PHOSPHATE EXPORTS BY JORDAN.

PHOSPHATE EXPORTS LONG HAVE dominated Jordanian foreign trade. Jordan is very rich in its phosphate deposits. It was reported that the first discovery of phosphate deposits in Jordan took place as early as 1894. However, scarcity of capital, unavailability of technology and international political developments came in the way of commercial production. Phosphate production in Jordan could take place only by 1934-35 at the Rusaifa, which has been the first phosphate mine in Jordan. [1] The important areas of Phosphate ore concentration in Jordan are as follows:

1. Ras al-Naqab/Ma'an: A very large area of phosphate deposits, south of Ma'an. Here production started in the new mine of Al-Shidiyah in the second half of 1988. Phosphate ores in Al-Shidiyah contain very high level of tricalcium phosphate between 75-77 per cent. [2]

2. Wadi al-Abyadh: One of the important phosphate mines in Jordan. Currently the largest amount of phosphate is produced from this mine. Phosphate ores in this mine also contain high level of tricalcium phosphate between 73.75 per cent.

3. Mahatta al-Hasaal-Qatranah: This is also one of the largest phosphate mines in Jordan. Phosphate ores at al-Hasa mines also contain high level of tricalcium phosphate between 73-75 per cent.

4. Al-Rusaifa: This mine is located between Amman and Zarqa. Phosphate deposits here contain low level of tricalcium phosphate between 60-62 per cent. Current Production at al-Rusaifa has been reduced to negligibly low levels.

5. Large deposits of phosphate have been located between al-Qatranah and Amman but quantity of phosphate layers is yet to be evaluated.

6. In northeast Jordan, vast phosphate layers have been discovered near Jordan-Iraq border. However, these are also yet to be evaluated. [3]

Jordan's total phosphate ore reserves at the beginning of 1999 were estimated to be 1.7 billion tons. Out of this the Al-Shidiyah mine alone contains 1.5 billion tons of phosphate ores. [4] With the better evaluation of existing mines and with new discoveries, the reserves could further inflate. Jordanian Phosphate Mines Company (JPMC) is the sole authority responsible for the exploration, production, transportation and sales of Jordanian phosphate. Eighty per cent of the shares of Jordanian phosphate Mines Company is held by various agencies of the government of Jordan, the largest (41.5 per cent) being held by Jordanian investment Agency. Whereas about twenty per cent of JPMC's share is owned by non-Jordanian organizations of which the largest (16 per cent) is owned by the Government of Kuwaiti. [5] Up to the mid-eighties phosphate was produced in Jordan on three sites namely Al-Rusaifa, Al-Hasa and Al-Abyadh. However, due to the fall in demand for low-grade phosphate, mining from AlRusaifa has declined to negligible levels. Production from the new Al-Shidiyah mine started in 1988. [6] AI-Shidiyah mines have been developed by JPMC in two stages with the help of World Bank assistance. In the long run JPMC is going to concentrate its production on the vast low-cost Shidiyah mine. This is also evident from Table I, which provides the data for Phosphate production in various mines in Jordan. Where it is observed that of the three major mines, production at al-Hasa and al-Abyadh, although, exceed production at Al-Shidiyah. But production at al-Hasa and al-Abyadh has declined in the given period. Where as production at the new major mine al-Shidiyah has increased tremendously. Production at al-Rusaifa has virtually declined to nil.

From the table, it is also observed that of the total Jordanian phosphate production in 1998, 27.1 per cent came from AI-Shidiyah mine, 32.0 per cent from the Hasa mine and 39.0 per cent from the Abyadh mine. However, phosPhate production during 1990-98 declined by 42 per cent at AI-Hasa and 4 per cent at AI-Abyadh. However, production at AI-Shidiyah increased by 300 per cent during the given period.

By 1968 Jordan's production of rock phosphate rose to 1.16 million tons, which was five times more than the production in 1956. The production further increased to 1.76 million tons by 1976, and by 1985 the total output rose to 5.92 million tons. This was achieved despite the near closure of Rusaifa mine. The production further increased to 6.25 million tons in 1986 and 6.7 million tons in 1987. Jordan's long-term 10 year contract with Thailand, in 1986, for supply of 0.65 million tons of phosphate per year further boosted its phosphate output. However, the production declined marginally in 1988, when Jordan produced 6.5 million tons of rock phosphate. [7] In the years that followed the declining trend continued. It came down to 6.2 million tons in 1990. Within four years it further declined to 4.2 million tons in 1994. Thereafter the production had shown steady improvements and Jordanian phosphate production had increased to 5.9 million tons by 1998.

