Institute of Pacific Relations

Dutch Now Control Large Bauxite OutputAuthor(s): Alvin BarberSource: Far Eastern Survey, Vol. 8, No. 12 (Jun. 7, 1939), pp. 144-145Published by: Institute of Pacific RelationsStable URL: http://www.jstor.org/stable/3021899 .

Accessed: 12/06/2014 18:10

Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at .http://www.jstor.org/page/info/about/policies/terms.jsp

.JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range ofcontent in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new formsof scholarship. For more information about JSTOR, please contact support@jstor.org.

.

Institute of Pacific Relations is collaborating with JSTOR to digitize, preserve and extend access to FarEastern Survey.

http://www.jstor.org

This content downloaded from 195.78.109.51 on Thu, 12 Jun 2014 18:10:03 PMAll use subject to JSTOR Terms and Conditions

144 Dutch Now Control Large Bauxite Output June 7

tung rises above 12^ a pound, paint manufacturers tend to favor substitution of other drying oils. With tung prices almost continuously above this level and deliver- ies from China so uncertain during the past two years, there have been extensive attempts at substitutions of linseed oil, Manchurian perilla oil, oiticica oil from

Brazil, synthetic dehydrated castor oil and other near substitutes. Convincing evidence, however, that the

tung-oil market is still not seriously threatened by the inroads of substitutes has just been offered in the report on consumption of fats and oils issued by the Bureau of the Census. The report indicates a 25% increase in the consumption of tung oil for the first quarter of 1939 over the figure for the same period last year, as com-

pared with gains of only 21% and 13% in the con?

sumption of linseed oil and perilla oil respectively. It would seem clear that as long as tung oil can be

secured from China it will continue to find a ready mar? ket in the United States, even at a relatively high price level. The seriousness of the threatened shortage?par? ticularly now that reserve stocks are so low?was of-

ficially recognized last December when the $25 million credit to Chinese interests was authorized by the

Export-Import Bank of Washington; among the an? nounced purposes of the loan was the facilitation of

tung-oil shipments to the United States (see Far East? ern Survey, Jan. 5, 1939, p. 5).

Joy Hume.

DUTCH NOW CONTROL LARGE BAUXITE OUTPUT

Rapidly rising production of bauxite in Netherlands India and the beginnings of a new nickel mining indus?

try there call attention to two of the lesser-known min?

eral resources of the Islands. Except for the large-scale development of tin and petroleum, the mining industry of the country has been relatively unimportant in spite of the known fact that it possesses a considerable store

of mineral wealth. Most of the minerals of Netherlands India are found in the outer islands where exploitation has been hindered by difficulties of transport and scar-

city of labor. It is only in recent years that these condi? tions have been somewhat remedied through the de?

velopment of interisland routes of communication, while at the same time the demand for metals arising from the armaments race and the desire to provide a more diversified base for the country's economy have focused attention on the expansion of the mining in?

dustry. It is possible that this effort has also been

strengthened by the shrewd guess that well-developed territories in the outlying regions less readily invite a

challenge to the sovereignty of the Netherlands Government.

Among the newer mineral industries of the Islands, bauxite mining is the most advanced. (The beginning of a nickel mining industry will be discussed in a later

issue.) Although large-scale operations in the industry were not begun until 1935, Netherlands India became an important bauxite producer in the following year and in 1937 ranked well up in the world industry. Production in Netherlands India is controlled by the Nederlandsch-Indische Bauxiet Exploitatie Mij. (NIBEM), in which several companies hold partici- pations, viz. the Billiton Mij., which has 28%; the Nederlandsch-Indische Tin Exploitatie Mij., 63.1%, and the Oost-Borneo Mij., 8.9%. The Nederlandsch- Indische Tin Exploitatie Mij. is in turn controlled

equally by the Billiton Mij. and the Gemeenschap- pelijke Mijnbouw Mij. Billiton (the Mutual Mining Co. Billiton), the latter a joint concern of the govern-

ment and the former Billiton Co. The deposits now worked in Netherlands India occur

on the islands of the Riouw Archipelago, off the east coast of Sumatra just south of Singapore, including the

larger islands of Bintan and Batam and a number of the smaller neighboring islands, notably Ankoet, Kojan and Boelan. The main plant is at Soengei Kolak, on Bintan, where bauxite deposits are found almost all over the island to a depth of about 4 meters. A typical analysis of the ore shows approximately 53% alumina, 2.5% silicon dioxide, 13.5% ferric oxide and 1.2% titanium dioxide. Open working is possible, and the ore, after simple washing, is brought to two large con- tainers and thence by conveyor belt to the ship. Years of investigation and preparation to insure the sound- ness of the project preceded the beginning of commer? cial operations, and mechanized equipment of the best

type has been provided. In the first year of operation a large addition was made to the bauxite-extraction

plant. There has since been added a very modern con?

veyor and stacker plant, said to be capable of loading the largest ocean-going cargo vessels at the rate of 800 tons per hour. Recently an overhead cableway connect-

ing the main plant on Bintan with the islands of Ankoet and Kojan has been completed and is expected to facili- tate the exploitation of deposits materially. A large mining force is required and the project, in 1936, em?

ployed about 6,000, mostly Chinese. In 1935, when commercial operations were first be?

gun on a large scale, Netherlands India produced 16,717 metric tons of bauxite. In 1936 production was in? creased almost ten times, amounting to 150,328 metric tons in a year when world production reached 2,835,000 tons. In 1937 Netherlands India produced about

200,000 tons against a world figure of 3,500,000, and in 1938 Netherlands India production was increased to about 230,000 tons on preliminary estimates.

