Phosphate mining in Nauru
Encyclopedia
The economy of Nauru
has been almost wholly dependent on phosphate
, which has led to environmental catastrophe on the island, with 80% of the nation’s surface having been strip-mined. The island's phosphate deposits were virtually depleted by 2000 although some small-scale mining is still in progress.
) for the Pacific Islands Company on the Lady M, Henry Denson, found a unique looking rock on Nauru during a brief stop on the island. He originally believed it to be a piece of petrified wood
. Denson, according to legend, had planned on making children's marbles from it but fate would have it end up as a door stop in the company's Sydney office.
In 1899, Albert Ellis
, a management official of the phosphate division of the Pacific Islands Company was transferred to the Sydney office to "analyse rock samples coming from the Pacific Islands." Ellis noticed the rock and suspected it to be phosphate (similar looking to the phosphate coming from Baker Island
), but was rebuffed by Denson and told that it was only wood. Three months later, Ellis decided to test his hunch and tested the rock for phosphate. It turned out to be phosphate ore of the richest quality.
It turned out that Banaba Island
(Ocean Island), Nauru's neighbour to the east, shared Nauru's geological luck and also had significant reserves of phosphate.
In the first year of mining alone, 11000 pounds (4,989.5 kg) of phosphate were shipped to Australia. After World War I
Nauru was given in trust to Britain
, Australia
and New Zealand
. They established the British Phosphate Commissioners, who took over the rights to the phosphates.
In 1968, Nauru became a sovereign, independent nation. In 1970, the newly formed government purchased the full rights to the phosphate business from Australia for AU$21 million. This purchase brought an economic boost to the Republic, as revenues from the mining operations are estimated to have been AU$100-120 million annually since independence through virtual resource exhaustion in the early 1990s. Gross production of phosphate from 1968 through exhaustion has been 43 million tons.
A number of prominent Nauruans, notably René Harris
, who have headed the Nauru Phosphate Corporation
, have gone on to serve as President of Nauru
.
In the year 1948, revenues from phosphate mining were AU$745,000. A minuscule 2% (AU$14,900) was being returned to the Nauruans, while 1% was being charged for "administration". In the 1960 future president Hammer DeRoburt
negotiated royalties of profit to the Nauruans to be 22% while administration would increase to 14%.
One apparently successful development project was in 1988, whereby the Royalty Trust purchased 600 acres (2.4 km²) of vacant, residentially zoned land near Portland, Oregon
. Called Forest Heights, it was controlled by the Nauru trust until 75% of the allotments were sold, when the homeowners association took over.
Nauru
Nauru , officially the Republic of Nauru and formerly known as Pleasant Island, is an island country in Micronesia in the South Pacific. Its nearest neighbour is Banaba Island in Kiribati, to the east. Nauru is the world's smallest republic, covering just...
has been almost wholly dependent on phosphate
Phosphate
A phosphate, an inorganic chemical, is a salt of phosphoric acid. In organic chemistry, a phosphate, or organophosphate, is an ester of phosphoric acid. Organic phosphates are important in biochemistry and biogeochemistry or ecology. Inorganic phosphates are mined to obtain phosphorus for use in...
, which has led to environmental catastrophe on the island, with 80% of the nation’s surface having been strip-mined. The island's phosphate deposits were virtually depleted by 2000 although some small-scale mining is still in progress.
First discovery of phosphate
In 1896, a cargo officer (supercargoSupercargo
Supercargo is a term in maritime law that refers to a person employed on board a vessel by the owner of cargo carried on the ship...
) for the Pacific Islands Company on the Lady M, Henry Denson, found a unique looking rock on Nauru during a brief stop on the island. He originally believed it to be a piece of petrified wood
Petrified wood
Petrified wood is the name given to a special type of fossilized remains of terrestrial vegetation. It is the result of a tree having turned completely into stone by the process of permineralization...
. Denson, according to legend, had planned on making children's marbles from it but fate would have it end up as a door stop in the company's Sydney office.
In 1899, Albert Ellis
Albert Fuller Ellis
Sir Albert Fuller Ellis was a prospector in the Pacific, he discovered phosphate deposits on the Pacific islands Nauru and Banaba Island in 1900. He was the British Phosphate Commissioner for New Zealand from 1921 to 1951.Ellis was born in Roma, Queensland, his family moved to Auckland where he...
, a management official of the phosphate division of the Pacific Islands Company was transferred to the Sydney office to "analyse rock samples coming from the Pacific Islands." Ellis noticed the rock and suspected it to be phosphate (similar looking to the phosphate coming from Baker Island
Baker Island
Baker Island is an uninhabited atoll located just north of the equator in the central Pacific Ocean about southwest of Honolulu. The island lies almost halfway between Hawaii and Australia, and is a possession of the United States. Its nearest neighbor is Howland Island, to the north.Located at...
), but was rebuffed by Denson and told that it was only wood. Three months later, Ellis decided to test his hunch and tested the rock for phosphate. It turned out to be phosphate ore of the richest quality.