The amount of Jordanian phosphate production is directly linked with the size its phosphate exports. A substantial amount of Jordanian phosphate is for export purposes. Jordan exports about 65 per cent of its phosphate production. Whereas the remaining amount of phosphate production has been utilized for the domestic consumption to be used as input at the Aqaba fertilizer complex and the Indo-Jordanian Chemicals Company. [8] Since the major portion of Jordanian phosphate is meant for export purposes, any fluctuation in its demand abroad affects the volume of production directly. A decline in the export demand results in decreased level of production, whereas an improvement in the export demand automatically increases the production. This has been the trend in the production profile of the Jordanian rock phosphate. Phosphate exports have been the largest and most important item of Jordanian exports. [9] However, Jordanian export is not limited to phosphate only. There are a few other important items in the Jo rdanian export basket. Potash, another mineral product has been the second most important commodity on the Jordanian list of exports. Jordanian fertilizer has also become substantially important export commodity and in terms of revenue earnings, it has become the third largest item of export. Besides these, Jordan exports agricultural commodities as well. The government of Jordan gives special attention to the agricultural sector and to the production of vegetables for the purpose of export. The vegetables export has been the fourth largest source of export earnings for Jordan. It can be observed that, broadly, the pattern of Jordanian export reflects the existing pattern of production structure in Jordan. Industrial development in Jordan has revolved and remained concentrated to its mineral sectors, especially phosphate and potash. [10]

PHOSPHATE IN JORDANIAN EXPORTS

For many years phosphate has been Jordan's most important item of export. This mineral commodity has remained the largest revenue earner for Jordan. During 1979 the phosphate exports accounted for 43.6 per cent of the total Jordanian export earnings. However, by 1983, the share of revenues from the phosphate exports had declined to 32.2 per cent of the total Jordanian exports. [11] Table 2 provides data about the percentage share of phosphate exports in the total Jordanian exports during the period 1984-98. From the data available in Table 2, it is clear that the share of Phosphate exports in total Jordanian exports has declined considerably during the above period. The revenues inflow on account of phosphate exports constituted 27.0 per cent of total Jordanian export earnings during 1984. However, by 1998, the share of phosphate exports revenues in total Jordanian export revenues had declined to only 13.4 per cent. However, from this we should not conclude that JPMC has not been performing well in the inter national market. Looking deeply at the data in Table 2, it is found that there have been variations in the percentage share of phosphate revenues, even though the phosphate revenues did not register a corresponding unidirectional variation. For example during 1985-86 it is found that phosphate export revenues declined from 66 million dinars in 1985 to 64.8 million dinars in 1986. However, the share of phosphate exports in total Jordanian exports rose to 29.0 per cent in 1986 as compared to its share of 26.0 per cent in 1985. Thus it is found that the share of phosphate exports in total exports improved despite a decline in phosphate revenues. This is explained by the heavy decline in total export revenues during 1986 and severe contraction in the Jordanian export commodities other than phosphate. On the other hand, it is found that during 1987-88, the phosphate export revenues increased from 61.0 million dinars to 76.7 million dinars. However, the share of phosphate exports in total exports declined from 25.0 per cent in 1987 to 24.0 percent in 1988. Further Jordan's phosphate export revenues increased from 97.9 million dinars in 1993 to 100.4 million dinars in 1994. However, the share of phosphate exports in Jordan's total exports decreased from 14.2 per cent in 1993 to 13.0 per cent in 1994. This is explained by the higher growth of the total export revenues in 1988 and 1994 as compared to the growth of phosphate export revenues during these years.

This is so because of a higher expansion of Jordanian export items other than phosphate. However, the fact remains that despite a very substantial decline in the percentage share of phosphate export revenues in total export revenues, it still remains the most important item in Jordanian export basket. Phosphate has remained the largest revenue earner among Jordanian export commodities and still retains its prime importance.

Table 2 provides information about the share of phosphate exports in Jordanian total exports and Table 3 provides data on the volume of Jordanian phosphate exports during 1984-98. With the help of these two tables, it is found that during many years phosphate export revenues declined even though the volume of Jordanian phosphate exports expanded. From table 2, it is found that Jordanian phosphate export revenues declined by more than one million dinars in 1986 as compared to 1985, even though Jordan had exported according to Table 3, 5.2 million tons of Phosphate in 1986 as compared to its exports 4.6 million tons of phosphate in 1985. Thus despite an increased magnitude of phosphate exports by Jordan in 1986, Jordan earned comparatively lower amount of revenues in 1986. The same trend did prevail in 1987. Jordan earned 61 million dinars from phosphate exports in 1987. This was 3.8 million dinars lower than Jordan's phosphate revenues in 1986. This happened despite an increase of 0.34 million tons of Jordani an phosphate exports in 1987 as compared to 1986. The decline in phosphate export revenues had been on account of the depressed prices of phosphate in international market. During the above instances prices were so much depressed that despite higher level of phosphate exports in the succeeding years, phosphate exports revenues were lower than that earned in previous years. This in turn contributed to the decline in the proportional share of phosphate revenues in the total Jordanian export revenues. However, there have been exceptions and Jordan has benefited from a rise in phosphate prices in international market also. For example during 1998 Jordan's earnings from phosphate exports increased to 139.7 million dinars from 134.5 million in 1997. Whereas the size of Jordan's phosphate exports declined in 1998 to 3.74 million tons from 4.37 million tons in 1997. Thus despite a decline of 0.63 million tons of phosphate exports in 1998, Jordan earned over 5 million dinars more as phosphate exports revenue, as compa red to the previous year.

