We can hold finished goods such as clothes and laptops in our hands, and imagine a little of the sewing or assembling that went into their manufacture. We can also imagine what our food looked like when it was still growing in the sunlight or chewing grass in the fields. But few of us have been witness to the ways oil drilling can change a landscape, or what copper ore looks like as it’s ripped from the earth. At the origin of global supply chains, natural resource extraction is shrouded from consumers’ view. But it accounts for as much as 20 percent of the global economy.Raw materials such as iron, copper, and aluminum are purchased by builders and manufacturers and end up becoming our cars and homes, our can openers and cell phones, not to mention the roads, buildings, and infrastructure that make modern living possible. Energy from fossil fuels such as petroleum, coal, and natural gas account for nearly 85 percent of global energy consumption. Petroleum is not just a leading source of energy production—it’s also a major ingredient in plastics, synthetic fabrics, pesticides, medicines, and countless other consumer goods.
In short, taking resources out of the ground is where the modern global economy begins. It’s no surprise, therefore, that so many of our global conflicts can be traced to a struggle for control over these very resources.
In the 1500s, fleets of European ships set off for North and South America, digging mines in what would become Mexico, Central America, Bolivia, and Brazil to inlay churches and castles of the European monarchies. Native populations in the Americas were decimated and displaced.
In the following centuries the discovery of diamonds and later oil in Africa led to infiltration by foreign powers from Tunisia to South Africa. A pattern of resource exploration and colonization played out around the globe through the Industrial Revolution of the eighteenth and nineteenth centuries and into the twentieth century, with major world wars fought over control of resource-rich lands.
Today, the struggle for resource control continues to shape global politics. As was the case when European prospectors first found gold in the New World, the discovery of rich deposits of minerals or fossil fuels has rarely been good news for the people who live above them. Economists have labeled this problem the “paradox of plenty” or the “resource curse.” In many developing nations, the wealth generated by mining natural resources ends up mostly in the hands of multinational corporations that can afford pricey extraction technology, and the political elite who lease them land or are otherwise paid off. For communities living near oil wells or copper mines, social, political, environmental, and economic instability is the norm. Aside from encouraging warfare and corruption, valuable resources can distort national economies, driving up exchange rates and making it difficult for farmers, manufacturers, and other industries to compete on the global market.
The largest mining and petroleum-extraction companies in the world have operations on all seven continents, and have operating budgets larger than those of most nations. These companies are so large, so ubiquitous, sometimes we hardly notice them at all. Most readers will be familiar with the names of the world’s major petroleum producers—Shell, Chevron, British Petroleum—but few of us know much about the companies that pull mineral ore from the ground.
One such company is Rio Tinto Group, a nearly 150-year-old mining conglomerate headquartered in London. Rio Tinto is a world leader in the production of aluminum, copper, diamonds, iron, and uranium, as well as a major producer of gold and coal. The company runs mining operations throughout North and South America, Australia, Africa, and the South Pacific. With assets of over $90 billion and active mining operations in dozens of countries, the company is a global economic powerhouse.
In Papua New Guinea, Rio Tinto has been accused of using its financial clout to devastating effect. As a teenager in the 1970s on the tiny Melanesian island of Bougainville, Clive Porabou took up arms after Rio Tinto’s massive copper-mining operations threatened to make his island uninhabitable. Because the mines were such a rich source of revenue for Papua New Guinea, the government brutally suppressed local resistance to them; the conflict led to a decades-long war of independence for Bougainville. Read his story here.
This article is excerpted from the book Invisible Hands: Voices From The Global Economy, an oral history collection by publisher Voice of Witness.
Graphic by Michelle Ney