In various posts, we have seen the importance of petroleum, copper and tin as underground sources of the power of the United States, and we have seen the aggressive action by the United States to attain control of these natural resources of Latin America (see “The Underground Sources of Power” 10/16/2013, “Petroleum in Latin America” 10/17/2013, “Petroleum in Venezuela” 10/18/2013, “Copper in Chile” 10/22/2013, and “Tin in Bolivia” 10/23/2013) . Iron also was a part of this dynamic, and it was exploited in Venezuela and Brazil.
In the classic work, The Open Veins of Latin America, Eduardo Galeano noted the importance of iron: In 1970, 85% of the industrial products of the United States contained steel, and you cannot make steel without iron. This explains the interest of the major US steel corporations in the iron of Venezuela and Brazil during the 1950s and 1960s (Galeano 2004:198; 2007:153).
Galeano also observed that iron and steel reflect the international division of labor between core and periphery. “Steel is produced in the rich centers of the world, and iron in the poor periphery; steel pays the salaries of the ‘worker aristocracy,’ and iron, day wages of mere subsistence” (Galeano 2004:199; 2007:153).
US Steel and Bethlehem Steel directly controlled the extraction and exportation of iron from Venezuela. Since the iron was destined for their own iron and steel works in the United States, their primary interest was in obtaining cheap iron and not in maximizing profits from the iron-exporting activities. Nonetheless, in the single year of 1960 they earned more in profits from the exportation of iron than they paid in taxes to the Venezuelan state during the ten years beginning in 1950 (Galeano 2004:198; 2007:153).
In Brazil, the exportation of iron was a source of conflict. A 1952 military accord between Brazil and the United States prohibited Brazil from selling strategic raw materials, such as iron, to socialist countries. In 1953 and 1954, Brazilian President Getúlio Vargas ignored the agreement and sold iron to Czechoslovakia and Poland at prices higher than those being paid by the United States. This defiance culminated in the president being deposed in 1954 (Galeano 2004:200-1; 2007:154).
The conflict continued in the early 1960s. The US company Hannah Mining sought to obtain the rights to mine and export Brazilian crude iron in the late 1950s and early 1960s. By pressuring the Brazilian government, including the incorporation of high officials of the Brazilian government as directors and advisers of Hannah, the company was able to obtain in 1961 authorization of the right to exploit iron deposits that belong to the government. However, considering the authorization to be illegal, the President of Brazil cancelled it, restoring the iron deposits to the national reserve. Four days later, the president was forced to resign. But a popular uprising frustrated the coup d’état, and Vice-President João Goulart assumed the presidency. The Goulart government put into practice the cancellation of the illegal authorization in July 1962. However, Goulart was overthrown in a July 1964 coup d’état that was supported by the United States, establishing a repressive dictatorship that adopted economic policies consistent with the interests of the US steel giants. The decree legalizing Hannah’s authorization was issued on December 24, 1964. In addition, the military government backed company plans to amplify its port 20 miles from Rio de Janeiro and to construct a railroad for the transportation of the iron. In October 1965, Hanna formed a consortium with Bethlehem Steel for the exploitation of iron. But US Steel was not left out. It formed a consortium with a Brazilian state mining company, and by these means it obtained a concession to the iron deposits in the Sierra de los Carajás in the Amazon (Galeano 2004:200-3; 2007:154-56).
Ultimately, the military government was replaced by civilian governments that cooperated with the United States and US corporations in the implementation of the neoliberal agenda. And popular opposition to foreign control of natural resources continued. Popular protest led to the overthrow of the neoliberal government of Fernando Collor de Mello in 1992. And they led to the election of Workers’ Party candidates Luiz Inácio Lula da Silva in 2002 and 2006 and Dilma Rousseff in 2010. The Workers’ Party governments have been participating in the process of Latin American unity and integration, which seeks to develop alternatives to the structures that facilitate US control of the natural resources of the region. The new political reality of Latin America today, established on a foundation of popular movements, will be the subject of future posts.
Galeano, Eduardo. 1997. The Open Veins of Latin America: Five centuries of the pillage of a continent, 25th Anniversary Edition. Translated by Cedric Belfrage. Forward by Isabel Allende. New York: Monthly Review Press.
__________. 2004. Las Venas Abiertas de América Latina, tercera edición, revisada. México: Siglo XXI Editores.
Key words: Third World, revolution, colonialism, neocolonialism, imperialism, democracy, national liberation, sovereignty, self-determination, socialism, Marxism, Leninism, Cuba, Latin America, world-system, world-economy, development, underdevelopment, colonial, neocolonial, blog Third World perspective, open veins of Latin America, Galeano, iron, Brazil, Venezuela