Thus a significant hike in the phosphate price in the international market resulted in substantial benefit to Jordan. Therefore, the decline in the percentage share of phosphate exports in Jordanian total exports during 1984-98 is not because of decline in phosphate export revenues. The diversification and faster expansion of items of exports other than phosphate has resulted in higher growth of Jordan's total export revenues than the growth observed in phosphate export revenues. Nevertheless, this is a positive development for Jordan's trade prospects, since such diversification has decreased Jordan's dependence on export of a single commodity, that is, phosphate. Besides, the vagaries and risks associated in depending upon a single export commodity, too, are considerably reduced, even though the magnitude of exports of that export item may not necessarily decline.

JORDAN IN THE GLOBAL PHOSPHATE MARKET

Jordan has fast acquired the status of being second largest exporter of phosphate in the World -- Morocco being the first largest exporter. Till 1991, the status of being the second largest exporter of phosphate was enjoyed by the United States. The comparative position of various phosphate-exporting countries has already been provided in Table 3. This also provides the annual size of phosphate exports of these countries from 1984 to 1998. Jordan had been third largest phosphate exporting country till 1991. However, since 1992 Jordan became the second largest phosphate exporter pushing the United States to third position, which by 1998 had declined to be the smallest phosphate exporter. Other important exporters of phosphate are Togo, Israel, Algeria, Tunisia and Senegal. These phosphate exporters are the main competitors of Jordan in the international phosphate market. But Jordan has an edge over other exporters for two reasons. First, Jordan has a superior quality of phosphate in its mines; and second, Jor dan's geographical location makes the transportation easier. Phosphates are exported through Aqaba port, which is Jordan's only seaport on its 20 km red sea coastline. For Jordan transportation from Aqaba to the countries eastwards is cheaper in comparison with the other phosphate exporting countries. Thus Jordan has got an edge in terms of transport costs for its phosphate exports over other exporters, especially in the important markets of South Asia and Southeast Asia. However, there is one country, namely Israel, which is Jordan's neighbor and also a phosphate exporting country, which is in a position to offset Jordan's transportation advantage. Therefore, the JPMC will have to be extra careful and keep an eye on the marketing strategies of Israel.

The performance of JPMC in terms of the magnitude of exports could be analyzed from Table 4. This table provides data about the global phosphate trade during 1984-98. The year 1998 saw an increase of 4.3 per cent of global phosphate exports. However, in the same year Jordanian phosphate exports increased by 27 per cent. And Jordanian phosphate exports constituted 9.8 per cent of global exports of phosphate in 1994. Similarly, in 1987, '88, and '96, Jordanian phosphate exports grew much faster than the growths in world exports of phosphate. And thus during these years Jordan was able to increase its share in world phosphate exports. However, during 1994 and 1997, the growth in Jordanian phosphate exports was lower than the growth in world phosphate exports. And consequently the percentage share of Jordanian phosphate exports in world phosphate exports declined during these years. The world phosphate exports saw a negative growth in many years. However, during 1986 and 1989, the Jordanian phosphate exports observed positive growth despite a negative growth in world phosphate exports. And hence during these years, Jordan was able to enhance its percentage share in world exports. During 1985, 91, 93 and 98, the world phosphate exports and Jordanian phosphate exports, both, declined. However, the decline in Jordanian phosphate exports was lower than the decline in world phosphate exports. And thus an improvement in percentage share of Jordanian phosphate exp orts in world phosphate exports is observed during the above years. The only year in which Jordanian phosphate exports declined faster than the decline in world phosphate exports was in 1990. The world phosphate exports declined in 1990 by 15.9 per cent whereas during the same year Jordanian phosphate exports declined by 23.4 per cent. And consequently the percentage share of Jordanian phosphate exports in world phosphate exports declined in 1990. From the above analysis, it can be concluded that only in a few years Jordanian phosphate exports under performed as compared to world phosphate exports, whereas in most of the years Jordanian phosphate exports performed better than world phosphate exports. And the percentage share of Jordanian exports in world phosphate exports improved from 9.8 per cent in 1984 to 14.7 per cent in 1998. [12] This reflects upon the overall performance of Jordanian phosphate Mines Company during the above period.

