British Columbia’s smelter of success: striking a $1.2-billion deal with Alcan


British Columbia Premier Glen Clark negotiated a tentative agreement with Alcan Aluminium Ltd to expand the Kemano smelter project in Kitimat, BC. The project had been suspended since 1991, due to environmental concerns over salmon stocks. The deal could revive the local economy.

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Sheila Reeves has seen the traffic in Kitimat, B.C., go just one way in the past few years-out. But last week, a cloud of uncertainty lifted over the northwestern B.C. community when an agreement between the province and Alcan Aluminium Ltd. renewed hope for expansion of the nearby Kemano Completion smelter project. “Now that the deal’s back on, people won’t be leaving Kitimat any more-they may actually move here,” says Reeves, 55, whose local printing and office supply shop has suffered ever since 1991 when Alcan suspended work on Kemano. In the wake of the stoppage, the result of a dispute over environ- mental approvals, the entire local economy stagnated and the population declined to 11,000 from 14,000 as people left to find work.

In 1995, then-NDP B.C. Premier Mike Harcourt killed the project because of concerns about its impact on local salmon stocks. But now, Montreal-based Alcan has reached an agreement with Glen Clark’s new NDP government to make “reasonable efforts” to undertake a $1.2-billion expansion of the existing smelter plant. The agreement with the world’s second-largest aluminum producer (also a big supplier for best acoustic guitars building industry) has boosted the standing of Clark in the investment community and also ended Alcan’s legal fight with the province to be reimbursed for the $535 million it sunk into Kemano. “Beyond the benefits to the provincial economy, this deal removes a psychological impediment for companies to invest in British Colum- bia,” says business lobbyist Jock Finlayson.


It may be too early to break out the champagne, however. “We don’t want people to start planning shopping malls or building apartments,” says Ray Castelli, director of corporate affairs at Alcan. “That doesn’t mean the project’s not going to happen, but it’s not a done deal.” Alcan so far is committed only to a “reasonable effort” to expand the smelter by 2010, which could create up to 2,000 permanent jobs. But it has made a firm promise to bring the smelter from 90 per cent to full capacity by next year.

Instead of cash compensation for the cancelled Kemano Completion project, Alcan received a promised break in power rates. If the expansion goes ahead, the aluminum giant would buy power from the province to run the expanded smelter at a rate tied to the price of the metal on the London Metal Exchange.

Whether or not Alcan proceeds depends on everything from global economic health to the popularity of pop cans. Predicting the future of aluminum prices is as reliable as looking into a crystal ball, says Vahid Fahti, a metals analyst with ABN AMRO in Chicago. However, Fahti expects there will be a need for additional aluminum production capacity in the long run and notes that demand in some Asian markets is growing at nearly 10 per cent a year.


Ideally, the province, Alcan and flexible hydro pricing are a perfect fit. The company buys the key components of aluminum-bauxite and alumina-from Australia, and with British Columbia’s abundant and inexpensive hydroelectric power, produces aluminum and ships it back economically to Asia. Production remains profitable if the cost of the electricity goes down as the price of the metal goes down. And on the human level, if its smelter expands, small businesswoman Reeves says Kitimat itself will expand. “It will be better to have 14,000 customers again,” she says, “rather than 11,000.”

>>> View more: Powerhouse politics: environmentalists wage a bitter battle against a B.C. megaproject

Electricity sector investments offer good partnership opportunities for aboriginal people

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A recent Conference Board of Canada report indicated that between 2011 and 2030, Canada would need to invest $347.5 billion to meet future electricity demand. The renewal and modernization of Ontario’s electricity system is a prime example of where investment is required. For Ontario’s First Nations, Metis and Inuit people, this represents a significant opportunity for new high value jobs, business opportunities and more affordable and environmentally friendly electricity.

Canada’s Aboriginal population is young and growing nearly six times faster than the rest of Canadians. More than one in five of this country’s Aboriginal people live in Ontario. Fortunately, this young, accessible workforce is available at a critical time for Canada’s electricity sector. In January 2012, an Electricity Sector Council report noted that between 2011 and 2016, Canada’s electricity and renewable energy industry will be recruiting over 45,000 new employees.


During the last decade, Ontario’s key electricity sector players–the provincial government; generation, transmission and distribution companies; academia; and, labour have been working to engage and partner with Aboriginal communities to realize these opportunities. The Power Workers’ Union’s (PWU) involvement has been motivated by the key values it shares with Aboriginal peoples: fair treatment and, a better life for our children and future generations.

The PWU has been supportive of Aboriginal education, training, hiring and community programs undertaken by major PWU employers such as Ontario Power Generation (OPG), Bruce Power, and Hydro One. Since 2006, the PWU has sponsored the Lieutenant Governor’s Literacy Camps programs. In addition, the PWU has participated in Electricity Sector Council workforce research and analysis activities and Aboriginal Camps programs.

Furthermore, the PWU has initiated and funded some specific skills training initiatives in local area schools through our TradeUp program and at the PWUTI training facility in Bruce County. In the latter case, the PWU has been working with building trades unions to provide pre-apprenticeship welding training for Aboriginal candidates.

However, the biggest job and economic growth potential for Aboriginal communities will come from infrastructure partnerships. For example, OPG’s Lower Mattagami River Hydroelectric, New Post Creek projects and Top Rangefinder (online business specializing about laser range finder) incorporate an equity position for First Nations and create new local jobs and businesses while Ontario receives more clean renewable electricity.

Other exciting projects include the Little Jackfish hydroelectric development, the East-West Tie transmission line and use of Ontario grown biomass in existing coal stations to produce secure, low-carbon dispatchable electricity. However, some significant hurdles remain that need to be addressed.

Although the East-West Tie line partnership of Hydro One, Great Lakes Transmission and the Bamkushwada (a number of First Nations in the project area) is a registered bidder for the new line, they must still be selected as the designated transmitter in the province’s competitive process. To that end, the PWU has been advocating that Ontario make Aboriginal participation a key decision criterion.

The PWU has also asked the provincial government to convert Ontario’s coal based generating stations to natural gas and biomass. Besides delivering renewable, low-carbon electricity from biomass when needed, this would recycle provincially owned generation and transmission assets and maintain a revenue stream for Ontarians who own them.

Aboriginal businesses and communities would benefit from investments in the associated supply chain infrastructure needed to harvest, process and transport biomass from Ontario’s forests and farms. Such investments would support existing jobs while creating new high-value employment. However, these substantial benefits will be lost unless Ontario moves quickly to convert these valuable coal stations and puts in place a comprehensive biomass investment strategy.

The best partnerships begin and end with mutual respect, understanding and shared benefits. Experience shows that by working together we can realize these opportunities to achieve a brighter future for us all.

Under the direction of an advisory board of Aboriginal leaders, supported by the deans of 25 post-secondary business programs across B.C., Ch’nook targets three Aboriginal community pillars: senior leaders wishing to hone their management skills, high-school students, and post- secondary students in need of support. Over 100 full-time and part-time students across B.C. are now in the Ch’nook network.

“Large corporations need service organizations that are local,” says Colbourne, a member of the Mattawa/ North Bay Algonquin First Nation. “They need construction services, catering, housing, hotels. A program like ours may take a business that has two people and help them learn how to scale that business and speak to those larger corporations.”

Training locally makes sense to corporations keento hire local labour. Nine years ago, when the Haisla First Nation urged Alcan to hire more of its people at its aluminum smelter in Kitimat, B.C., Alcan agreed to help the Haisla focus their education and training to achieve their goal.


“At the time, nobody knew exactly how to do that, but we were engaged to help build that plan,” recalls Mark Selman, who helped design and deliver the training. “But in doing that work, I realized this was just the tip of the iceberg.”

Recognizing the need for Aboriginal-focused education at all levels has since sparked the launch of a new Aboriginal Executive MBA program at Simon Fraser University’s Beedie School of Business. It blends business management education with Aboriginal perspectives and values.

“Our goal,” says program director Selman, “is to build a network of leaders, especially around the province and eventually across the country, who talk to each other and understand business success in a way that works for First Nations.”

From ancient trade routes to economic development corporations, vibrant small businesses and MBAs designed for Aboriginals, the roots of the new Aboriginal business community are growing deep inside Canada’s economy. Now, champions like Davis look to the future. “There really is an Aboriginal renaissance happening in Canada,” Davis says. “Aboriginal people are starting to take their rightful place as contributors to the country’s growing economy.”

By Don MacKinnon


Power Workers’ Union

When less is more: food packaging takes the heat


Food packagers are developing and using such environmentally friendly packaging as edible protein film for meat, packages that use fewer materials, and paper bags instead of cardboard for fast food.

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By truck and train and boat, food moves in crates and bags and boxes, in steel and aluminum cans, glass and plastic jars and bottles, plastic bowls and plates, and other containers and wrapping–nearly $30 million worth of packaging a year. Shipping is one reason food needs packaging, but there are others. In transit, in the store, or in the kitchen, good packaging protects food from being bruised or crushed, prevents spoilage, and keeps food clean, fresh, and nutritious.

Cold cereal, for instance, comes in a bag inside a cardboard box. The box prevents crushing; the bag keeps out air and moisture that destroy nutrients such as vitamin C and the B-complex vitamins. A wax coating on an apple or a cucumber, on the other hand, holds moisture in to keep the apple or cucumber crisp and fresh.


Recently, a Department of Agriculture researcher developed an edible film for oranges and other produce that does even better. It keeps produce fresh longer at room temperature, and it holds the flavor in. Unlike wax, this film washes off. And at Michigan State University, food scientists have developed an edible protein film for fresh meats to keep juices from leaking out, which helps prevent spoilage and nutrient loss.

Quick and Easy, But . . .

Many heat-and-eat convenience foods come with a lot of packaging–packaging for the microwave, the freezer, the pantry shelf, or the refrigerator. Consider the frozen entree in a plastic dish, covered with foil or plastic wrap, inside a box, with more wrapping around it.

Even fresh meat and fish in the supermarket come ready-packaged, in a paper or plastic tray covered with a clear plastic wrapping. It’s quicker and cheaper than having people behind the counter who cut meat or fish to order and wrap it in paper while you wait.