Although production figures for island bauxite were somewhat below earlier expectations in 1937 and 1938,

This content downloaded from 195.78.109.51 on Thu, 12 Jun 2014 18:10:03 PMAll use subject to JSTOR Terms and Conditions

1939 Indo-China Faces Budget Deficit for 1939 145

they represent a substantial development of the indus?

try, which now ranks in importance with that of the

bauxite-producing areas of the Netherlands Empire in the western hemisphere. It is seldom realized that the Netherlands is a world colonial power in the fullest sense of the term or that the territories of the Empire in Europe, America and the Far East, though scattered

geographically, are rather closely knit politically and

economically in a single imperial organization. The Surinam Colony (Dutch Guiana) has been an impor? tant producer of bauxite for years, and if its 1937 pro? duction of 392,000 tons is added to production in the East Indies for that year it is found that Netherlands

Empire territories controlled only a little less than a fifth of the entire world output. Bauxite reserves in

Surinam, where both the Aluminum Co. of America and the Billiton Mij. have large interests, are estimated above 50 million tons, perhaps as high as several hun- dred million tons. While no recent estimate of bauxite reserves in Netherlands India has come to hand, earlier estimates ranged up to 20,000,000 tons. Taken together, these figures mean that the Netherlands Empire has more than one tenth of present estimated world re? serves of bauxite of ore grade.

Germany has been the best customer for Netherlands India bauxite, taking 128,000 tons out of 150,000 tons

produced in 1936; 139,000 out of 200,000 tons in 1937; and 193,000 out of 230,000 tons in 1938. Since German bauxite deposits are low-grade and are used mostly for abrasives when worked, the German aluminum indus?

try, which now ranks second to the United States in

production, imports almost all its ore. The commercial

treaty signed by Germany and the Netherlands in 1934, and subsequent agreements, took into consideration the

products of Netherlands India and opened the German market for Netherlands India bauxite when previous sources of supply for the Germany industry were some? what curtailed. France, the world's ranking producer of

bauxite, drastically restricted its exports of this com?

modity in 1935. Italy needed more of its domestic sup? ply for its own expanding aluminum industry. Germany continued to draw on Yugoslavian bauxite and more

recently has taken large quantities from Hungary, but German restrictions on the use of other base metals (a

military measure) have greatly increased the use of aluminum in that country. Consequently Netherlands Indian bauxite has found a ready market there up to now.

Japan also manifested an early interest in Nether? lands India bauxite and in 1936 contracted for 24,000 tons annually for an aluminum works on Formosa. For some time, however, shipments were irregular because of increased Japanese production of bauxite and diffi? culties over foreign exchange. In 1938 Japanese interest revived and regular shipments to that country from Netherlands India were begun. (See Far Eastern Sur?

vey, Aug. 18, 1937, p. 198; July 1,1936, p. 149.)

Although all Netherlands India bauxite has been sent abroad for smelting, plans are well advanced for estab-

lishing an aluminum industry on the islands. Cheap fuel and cheap electric power, together with the large bauxite deposits, make the prospects favorable. The aluminum-bauxite syndicate has been considering the installation of a smelting plant at Palembang on Su?

matra, but no final decision as to its location has been reached. The importance of the project is indicated by the fact that the cost of the reduction plant is estimated at 25 million guilders. Meanwhile, until the completion of the works, the syndicate intends buying aluminum for manufacture into various articles by smaller fac? tories in Java and elsewhere.

These plans for a domestic aluminum and aluminum-

manufacturing industry assure a market for Nether? lands India bauxite irrespective of the future trend of the German trade or of the development of bauxite on the Japanese mandated islands or in British India.

Recently, in Holland, an Amsterdam company was formed for the fabrication of aluminum, and there are

reports that Canadian-Dutch and French-Dutch com?

panies will establish rolling mills there. With these de?

velopments, the completion of the reduction works in Netherlands India would make the Netherlands Em?

pire self-sufficient as a producer of aluminum. Alvin Barber.

INDO-CHINA FACES BUDGET DEFICIT FOR 1939

After showing substantial surpluses in 1937 and

1938, Indo-China faces a budgetary deficit this year and probably for a few years to come. This situation is attributable partly to domestic factors and partly to economic and military adjustments made necessary by the conflict in China and concern regarding the recent course of Japanese policy.

During the depression period a policy of severe bud?

getary deflation was followed and although since 1936 there has been a renewal of prosperity, reflected in in? creased revenue, expenditures on public works con-

tinued to decline, and all available loan funds were used up. These trends account for the recent surpluses which were achieved despite rising prices resulting from the depreciation of the piastre, which is tied to the

franc, and increased expenditures on defense. The domestic factors accounting for the increase in

expenditures this year include a further rise in prices due to depreciation of the currency, increased subven- tions to local budgets, the necessity for financing pub? lic works out of the ordinary budget now that available loan funds are exhausted, the purchase of new stocks

This content downloaded from 195.78.109.51 on Thu, 12 Jun 2014 18:10:03 PMAll use subject to JSTOR Terms and Conditions