Discussion - State Companies in International Industrial Minerals Trading – Technical Papers, MINING ENGINEERING, Vol. 35, No. 10, October 1983, pp. 1423-1426 – Prast, W. G and Radigan, A. M.

The authors' paper did not explain the facts and reasons why state companies are established and what their role is in international industrial mineral trading. Also. I do not agree with the conclusion implying that the main goal for state companies is to capitalize natural resources. Almost all state companies are founded by certain laws and their activities are arranged by state regulations. Their only aim is to operate mineral deposits for their people and to protect the rights of the people. Although some ore deposits, such as nonstrategic or small, may be exploited by privately owned companies, the state has the right to control the operation and production. Activities of state companies may or may not be widened because of the character of the deposits and the importance of the mineral market involved. For some countries, although governments may occasionally change hands, the policy of the mineral trading system is not affected by this change. There is no doubt that any government desires to make more earnings to increase GNP, when it is involved in operating and trading mines. It wants to produce and sell the finished products, instead of unprocessed ones, if possible. When it is known that some mineral deposits are relatively rare, such as Turkish boron deposits, the government can nationalize the mines to control production and affect the market. If there is an abundance of a certain mineral in the market, the government can cut production and set a floor price, such as Canadian potash. Also, when production of a specific mineral is unique, such as Turkish chromite, the price of such mineral may be set by correspondent government. One may add that if some governments with their state companies produce a certain mineral in a larger amount, they may decide to establish a cartel to protect their production and price. These are the facts followed by government-owned state companies and partially government-owned companies. The reason being charge of many deposits by the state companies is always the same: "protect" the mineral rights of the people.