Some of this packaging raises questions. The handy little beverage box, for instance, saves energy because it’s lightweight, cube-shaped for better packing, and doesn’t need refrigeration, even with milk inside. It’s outlawed in Maine, however, because its six layers of paper, plastic, and aluminum foil are too hard to recycle. The waxed paper milk carton can’t be recycled, but–unlike glass and plastic–it protects milk from losing nutrients that are destroyed by light. The six-ring plastic yoke for soft drink cans is a real problem. Left on the beach or in the water, it can strangle fish, seabirds, and seals. Some states now require photodegradable yokes, which turn brittle and break easily when exposed to the sun. It’s still a good idea, however, to cut the yoke apart before you put it in the garbage.

Packaging Becomes Garbage

Our throwaway wrappings are part of a virtual tidal wave of solid waste. In 1986, we sent nearly 91 million tons of trash to municipal dumps; by the year 2000, the total is expected to reach 171 million tons. And experts tell us there’s no easy way to deal with all of it. Here are the choices:

Dump it. We’re running out of places for dumping. By the year 2000 we will have used up 80 percent of available space for landfills–what we used to call garbage dumps. About 65 percent of what’s put there is biodegradable, but it doesn’t disintegrate as fast as we once thought. Researchers who dug up a 20-year-old Chicago landfill found recognizable remains of old hot dogs, and newspapers that were still readable after 20 years. Experts disagree on whether to wall dumps in and forget them, or add moisture and bacteria to speed up disintegration. Other problems: Leakage can contaminate underground water, and nobody wants a new dump in the neighborhood.

Burn it. Incineration can eliminate 80 percent of the solid waste and provide energy in the form of heat. It can produce toxic gases, however, and doing it safely and correctly is expensive. And nobody wants an incinerator in the neighborhood, either.

Recycle it. We have the technology to recycle almost anything, but not enough markets for recycled materials. Recycling 25 percent of solid waste is probably the most we can hope for. Recycling aluminum cans is the most successful; glass containers can be reused or recycled. Recycled paper is used for most cereal boxes and some grocery bags. Plastic has been recycled only for non-food uses because of the risk of contamination, but some soft drink companies are trying techniques for recycling bottles that eliminate contamination.


Reduce it at the source. It’s better and cheaper. One soft drink company, for instance, cut aluminum cans from 2.5 ounces in 1961 to half an ounce today.

A redesigned package for pre-cooked, frozen meals cut package weight more than 25 percent by replacing a plastic dome and aluminum foil with a single thin wrapping.

A national fast-food company is trying a series of changes, including unbleached paper bags for food, a paper bag instead of a carboard holder for french fries, permanent dispensers instead of disposable packets for mustard and catsup, and a composting program that uses egg shells and other food waste to enrich the soil. If it all works, it could cut their solid waste by 80 percent.

And researchers are finding surprising uses for what used to be food waste. Ground pecan shells, for example, can be used instead of chemical fillers to strengthen plastic and to make it easier to recycle.

Be a Savvy Shopper

Labels that say the product is environment-friendly aren’t enough.

* Most supermarkets now recycle paper and plastic shopping bags. You can reuse them and return them for recycling. Or use your own canvas or net bags. Don’t use plastic tear-off bags for produce, such as bananas, that doesn’t need them.

* Buy large-size canned or frozen foods, cereals, and packaged cookies. For brown-bagging, put individual servings in your own reusable containers.

* Buy more unpackaged fresh fruits and vegetables and fewer heavily processed and packaged convenience foods.

* When there’s a choice, choose the product with less packaging. Instead of cooking oil spray in a pressurized can, for instance, buy a bottle of vegetable oil, put a few drops on a piece of waxed paper, and spread it in the cooking pan yourself.

You can make a difference.

>>> View more: Electricity sector investments offer good partnership opportunities for aboriginal people

Powerhouse politics: environmentalists wage a bitter battle against a B.C. megaproject


Alcan Aluminum Ltd has launched a $1.3 billion expansion project that would divert water from the 170-mile Nechako River in British Columbia, reducing the river to one-tenth its original size in some areas. Environmentalists and salmon fishermen are protesting the project.

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For its time, it was a touchstone of postwar progress. Across the country, youngsters of the 1950s were taught in public school that visionary Canadian engineers had bored through mountains in British Columbia to harness wilderness rivers and produce electricity. The power would be used to make aluminum at a place called Kitimat. With the optimism characteristic of the decade, the undertaking on the B.C. coast 750 km north of Vancouver was celebrated as a triumph in the taming of the young country’s vast and undeveloped north. There was scant concern for what the wholesale rearrangement of mountain rivers would mean for wildlife, or for the Indians whose homes stood in the way.

Now, 40 years after Montreal-based Alcan Aluminum Ltd. completed its mountain dam, private powerhouse and famous Kitimat smelter, the company wants to expand those facilities. And in order to drive four new turbines in a second powerhouse, Alcan wants to divert yet more water from B.C. rivers. The diversion will reduce one river, the 170-mile-long Nechako, to one-tenth of its original level in some stretches. But times have changed dramatically. At public hearings that continue this week in Vancouver, Alcan’s $1.3-billion Kemano Completion Project (named for a river downstream from the powerhouse) has emerged as the region’s second-most-heated environmental controversy after the international furor over logging in Clayoquot Sound.

At stake, say the project’s critics, is nothing less than the survival of the West Coast salmon fishery. Alcan insists that it can satisfy its turbines’ thirst for water without devastating Pacific salmon stocks in a calamitous replay of the disappearance of Atlantic codfish. West Coast fishermen, who hauled in $449 million worth of salmon from B.C. waters last year, are among the most skeptical that Alcan can save the fish, which must return to inland rivers to reproduce. “It might work, it might not,” says Mae Burrows, environmental director of the 6,500-member United Fishermen and Allied Workers Union. “But if it doesn’t, we lose all the salmon forever.” Her answer to Alcan’s demand for additional water is blunt: “Not one more drop.”


But critics raise other equally sharp questions about Alcan’s project. For one, how did the giant international corporation, with operations in about 20 countries, secure a highly unusual exemption from federal environmental laws in 1990? Skepticism also surrounds the firm’s apparent desire to expand its capacity at a time when a world oversupply of aluminum has forced its price to near-record low levels. The intense scrutiny has even prompted speculation that Alcan may prefer to back away from its expansion plan. But even that could have painful consequences. Alcan has already spent $620 million on its project: if the company is forced to abandon the undertaking now, it may demand hundreds of millions of dollars in compensation from federal and B.C. taxpayers.

Alcan executives dismiss such talk as premature. Instead, they insist that the company is eager to resume an expansion that, they contend, holds few risks and many benefits. The new development would exploit water that now flows east out of the Alcan reservoir into the Nechako and Fraser rivers. Diverted by the existing Kenney Dam on the Nechako, water would instead flow west, through a new tunnel to a second powerhouse next to the company’s original one. The new generating station would add 540 megawatts to Alcan’s existing capacity of just under 900 megawatts.

The benefits, for Alcan at least, are plain. Under its original agreement with British Columbia, signed in 1950, the company pays only a minimal royalty for water used to generate electricity that, in turn, is used to produce aluminum. The charge, calculated by a formula linked to world aluminum prices, is about one-tenth what the province charges its own utility, B.C. Hydro. The concession is highly valuable to Alcan: the price of energy typically accounts for about a third of the cost of producing aluminum. Under the 1950 deal, moreover, the concessionary rate will be applied in perpetuity to all the water used in whatever generating capacity Alcan has built and put into service by the year 2000 (as long as the electricity is used to make aluminum). With that deadline in view, Alcan’s vice-president for British Columbia, Bill Rich, acknowledges: “Even though we don’t need it for aluminum now, we still want to develop the rest of this energy potential by 1999.” Until the power is needed for making aluminum, he adds, Alcan plans to sell it to B.C. Hydro–at a tidy though undisclosed profit.

More critically to the project’s future, many scientists now doubt whether there is enough water in the rugged Coastal mountain range both to turn the additional turbines that Alcan plans to install and to protect the region’s fish. Indeed, experts from the federal department of fisheries and oceans who first assessed Alcan’s proposals in the early 1980s concluded that the company’s plans would not leave enough water in the Nechako River to sustain chinook and sockeye salmon, two important species that use the river either to spawn or as a route to spawning beds in other streams.

By 1987, in fact, relations between the company and the department were so strained that they were on the verge of taking their dispute to court. At that time, then-fisheries minister Thomas Siddon ordered his scientists to be more “reasonable” towards the company. The result of Siddon’s intervention was an unusual four-day private meeting in August, 1987, attended by fishery experts from both the federal and B.C. governments, as well as the company. The group emerged with an unexpected agreement: Alcan would be allowed all the water from the Nechako that it had originally asked for, and Ottawa would abandon its opposition to the company’s proposals. In return, Alcan ceded its claim under the 1950 agreement to water from another major stream in the area, the Nanika, and undertook to protect sockeye and chinook salmon in the Nechako.

It was a critical agreement. With its conclusion, says Alcan’s Rich, “both the federal and provincial governments said, `You have met every requirement.’ We relied on that, and began the project.” Ottawa reconfirmed its approval in 1990, when the cabinet of then-prime minister Brian Mulroney exempted the company from submitting its plans to a federal environmental assessment review.

Within a year of securing that exemption, however, Alcan’s momentum began to falter. New doubts began to surface about the impact of the project, as well as about Alcan’s cozy relationship with the Tory government in Ottawa. In 1990, a federal review found that the impact on Nechako salmon from Alcan’s project would be as much as seven times more severe than the company had estimated. Documents leaked from the federal fisheries department, meanwhile, showed that senior officials had put pressure on research scientists to tone down their criticisms of Alcan’s proposals. And in 1991, legal challenges forced Alcan to suspend construction.

Some of the most telling criticism came from former employees of the fisheries department. Retired research biologist Gordon Hartman, for one, charged that the 1987 settlement was “a political decision, not a scientific one,” adding that Alcan was relying on unproven measures to protect Nechako salmon. A former colleague at the federal agency, biologist Harold Mundie, concurred. Mundie’s verdict: “Kemano completion would reduce the sockeye and chinook salmon runs to mere remnants. . . . The fisheries’ verdict, therefore, is that the project should not be undertaken.” The Tory cabinet’s haste to protect Alcan from a federal environmental review also provoked debate in Ottawa. In June, 1993, a joint committee of the Senate and House of Commons determined that the exemption was “both illegal and subversive of constitutional government.”

