War Profiteer of the Month: Rio Tinto Alcan
On the 15th of November 2007, Rio Tinto Canada Holding, an indirect owned subsidiary of Rio Tinto – one of the biggest mining corporation in the world – acquired all of the common shares of Alcan world leading producer of aluminium. This makes now the new Rio Tinto Alcan the biggest producer of aluminium in the world.
Rio Tinto & Alcan have spent lots of resources in public relations which has been successful, despite the company's reality as a leader in dirty industry (strip mining, smelting, hydro electric dam), well spent money on image provides the veneer of a clean and conscious corporation with impeccably clean hands. In practice however, Rio Tinto & Alcan are a much less successful at following their own rhetoric. That is why it is important to profile Rio Tinto Alcan as The War Profiteer of the Month of December.
Rio Tinto Alcan – former Alcan – and the arms trade
In 2004 Alcan's Engineered Products Business group Aerospace business unite generated $ 1,155 billion in operating revenue. Sixteen percent of this total came from sales to customers in the military and space industries. This financial data is not insignificant, and given that the former Alcan claimed to be a "key supplier to both European and North American military markets", it is clear that the company now own by Rio Tinto and call Rio TInto Alcan is involved in the arms trade. Through a company acquired in 2003, Baltek, Alcan is supplying some of the world's largest builders of military equipment. Some of Baltek's main customers include: Northrop Grumman, Boeing, Lockheed Martin.
Aluminium and the arms trade
The world's most lucrative and powerful companies are those producing arms in “defence” or “aerospace”, and these are the aluminium producers highest-paying customers. The whole history of mining and metal technology is connected closely with the history of weaponry, which has motivated and funded inventions since the Bronze and Iron Ages. The industrial revolution led to a huge arms build up during the first half of the 20th century, which was among the causes of the two world wars.
“War was good to Alcoa” – Alcoa was one of the main aluminium producer in the early 20th century. Alcoa flourished during the two world wars, when about 90% of aluminium went into military uses. In the 1920s, lobbyists for arms companies scuppered a League of Nations motion to ban the selling of arms for private (company) profit. At that time there was a widespread understanding that arms companies were a prime cause of wars. Where is this understanding now? Aluminium's “strategic” value to the arms companies – to America's “permanent war industry” in particular, which Eisenhower called its “military-industrial complex” – is obviously a key reason that the real costs of producing aluminium are hidden and transferred. Britain too, while closing down most of its manufacturing industries during the Thatcher era, kept “aerospace” or “defence” as a cornerstone of its economy, as the most lucrative and “strategic” sector.
One reason for aluminium's strategic value is thermite, a little-known invention at the dawn of the 20th century in 1901, that virtually defined the violent course of the 20th century. While smelters require huge supplies of electricity in order to split aluminium from its bonding with oxygen in molecules of aluminium oxide, thermite reverses this process: a bomb is packed with iron oxide and aluminium powder. When the fuse ignites, the aluminium leaps to the high temperature of its “heat of formation” to re-bond with oxygen, making the explosion huge. This was the basis of the first world war hand grenades, second world war incendiary bombs and napalm, and the “daisy cutters” used by American planes for “carpet bombing” from the Korean and Vietnam wars to Iraq. Aluminium is also basic to the technology of nuclear missiles.
Dewey Anderson's words in 1951from his report "Aluminium for Defence and Prosperity" remain true today: the aluminium industry is “at the very core of the military-industry complex… Aluminium has become the most important single bulk material of modern warfare. No fighting is possible, and no war can be carried to a successful conclusion today, without using and destroying vast quantities of aluminium… Aluminium makes fighter and transport planes possible. Aluminium is needed in atomic weapons, both in their manufacture and in their delivery… Aluminium, and great quantities of it, spell the difference between victory and defeat…”
Although the aluminium percentage in war-planes has diminished, the complexity of aluminium alloys used has increased, alongside a new range of composite fabrics blending oil or plastics with aluminium. These alloys and composites are crucial for aircraft, missile technology, and satellites, as well as war-ships and tanks. In other words, military might is a driving force and key source of profit behind aluminium production, now as much as before.
Ronald Graham in 1982 gave the percentage of aluminium used in the arms industry at around 30%. Lists of aluminium consumption by sector miss out arms manufacture now, and when “defence” or “aerospace” is given it does not rise above 4%. If this is correct, it is still substantial, since it represents aluminium's most complex and highly-priced alloys. However, we believe the figures have been considerably “massaged” through listing many defence applications under “auto”, “construction” etc., and not taking account of stockpiling. The US started its aluminium stockpile in 1950, and the Defence Production Act of 1959 prioritized this and classed aluminium as one of 4 “controlled metals” for defence. The stockpile reached nearly 2 million tons in 1963, and was again prioritized in the first year of Reagan's administration in 1980, and since.
How much aluminium is being consumed and destroyed in the Iraq and Afghanistan wars? What kinds of profits are these wars bringing to the aluminium producers as well as arms companies? The faster the military hardware is consumed, the bigger their trade. War is still probably the aluminium producers best business, although the contracts and statistics proving this have long been hard to access.
Rio Tinto Alcan being one of the mayor producers of aluminium in the world and their business relation with the weapons industry makes it a worthily deserver of the War Profiteer of the Month profile.