222 Book reviews
convenient tabs providing quick access
to each major section. There are six
major sections and three appendices.
The book is spiral bound, and suitable
for heavy, continued usage.
The title of the book does not fully
reflect its content. The book title would
benefit from the inclusion of the word
'agreements' as most of the topics deal
with royalty agreements, their negotia-
tion and contents. Structuring a volume
on all the topics relating to royalty
agreements is a daunting task, and the
reader may wonder at the placement of
some topics within the various sections.
Given the fact that the book is not in-
tended to be read cover to cover, but to
act as a handbook, this shortcoming
does not detract. The detailed table of
contents and index provide quick access
to most topics.
The first chapter deals with the basic
nature of royalty agreements. Topics
such as the form and execution o f the
agreement, letters of intent, use of legal
and financial advisors, and terminology
are covered. For those interested in in-
digenous people's rights, there is even a
short section dealing with aboriginal
groups settlements. Practical advice is
liberally sprinkled throughout the chap-
ter. The material provides insight for
both the payor and receiver.
Chapter 2 is titled 'Definitions'. Def-
initions of key terminology typically
found in royalty agreements is provided
accompanied by commentary on the
purpose, strengths and weaknesses of
that terminology. The commentary
clearly reflects the author's many years
of experience and practice in this field.
In Chapter 3 several types of royalty
are introduced and commented on.
While the chapter covers some o f the
main ways in which royalties may be
determined, it fails to address many
other methods. Those interested in
learning about a broader spectrum of
royalty types may find it useful to refer
to this reviewer's book (Otto, 1995). For
the royalty methods covered, the au-
thor's treatment is thorough and the
commentary particularly useful for roy-
alty recipients.
Chapter 4 is devoted to the determi-
nation o f the royalty amount due and
how that amount is to be paid. Important
topics such as who determines the
amount due, apportionment, indexing
and nominees are briefly explained.
Chapters 5 and 6 contain a wide variety
of miscellaneous and 'boiler plate' con-
tractual provisions. Many of the most
important topics are handled with a
sample clause accompanied by com-
mentary.
In summary, anyone involved with
the negotiation of a royalty agreement
should find this volume exceptionally
useful. It is packed with sample clauses
and commentary that are valuable for
both experienced practitioners as well as
laymen. While the book is primarily in-
tended to address royalty arrangements
between private parties, much of the ma-
terial is also applicable to agreements
between governments and private min-
ing parties.
Reference
Otto, J M (1995) The Taxation q/Min-
eral Enterprises Graham and Trot-
man, London
James M Otto
lnstitute./br Global Resources Polio3,
and Management
Colorado School of Mines, USA
Steel in the 21st Century: Competi-
tion Forges a New World Order
William T Hogan
Lexington Books, New York, 1994, 202
pp. 1SBN 0 02 914795-6, US$40.00
In his latest book, Father William T
Hogan (Fordham University) discusses
old questions about the steel industry,
but with current data. According to his
analysis, three forces are reshaping the
steel industry. First, the competition be-
tween industrialized and developing
countries. Second, the competition be-
tween classic technological route coke
integrated mills versus minimills using
scrap. Third, the competition between
steel and substitute materials, such as
plastics, aluminium, concrete and wood.
Hogan's text is interesting for a wide
readership. For academics, the writing is
objective. Furthermore, it can be read
bypassing the details. For experts, the
author provides a lot of information,
specially about the diffusion of new
technological processes. And although
without any specific section, he indi-
cares the role of secondhand equipment,
a new trend in the industry.
The book is divided into six chap-
ters. The first introduces the three rele-
vant types of competition in the steel
industry. In the second and more import-
ant chapter, Hogan paints a predicted
scenario for major producers of steel, in
the beginning of the 21st century. He
first emphasizes the increasing impor-
tance of developing countries in produc-
ing and exporting steel. He then
analyzes, case by case, the perspective
of divestiture (in industrialized coun-
tries) and the augmentation of capacity
(in developing countries). Although di-
vestiture is discussed, Hogan does not
deeply investigate exit costs.
The Republic of Korea, China, India,
Brazil, Taiwan, Thailand, Malaysia and
Indonesia receive special attention. This
reviewer found the most interesting sec-
tion to be that on India. There Hogan de-
scribes the installation of new and
enlargement of old plants, until the year
2012. But, surprisingly, he does not em-
phasize the emergent lspat Group
which, at the time of publication, al-
ready had mills in India, Indonesia,
Mexico and Trinidad and Tobago.
Today, lspat has also established opera-
tions in Canada, Germany, Ireland and
Kazakhstan. This limitation results from
an emphasis on investment by countries,
underrating an increasing internalization
in the sector.
In the Brazilian section, Hogan dis-
cusses mainly the financial results o f
privatization. However, some of the in-
formation is inaccurate and a more
complete treatment of Latin America
would have been useful. In the Mexico
section, for example, he only points out
that the steel industry was privatized in
1992. Except for Brazil, the Latin
American steel industry is analyzed
only superficially.