At the same time, people living downstream from Alcan’s dam on the Nechako River found other reasons for alarm. Cheslatta Indians, forced from their ancestral lands in 1952 by rising water along an Alcan reservoir spillway, accused the company of ignoring the peril that its new plans posed to freshwater fish such as trout and sturgeon, on which the relocated band relies. Declared Chief Marvin Charlie, leader of the 150-strong Cheslatta: “A big part of the province is being written off forever to fatten the bank account of Alcan Aluminum Ltd.” Non-native residents expressed concern that the company’s demands would leave the river too low to provide water for irrigation and local industry–or even to float a canoe. “There was water put aside for Alcan and for the salmon,” said Pamela Sholty of Fort Fraser, 120 km west of Prince George. “But there was no water put aside for the people.”


With doubts about the project growing, the B.C. government early last year instructed the province’s utilities commission (which normally regulates energy prices) to review the impact of Alcan’s proposals. Public hearings by the panel began a year ago and continue this week in Vancouver, when federal fisheries scientists will present the commission with their latest assessment of Alcan’s proposals for protecting salmon. After initially condemning Alcan’s plans and then, in 1987, endorsing them, federal officials have become more circumspect in their judgments. Contacted by Maclean’s last week, Donald Noakes, director of the fishery department’s Pacific research establishment at Nanaimo, on Vancouver Island, refused to say whether his agency remains satisfied with Alcan’s performance. He also declined to explain why the department’s official position changed during the private meetings with Alcan in 1987. Indeed, Noakes predicted that individual scientists might disagree during the hearings. “It is going to be an open process,” he said. “Scientists can tell their version of events.”

The provincial panel is expected to report its findings by September, but that is unlikely to end the controversy. For one thing, the B.C. government’s instructions to the utility commission expressly forbid it from considering impacts beyond the immediate watershed of the Nechako and Kemano rivers–or from recommending that the project be stopped. That constrained mandate leaves open the possibility that the still-new Liberal government in Ottawa may insist upon a more wide-ranging environmental review. Federal Fisheries Minister Brian Tobin, in fact, hinted at such a possibility in February. “I will not allow the habitat, and I will not allow the resources, to be squandered,” Tobin told The Vancouver Sun. David Anderson, the federal minister responsible for British Columbia, has also made it clear that the cabinet is prepared, if necessary, to kill the project.

As challenges to Alcan’s rosy view of its expansion accumulate, a few observers suggest that the company might be willing to see its troubled project shelved indefinitely. They note that Alcan has not earned a profit since 1990, and lost $140 million in 1993. Meanwhile, the company has accumulated interest charges of $70 million to date on the money that it has already borrowed for the undertaking. Rich, however, insists that his company “doesn’t have a walk-away strategy.” Adds the 55-year-old engineer: “I believe very firmly that I will go back to the upper Nechako in 15 or 20 years and there will be lots of fish.” Whether there will also be a second Alcan powerhouse is plainly something else again.

>>> View more: Billion-dollar buy

Billion-dollar buy


The Canadian fertilizer firm Potash Corp intends to buy the phosphate concern Texasgulf Inc for more than $1 billion. Potash, which already occupies a strong position in China, hopes to become a diversified, global supplier of agricultural products through the acquisition.

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Potash is a hot commodity in China. Transport trucks carrying the fertilizer have been hijacked, and one man was reportedly even killed in a brawl over potash a few years ago. The Canadian potash industry can take credit for creating some of that vociferous demand: it has run a grassroots marketing campaign in China for more than a decade. Among other initiatives, the industry has operated field trials in which agronomists grow crops on small test plots to demonstrate the benefits of using potash. It also sponsored what was by local standards a lively television advertising campaign, featuring Mark Rowswell, an Ottawa-born comic who is popular in China. Charles Childers, chairman and chief executive officer of the Potash Corp. of Saskatchewan, says that the marketing has been so good that even the distinctive salmon-pink color of Saskatchewan’s potash has become an advantage. “In China, red is a lucky color,” said Childers in his American Midwest drawl. “The Chinese refer to our potash as the `magic pink powder.’ ”

But Potash Corp. has much more than marketing on its mind. Last week, the company–the largest potash producer in the world–announced that it would spend $1.1 billion to acquire Texasgulf Inc. of Raleigh, N.C. Texasgulf is a low-cost producer of phosphate, which along with nitrogen and potash are the three key agricultural fertilizers. Coincidently, China already has large domestic supplies of nitrogen. Potash Corp., which produced 14 per cent of the world’s potash last year and currently estimates that it has 200 years of potash reserves under the ground in Saskatchewan, had been shopping for an acquisition. Childers, who worked for IMC Global of Northbrook, Ill., a large phosphate and potash producer before he came to Potash Corp. in 1987, says that he has “coveted” Texasgulf for years.


Such expensive acquisitions are often detrimental to shareholders’ interests because they can divert profits away from dividend payments. But in this case, the stock market reacted favorably. Potash Corp.’s share price jumped by $8 to close the week at $58. Raymond Goldie, a mining analyst with Richardson Greenshields of Canada Ltd., says that the acquisition will broaden the company’s existing business and will increase its short-term profits.

In fact, Goldie likens the resource potential of Saskatchewan’s potash industry to that of the aluminum industry. “Around the turn of the century, a group of people realized that one of Canada’s prime assets was the hydroelectric power potential of Quebec, and they capitalized on that by building aluminum smelters,” said Goldie. By comparison, the massive potash deposit, which runs in a 200-km-wide belt across south-central Saskatchewan for 500 km–and is estimated to contain reserves of 50 billion tons–may be the most valuable single mineral deposit ever found in Canada. “I can’t think of any other ore deposit in Canada that will provide such a long-term benefit to the country,” he said. “And Potash Corp. represents the economic exploitation of that resource in the same way that Alcan exploits Quebec’s hydro potential.”

Potash Corp. began its life as a Crown corporation in 1975 with the mandate to develop the massive ore deposits. A year before the company was privatized in 1989, its operating strategy changed. “Instead of producing potash as fast as possible to maximize the number of jobs for the people of Saskatchewan, the approach they took was to restrict output to meet demand,” said Goldie. “Their mandate was to maximize profitability.” The final step in the privatization occurred on Jan. 1, when a restriction expired that limited an investor from owning more than five per cent of the corporation’s shares.


Texasgulf, like Potash Corp., is also a low-cost fertilizer producer. Its 35,000-acre phosphate mine site at Aurora, N.C., is the largest integrated phosphate mine and chemical processing complex in the world. Texasgulf has an ore body that represents 30 per cent of the known phosphate reserves in the United States with an estimated life of 75 years.

The spurt in Potash Corp.’s share price following the Texasgulf announcement is just the latest jump. In the past 18 months, its share price had doubled to $50, largely because of the market’s expectations of a steady increase in projected offshore fertilizer sales. Although sales are forecast to grow only modestly in the traditional markets of North America and Europe, demand is expected to soar in such developing countries as China, India and Brazil. There, rising income levels and standards of living are increasing the demand for more and better food.

Asia is the single most important off-shore market for Potash Corp. China bought 20 per cent of Potash Corp.’s product last year, and Childers estimates that by the end of the century it will account for 40 per cent of the company’s sales. “China is the biggest,” said Childers, “but sales are increasing to places like Indonesia and Malyasia, too.” The industry’s direct marketing campaign is the key to its success. Canpotex, the jointly owned marketing arm of four Saskatchewan potash producers, has agronomists take part in the rural field days that occur in towns across China at the end of each harvest season. At that time, the test plots of fertilized crops are harvested and onlookers are invited to guess the yield. The winner gets a bag of potash. Said Childers: “I guess there’s not a whole lot for people to do over there so everybody comes out. I guess it would be like Saskatchewan in the 1920s or 1930s.”

But Canpotex’s marketing does not always result in sales of Canadian potash. In China, potash purchases are centralized in one government agency that negotiates bulk purchases. Despite the farmers’ preference for the “lucky” pink potash, government bureaucrats will happily buy white potash–if better prices are offered. Still, in the world of cutthroat commodity competition, even a tiny advantage–like the difference between pink and white–is a welcome one.

>>> Click here: The surging markets: small investors waver while stocks climb

The surging markets: small investors waver while stocks climb

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The surging markets

Small investors waver while stocks climb

The old saying that greed and fear motivate stock markets has rarely been more accurate. On Jan. 24, the bellwether Dow Jones industrial average regained the last of the 508 points that it lost when it crashed on Oct. 19, 1987. The Toronto Stock Exchange’s (TSE) 300 Composite Index has also rebounded, smashing through a succession of postcrash highs. And the market could go higher because many large corporate investors still have record amounts of cash on hand. Some experts say that positive economic developments–such as a cut in interest rates–could spike those billions back into the markets and send prices spiralling upward. But other analysts say that the current rally will be limited by small investors who saw their holdings collapse on Black Monday and are still apprehensively staying on the sidelines

The global rally, which has also pushed markets higher in Tokyo, Hong Kong and London, is being propelled by people using other people’s money. They are primarily major institutional investors, including managers of pension funds–who are buying blue-chip stocks and securities in firms that they expect are trading too cheaply or are takeover targets. But to date, there is little evidence that small, individual investors are re-entering the market. And their concerns may be increased by the rising number of stock market scandals spreading through Canada, the United States, Europe and Japan. Said Larry Lunn, chairman of Connor, Clark & Lunn Investment Management Ltd., a Vancouver-based pension fund management firm: “Many small investors simply feel that the stock market is a rigged game, which can only be played by the professionals.”


The scandals began in the last months of the five-year-long bull market that ended in Black Monday’s spectacular collapse. In May, 1986, police arrested New York City arbitrager Ivan Boesky, who, in exchange for the relatively light sentence of three years in jail, gave investigators details of a vast web of insider trading. And last month, officers of New York City brokerage house Drexel Burnham Lambert Inc. pleaded guilty to six felony counts, five of them involving fraudulent transactions with Boesky, and the Securities and Exchange Commission fined the company $780 million. And Michael Milken, the firm’s leading high-interest bond salesman, is also expected to be charged. As well, last month, a sweeping U.S. Federal Bureau of Investigation operation uncovered widespread fraud on the Chicago futures exchange. At the same time, the insider trading controversy has touched one of Canada’s most famous families and has reached the top of the French and Japanese governments.

