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 abo ...

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

copper Copper is a chemical element; it has symbol Cu (from Latin ) 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 pinkish-orang ...

Composition

It was initially constituted with four members,

Chile Chile, officially the Republic of Chile, is a country in western South America. It is the southernmost country in the world and the closest to Antarctica, stretching along a narrow strip of land between the Andes, Andes Mountains and the Paci ...

Peru Peru, officially the Republic of Peru, is a country in western South America. It is bordered in the north by Ecuador and Colombia, in the east by Brazil, in the southeast by Bolivia, in the south by Chile, and in the south and west by the Pac ...

Zaire Zaire, officially the Republic of Zaire, was the name of the Democratic Republic of the Congo from 1971 to 18 May 1997. Located in Central Africa, it was, by area, the third-largest country in Africa after Sudan and Algeria, and the 11th-la ...

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. It is typically referred to being in South-Central Africa or Southern Africa. It is bor ...

. A further four were added to the

cartel A cartel is a group of independent market participants who collaborate with each other as well as agreeing not to compete with each other in order to improve their profits and dominate the market. A cartel is an organization formed by producers ...

in 1975 -

Australia Australia, officially the Commonwealth of Australia, is a country comprising mainland Australia, the mainland of the Australia (continent), Australian continent, the island of Tasmania and list of islands of Australia, numerous smaller isl ...

Indonesia Indonesia, officially the Republic of Indonesia, is a country in Southeast Asia and Oceania, between the Indian Ocean, Indian and Pacific Ocean, Pacific oceans. Comprising over List of islands of Indonesia, 17,000 islands, including Sumatra, ...

Papua New Guinea Papua New Guinea, officially the Independent State of Papua New Guinea, is an island country in Oceania that comprises the eastern half of the island of New Guinea and offshore islands in Melanesia, a region of the southwestern Pacific Ocean n ...

and

Yugoslavia , common_name = Yugoslavia , life_span = 1918–19921941–1945: World War II in Yugoslavia#Axis invasion and dismemberment of Yugoslavia, Axis occupation , p1 = Kingdom of SerbiaSerbia , flag_p ...

. 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 an organization enabling the co-operation of leading oil-producing and oil-dependent countries in order to collectively influence the global oil market and maximize Profit (eco ...

, 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 or embargoes are commercial and financial penalties applied by states or institutions against states, groups, or individuals. Economic sanctions are a form of coercion that attempts to get an actor to change its behavior throu ...

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 (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