EIS asked our political risk analyst to have a look at some stategic
minerals.  Here is a start. There's more coming.  We'll try and have a look
how some investments can be shaped by following these.  Graham will keep an
eye on developments for us in the coming year.

Strategic Minerals, By Dr Graham E.L. Holton

CONTENTS:
~ Introduction

~ Strategic Metals as Defined by the U.S. Government

~ U.S. National Defense Stockpile Inventory

~ International Strategic Minerals

~ Strategic Metals Used in Metallurgy

~ Expected Increase in International Demand

~ Unlikely Increase in Short-term Demand

~ Overview of African Mining Industry

~ Metals Mine in Africa:
Chromite

Cobalt

Gold

African Gold Mining

Magnesium

Manganese

Nickel

Platinum

Zimbabwe Platinum Mining Industry

Vanadium

Other Minerals

African Mining Statistics

African Mining Projects

African Mines

Glossary of Mining Terms
INTRODUCTION:
During the next five years strategic minerals will be of special interest
as governments replace their military stockpiles, depleted at the end of
the Cold War, and the heating up of international conflicts in various
parts of the world. Of immediate necessity are metals used in the aerospace
and armaments industries.

Strategic minerals are required for the electronics and automobile
industry, for catalytic converters necessary to meet increasingly strict
environmental regulations, including NAFTA (North American Free Trade
Agreement) and the E.U. Many minerals produced in Third World countries are
affected by geopolitical uncertainty, and internal political problems which
disrupt production and push up those commodity prices internationally.
Other disruption is caused by environmental and social justice groups which
force the closure of mines, and thereby affect international prices.

Numerous factors affect company share prices and the international price of
commodities. Company share prices are affected by litigation by other
corporations, environmental and social justice groups, indigenous groups,
and governments investigating antitrust and antidumping violations.

Strategic Metals as Defined by the U.S. Government:
U.S. FOREIGN RELATIONS •SUBCHAPTER III - GENERAL AND ADMINISTRATIVE
PROVISIONS •Part III - Miscellaneous Provisions § 2423. Exchanges of
certain materials.

(a) Agreement for necessary or strategic raw material; definition
Notwithstanding any other provision of law, whenever the President
determines it is in the United States national interest, he shall furnish
assistance under this chapter or shall furnish defense articles or services
under the Foreign Military Sales Act (22 U.S.C. 2751 et. seq.), pursuant to
an agreement with the recipient of such assistance, articles, or services
which provides that such recipient may only obtain such assistance,
articles, or services in exchange for any necessary or strategic raw
material controlled by such recipient. For the purposes of this section,
the term 'necessary or strategic raw material' includes petroleum, other
fossil fuels, metals, minerals, or any other natural substance which the
President determines is in short supply in the United States.

(b) Allocation of raw materials to Federal agencies
The President shall allocate any necessary or strategic raw material
transferred to the United States under this section to any appropriate
agency of the United States Government for stockpiling, sale, transfer,
disposal, or any other purpose authorized by law.

U.S. National Defense Stockpile Inventory:
Aluminium
Antimony
Bauxite (Jamaica)
Cadmium
Chromite (mettallurgical and refractory)
Copper
Fluorspar (Metallurgical)
Germanium
Lead
Mica (Muscovite)
Nickel
Platinum
Silver
Tantalum minerals
Tin
Tunsten (Powder)
Zinc

International Strategic Minerals:
Mineral         Moved By
Beryllium               air transport
Cobalt                  container vessel
Columbium               container vessel
Chromium                bulk carrier
Gallium                 air transport
Germanium               air transport
Indium          air transport
Manganese               bulk carrier
Platinum                air transport
Rhenium                 air transport
Tantalum                air transport
Titanium                bulk carrier
Tungsten                container vessel
Vanadium                container vessel

Strategic Metals Used in Metallurgy:
Antimony: Used as a hardener to solder, pewter, white metal bearings,
accumulator plates (car batteries), and telephone sheathing.

Beryllium: Beryllium copper is amonst the strongest non-ferrous alloys,
though has toxicity and processing problems.

Cadmium: Obtained as a byproduct of zinc production and not mined in their
own right. Used in nickel-cadmium batteries for uniterrupted power supply;
cadmium coating of metals to stop corrosion; photoelectric cells in street
lighting; stabilizer in PVC (polyvinyl chloride); and paint pigments.