DIRECTION OF JORDANIAN PHOSPHATE EXPORTS

About 65 per cent of Jordanian phosphate was exported throughout the world in 1998. The remaining 35 per cent was directed towards the industrial complex at Aqaba and Indo-Jordanian chemicals Company. The largest market for Jordanian phosphate is in Asian countries, specially South Asia and South east Asia. Next, in terms of the volume of exports comes western Europe followed by Eastern Europe. Asian importers have large agricultural sectors and hence their marketing potential for phosphate and fertilizers is very high. The data about the sales of phosphate by geographical areas has been provided in Table 5. During 1984, about 45 per cent of Jordanian phosphate was destined for Asian countries, whereas over 28 per cent of Jordanian phosphate was exported to Eastern Europe. Western Europe imported 8 per cent. Over 17 per cent of Jordanian phosphate went for domestic consumption to be utilized as input at the industrial complex at Aqaba. The following years observed a general improvement in Jordanian phosphate output and substantial improvement in Jordanian phosphate exports to Asian countries, However, in 1993, Jordanian phosphate production declined significantly. And so declined the Jordanian phosphate export to Asia and Eastern Europe. However, Jordanian phosphate exports to western Europe not only increased but Western Europe absorbed more of Jordanian phosphate than Eastern Europe. Since then western Europe has been importing larger amount of Jordanian phosphate than Eastern Europe. During 1993 about 62 per cent of Jordanian phosphate was sold to Asian countries, about 12 per cent to West European countries, about 4 per cent to Eastern European countries and 17 per cent went to the industrial complex at Aqaba. Since 1997, the Indo-Jordanian Chemicals Company, a joint venture between JPMC and Southern Petro-Chemical Industries Corporation of India, has become a significant domestic consumer of Jordanian phosphate. During 1998 about 43 per cent of Jordanian phosphate was sold to Asian countries, 11 per cent to Western Europe, 2,0 per cent to East Europe and 8 per cent to the other regions. Domestically about 22 per cent of Jordanian phosphate was consumed by industrial complex at Aqaba and 14 per cent was utilized by Indo-Jordanian chemical companies. From Jordan's point of view the loss of markets in East European Countries was significant blow to its phosphate marketing strategy. But the JPMC, in order to minimize the impact of loss, evolved a strategy to improve its sales of phosphate in Asian and West European markets. It is important to note here that Jordan was having a market sharing agreement with Morocco, the largest phosphate exporter. But this produced little benefit to Jordan. It was discovered that Morocco did not adhere to this agreement and penetrated into the markets traditionally held by Jordan, such as South East Asian markets, thereby undercutting Jordan on phosphate prices. [13] It was due to this fact that markets in Asian countries have been gaining increasing importance in Jordanian phosphat e export strategy. Accordingly, it would be more useful to look into the countrywide data of Jordanian phosphate exports.

Table 6 provides the data about the countrywide direction of Jordan's phosphate exports during 1984-98. During 1984, Romania and India were the largest and second largest importers of Jordanian phosphate respectively. Among other large quantity buyers were Indonesia, Yugoslavia, Japan, Taiwan and Poland. However, a year later, in 1985, India became the largest importer of Jordanian phosphate. Since then India remains the largest and most important market for Jordanian phosphate exports. Romania remained an important importer for a few years. However, gradually, Jordanian phosphate exports to Romania declined to nil. This happened in almost all the countries of Eastern Europe. Jordanian phosphate exports to Poland, Czechoslovakia, Albania and Russia were totally stopped. By 1998 only Bulgaria and Yugoslavia were importing small quantities of Jordanian phosphate. Thereby, during the period 1984-98, Jordanian phosphate exports to the countries of East Europe declined from 1609 thousand tons to a mere 120 thousa nd tons. And, in the meantime, Jordanian phosphate exports lost the important East European markets of Poland, Romania, Czechoslovakia and Russia.

In the meanwhile, Jordanian exports to the West European market improved from 451 thousand tons in 1984 to 653 thousand tons in 1998. However, during the above period, Jordanian phosphate exports lost the important markets of Italy, France, West Germany, Austria and Sweden, where Jordanian exports had declined to nil. However, increases in Jordanian phosphate exports to Holland, Belgium and Finland over compensated the loss of other markets of west Europe. Holland, alone imported 508 thousand tons of phosphate from Jordan in 1998. Jordan phosphate exports to the Asian countries, during 1984-98, improved only slightly. The loss of the markets of Bangladesh and Turkey was compensated by addition of new markets of Thailand for Jordanian phosphate and enhanced exports to India and South Korea. Jordanian phosphate exports to Far East and Southeast Asia declined from 1159 thousand tons in 1984 to 880 thousand tons in 1998. Jordanian phosphate exports to China and Philippines declined to nil whereas exports to Taiw an, Japan and Malaysia declined considerably during the above period. However, Jordanian phosphate exports to Indonesia improved considerably during the above period. JPMC has been able to increase its phosphate exports to the Oceana countries of Australia and New Zealand. Jordanian phosphate exports to Australia increased from 55 thousand tons in 1984 to 402 thousand tons in 1998. From the above discussions it could be observed that there has been tremendous shift in the market structure of Jordan's phosphate exports in the above years. The once most important East European market has nearly been lost. However, this loss has been partly compensated by the JPMG by enhancing phosphate exports to West European market. However, JPMC has been able to somehow protect its market share in Asian countries. The loss in South East Asian markets has been more than compensated by market gains in the countries of Oceania. Thus the markets of Asia, Far east, South East Asia and Oceania have acquired the most important prof ile in Jordanian phosphate export strategy.