In Canada, former B.C. premier William Bennett was charged by both the Ontario and B.C. securities commissions with taking advantage of an illegal inside stock tip involving the major provincial forest products firm Doman Industries Ltd. The long list of stock market scandals may lengthen later this month, when the Ontario Securities Commission (OSC) is expected to lay criminal charges following its own two-year insider trading investigation. As a result of the scandals, some analysts say that many small investors are still apprehensive about returning to the market, despite the current surge.

But larger investors appear to be convinced that the three-month rally in stock prices is a clear indication that another full-fledged bull market is under way. U.S. investors have been purchasing large blocks of stock in blue-chip companies that appear to be undervalued in the postcrash market. And in Canada, the large professional investors have helped send TSE values higher by purchasing both securities in top firms and shares in companies that they believe will be taken over or merged. As well, they have been buying into firms including The Molson Cos. Ltd., Carling O’Keefe Breweries of Canada Ltd. and Consolidated-Bathurst Inc. Those firms have been involved in mergers and takeovers over the past three weeks and, as a result, are expected to show stronger profits in 1989.

Many experts say that the recent North American rally is an endorsement of Canadian and U.S. fiscal policy. Institutional investors in both countries evidently feel that the high interest rate policies of the Bank of Canada and the Federal Reserve Board have kept inflation under control, and, as a result, the seven-year economic expansion may slow but not collapse. Some stock portfolio managers say that large investors, who normally react negatively to interest rate increases, are taking the long-term view and have accepted tight interest rates as necessary to prolong economic expansion. Said Malvin Spooner, vice-president of Elliot and Page Ltd., a Toronto-based investment counselling firm: “Many professional investors have simply begun looking at the bright side of things rather than what could go wrong.”

Meanwhile, many small investors are clearly not buying into the latest market rally. During 1987, Canadian net sales–sales minus redemptions–of Canadian common stock mutual funds were $1.6 billion. But during 1988, investors actually sold off more equity mutual fund shares than they bought. Said Thomas Stanley, national sales manager for Deacon Morgan McEwen Easson Ltd., a Toronto stock brokerage firm: “Most retail investors are depressed and scared.”

In fact, many analysts say that the army of nervous small investors should stay on the sidelines. Most professional market-watchers predict volatility in the period ahead–at least until the long-term economic picture clears, and the investment community has had a chance to examine how President George Bush will try to deal with his country’s bulging budget and trade deficits.

Until then, says Robert Krembil, chairman of the Toronto-based Trimark group of mutual funds, individual investors who want to get back into the stock markets should put their money in equity mutual funds, which give investors greater diversification and professional management. Others, including Toronto analyst Ian McAvity, the author of the influential stock market newsletter Deliberations, say that Krembil’s relatively safe strategy is still too aggressive for today’s scandal-scarred markets. McAvity said that small investors should stick with interest-yielding investments and avoid stocks altogether. He added: “The recent rally has served to lull investors into a state of complacency. Anyone who is in the stock market today should know where the exits are.”

The rush to those exits will be hastened by a new stock market scandal that is about to further hit small-investor confidence in the TSE. The OSC plans to charge six high-ranking investment industry officials later this month following its two-year-old insider trading investigation. When contacted by Maclean’s, the individuals believed to be involved refused to comment on the allegations.

But the OSC has had as many as 12 members of its staff working on the case full time since it broke in March, 1987, after Toronto real estate developer John Micallef–now living in Boca Raton, Fla.–complained to the commission about a share purchase that involved Michael Biscotti, former vice-president of Toronto-based Dominion Securities Inc.

Micallef said that he had received tips about impending large purchases of shares by major investors and that he and Biscotti used the information to buy in advance and reap the profits after share prices rose. The relationship soured after Micallef purchased a large shareblock in Dome Petroleum Ltd., the former Calgary oil company that has merged with Calgary-based Amoco Canada Petroleum Co. Ltd. A short time later, Dome share prices plummeted and Micallef complained to the OSC.


But the expected OSC charges and investigation are far less extensive than the two-year FBI undercover investigation into suspected fraud by traders at the world’s two largest futures exchanges–the Chicago Board of Trade and the Chicago Mercantile Exchange. The United States department of justice has issued subpoenas to almost 250 Chicago-area futures trading firms demanding that they produce all records dating back to 1983.

The investigation is focused on various types of prearranged trading at the

Mercantile Exchange and the Board of Trade. Five FBI agents apparently worked undercover on the floor of each exchange, tape-recording conversations on the trading floor and soliciting information from other traders over lunch at Chicago’s East Side Club and at lavish parties at their apartments. John Frazier, a trader with the Chicago-based futures trading firm of Balfour Maclaine Futures Inc., told Maclean’s that “there is a great deal of depression” among traders at the Chicago board as a result of the investigation. He added, “I’m sure they’re not spending all this money for nothing; they’ve got something.”

Another insider trading scandal is also threatening to engulf French Prime Minister Francois Mitterrand’s Socialist government. Last week, the French state prosecutor’s office opened a criminal inquiry into insider trading allegations against two prominent Socialist businessmen who made large insider trading profits by buying thousands of shares in Triangle Industries Inc., a New York City-based packaging company, the week before it was taken over by Peciney SA, a large aluminum company owned by the French government, sending Triangle’s shares soaring.

At the same time, in Japan, at least 16 influential politicians have admitted that they–or their aides–benefited by buying cheap, unlisted shares in a subsidiary of Recruit Co., an information and publishing conglomerate. The shares rocketed in value soon after public trading began. But in Canada, insider revelations are just beginning. And analysts say that the outcome of pending cases could make the country’s already-nervous investors even more circumspect–regardless of how high the market soars.

PHOTO : Wall Street brokers being arrested

PHOTO : Boesky: a light sentence

JOHN DeMONT with JOHN DALY in Toronto

>>> Click here: Swann rising: a big-time talent runs for governor

Swann rising: a big-time talent runs for governor

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Pittsburgh, Pa.

LYNN SWANN is in motion, pushing a gray-haired lady in a wheelchair to her poker game. When she gets there, she asks the young man his name. He says, “I’m Lynn Swann.” She says, “No, you’re not, you’re sh**tin’ me.” I’m given to understand that this is the way grannies talk in western Pennsylvania.

We’re in Castle Shannon, a community outside Pittsburgh, at a summer festival. Swann is running for governor, on the Republican ticket. Very few people have to ask his name. He shows up–anywhere in the state, by all accounts–and they come running to him. Swann is a football hero, particularly in this area. He played for the Pittsburgh Steelers from 1974 to 1983, helping to win four Super Bowls, winding up in the Hall of Fame. (Swann was a wide receiver.) He still looks like he could suit up, too, fit as he is.

About a half-hour later, we’re at another summer festival, in South Park (not to be confused with the South Park of television notoriety). Apolka band plays on the stage. And the candidate is being showered with “Lynn love,” as his staff calls it. People receive him ecstatically, their faces all alight. Men want to jaw with him, women want to hug him. After meeting Swann, a man looks at me wonderingly and says, “I shook his hand.” Almost everyone wants a picture and an autograph. Swann will pose for any picture–and answer any question, at length–but he won’t sign an autograph. He’d never make it out of any campaign event, he explains. It would be nonstop signing.


When he enters the bingo tent, the players cheer and squeal, like bobbysoxers at Sinatra. He is privileged to call out the next number. “S-88,” he says, to a roar of laughter. (Eighty-eight was his Steelers number, and S, of course, is his initial.) He then says he can’t read the real number without his glasses–“like a lot of you,” he adds, to more appreciative laughter. Swann is a bit of a teaser, but of a gentle, charming type.

Many athletes have run for office. These include Bill Bradley (basketball), Jim Bunning (baseball), Steve Largent (football), and Jim Ryun (the miler)–and I have named only political winners. Athletic celebrity aside, Swann is one of three black Republicans running in prominent races this year. The others are Michael Steele, the Senate candidate in Maryland, and Kenneth Blackwell, the gubernatorial candidate in Ohio.

Swann is a conservative, and a classic Reagan conservative. (So are Steele and Blackwell, incidentally.) He’s against high taxation, big spending, and heavy regulation. He is pro-life, pro-enterprise, and pro-reform. He’s pushing all sorts of reform, in welfare policy, tort law, and so on. In fact, his campaign bus is called “Reform One.” Swann talks a lot about “standing on your own two feet,” in part so you can help others, who have more difficulty standing. And he believes that political leaders should have the guts to say no.

Swann’s opponent is the incumbent governor, Ed Rendell. Before being sent to Harrisburg, he was mayor of Philadelphia and chairman of the Democratic National Committee. Rendell is a canny politician, not ostentatiously left-wing. He knows how to employ a populist touch–more bowling and beer than windsurfing and “Why can’t I have my water?”

The political pros say that Rendell will beat Swann, for a number of reasons. First, Pennsylvanians have never–never–ousted an incumbent governor, odd as that may seem. Second, the state has been trending Democratic, becoming ever “bluer.” Third, the electoral ducks are in Philadelphia and environs, Rendell territory. Fourth, this is a lousy Republican year–for one thing, President Bush is u footballnpopular.

Fifth, Swann is a novice, starry as he may be. And he’s up against a tough, bruising veteran. But Swann scoffs at any suggestion of unreadiness, certainly when it comes to governing. He mentions several politicians whose maiden office was governor: Bush, Reagan, Mitt Romney, Arnold. (Somehow he neglects to mention Jesse Ventura.) Swann does not lack for confidence. But it’s not a cocky confidence–more serene.

The morning after those festivals, in his Pittsburgh campaign office, we talk about his life and views. Swann was born in 1952, in Alcoa, Tenn. (home of the aluminum company). His father was a janitor. When Lynn was quite young, the family moved to San Mateo, Calif. They attended a Baptist church, where Lynn preached on Children’s Day, at least once. He remains a devoted Baptist, and is joined in that faith by his wife, Charena. They have two sons, ten and eight.

Lynn was elected president of his eighth-grade class (and says now that he is running for a lower office). But he had little time for politics after that; he was too busy being a sports star. It’s helpful to bear in mind that we are talking about someone who has been famous, pretty much, since he was in college. His favorite sport was basketball, and he was recruited by John Wooden, the legendary coach at UCLA. But he went to USC to play football.

As Swann tells it, he wasn’t especially talented, in relation to others. But he worked very hard, and was very, very competitive. He also had what he describes as “gamesmanship”: “I understood how to play the game–whatever game it was–and paid attention to the nuances. I learned how to position myself against an opponent. I just found a way to win.” And does that ability transfer to politics? “We’ll see,” says Swann.