Chromium: 70% used in high-performance, stainless steels; Nimonic alloys
for jet engines.

Cobalt: Used in superalloys and Nimonics; cobalt-samarium and Stellite
alloys used for high temperature properties in petrol and diesel engine
exhaust valves and rebuilding of knee and hip joints. Over half the world's
supply comes from Zaire and Zambia which have numerous political problems.

Gallium: Used for doping silicon for transistors, gallium arsenide lasers
in telecommunications technology and compact disc players;
electro-luminescent lamps.

Germanium: Used as semiconductor in transistors; infrared and gamma-ray
detectors.

Indium: Not mined in its own right but as a byproduct of zinc, copper, lead
and tin mining. Used in fusible alloys in medical radiology and safety
devices; semiconductor, photo-electric cells, and optical fibres.

Managanese: Fifth in tonnage consumed by industry world wide. Used in very
hard steels for bridges, ship plates, automobile engines, railway points,
rock drills, stone crushers,; electrical resistance alloys; propellers of
submarines.

Molybdenum: Largest ore deposits are in U.S.A., Canada, and Chile. High
corrosion resistance in chemical industry as autoclaves and tubes and
electrodes; low alloy steels for construction; railway traffic hauling iron
ore; stainless steels; low temperature steels; high and low speed steels;
radiation shielding in vacuum melting furnaces; construction in nuclear
engineering; industrial and automobile lubricants.

Palladium: Cheaper than platinum; used in speech circuits of telephones;
Palladium catalysts are used in oxidation and hydrogenation processes, in
margarine manufacture; hydrogen manufacture; 'cold fusion' reactors.

Platinum: Principal supplies from Russia, South Africa and Canada. Platinum
catalysts are used in chemical processes to manufacture ammonia, low-octane
petrol; catalytic converters of cars and oil refineries to reduce emission
levels to follow environmental regulations; The automobile industry is the
largest user of Platinum. Optical glass and pyrometer manufacture.
Rare Earths: Used in cigarette lighter flints; abrasives in high quality
polishing of glass of lenses, mirrors and TV face plates; catalysts in oil
industry; magnetic alloys. Gadolinium is used in the control rods in some
nuclear reactors.

Rhenium: Strengthens tungsten and molybdenum at high temperatures to
produce high temperature thermocouple wires.

Tantalum: Extremely high corrosion resistance and ability to store
electrical energy, over half is used in small capacitors in electronics
industry, the market is enormous, especially in Japan and the United
States. In chemical engineering is used in vessel liners, heat exchangers
and thermocouple protection sheaths; in surgery for impants; refractory
processes; cutting tools.

Tungsten: Steels containing tungsten are capable of machining metals at
high speeds, used in tool drilling tips, oil well drilling cones; where
high inertial forces are encountered in governors, gyroscope motors and
balancing weights; shielding materials against X-rays and Gamma-rays;
playing darts.

Vanadium: Used in high strength, low alloy steels for bridges, high rise
buildings, aircraft hangers, oil and gas pipelines and oil and gas
production platforms.

Yttrium: Lasers required to study electronic circuits; nickel- and
cobalt-based superalloys as coatings for turboblades in aero engines;
lambda-sensors for determining the oxygen content of automobile gases.

Expected Increase in International Demand:
Primary Aluminium: prices have increased since the low of November 1996.
Antimony: Used in automobile industry.
Chromium: slow growth but stable prices.
*Cobalt: a strategic commodity used in aerospace industry. Political
problems in Zaire affect production. Court action by Minor Metals.
*Columium: a strategic commodity used in aerospace industry in superalloys.
Magnesium: future usage in the automible industry, but affected by
increased recycling and dumping by the former U.S.S.R.
Manganese: essential to iron and steel production and in batteries, but low
demand expected because of world overcapacity.
*Molybdenum: refractory metallic element used as an alloying agent in steel
production, with long- term demand. Prices are presently stable.
*Platinum and Palladium: dominant metal used in catalytic convertors.
Increase in environmental legislation in North America and Europe and the
increase in the automobile industry in Asia will see a long-term increase.
Also has other industrial usages. Russia supplies half of the palladium and
25 % of the platinum used in world market, and prices have been affected by
decrease in shipment.
*Rare Earths (Lanthanides, Yttrium, Scandium): increased demand in
catalytic convertors and rechargable batteries.