Once the direction of Jordanian phosphate exports has been studied in detail, it would be useful to further investigate the concentration of Jordanian phosphate exports. A good export strategy is to diversify and spread the exports as much as possible, because higher concentration and lower spread of the exports makes the exporter more vulnerable to market disturbances. Whereas a lower concentration and higher spread makes the exporter less vulnerable to the market disturbances. Jordan's phosphate is exported to over 31 countries of the world. However, a major portion of Jordan's phosphate exports was absorbed by only four importers namely India, Indonesia, Holland and Australia. These four countries among themselves absorbed 73.2 per cent of total Jordanian phosphate exports in 1998. Thus about three-fourths of Jordanian phosphate exports in 1998 were concentrated in the four above mentioned importing countries while only one-fourth of Jordanian phosphate exports went to the remaining importing countries of the world. Thus the task before JPMC would be not only to defend its market share in the four largest importing countries but enhance its phosphate exports to other importing countries and expand to the new markets.

DIVERSIFICATION OF JORDANIAN PHOSPHATE INDUSTRY AND FERTILIZER EXPORTS

It was realized by Jordanian authorities that instead of remaining exporters of only rock phosphate, they urgently required diversification of phosphate industry. It was argued that if Jordan could diversify its activities to produce other phosphate products like diammonium phosphate, phosphoric acid and aluminum fluoride, it could increase income, generate employment and maximize export earnings. The availability of cheap rock phosphate as input to these industries was considered an advantage. Besides, low cost of production could provide Jordanian phosphate products an edge in the international market. This realization resulted in Jordan's most important industrial venture -- the establishment of Aqaba fertilizer complex. The project, managed by Jordan Fertilizer Industries Company (JFIC), cost $410 million. It was designed to produce 750,000 tons of diammonium phosphate and 105,000 tons of Phosphoric acid per annum. [14] The project also included an aluminum fluoride plant with an annual production capaci ty of 12,000 tons. The diammonium phosphate and phosphoric acid plants started production in June 1982, whereas the aluminum fluoride plant started production in mid 1984. However, the Jordanian Phosphate Mines Company (JPMC) bought Jordanian fertilizer Industries Company (JFIC) in 1986. Thus the Jordanian fertilizer Complex at Aqaba was also now managed by JPMC.

The data about the Jordanian exports Diammonium phosphate, Phosphoric acid and Aluminum fluoride during 1984-98 has been provided in Table 7. Jordan exported 548 thousand tons of Diammonium phosphate (DAP) fertilizer in 1984, which increased to its maximum in 1996, when Jordan exported 713 thousand tons. However, by 1998 Jordan's exports of DAP amounted to 677 thousand tons. Jordanian exports of DAP has been varying according to the variation in global demand for fertilizers. Jordan also exported phosphoric acid produced at Aqaba plant. During 1984, the Jordanian exports of

Phosphoric acid amounted to 31 thousand tons. However, Jordanian exports of phosphoric acid declined to a small level of 4 thousand tons in 1998. It must be pointed out here that most of the phosphoric acid produced at Aqaba fertilizer plant has been utilized as an input to produce DAP fertilizer, which in turn is exported worldwide. Recently Japan Jordan Company has also become a substantial and the largest user of Jordanian phosphoric acid. Jordan's export of aluminum fluoride increased from 6 thousand tons in 1985 to 13 thousand tons in 1998.

Table 8 provides data about the destination of Jordanian export of DAP fertilizer. India has been the largest buyer of Jordanian DAP fertilizer. It has already been observed that India has been the largest importer of Jordanian rock phosphate also. During 1998, India imported about 40 per cent of total Jordanian exports of diammonium phosphate. Other important destinations of Jordanian phosphate exports have been Ethiopia, Iraq and Iran. About 90 per cent of Jordanian exports of diammonium phosphate during 1998 has been concentrated to the four countries namely India, Ethiopia, Iraq and Iran. [15]

The information about the sales of Jordanian phosphoric acid has been provided in Table 9. Pakistan and Saudi Arabia were the main importers of Jordanian phosphoric acid. However, since 1997 Japan Jordan Company has been the largest purchaser of Jordanian phosphoric acid. The above company has been a joint venture of JPMC with the Arab Potash Company (APC) and a consortium of the Japanese agricultural federation Zen-noh, Mitsubishi Corporation , Mitsubishi Kasei Corporation and Asahi industries. The plant has a capacity of producing 300 thousand t/y of compound fertilizer and ammonium phosphate. The establishment of this joint-venture company has increased the production and sales of Jordanian phosphoric acid tremendously. The Japan Jordan Company purchased about 90 per cent of Jordanian total sales of phosphoric acid during 1998.

The data about the Jordanian export of Aluminum fluoride has been provided in Tablel0. Egypt, Dubai and Iran have been the important importers of Jordanian aluminum fluoride. During 1998 Egypt imported 43 per cent, Dubai 34 per cent and Iran 23 per cent of total Jordanian exports of aluminum fluoride.