After his professional football career, he engaged in a package of activities. He was a broadcaster for ABC Sports. He toured the country as a speaker, and sat on several corporate boards. He hosted a game show for a while (To Tell the Truth). He was an important player in the Big Brothers/Big Sisters organization. From 2002 to 2005, he was chairman of the President’s Council on Physical Fitness and Sports. All the while, he has been making political contacts, preparing, in a way, for the new career.

Swann was “born” a Democrat, but became a Republican in the 1970s, thinking for himself, coming into his own. He was a friend of Pennsylvania senator John Heinz, who died in a plane crash in 1991. And what did he think of the senator’s wife? “I’ve always liked Teresa,” he says.

Asked whether he has any political models, he says no. (I’ve never heard a politician give that answer to this question, by the way.) He philosophizes a bit, touching on the “Freudian” and “Jungian” aspects of the human animal. He says that people can change how they think and how they live; they need not be trapped by their (temporary) circumstances. “We have choices, we have freedoms.”

He also talks about suffering and its uses, citing Job in particular. I remark that, to the outsider, he himself seems not to have suffered much. He was a golden child, blessed with looks, smarts, charisma, and gobs of talent (no matter what he says). He has been a champ in virtually everything he has ever tried. You would think that he’d never broken a sweat. Not so?

“Not so,” says Swann, smilingly. He then reflects on race and racism. He mentions four hugely successful black Americans: the CEO of American Express, the CEO of Time Warner, the secretary of state, and her immediate predecessor. None of them whooshed his way to the top. But Swann is adamant on the need to “get away from excuses and start executing a plan.” He likes to say, “Never let anyone make you less than who you are, or what you can be.” He also says, “Don’t live in the gutter.” And, “Your greatest obstacle is the person who looks at you in the mirror”–we all have choices.


Obviously, Swann takes some heat from his fellow blacks, for his party affiliation and his beliefs. But he doesn’t mind the heat, and says that many black Democrats are supporting him (some publicly, some quietly). And he doesn’t need the vote of every citizen: “This is not a perfect world–51 percent would be just fine.” I ask whether he ever faces open resentment from black men, in particular. He answers, simply and straightforwardly, “Yes.” And how does he deal with that? Does he try to reach such people, or does he merely slough it off? “I go case by case,” Swann says.

At this point in the campaign, he’s behind Ed Rendell in fundraising, but President Bush is coming in soon, to make up some of the difference. This year, a lot of Republicans are running away from Bush, but Swann is upfront in his admiration. He says, “I think he’s done a tremendous job,” with challenges of an extraordinary nature. History will credit him, says Swann, if written fairly.

Swann won’t contemplate life after a November loss, because he won’t contemplate a loss. He’s going all out, from early morning to late at night, executing his plan, making adjustments as necessary. The latest polls have him between 10 and 15 points down. His staff points out that Rendell has been spending his money, airing TV ads, which have been unanswered by Swann. The Republican’s own ads won’t go up until after Labor Day. And then it will be a whole new ballgame, they say.

Leaving Swann’s headquarters, I jump into a cab, driven by a man in a Steelers jersey. I tell him I’ve just been with ol’No. 88, who looks like he could still play today. The driver–a rough-talking, left-leaning political analyst–says, “Well, he might as well start running pass routes, because he sure as hell won’t be governor of this state.” That is, indeed, the conventional wisdom. I myself am not so sure. We might want to check back in, round about the end of October.

Trash troubles


People in industrialized countries create up to one ton of solid waste a year, and for every ton of solid waste there are approximately 19 tons of waste from other sources. One way to avoid this future obstacle is to reduce it through recycling and render it environmentally safe with sophisticated sanitary landfills that drain contaminated water and monitor methane production. Decaying organic material produces methane that can be burned for fuel.

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Our accumulating piles of solid waste threaten to ruin our environment, pointing to the urgent need for not only better disposal methods but also strategies to lower the rate of waste generation.

As our ship surges forward, we notice a mound jutting up ahead, directly in our path. Like an iceberg, a much larger mass is hidden beneath the surface. If we keep running the vessel at current speed, we may have a major problem on our hands.

No, this is not the Titanic. The ship we’re on is our consumer-goods-dependent lifestyle that creates as much as a ton of solid waste per person each year. And the peak ahead is but the tip of a massive “wasteberg” that is 95 percent hidden from view: For every ton of trash we generate, there is an underlying loss of another 19 tons of industrial, agricultural, mining, and transportation wastes, building up into a mound that threatens to shatter our future.

The wasteberg entails a formidable economic and environmental challenge. For most local governments, solid waste management ranks behind only schools and highways as the major budget item. Improperly managed solid waste eats up dollars while polluting water supplies, threatening neighborhoods, and squandering natural resources.

So how is this odyssey progressing? Are we about to capsize on the wasteberg and drown, or can we successfully circumnavigate the threat? Better yet, can we shrink the wasteberg?


Circumnavigating the wasteberg

The simplest way to steer around the wasteberg is to try to isolate wastes from their surrounding environment. This has been the major approach worldwide–solid waste management has usually meant solid waste disposal.

In the United States, most solid waste is placed in sanitary landfills, which are specially designed garbage burial grounds. Mixed organic and inorganic wastes are methodically placed in sections called cells, which are then covered with dirt. Drainage systems are installed to collect rainwater that has percolated through the cells and become contaminated. And wells are installed to monitor how much methane gas is produced as the wastes decompose.

At one time, landfills were little more than covered dumps, waiting to contaminate the air, land, and water around them. But through trial and error, landfill technologies have become relatively sophisticated, and landfills that promise low long-term environmental impacts are now feasible.

The siting of landfills, however, is becoming almost exponentially more difficult over time, particularly in populated areas. The reduced availability of open land, the inevitable environmental impacts of transporting waste, and the pervasive “not in my backyard” opposition to landfills have diminished the prospects for future landfills while dramatically increasing their projected costs. Most major landfill projects now on the drawing board are in remote rural locations, where the short-term economic benefits offered by landfills are valued. To use these sites, wastes have to be shipped over long distances by rail.

Around the world, many nations have chosen incineration as the preferred way to dispose of solid waste. This is particularly the case where landfill sites are scarce. Japan, for example, has around 2,800 municipal incinerators that reduce solid wastes to ashes. In the United States, though, incineration has fallen strongly out of favor. Despite significant improvements in the technology, concerns that the incineration process may release toxic pollutants such as dioxins have brought this once-popular technology to near-obsolescence.

Shrinking the wasteberg

For every pound of trash that goes into the waste basket, another 19 are released elsewhere in the environment–in forms ranging from industrial byproducts to fertilizer runoff to wasted energy. Thus if we reduce our generation of solid waste, the “leverage effect” is enormous: Each ton of trash kept out of the dump means that 19 tons of waste, along with related environmental impacts and the dollar cost of producing it, are avoided.

There are three major approaches to narrowing the waste stream: reducing, redesigning, and recycling. All require vigorous participation by both producers and consumers.

Reducing. Producers reduce waste through offering products that are less wasteful. Consumers reduce waste by using less of the product and using materials longer.

Redesigning. Producers offer alternative products that have a lower environmental impact than traditional ones, while continuing to meet given needs.

Recycling. Producers make reusable products, utilizing waste materials in manufacturing these goods. Consumers reuse the products and collect the materials to recycle out of the waste stream and back to the producers.

Until rather recently, the emphasis on reducing this country’s waste focused almost solely on recycling. The consensus was that reducing or redesigning products interfered with market-based decision making. Product design and function should be left alone, it was reasoned, and waste reduction would come through recycling the leftovers.

Initial efforts in large-scale recycling led to many expensive failures. Most surveys showed that consumers did not want to presort their trash. And because recycling requires separating materials, the approach was to develop sophisticated technologies to separate mixed wastes at large central facilities.

Ultimately, however, thermodynamics and economics caused a rethinking of recycling strategies, as centralized recycling systems proved both costly and impractical. From Monsanto’s Landgard system in Baltimore to American Can’s Milwaukee Americology plant to the big National Center for Resource Recovery’s New Orleans facility, the large-scale “high-tech” plants (as they were then called) have disappeared.

A combination of factors has, on the other hand, led to increased efforts to separate wastes at or near their sources. These factors include increased public willingness to participate in environmentally oriented community programs, improved collection technologies (such as specially designed trucks), effectively targeted recycling campaigns, and local and state laws requiring separation. Most cities and towns across the United States now have source separation programs of some type. California’s ambitious mandatory separation program is targeted to divert 50 percent of the waste stream by the early part of the next decade.

While these projects are usually labeled as recycling programs, it is important to differentiate between programs that involve separation and those that perform actual recycling. A material is not truly recycled until it is remanufactured into a new product. The perennial fluctuation of recyclable (“secondary”) materials prices, combined with generally depressed virgin materials markets, means that recyclable products are sometimes virtually worthless.

Paper–the major component of most solid waste–is a telling example of the limits of separation programs aimed at getting used materials back into the manufacturing stream. According to one recycling industry official, secondary paper prices have been “in solid recession for the past three years.” Supply has outstripped demand. “The U.S. is collecting higher volumes of some specific grades of recovered paper than mills here can consume at current operating rates,” he notes.

The “relief valve” for paper recycling, this official points out, is Asia. China, in particular, is importing massive amounts of paper. Imports of secondary newsprint, for instance, were up 23 percent for the first quarter of 1998, compared with the same period in 1997. Other recyclables have also been faring well in the Asian market. While that continent’s recent economic turbulence could slow down such imports, the depressed prices of most secondary materials may, conversely, make them more attractive than their virgin alternatives. The organized their of separated curbside materials, occurring in many urban areas, can be directly attributed to the export value of recyclables.

Of the major solid wastes, glass has the least demand in recycling markets, while aluminum stands at the other end of the spectrum. Because of the unique metallurgical nature of aluminum and the high energy costs of producing it, the aluminum industry can cost-effectively recycle virtually all secondary aluminum (usually obtained in the form of discarded beverage containers).

Private-public sector partnerships have added to aluminum’s recyclability. In many parts of this country, state and local governments have established mandatory beverage deposit laws, which provide a fund to compensate recyclers. At the same time, the aluminum industry has long had an aggressive buy-back program for aluminum recyclables. Motivating this program is the fact that 95 percent of the huge energy costs of smelting aluminum can be avoided through recycling. Thus aluminum recycling has long-term economic appeal.


