Environmental Conditions For CIPEC
The OPEC embargo marked a turning point in the history of the international copper trade, waking up the countries that depended strongly on their exports of commodities. They desired to imitate the behavior of CIPEC with the objective of increasing the prices of their commodities.
Motivated by Rio Tinto Zinc (RTZ), in November 1974 in Lusaka the members of CIPEC reached an agreement to reduce copper exports by 10% -- later on increased to 15% -- until the first half of 1976. The high incentives took to that the countries did not complete the agreement completely and in fact in this period only 300,000 tons of copper were reduced by the cartel—hardly half of the reductions contemplated in the agreement. High inventories and the growth of sources outside of the cartel prevented the policies adopted by CIPEC to benefit its members.
Read more about this topic: Intergovernmental Council Of Copper Exporting Countries
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