Instead of remaining the exporters of phosphate rock exports only, the Jordanian Phosphate Mines Company adopted the strategy to move into the production and exports of finished products that utilize rock phosphate as input. The establishment of industrial complex at Aqaba was first step in this direction. However, since the early nineties, the JPMC's plans for future development have been centered on joint ventures with foreign companies who would provide investment funds and guarantee long-term export markets. These ventures have been designated as "free zone" industries to allow foreign majority participation. The Indo-Jordan Chemicals Company (IJCC) was the first of such ventures. IJCC has been a $170 million joint venture between Indian fertilizer giant southern petrochemical Industries Corporation (SPIC), Jordan Phosphate Mines Company (JPMC) and the Arab Investment Company SAA (TAIC). JPMC holds 34.8 per cent stake in the joint venture and supplies IJCC with critical raw materials, 3.5 million Cubic m eters of water and 1.8 million tons of rock phosphate to the Venture. [16] SPIC is the majority partner and holds 52.2 per cent stake in the Venture. SPIC is the buyer of finished product whereas JPMC is the supplier of inputs for IJC. The rest of the equity is held by TAIC, a joint stock Company owned by 15 Arab states. The $170 million project went on stream in August l997. [17]

The Company achieved a turnover of $82.73 million in 1998 and $88.20 million in 1999. It posted a profit of $1.55 million in 1997, $13.10 million in 1998 and $11.14 million in 1999. The successful running of the venture has resulted in the proposal to double its capacity. [18] Jordan Phosphate Mines Company (JPMC) hopes to achieve similar success with Japan Jordan Company. JPMC along with Arab Potash Company holds 40 per cent stake in this joint venture whereas the consortium of Japanese companies hold 60 per cent stake in $84 million joint venture. The Commercial production in Japan Jordan Company started in 1997. This company is also known as Nippon Jordan fertilizer Company 9NJFC) and achieved sales of $ 40 million in 1998.

The success in these ventures has given boost to the establishment of the third, larger project with Norway's Norsk Hydro for $600 million fertilizer projects in Shidiyah and Aqaba. The joint venture called Hydro Agri Jordan has plans for the production of 440,000 t/y of phosphoric acid at JPMC's Shidiyah mine site in southern Jordan and 1.2 million t/y of NPK fertilizers at a site next to the existing JPMC plant at Aqaba. JPMC along with other Jordanian shareholders holds 40 per cent stakes whereas Norsk Hydro of Norway holds 60 per cent stake in the Hydro Agri Jordan Joint Venture. Production from the new plants is targeted to begin in 2002. [19] JPMC is hoping for the new venture to enjoy the same success as its existing other joint ventures, Indo-Jordan Chemicals Company and Nippon Jordan Fertilizer Company. Both projects have been based on joint venture agreements that guarantee technical input and end markets. These joint venture arrangements have been possible with the passing of the new investment pro motion law in 1995. [20] To establish these joint ventures, their locations have been declared free zones, granting them valuable tax and customs concession. Moreover, in all these joint ventures, foreign partners hold the majority shares. Jordan's mineral projects have generally been the preserve of the major public companies. However, they were now being joined by a new US/Jordanian joint venture, the Green Technology Group Jordan (GTGJ). The group plans to develop a number of mineral related ventures. GTGJ, the first purely private company to obtain a mining license in Jordan, is investing an initial $4-5 million in a project in Aqaba area to mine glass sand for use in the production of silica flour. [21] On the other hand JPMC too has extended its activities outside Jordan and has entered into joint ventures. For example, it holds 10 per cent shares in a fertilizer plant for DAP and Urea production in Pakistani Fauji Fertilizer. The JPMC was also reported to be holding share in the consulting and contract ing for Industrial Projects (CCIP) which had plans to launch three new public share holding companies to provide spare parts for Jordan's mineral industries. The JPMC has also obtained a founding share in the Jordanian Mining Investment Company which would exploit a wide range of mineral resources. It has also entered into partnership with a private shareholding company for producing gypsum plaster. [22]

CONCLUSION

From the analysis provided in the previous sections, it could be observed that the performance of Jordanian phosphate Mines Company has been remarkable. It has not only been successful in retaining its share in the global market but also in improving its share of phosphate exports. The opening up of the A1-Shidiyah phosphate mine has pit JPMC in an advantageous position. The JPMC has been successfully exploring, processing and exporting phosphate rock to the international market. However, in order to boost its performance the JPMC will have to diversify its activities further and not depend solely upon the export of rock phosphate. The JPMC's program to diversify its activities to the production and exports of phosphate products like DAP fertilizer, phosphoric acid and aluminum fluoride has been a step in this direction. The establishment of Aqaba fertilizer complex has been another important step. The gradual shift from exporting only rock phosphate to producing and exporting various other phosphate related products has many long-term advantages for Jordan: first, the profit-margin for finished products in the international market is higher; Secondly, export of various other phosphate products along with fertilizers and rock phosphate would fetch more revenues for Jordan, resulting in improved national income; and, thirdly, it will increase tremendous employment opportunities for Jordanians.