In Chapter 3 Hogan goes back to one
of his favourite themes: the competition
between minimills and integrated mills.
In 1987 he published Minimills and In-
tegrated Mills: A Comparison of Steel-
making in the United States on this
subject. In both books, Hogan restricts
his treatment mainly to the North Amer-
ican industry. He explains how min-
imills extended their production to other
products, beyond rebars, small channels
and angles.

The more important part of Chapter
3 is dedicated to a breakthrough innova-
tion: thin slab casting. This technology
allows minimills to produce a type of
lower end quality flat-rolled sheets.
Hogan describes the implementation of
every thin slab project in the world. He
concludes that the competitive struggle
of minimills and integrated mills will in-
crease. In the past, minimills have been
able to compete with noncore products
of integrated mills. Now, flat-rolled
sheets account for a major share of in-
tegrated mills production. The further
enlargement of market share of min-
imills will be difficult.
Hogan also forecasts the situation of
the US steel market for the year 2010.
He predicts that shipments in 2010 will
be almost 15% higher than the average
from 1988-92. He expects that imports
will continue to represent 15-16% of
apparent consumption. Concerning flat-
rolled demand, he points out that, in the
recent past, although aggregate demand
was almost the same, the galvanized
segrnent expanded by nearly one-fourth,
confirming the upgrading trend.
In Chapter 4 Hogan analyses the
competition between steel and substi-
tute materials (plastics, aluminium, con-
crete and wood) in automotive,
construction, container and appliance
industries. This is a well-known discus-
sion. The author only organizes argu-
ments and data, relative to industrialized
countries. He also restricts his observa-
tions to past data and does not make any
predictions. However, recycling is an
important factor in determining the out-
come of this struggle.
In the Chapter 5 Hogan returns to
new technologies. This part, about the
current and prospective diffusion of
modern techniques, is more interesting
for experts. Hogan predicts that the steel
plant of the future will become more
highly computerized and automated, as
well more specialized in its product
concentration. He gives special attention
to three new technologies: pulverized
coal injection (PCI), a partial substitute
for coke ovens; direct-current electric
furnace (DC), a substitute for traditional
alternating-current electric furnace
(AD); and thin slab casting.
In the Chapter 6 Hogan sums up his
points. Finally, it is clear in the end of
the book that, on the one hand, steel is
an old industry, with a stagnation of de-
mand; on the other, fortunately, it is no
longer a technological mature one, as it
seemed some years ago.
Germano Mendes de Paula
Federal University of UbeHandia.
Brazil
Mining and Mineral Resource Issues in
Asia Pacific (Conference Proceedings)
D Denoon, C Ballard, G Banks and P
Hancock (eds)
Division of Pac(~c and Asia History,
Australian National Universi~,
Canberra, 1996, A$30
The role that the mining industry can
play in the development process has
been actively debated for centuries. A
widespread acceptance of the concept of
sustainable development has been a new
factor in some of the debate in recent
times.
It was therefore appropriate, there-
fore, that a multi-disciplinary group
should assemble in Canberra to draw to-
gether knowledge and opinions on many
of the main issues. Australia, being a
leading mining nation and now having
its major mining houses working in
many countries, has a lot of experience
to bring to the debate.
A paper by Richard Auty drew to-
gether the international research. There
is some agreement about the special fea-
tures of the mining industry high risk
exploration phase; capital intensive
large scale mining; mines located where
orebodies occur (and tend to be remote
locations); environmental issues which
are inevitable when land is disturbed;
taxation and the treatment of rents; local
versus national claims; and so on.
Book reviews 223
Auty set the tone by reference to his-
tory which shows that discovery of a
major orebody in a country does not au-
tomatically ensure high living standards
for all citizens of that country. This is
the 'curse of geology' effect. So the im-
portant question is what set of policies
will ensure best national outcomes
whilst respecting environmental objec-
tives? One of the features of the industry
is that the larger mines are very visible
and tend to be accompanied by much
hype which raises local expectations.
Few other industries develop new towns,
ports, airstrip, power supplies, hospitals,
schools etc. Gill Burke reminded the
conference of the importance of small
scale miners.
This volume contains papers by
more than forty contributors. It is a cur-
rent outline of the issues and its strength
lies in the mix of practical and research
knowledge of its contributors and the
wide spread of interests represented.
Like many controversial policy sub-
jects one is left wondering about the
huge research agenda which remains. Is
it, for example, possible to hope for a
code of conduct for all stakeholders in-
volved in mining developrnents? Or is it
inevitable that history and mistakes
must be repeated? Some small steps to-
wards introduction of best practice have
been attempted in the mining tax and
mining code policy areas with encour-
aging results.
Perhaps another approach might be
to seek much more o f this multi-
disciplinary work. The benefits are
clearly visible in the conference pro-
ceedings.
The papers can be highly recom-
mended to those interested in a well in-
formed outline o f the policy issues in
mining and mineral resource develop-
ments. It combines authoritative interna-
tional contributors with a wide spread of
Australian experts.
John D S Macleod
Formerly Chief Economist, CRA