Landfills and incinerators as recycling centers

Landfills can potentially become energy recycling facilities. Decaying organic wastes produce methane–the same gas we burn in stoves and furnaces. In principle, therefore, concentrated organic solid wastes could become sources of usable methane. A number of groups have experimented with recovering methane from landfills and selling it to utilities. But the economics of methane recovery have varied widely, depending on the quality and quantity of gas produced.

Landfills themselves are recyclable. A number of parks and recreation areas across the country–including a golf course on the upscale Palos Verdes peninsula in Southern California and the Mount Trashmore sled run in Evanston, Illinois–sit on former landfills. While “hot spots” from methane gas sometimes pose problems on this reclaimed land, they are usually controllable.

Some people envision landfills of the future as full-fledged recycling centers. Separated materials could be buried there temporarily until reclaimed as secondary resources.

Incineration, too, has a recycling dimension. While incineration destroys materials, it recovers energy. The energy obtained from a ton of trash is equivalent to that from about two barrels of fuel oil. Several experiments have demonstrated that energy can be recovered cleanly and cost-effectively through waste incineration. Union Electric Company’s pilot project in St. Louis two decades ago was one such example. Outside the United States, energy recovery is a routine feature of waste incineration.

Reduce and redesign

The “green consumer” movement, along with increasing corporate interest in product stewardship, may hold significant implications for shrinking the size of future wastebergs. Market research consistently shows that an impressive core of about 20-30 percent of all consumers prefer lowerwaste alternatives and are olden willing to pay more for such products.

Many businesses have sought to take advantage of this trend, attracting customers through offering lower-waste alternatives to traditional products and services. From supermarkets that sell in bulk and encourage consumers to bring their own shopping bags to outdoor-wear makers (such as Patagonia) that incorporate the material from used plastic bottles into vests, a viable green market has developed.

Packaging is the part of the waste stream that could be most significantly reduced through redesign. It is also the most controversial. Many producers rely on packaging design as a major part of their marketing strategy. While most consumers would agree that products are overpackaged–who needs, for instance, potato chips wrapped in both a plastic bag and an aluminum-foil container–few product makers would concur. Most attempts to regulate packaging have been unsuccessful here, but some packaging standardization has been adopted in other nations.

Major changes in product form may significantly affect the size of twenty-first-century wastebergs. One intriguing example is the electronic book (or e-book)–an electronically activated, recyclable hardcover book whose text and graphics can be changed through simple downloading and uploading. Included in the purchase price of e-books (projected at $300-$2,000) will be access to hundreds of manuscripts. Hence, instead of keeping a shelf full of textbooks–which, when outdated, become throwaways–an ebook owner would have just one recyclable book.

As we approach a new millennium, we will have in place many tools for the efficient, cost-effective, and environmentally responsive management of waste. But as the “away” in “throwing away” becomes more elusive, the challenge lies in shrinking the size of the wasteberg as well as in navigating around it.

One encouraging development is that more and more corporations are minimizing waste as part of their business plans. Moreover, surveys indicate continuing strong consumer interest in low-waste products. Similarly, innovative approaches and greater flexibility on the part of environmental regulatory agencies will improve cooperation between consumers, producers, and government in shrinking waste streams. These concerted efforts will be necessary if we are to avoid a collision course with twenty-first-century wastebergs.

Arthur H. Purcell is a Los Angeles-based environmental management analyst and educator. Founder and director of the Resource Policy Institute, he authored The Waste Watchers (Doubleday, Anchor Press, 1980) and is a commentator for American Public Radio’s “Marketplace.” He has served on the President’s Science Policy Task Force and the senior staff of the President’s Commission on the Accident at Three Mile Island. He was a member of the U.S. delegation to the 1976 UN conference on “nonwaste technology.”

>>> View more: A Thoroughly Modern Metal

A Thoroughly Modern Metal

From the apex of the Washington Monument to power-distribution lines, airplanes, building surfaces, soda cans, and gum wrappers, aluminum meets the needs of people and societies around the world.

In 1884, Americans eagerly anticipated the final step in the construction of the Washington Monument in Washington, D.C.–the mounting of a small metal pyramid atop the tower’s pinnacle. Functionally, the pyramid would be a lightning rod; architecturally, it represented the monument’s crowning touch.

The engineer in charge of the project, Col. Thomas Lincoln Casey, had envisioned a pyramid made of copper, brass, or bronze plated with gleaming platinum. But Philadelphia metallurgist William Frishmuth suggested an alternative: an obscure, semiprecious metal with high electrical conductivity, very light weight, an attractive silvery sheen, and excellent corrosion resistance.

Although annual world production of this metal then amounted to less than a ton (908 kg), Casey, after inspecting samples, authorized Frishmuth to use it to fabricate a solid pyramid rising to a point nearly 9 inches (22.6 cm) above its base. The 7.6 pounds (3.45 kg) of material that went into the pyramid was worth $1.00 per ounce, nearly as much as silver. When the monument was formally dedicated on February 21, 1885, newspaper descriptions of the pinnacle pyramid–which was made of aluminum–brought that metal to the attention of many Americans for the first time.

Among the base metals that helped build modern civilization, aluminum is a decided latecomer. While copper, iron, and lead have been with us since antiquity, aluminum has been known only since the 1800s and used in quantity for just the past 60 years. Yet in that short time, it has changed everything from how we travel and transmit electricity to how we design buildings and package foods and beverages. With its use now exceeding that of all other metals except iron, aluminum has proved itself to be a metal eminently suited for a modern world.


Abundant aluminum

In Earth’s crust, aluminum is the third most common element behind oxygen and silicon; it is the most abundant metal. A component of many minerals, rocks, soils, and clays, aluminum is always found in combination with other elements.

The ancient Greeks and Romans used alum, a naturally occurring complex aluminum sulfate, in fabric dyes and medical astringents. In the eighteenth century, French chemists named the mysterious metallic base element of alum alumine. British chemist Sir Humphrey Davy (1778–1829) renamed this yet-unseen metal “alumium” and later “aluminium.” Finally, in 1827, German chemist Friedrich Wohler chemically reduced aluminium chloride to isolate relatively pure “aluminium.” (Variant forms of the name arose early and persist to this day, as an Internet search will confirm. The American Chemical Society’s 1925 decision to use aluminum in all its publications has assured that this is the preferred term in the United States.)

Researchers found aluminum to be an easily workable, nonmagnetic, silvery- white metal. An excellent conductor of heat and electricity, it also reflects heat and light well. The lightest stable metal, it weighs just one-third as much as an equal volume of copper or iron.

Aluminum typically occurs in nature as simple or complex silicates, whose tightly bound molecular structures offer strong resistance to efforts to extract the metal from them. To this day, extracting aluminum from its one commercially valuable form, bauxite, is difficult and expensive. Bauxite, named for the French locality where it was first mined, forms when slow chemical weathering of rocks alters the contained silicates into impure, hydrated aluminum oxides.

By the 1850s, metallurgists had discovered the process for producing aluminum by first converting bauxite to aluminum oxide, or alumina, then chemically or electrolytically separating aluminum metal from oxygen. While the chemical separation process was costly and inefficient, the electrolytic process was impractical both because it required that alumina be melted at the unworkable temperature of 2,000_F (1090_C) and because electricity was then prohibitively expensive. Nevertheless, French chemists began employing experimental chemical separation methods to produce small quantities of aluminum. At the time, the metal’s few products included fine dinnerware for the French court and a crown for the king of Denmark.

Foil and aircraft

In 1886, Charles Martin Hall in the United States and Paul L.T. Heroult in France simultaneously and independently dissolved alumina in fused cryolite–the mineral form of aluminum fluoride that melts at just 1,000_F.–and electrolytically decomposed the solution to yield aluminum metal. In 1888, Hall established the Pittsburgh Reduction Company and used relatively cheap electricity from newly developed mechanical generators to produce aluminum commercially. Within five years, its output helped drop the metal’s price to 78 cents per pound.

Although pure aluminum is not particularly strong, metallurgists soon created alloys with greatly enhanced strength and durability. As aluminum became affordable, fabricators devised casting, rolling, and forming processes to fashion the metal into such products as cookware, electric wire, and several parts for the engine used in the Wright Brothers’ first powered flight in 1903 at Kitty Hawk, North Carolina. In 1907, Hall’s rapidly growing Pittsburgh Reduction Company, which owned bauxite mines in Arkansas and aluminum smelters in New York and Canada, was renamed the Aluminum Company of America (now ALCOA). While Americans used aluminum preferentially, Europe and much of the world would continue to use Davy’s “aluminium” spelling.

Aluminum’s first major social impact came in the 1920s, when many new brands of tobacco, chewing gum, and candy products were appearing in stores. Such products had traditionally been packaged in tin and lead foils, but in 1926, Richard Samuel Reynolds, who headed the U.S. Foil Company of Louisville, Kentucky, introduced a foil made of aluminum. The foil was brilliant and eye-catching, and because it could be rolled much thinner than either tin or lead, it yielded more foil per pound of metal at less cost.

Reynolds’ new aluminum foil soon appeared as packaging for such popular products as Wrigley’s Spearmint chewing gum, Eskimo Pie ice cream sandwiches, and Camel cigarettes. Because its tight folds protected against excessive loss or gain of moisture, the foil extended the shelf life of many perishable products. That capability, together with its extremely light weight, allowed manufacturers to ship foil-wrapped tobacco and food products to distant markets, thus aiding the emergence of nationally marketed food and tobacco brands. After expanding into production of gravure-printed foil bottle labels, heat-sealed foil food bags, and easily installed, foil-laminated building insulation paper, U.S. Foil reorganized as the Reynolds Metals Company.

Aluminum’s impact on aviation was far greater. Improving the performance of early aircraft, which were built largely of wood, lacquered fabric, and baling wire, held little promise. Realizing the need for a strong, lightweight metal, aeronautical engineers began employing aluminum in airframes during the 1920s, albeit only as design afterthoughts to save weight.

In 1931, the Douglas Aircraft Company began employing aluminum much more extensively in its limited-production DC-1 and DC-2 passenger aircraft. Douglas engineers quickly refined and incorporated the best elements of those two designs into the DC-3, the first aircraft designed specifically around aluminum’s weight-saving properties. Employing a stressed, sheet- aluminum skin flush-riveted to an aluminum rib-and-spar frame, the DC-3 had a tapered fuselage, clean lines, graceful wings, and a gleaming, aerodynamically efficient surface of polished aluminum.