It turned out that Banaba Island
Banaba Island
Banaba Island , an island in the Pacific Ocean, is a solitary raised coral island west of the Gilbert Island chain and 300 km east of Nauru. It is part of the Republic of Kiribati. It has an area of 6.5 km², and the highest point on the island is also the highest point in Kiribati, at 81...
(Ocean Island), Nauru's neighbour to the east, shared Nauru's geological luck and also had significant reserves of phosphate.
History
Ellis' discovery of phosphate excited the executives of the Pacific Islands Company and they decided to pursue rights and access to Nauru's lucrative resource. The negotiations to pursue rights to the phosphate involved four parties: The British and German governments, the newly reorganized Pacific Phosphate Company, and Jaluit-Gesellschaft (a German mining company that had been exploiting phosphates on Nauru since the late 19th century). In 1906, an agreement was established whereby Jaluit-Gasellschaft's rights were transferred to the Pacific Phosphate Company for "a cash payment of 2,000 pounds sterling (British), 12,500 pounds sterling (British) worth of shares in the Pacific Phosphate Company, and royalty payments for every ton of phosphate exported."In the first year of mining alone, 11000 pounds (4,989.5 kg) of phosphate were shipped to Australia. After World War I
World War I
World War I , which was predominantly called the World War or the Great War from its occurrence until 1939, and the First World War or World War I thereafter, was a major war centred in Europe that began on 28 July 1914 and lasted until 11 November 1918...
Nauru was given in trust to Britain
United Kingdom of Great Britain and Ireland
The United Kingdom of Great Britain and Ireland was the formal name of the United Kingdom during the period when what is now the Republic of Ireland formed a part of it....
, Australia
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
and New Zealand
New Zealand
New Zealand is an island country in the south-western Pacific Ocean comprising two main landmasses and numerous smaller islands. The country is situated some east of Australia across the Tasman Sea, and roughly south of the Pacific island nations of New Caledonia, Fiji, and Tonga...
. They established the British Phosphate Commissioners, who took over the rights to the phosphates.
In 1968, Nauru became a sovereign, independent nation. In 1970, the newly formed government purchased the full rights to the phosphate business from Australia for AU$21 million. This purchase brought an economic boost to the Republic, as revenues from the mining operations are estimated to have been AU$100-120 million annually since independence through virtual resource exhaustion in the early 1990s. Gross production of phosphate from 1968 through exhaustion has been 43 million tons.
A number of prominent Nauruans, notably René Harris
René Harris
René Reynaldo Harris was President of the Republic of Nauru four times between 1999 and 2004. He was a Member of Parliament from 1977 to 2008.-Background and early career:...
, who have headed the Nauru Phosphate Corporation
Nauru Phosphate Corporation
The Nauru Phosphate Corporation was a government-owned company controlling phosphate mining in Nauru, now known as the Republic of Nauru Phosphate, or RONPhos.-Failed investments:...
, have gone on to serve as President of Nauru
President of Nauru
The President of Nauru is elected by Parliament from amongst its members. He is both the head of state and head of government of Nauru. Nauru's unicameral Parliament has 18 members, with an electoral term of 3 years. Political parties only play a minor role in Nauru politics, and there has often...
.
Investments and finances
The government puts profits from the mining into a trust for the islanders. This trust reached a peak of AU$1 billion, returning approximately 14% annually. Poor investments and corruption have left the trust fund nearly empty and therefore Nauru with little money.In the year 1948, revenues from phosphate mining were AU$745,000. A minuscule 2% (AU$14,900) was being returned to the Nauruans, while 1% was being charged for "administration". In the 1960 future president Hammer DeRoburt
Hammer DeRoburt
Hammer DeRoburt, KBE was the founding President of the Republic of Nauru, and ruled the country for most of its first twenty years of independence.-Background and early career:...
negotiated royalties of profit to the Nauruans to be 22% while administration would increase to 14%.
One apparently successful development project was in 1988, whereby the Royalty Trust purchased 600 acres (2.4 km²) of vacant, residentially zoned land near Portland, Oregon
Portland, Oregon
Portland is a city located in the Pacific Northwest, near the confluence of the Willamette and Columbia rivers in the U.S. state of Oregon. As of the 2010 Census, it had a population of 583,776, making it the 29th most populous city in the United States...
. Called Forest Heights, it was controlled by the Nauru trust until 75% of the allotments were sold, when the homeowners association took over.
See also
- Environmental effects of agriculture
- Economy of NauruEconomy of NauruRevenues of Nauru have traditionally come from exports of phosphate rock. Primary phosphate reserves were exhausted, and mining ceased, but in 2006-07, mining of a deeper layer of "secondary phosphate" began. It is hoped that this economic activity might lift Nauru from the bottom rung of global...
- Nauru Phosphate Royalties TrustNauru Phosphate Royalties TrustThe Nauru Phosphate Royalties Trust was a sovereign wealth fund developed by the government of the Republic of Nauru in which the government invested money from the state owned mining company, Nauru Phosphate Corporation...