discussion of cartels has concerned only present land- 
based mineral exporting countries. The position taken by the Group 
of 77, representing about 100 developing countries, in the Third U.N. 
Law of the Sea Conference, would establish a regime that would give 
the United Nations a “cartel” with essentially arbitrary powers in deep 
seabed mining and metal production. The United States and delegates 
of other industrialized countries are generally opposed to vesting this 
8 Bullis, op. cit., pp. 19-20. 