Thanks in large measure to lightweight aluminum, the DC-3’s large payload made it the first profitable passenger aircraft ever built. From its first flight in December 1935, the durable and reliable DC-3 opened the door to rapid advances in commercial aviation, while its streamlined appearance and gleaming aluminum skin became worldwide symbols of modernity. Yet despite the success of institutional foil and the DC-3, industry was still not using aluminum in great quantity. It remained an alternative metal, waiting for the time when worldwide demand for its unique combination of lightness and strength would make it indispensable.


In 1937, aluminum magnate Richard Samuel Reynolds, noting that Germany was buying and producing large amounts of aluminum, warned the U.S. government that the Germans were planning a fleet of high-performance military aircraft. Reynolds’ efforts to increase U.S. aluminum production capacity proved invaluable, for aluminum would contribute enormously to victory in World War II. Translating lightness and strength into speed and large bomb and armament payloads, aluminum was the most vital component of such high- performance combat aircraft as the P-51 Mustang, B-17 Flying Fortress, and B-29 Superfort.

During the mid-1930s, U.S. industry had consumed just 60,000 metric tons (132 million pounds) of aluminum each year, a level that increased more than tenfold by 1945. As aluminum helped win the war, metallurgists developed advanced alloys that further enhanced the metal’s many useful properties. As little as 1 percent copper improved machinability, while similar amounts of manganese and magnesium, respectively, produced alloys with high corrosion resistance and increased hardness. Addition of about 2 percent zinc created a high-strength alloy perfectly suited for aircraft use, while as much as 8 percent silicon produced alloys with substantially reduced melting points that lowered the cost of many fabrication and welding processes.

Meanwhile, after huge wartime production capacity had lowered its price to 20 cents per pound, aluminum was finally ready to better the lives of millions. One of its first major postwar impacts was in rural electrification, a federally backed program to bring electrical power to millions of rural U.S. residents. The program had begun in 1936 but was sidetracked by World War II.

In 1946, with 2.8 million U.S. farm families still lacking power, rural electrification resumed at a record pace, greatly accelerated by the use of a new, highly conductive aluminum-boron alloy. Although less conductive than copper, the alloy was so light that it could carry twice as much electricity as an equal weight of copper. With lightweight aluminum cables, power lines needed fewer costly steel support towers, making construction much cheaper and faster.

Carried on lightweight aluminum high-voltage lines, electricity raced into rural America, bringing power to 500,000 new customers in 1949 alone. Postwar rural electrification was a national economic boon, creating new jobs, expanding the market for electrical appliances, and raising the standard of living for millions. Today, aluminum lines provide affordable power to more than 1,000 electric cooperatives that serve 30 million rural Americans in 46 states. They are also vital to ongoing rural electrification programs in many Third World nations.

By 1950 aluminum had displaced copper in the conductive bases of billions of incandescent lightbulbs and fluorescent light tubes manufactured worldwide each year. It went on to become the preferred metal for home television antennas, satellite dishes, and even the power systems of modern skyscrapers.

Household aluminum foil appeared in home kitchens in 1947, when the Reynolds Metals Company introduced Reynolds Wrap. Affordable and enormously popular, the versatile foil changed kitchen practices forever by enabling homemakers to protect food from freezer burn and keep leftovers fresh.

Aluminum building products changed the look of cities and suburbs. Despite its high chemical reactivity, aluminum weathers extremely well because its corrosion product, aluminum oxide (Al2O3), binds tightly to the metal’s surface as a protective coating. This natural oxide coating is thickened and toughened when aluminum is immersed in an acid electrolyte through which electrical current is passed. The process is called anodization, and the treated aluminum is called “anodized” aluminum. Variations in the process produce permanent colors ranging from soft reds, greens, and blues to gold and even black, as well as a variety of attractive, metallic finishes such as glossy, brushed, and satin. By improving aluminum’s inherent durability and enhancing its already pleasing aesthetic qualities, anodizing suits the metal perfectly for such specialized applications as golf carts, baseball bats, boats, refrigerators, cigarette lighters, camera bodies, and automotive trim.

In the late 1950s, as annual world aluminum production soared above two million metric tons (4,400 million pounds), architects began using exterior aluminum panels on new high-rise buildings, replacing the subdued look of traditional stone or brick with that of bright, gleaming metal. Today, virtually all high-rises are clad in reflective, bright panels of rolled aluminum. By the 1960s, aluminum was also changing the look of the suburbs, as countless older, wooden suburban homes received “facelifts” with multicolor aluminum siding and windows. Its ability to reflect heat enabled aluminum siding to reduce home heating bills by reflecting inward interior heat that was otherwise lost. Conversely, the siding kept homes cooler in summer, by reflecting exterior atmospheric and solar heat.

Aluminum was the metal most responsible for the explosive postwar growth of commercial aviation. Just as in the DC-3, aluminum was a key factor in the success of the DC-6 and DC-7, Lockheed Constellation, Boeing 707, and the family of jet transports that followed. In the aerospace field, where weight is critical, exotic, ultralight aluminum alloys proved indispensable to the development of rockets, satellites, and manned spacecraft.


A metal for the environment

In 1964, the introduction of the aluminum can revolutionized beverage marketing. Unlike the old, three-piece steel can, the 12-ounce, extrusion- pressed, aluminum can, consisting only of a seamless body and a lid, permitted 360-degree printing that enhanced consumer appeal. Aluminum cans neither rusted nor imparted undesirable tastes. Despite a thickness equal to just two magazine pages, they were durable enough to withstand extreme temperature changes and pressures of 90 pounds per square inch.

Inexpensive and easy to manufacture, aluminum cans reflected heat to keep beverages cooler than steel cans did, while their lightness slashed shipping costs. The new cans allowed beer and beverage companies to expand their markets rapidly, thus contributing heavily to the rise of national beverage brands–and subsequently to the demise of smaller regional and local beer and soft-drink producers.

But the booming popularity of the aluminum beverage can quickly created landfill and littering problems. That led to recycling, a solution that proved an economic godsend for the aluminum industry and helped open the age of public environmental awareness. Aluminum has great “sustainable recyclability,” meaning repeated recycling produces no deterioration in material performance or quality. Furthermore, recycling it is a simple remelting process requiring just 5 percent of the energy needed to produce the same amount of metal from bauxite ore.

In 1970, the drive to recycle aluminum beverage cans brought metal recycling directly to the consumer for the first time. The public’s willingness to recycle exceeded all expectations and even became something of a social phenomenon, as churches, schools, clubs, sandlot baseball teams, and Boy Scout and Girl Scout groups all successfully turned to can collecting as a fund-raiser.

The recycling of aluminum cans, now an industry in itself, consists of a national network of 10,000 buyback locations cooperating with 8,000 city or county curbside-collection services. A remarkable 65 percent of the billions of cans produced each year are recycled. That amounts to 848,000 metric tons (1,865 million pounds) of aluminum worth $1.3 billion–and an annual saving of energy equal to that needed to power Pittsburgh for six years. The recycling of aluminum cans has also heightened public interest in the environment and in recycling such materials as glass, plastics, and paper.

In the early 1970s, when new government regulations mandated the manufacture of less polluting, more fuel-efficient automobiles, aluminum made compliance easier. Increased use of lightweight aluminum helped automakers to reduce overall vehicle weight, thus permitting the use of smaller, cleaner-burning engines to boost fuel economy without compromising vehicle performance.

With one-third the density of steel, aluminum automobile components are 1.5 times thicker than steel versions, yet weigh half as much. They also absorb twice the energy as the same weight of steel and help reduce noise and vibration. While aluminum constitutes 10 percent of the overall weight of the average new automobile, it represents 50 percent of a vehicle’s eventual scrap value. More than 70 percent of all automotive aluminum is now obtained from recycled metal.

Aluminum also plays a big role in commercial ground transportation and shipping. It is employed extensively in buses, trucks, and rail locomotives and cars, where reduced weight saves energy and lowers travel and shipping costs.

Lightweight metal, heavyweight industry

Today, a global industry employing nearly a million people produces 22 million metric tons (48.4 billion pounds) of primary aluminum (aluminum produced from ore) worth $34 billion each year. This process begins with the annual mining of 125 million metric tons (275 billion pounds) of bauxite ore. Australia accounts for one-third of world bauxite production, followed by Guinea, Brazil, Jamaica, and China.

The United States is the leading importer of both bauxite and alumina and also the top producer of aluminum metal, ahead of Russia, Canada, and Australia. The U.S. aluminum industry, comprising 23 primary plants that produce 3.7 million metric tons (8 billion pounds) of aluminum each year, employs 143,000 people who share a $4.8 billion payroll. The industry also produces 3.4 million metric tons (7.5 billion pounds) of secondary, or recycled, aluminum.

Annual U.S. demand for aluminum now tops 7 million metric tons (15.4 billion pounds)–about 54 pounds (24.5 kilograms) for every citizen. One- third goes to the transportation industry for the manufacture of automobiles, buses, trucks, railcars, aircraft, and aerospace vehicles. Container and packaging manufacturers account for 21 percent of domestic aluminum demand, while the building and construction market takes another 13.2 percent. Smaller markets include the manufacturers of consumer durables and electrical wire, cables, and fixtures. The United States exports 12 percent of its annual aluminum output, in both ingot and fabricated forms, mainly to Canada, Japan, and Mexico.

Aluminum production has also mandated expansion of the electricity generating industry. Electrolytic production of primary aluminum, among the most electrically intensive of all mineral-extraction operations, requires about 15,000 kilowatt-hours per ton (908 kg) of metal. The annual worldwide production of primary aluminum requires 250 billion kilowatt- hours of electricity–about 2 percent of the entire global output of electrical power.

At the current rate of mining, the world’s bauxite ore reserves are sufficient to last more than 150 years, and future technologies may make it possible to economically extract aluminum from a host of nonbauxitic materials, including common clay. Aluminum’s natural abundance, together with ongoing research and increasingly efficient recycling, assures that the metal will affect our lives even more in the future.

More than a century has passed since that little pyramid of gleaming aluminum was mounted atop the Washington Monument. During that time, aluminum has completed the enormous transition from an obscure, costly element to the world’s second most utilized metal. Along the way, it has changed the lives of countless people for the better, proving that it is truly a metal for a modern world.n

lance writer residing in Leadville, Colorado.