However, these diversification and expansion programs require massive investments and state of art technologies, which may not be available domestically. Therefore, Jordan has invited foreign investment in its phosphate industry. To facilitate a smooth inflow of foreign investment the government has already been implementing measures to reform the country's tax and investment codes. The new investment policies have been a determined effort in this direction. The law provides for equal treatment to non-Jordanian as well as Jordanian investors. [23] Jordan has also been following up with tax reforms, trade regime reforms and privatization program in conformity with World Trade Organization (WTO). [24] Further, the Jordanian government has been making every effort to create a political environment that ensures stability and also guarantees the country's economic future. The successful and hassle free transition of power to the new King Abdallah, improvement in relations with Gulf countries and signing of the pe ace pact with Israel has been some of the steps taken to achieve these objectives. Jordan's mineral sector already has a track record for securing foreign participation. The establishment of many important joint ventures in the phosphate industry has been mainly due to the new economic policies pursued by Jordanian government. These joint ventures have been bringing in not only finance and technology but have provided Jordan with secure markets for enhanced sales of its rock phosphate and phosphate products. The increased level of sales of rock phosphate by Jordan in recent years and the successful operation of the new joint ventures, in a sense, vindicates the strategy of diversification and joint ventures pursued by Jordan Phosphate Mines Company.

Muhammad Azhar is a Senior Research Associate, Center for West Asian and African Studies, School of International Studies, Jawaharlal Nehru University, New Delhi, India.

ENDNOTES

(1.) Konard Schliephake, "Jordan: The Geographical and Economic potential" in Bichara Khader and Adnan Badran (eds.), The Economic Development of Jordan, Croom Helm, London, 1987, p. 67.

(2.) Tricalcium phosphate indicates the quality of phosphate ore. Thus the presence of a high percentage of tricalcium phosphate in phosphate ore indicates the high quality of ore. Where as the presence of a low level of tricalcium phosphate in the phosphate ore indicates the low quality of ore. Phosphate ores at the Shidiyah mines contain the highest level of tricalcium phosphate between 75-77 per cent whereas ores at Rusaifa contain the lowest level of tricalcium phosphate between 60-62 per cent.

(3.) Also see Konrad Schliephake, n. l.

(4.) Annual Report (Arabic), JP MC, 1998. p. 27.

(5.) Ibid., p. 63.

(6.) Annual Report (Arabic), JPMC, 1992, p. 19.

(7.) Annual Report (Arabic), JPMC, various issues. Jordanian phosphate production in various years could also be obtained from Industrial Commodity Statistics Book, United Nations, various issues.

(8.) Annual Report (Arabic), JPMC, 1998, p. 58.

(9.) Thirty fifth Annual Report (Arabic), Department of Research and Studies, Central Bank of Jordan, 1998. p. 166.

(10.) For details on Jordanian economy See Michael P. Mazur, Economic Growth and Development in Jordan, Croom Helm, London, 1979 and also see Wilson, Rodney (ed.), Politics and Economy in Jordan, London, Routledge, 1991.

(11.) Monthly Statistical Bulletin, various Issues, Department of Research and Studies, Central Bank of Jordan.

(12.) The percentage share of important phosphate exporters in world phosphate exports in 1998 were; Morocco: 46.4 per cent; Jordan: 14.78 per cent; Togo: 7.78 per cent; Israel: 6.10 per cent; Algeria: 4.55 per cent; Tunisia: 3.76 per cent; Senegal: 1.59 per cent; U.S.A.: 1.21 per cent and other exporters: 12.72 per cent. See Annual Report (Arabic) JPMC, 1998. p. 56.

(13.) Wilson, Rodney J.A., "Jordan's Trade: Past Performance and Future prospects" in International Journal of Middle East Studies, Vol. 20 (1988), p.331.

(14.) Michael B. Sullivan, "Industrial Development in Jordan", in Bichara Khader and Adnan Badran (eds.), The Economic Development of Jordan, Croom Helm, London, 1987, p. 138.

(15.) Middle East Economic Digest, (London), 29 May 1998, p. 13.

(16.) "Indo-Jordan Chemicals mulls expansion", The Hindu, 19 June 2000, p. 14.

(17.) Middle East Economic Digest, p. 15.

(18.) The Hindu, n. 16

(19.) Annual Report (Arabic), JPMC, 1998, p. 40.

(20.) Middle East Economic Digest, 6 October 1995, p. 4.

(21.) Middle East Economic Digest, 30 April 1999, p. 11.

(22.) Middle East Economic Digest, 15 March 1996, p. 15.

(23.) Middle East Economic Digest, 27 October 1995, p. 8.

(24.) Middle East Economic Digest, 30 April 1999, pp. 9-10.

