The
Nauru Phosphate Corporation (NPC) was a government-owned company controlling
phosphateA 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...
mining in
NauruNauru , officially the Republic of Nauru and formerly known as Pleasant Island, is an island nation in Micronesia in the South Pacific. Its nearest neighbor is Banaba Island in Kiribati, 300 km to the east...
, now known as the
Republic of Nauru Phosphate, or RONPhos. 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.
In 1896, a cargo officer 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.
The
Nauru Phosphate Corporation (NPC) was a government-owned company controlling
phosphateA 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...
mining in
NauruNauru , officially the Republic of Nauru and formerly known as Pleasant Island, is an island nation in Micronesia in the South Pacific. Its nearest neighbor is Banaba Island in Kiribati, 300 km to the east...
, now known as the
Republic of Nauru Phosphate, or RONPhos. 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.
First discovery of phosphate
In 1896, a cargo officer 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 woodPetrified wood is a type of fossil: it consists of fossil wood where all the organic materials have been replaced with minerals , while retaining the original structure of the 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 EllisAlbert Ellis was an American psychologist who in 1955 developed rational emotive behavior therapy. He held M.A. and Ph.D. degrees in clinical psychology from Columbia University and founded and was the president and president emeritus of the New York City-based Albert Ellis Institute...
, 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 IslandBaker 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.Baker is...
), 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 (
Ocean IslandOcean Island is a name given to two unrelated islands in the Pacific Ocean, and one in the Southern Ocean:* Kure Atoll, the last atoll in the Hawaiian Islands chain.* Banaba Island, in Kiribati, an island mined until recently for its phosphate....
), Nauru's neighbour to the east, shared Nauru's geological luck and also had significant reserves of
phosphateA 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...
.
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, 11,000 pounds of phosphate were shipped to Australia. After
World War IWorld War I , also known as the First World War, the Great War, and the War to End All Wars, was a global military conflict which involved most of the world's great powers, assembled in two opposing alliances: the Triple Entente and the Triple Alliance...
Nauru was given in trust to
BritainThe United Kingdom of Great Britain and Ireland was the formal name and the state form of the United Kingdom from 1 January 1801 until 12 April 1927...
,
AustraliaAustralia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the continental mainland , the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans...
and
New ZealandNew Zealand is an island country in the south-western Pacific Ocean comprising two main landmasses , and numerous smaller islands, most notably Stewart Island/Rakiura and the Chatham Islands. The indigenous Māori named New Zealand Aotearoa, commonly translated as The Land of the Long White Cloud...
. 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, respectively.
A number of prominent Nauruans, notably
René HarrisHE 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, have gone on to serve as
President of NauruThe president of Nauru is elected by Parliament from amongst its members. He is both the head of state and head of government.-List of Presidents since independence:...
.
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, respectively, was 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 DeRoburtHE Maggabi "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 of vacant, residentially zoned land near
Portland, OregonPortland is a city located in the Northwestern United States, near the confluence of the Willamette and Columbia rivers in the state of Oregon. As of July 2008, it has an estimated population of 575,930, making it the 29th most populous in the United States. It has been referred to as the most...
. Called Forest Heights, it was controlled by the Nauru trust until 75% of the allotments were sold, when the homeowners association took over.
Failed investments
In the early years of the Nauru Phosphate Royalties Development Trust, construction of two of five hi-rise luxury condos in Hawaii, on the island of Oahu have been built. The five towers (two completed as of 10/05) are located on prime Honolulu real estate with ocean views, and represent a benchmark in Honolulu luxury high-rises. Other investments included
Nauru HouseNauru House is a landmark 52-story building located in the Melbourne CBD. The building was designed by architectural firm Perrott Lyon Timlock & Kesa-History:...
in
MelbourneMelbourne is the capital city and most populous city of the State of Victoria, and the second most populous city in Australia. The Melbourne city centre is the anchor of the larger geographical area and statistical division known as the Greater Melbourne metropolitan area – of which Melbourne is...
and Hawaiki Tower in Honolulu. These luxury properties were only part of an international real estate portfolio that stretched into countries including Australia, the Philippines, Fiji, Guam, Samoa, the United States of America, New Zealand, and the United Kingdom.
Financial mismanagement and extravagant government spending (i.e.: investing AU$4 million in a London play,
Leonardo, about Leonardo DaVinci's love life which "flopped" after weeks of bad reviews) led to increased spending, and increased loans, which were levied upon the real estate holdings of the Nauru Phosphate Royalties Trust. One loan, of AU$236 million from
General ElectricThe General Electric Company, or GE , is a multinational American technology and services conglomerate incorporated in the State of New York. In 2009, Forbes ranked GE as the world's largest company...
, which was used as a loan to pay off all other loans, could not be paid by the government. This led to G.E. seizing Nauru's international real estate developments, including the trademark Nauru House in Australia.
RONPhos
Following the collapse of phosphate mining in 2002 due to virtual exhaustion of minable resources, repatriation of many foreign workers began. From 2004 to 2005, the foreign workers were reduced from 1,478 to 470. Most of the workers were from
KiribatiKiribati , officially the Republic of Kiribati, is an island nation located in the central tropical Pacific Ocean. It is composed of 32 atolls and one raised coral island, dispersed over 3,500,000 square kilometres, straddling the equator, and bordering the International Date Line to the east.The...
and
TuvaluTuvalu , formerly known as the Ellice Islands, is a Polynesian island nation located in the Pacific Ocean, midway between Hawaii and Australia. Its nearest neighbours are Kiribati, Samoa and Fiji. It comprises four reef islands and five true atolls...
.
On 1 July 2005, during a managerial restructuring, the Nauru Phosphate Corporation formally changed its name to the Republic of Nauru Phosphate Corporation to signal change. Today, RONPhos currently employs 20.4% of the working population of the Republic of Nauru.
Although the initial layer of phosphate has been mined out (approximately 100 million tones), a secondary level of phosphate is believed to exist, holding nearly 20 million tones of minable reources. RONPhos is begininng to develop plans for their economical extraction.
See also
- British Phosphate Commission
The British Phosphate Commission was a board of Australian, British and New Zealand representatives who managed extraction of phosphate from Christmas Island, Nauru and Ocean Island from the 1920s until the 1960s.-Nauru Island Agreement:...
- Economy of Nauru
- Economic Overview :Revenues of this tiny island 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...
- Nauru Phosphate Royalties Trust
The 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...
- Republic of Nauru
External links