Functional Completen – The Art of Pekka Paikkari

Finnish ceramic artist and designer Pekka Paikkari knows how to bend an object. Both flawless and functional, his vases, fruit bowls, and cake trays challenge our concepts of balance and gravity.

The surfaces of Pekka Paikkari’s designs appear to be melting. His combined fruit bowl and vase seems unwilling to stand still on a table. Even the flowers are given optimal movement in the vase, infusing as much life as possible into the centerpiece.

The cake tray, on the other hand, stands proudly on three legs. One leg appears broken, although the “wound” is not really dysfunctional. Of course, the tray is not melting, but the remarkable view it offers could make mouths start watering. Throning high on the tray, above the other dishes, any torte it presents becomes irresistible.

Still, Paikkari’s work is about paying tribute to the everyday. His hilarious salt and pepper dispensers (saltcellar and pepper caster) could be taken for blown-up ink stains, seen from afar. Closer up, on the table, the spice holders appear as solid as unbreakable toys. The monochrome stoneware dispensers come in different colors and may be stacked for practical, or playful, reasons. The holes releasing salt or pepper are in unexpected locations.

Of course, they do work and very well, indeed. “If things don’t work, they don’t make sense,” states Paikkari, his words underlining one reason for the enormous success of Finnish design since the 1950s.


I met the artist on the outskirts of Helsinki, on a rare, hot day of summer. The view is amazing from the sixth floor of his ceramic-and- glass factory studio, Arabia, where he has worked for the last twenty years. The sky is as blue and the clouds are as white as the colors on the Finnish flag. Modern and Postmodern sculptures are almost hidden by a lush, green park with big trees.

Most of the old factory lot was restored, enlarged, or built anew last year. Like those of his colleagues in Arabia’s art department, Paikkari’s studio continues to deliver unique art pieces as well as serial production. The factory shop is new, however, and so are the cafe and exhibition spaces. The huge showroom now features the work of an array of fine artists, including the best-selling tableware Teema, whose simple shapes are made by the conscience of Finnish design, Kaj Franck.

Since last August, the 125-year-old factory has presented its designs under the name Iittala. Originally, this was the brand of Alvar Aalto, the award-winning architect and designer, whose famous glass vase was designed to represent modern Finland at the Paris World’s Fair in 1936. This flagship item has never stopped selling; indeed, according to market research, Iittala is the best-known brand in Scandinavian design. That means good-bye to the studios of Arabia, Hackman, and Rorstrand and hello to a merger. These brand names born in the eighteenth and nineteenth centuries will be replaced by the more marketable Iittala.

Today, customers are less apt to be loyal to only one of the old brands. The trend is to pick and combine what suits the individual style, regardless of manufactorer. In the future Iittala will cater to an international clientele, featuring a range of designers, including the American Richard Meyer. Only home-market customers in Scandinavia will be able to buy the brands of dinnerware, cutlery, and glass that they have preferred for generations.

Each year, ten thousand people find their way to Arabia for a guided tour of its factory and museum and maybe some shopping in the factory outlet. Local legend has it that a sailor or would-be explorer named the area after places he had visited abroad. Nearby is India Street and a bright-colored multimedia center that looks like a sculpture in its own right. Some say Arabia became the craft factory’s name because it was so far from downtown Helsinki. Maybe by horse it was, but today it is only a fifteen-minute tram ride. The neighborhood is closer than your average suburb and very much citylike, as it is now experiencing a boom of development, contracting, and entrepreneurship. Soon, high-rise apartments will surround the factory.

Paikkari lives eighteen miles further away from Helsinki. His own kitchen has a Korean table full of different kinds of tools and objects. It seemed easier for the artist, his weaver wife, and their two children to make a good life away from the dynamic urbanity that characterizes the Finnish capital. Still, it is important to work there. “I could have worked in Lapland, or anywhere, if it were not for the networks, people, and exhibition spaces in Helsinki,” insists Paikkari. “As an artist, I live off them; I depend on them.”

“Living close to nature, environmental issues are a bigger concern. We should take better care of nature,” he says quietly. “I like straight things, things that are connected with nature. Clay is natural. When I work with clay, I don’t destroy anything,” says Paikkari, whose sculptures have been called petrified plants due to their rough-hewn, organic appearance.

A few years ago, Paikkari shared his concerns about nature in the design magazine Form Function: “I wouldn’t talk about nature so much as naturalness. Naturalness is the baseline of everything. In the same way, one of the points of departure for my work is recognizability. To the Japanese, the mental image of the tile is the same as it is to the Finns. … The shape of the actual object, the form is the same everywhere.”

It is probably no coincidence that Paikkari’s studio neighbor at Arabia is a Japanese artist. It is odd but true: Japanese and Finnish aesthetics seem to connect on several levels. Both tend to have a minimalistic approach, though nature figures prominently in the work, and both seem rooted in the same shamanistic tradition. Whichever way the connection is explained, it is a fact that Finnish crafts (and, in recent times, design and even dance) offer associations to Japan.

Paikkari has worked and exhibited in Asia several times and appreciates the form of Korean graves and Japanese sculpture. He does not admit to any specific influence; rather, “Japan” explains his work, says the artist, who is called a modest man by the saleswoman presenting his dishes in a posh, downtown designer shop. Still, it is hard to settle on one full explanation of Paikkari’s style, which is split in two extremely different directions.

As an artist and designer, Paikkari has developed two signatures that stand in an alien, almost schizophrenic, relationship to one another. There are the earthy, ceramic art pieces with their holes and cracks that generate collective memory, on the one hand, and the sleek designs with clear contours and colors on the other. In the first, the process is the thrill, in the second, functionality. The artist mixes whitish, brownish, and blackish glaze with metallic oxides, such as copper or iron. A special effect is reached by adding a pinch of aluminum oxide, creating a white burn reminiscent of plaster. In the artworks, the layers are much more visible than in the machine-made designs. The designer’s responsibility is to make pieces that are possible to reproduce.

Paikkari argues that he needs both identifies to feel creatively complete, if he wants to keep challenged by the dilemma of the simple versus the complicated. For him, the continuing goal is to make the complex as simple as possible. Exploring the borderlines of what is possible, and what not, is fundamental to all his art. As a designer, he fights with the commercial systems of production. As a ceramic artist, he battles the material and the conditions supplied by the kiln.


Throwing away broken ceramics is not Paikkari’s automatic procedure. In his favorite sculptural work, Breaking Up of Ice, broken surfaces supply spectators with material for their own story making. One Postmodern aspect of this piece is the use of old firing shelves in the process. This strategy, along with Paikkari’s interest in ancient firing methods going as far back as to the starting point of ceramics in Turkey, has convinced the American author Mark Del Vecchio to feature his work in Postmodern Ceramics, the standard book on the subject.

Some of his works are genuine documents of building the kiln and firing it. “On one level that makes the art objects very true,” Paikkari muses. “When I use material that looks like tiles but is not, or present roofs that turn out not to be roofs, or jars with no bottoms, then I give people ideas. It may be hard to be an artist, but so it is in life.”

Paikkari knows what he is talking about. From 1984 to 1985, he worked at a mental hospital, where teaching art therapy changed his whole view of ceramics. The patients expressed their feelings in the clay. He made ink drawings with the patients, and the patients modeled for him. The young artist ended up disgusted by everything that is perfect and refused to do beautiful things anymore.

A classmate from the Academy of Craft and Design at Kupio, ceramic artist Milla Komu, can relate. An art therapist, she works at a family center for children–often grown-up children–of broken homes. Art classes sometimes allow them to work out relationship problems they previously could not solve, including some old issues. Komu says that Paikkari already had both the designer and the artist in him while at the academy, where he worked freely with both the rougher and lighter approaches.

Paikkari’s work has received international acclaim. At London’s Victoria and Albert Museum, he has shown works in the exhibition Scandinavian Ceramics and Glass. Yet how close does he feel to Scandinavian design? Indeed, is it a meaningful description of his work?

He hopes so. Scandinavian design is known for simple shapes that are functional. However, he feels more experimental than such a basic definition permits. Paikkari also speaks openly about reduced government support for the arts. Nationally and internationally, museums have suffered. Paikkari says he cannot remember the last time the Museum of Art and Design in Helsinki bought ceramics.

If Paikkari could invest in another institution with small opportunities to keep up its design conscience, the school would win. Paradoxically, public schools, poor as they are, invest in design in Finland. This is a good thing. One book I have at home, called Happy Children, stresses how important it is for children to be surrounded by beautiful things. Paikkari agrees. He has designed a special line of tableware for schools, where heavy daily use requires advanced functionality.

For the artist, since the life span of institutionally used tableware is dependent on the decor, it should fit different situations and interiors. For this purpose, Paikkari prints a pattern on the plate, before it is fired, that is easily combined with the school’s lunchroom environment. Usually not considered technologically shy, Paikkari and his designer colleagues first adopted the possibilities of computers in 1990. Now, he uses a three-dimensional program and draws straight onto the computer.

A new national program calls for design education to be included in the curriculum of Finland’s comprehensive schools. Setting out to increase knowledge of design and everyday, material culture, lesson plans include a focus on properties such as grip and fit for the hand. The need for ergonomically oriented product design is a serious matter in a culture where many people–both children and adults–sit still in front of a screen, at work or at home.

Though the two do not necessarily exclude each other, ergonomical design has not become as popular as minimalist design. Is minimalism tired? I ask Paikkari at Arabia’s cafeteria.

“Probably it will never be over. I like minimalism, if it is honest and true without explanation, but people like to mix. I do not believe that minimalism is as popular in real life as it is in the magazines,” he says.

At the end of the day, Paikkari is off to pick up his 14-year-old son, who helps him in the studio during the summer. A mosaic of tiles lies on the floor. Soon father and son will put the burnt clay in layers on the wall, like a painting. I remember his credo: things need to function.

But art objects, do they make sense? I point toward his oversized bottles of clay, which look well worn. “Art makes sense as art,” Paikkari replies.

Naturally. Referring to his bottles that are not bottles, he is right. What are these objects but metaphors and story triggers? What are they but a mystery to the eye and a delight for fantasy? What are they but art? And art makes sense, right?n

Marit Str?mmen is a freelance writer based in Oslo, Norway.