Intergovernmental Council of Copper Exporting Countries member states map

The Intergovernmental Council of Countries Exporters of Copper (CIPEC) (French ''Conseil intergouvernemental des pays exportateurs de cuivre'') was created in 1967 in

Lusaka Lusaka (; ) is the Capital city, capital and largest city of Zambia. It is one of the fastest-developing cities in southern Africa. Lusaka is in the southern part of the central plateau at an elevation of about . , the city's population was ab ...

with the objective of coordinating policies of the country members looking for growth in the revenues coming from

copper Copper is a chemical element with the symbol Cu (from la, cuprum) and atomic number 29. It is a soft, malleable, and ductile metal with very high thermal and electrical conductivity. A freshly exposed surface of pure copper has a pinkis ...

Composition

It was initially constituted with four members,

Chile Chile, officially the Republic of Chile, is a country in the western part of South America. It is the southernmost country in the world, and the closest to Antarctica, occupying a long and narrow strip of land between the Andes to the east a ...

Peru , image_flag = Flag of Peru.svg , image_coat = Escudo nacional del Perú.svg , other_symbol = Great Seal of the State , other_symbol_type = Seal (emblem), National seal , national_motto = "Fi ...

Zaire Zaire (, ), officially the Republic of Zaire (french: République du Zaïre, link=no, ), was a Congolese state from 1971 to 1997 in Central Africa that was previously and is now again known as the Democratic Republic of the Congo. Zaire was, ...

and

Zambia Zambia (), officially the Republic of Zambia, is a landlocked country at the crossroads of Central Africa, Central, Southern Africa, Southern and East Africa, although it is typically referred to as being in Southern Africa at its most cent ...

. A further four were added to the

cartel A cartel is a group of independent market participants who collude with each other in order to improve their profits and dominate the market. Cartels are usually associations in the same sphere of business, and thus an alliance of rivals. Mos ...

in 1975 -

Australia Australia, officially the Commonwealth of Australia, is a Sovereign state, sovereign country comprising the mainland of the Australia (continent), Australian continent, the island of Tasmania, and numerous List of islands of Australia, sma ...

Indonesia Indonesia, officially the Republic of Indonesia, is a country in Southeast Asia and Oceania between the Indian and Pacific oceans. It consists of over 17,000 islands, including Sumatra, Java, Sulawesi, and parts of Borneo and New Guine ...

Papua New Guinea Papua New Guinea (abbreviated PNG; , ; tpi, Papua Niugini; ho, Papua Niu Gini), officially the Independent State of Papua New Guinea ( tpi, Independen Stet bilong Papua Niugini; ho, Independen Stet bilong Papua Niu Gini), is a country i ...

and

Yugoslavia Yugoslavia (; sh-Latn-Cyrl, separator=" / ", Jugoslavija, Југославија ; sl, Jugoslavija ; mk, Југославија ;; rup, Iugoslavia; hu, Jugoszlávia; rue, label=Pannonian Rusyn, Югославия, translit=Juhoslavija ...

. CIPEC represented around 30% of the world's refined copper, and more than 50% of the proven reserves of copper. The intent of the members to secure higher prices failed, particularly of increasing the price during the crisis of 1975-1976, and the subsequent change in Chile's economic system finally ended the cartel. Many experts consider that the market power of this cartel was negligible, because the residual demand that it faced was elastic (much higher than

OPEC The Organization of the Petroleum Exporting Countries (OPEC, ) is a cartel of countries. Founded on 14 September 1960 in Baghdad by the first five members (Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela), it has, since 1965, been headquart ...

, for example). The inability of coordinating output cutbacks during the extensive period of life of CIPEC seems to validate this hypothesis. It was dissolved during the 1990s.{{Cite journal, last=Mingst, first=Karen A., date=1976, title=Cooperation or Illusion: An Examination of the Intergovernmental Council of Copper Exporting Countries, jstor=2706259, journal=International Organization, volume=30, issue=2, pages=263–287, doi=10.1017/s0020818300018270

CIPEC stages

There were three stages of the CIPEC that economists recognize: * Nationalization stage (1967–1973) * Unilateral Action stage (1973–1976) * Reflux stage (1976–1988)

Environmental conditions for CIPEC

The

embargo Economic sanctions are commercial and financial penalties applied by one or more countries against a targeted self-governing state, group, or individual. Economic sanctions are not necessarily imposed because of economic circumstances—they m ...

marked a turning point in the history of the international copper trade, waking up the countries that depended strongly on their exports of commodities. They desired to imitate the behavior of CIPEC with the objective of increasing the prices of their commodities. Motivated by

Rio Tinto Zinc Rio Tinto Group is an Anglo-Australian multinational company that is the world's second-largest metals and mining corporation (behind BHP). The company was founded in 1873 when of a group of investors purchased a mine complex on the Rio Tinto, ...

(RTZ), in November 1974 in

the members of CIPEC reached an agreement to reduce copper exports by 10% -- later increased to 15% -- until the first half of 1976. The high incentives meant that the countries did not fully complete the agreement and in fact in this period only 300,000 tons of copper were reduced by the cartel — hardly half of the reductions contemplated in the agreement. High inventories and the growth of sources outside of the cartel prevented the policies adopted by CIPEC from giving benefit to its members.

Composition

CIPEC stages

Environmental conditions for CIPEC

See also

References

Further reading