                      PHOSPHATE PRODUCTION IN JORDAN
                           (In Millions of Tons)
Mines       1990 1991 1992 1993 1994 1995 1996 1997 1998
Al-Hasa      3.3  2.6  2.4  2.1  1.7  2.0  2.0  2.0  1.9
Al-Abyadh    2.4  1.9  2.2  1.5  1.4  1.9  2.0  2.2  2.3
Al-Shidiyah  0.4  0.4  0.6  0.6  1.0  1.0  1.3  1.5  1.6
Al-Rusaifa   0.1  0.1  0.0  0.1  0.1  0.1  0.1  0.1  0.1
TOTAL        6.2  5.0  5.2  4.3  4.2  5.0  5.4  5.8  5.9
Source: Anual Report 1998 (Arabic), Jordanian Phosphate Mines Company.
                  SHARE OF PHOSPHATE IN JORDANIAN EXPORTS
                    (In Thousands of Jordanian Dinars)
Year Phosphate Exports Total Exports Percentage
1984            69,613       261,055       27.0
1985            66,084       225,346       26.0
1986            64,805       225,615       29.0
1987            61,002       248,773       25.0
1988            76,682       324,788       24.0
1989           146,270       534,106       27.0
1990           138,668       612,252       23.0
1991           123,092       598,627       21.0
1992           122,464       633,755       19.0
1993            97,884       691,282       14.2
1994           100,390       793,919       13.0
1995           105,493     1,004,534       10.5
1996           126,922     1,039,801       12.2
1997           134,533     1,067,164       12.6
1998           139,700     1,044,100       13.4
Source: Monthly Statistical Bulletin, various
issues and 35th Annual Report 1998 (Arabic),
Department of Research and Studies, Central
Bank of Jordan, Amman.
                    PHOSPHATE ROCK EXPORTS BY IMPORTANT
                            EXPORTING COUNTRIES
                           (In Million of Tons)
Country  1984  1985  1986  1987  1988  1989  1990 1991 1992 1993 1994 1995
Morocco 14.98 14.78 13.69 13.06 14.26 12.51 11.67 9.14 9.13 8.40 9.53 9.42
U.S.    10.44  9.41  8.29  8.85  9.05  9.77  7.25 5.63 3.91 3.51 3.30 3.09
Jordan   4.69  4.60  5.20  5.54  5.81  6.41  4.87 4.26 4.26 3.57 3.83 3.88
Togo     2.76  2.44  2.27  2.51  2.87  3.69  2.42 3.07 2.08 1.58 2.23 2.65
Israel   2.04  2.31  2.49  2.67  2.25  2.69  1.94 1.92 1.95 2.10 2.38 1.96
Tunisia  1.17  1.13  11.9  1.24  1.16  1.11  0.59 0.43 0.96 1.11 1.31 1.33
Algeria  0.56  0.82  0.82  0.80  0.88  0.85  0.73 0.84 0.79 0.45 0.57 0.67
Senegal  1.32  1.19  1.33  1.40  1.77  1.37  1.47 1.18 1.05 0.84 0.62 0.85
Country  1996  1997  1998
Morocco 10.14 11.66 11.73
U.S.     1.57  0.28  0.31
Jordan   4.35  4.37  3.74
Togo     2.69  2.69  2.24
Israel   2.01  1.48  1.54
Tunisia  1.22  1.17  0.95
Algeria  0.99  1.10  1.15
Senegal  0.83  0.60  0.40
Sources: Annual Report (Arabic), various
years, The Jordan Phosphate Mines Company,
Jordan, and International Fertilizer
Association, Paris.
                     Global Phosphate Trade: Jordanian
                             and World Exports
                              (Million Tons)
Year   World Annual Jordanian Annual     Jordanian
     Exports Change   Exports Change    exports as
                (%)              (%)   per cent of
                                     world exports
1984    48    + 4.3       4.7  +27.0           9.8
1985    46    - 4.5       4.6  - 2.1          10.0
1986    44    - 4.3       5.2  +13.0          11.8
1987    45    + 2.3       5.5  + 5.8          12.2
1988    46    + 2.3       5.8  + 5.5          12.6
1989    44    - 4.3       6.4  +10.3          14.5
1990    37    -15.9       4.9  -23.4          13.2
1991    31.5  -14.9       4.3  -12.2          13.7
1992    29.5  - 9.4       4.3     --          14.6
1993    24.4  -17.3       3.6  -16.3          14.6
1994    27.8  +13.9       3.8  + 5.5          13.6
1995    28.6  + 2.8       3.9  + 2.6          13.6
1996    28.6     --       4.4  +12.8          15.4
1997    31.3  + 9.4       4.4     --          14.0
1998    25.3  -19.2       3.7  -15.9          14.7
Sources: Annual Report (Arabic), various
issues, The Jordan Phosphate Mines
Company, Jordan; FAO Yearbook, various
issues, FAO, Rome, and International
Fertilizer Industry Association, Paris.
                Sales of Phosphate from Jordan to Different
                 Geographical Areas (Including quantities
               delivered to industrial complex in Aqaba and
                  Indo-Jordanian Company) (Million tons)
Year  Asia and Eastern Western  Other [*] Industrial IJCC
Total   Orient  Europe  Europe Countries    Complex
1984      2.52    1.61    0.45   0.11        0.98    5.67
1985      2.73    1.48    0.33   0.07        0.84    5.45
1986      2.89    1.80    0.40   0.11        0.94    6.14
1987      3.17    2.02    0.28   0.08        0.90    6.45
1988      3.54    1.96    0.28   0.03        1.02       6.83
1989      3.88    2.03    0.44   0.06        0.99       7.40
1990      4.03    0.58    0.27    --         0.97       5.85
1991      3.29    0.67    0.26   0.03        0.91       5.16
1992      3.25    0.54    0.36   0.12        0.93       5.20
1993      2.64    0.15    0.50   0.26        0.73       4.28
1994      2.67    0.16    0.59   0.40        1.16       4.98
1995      2.77    0.14    0.68   0.29        1.14       5.02
1996      2.50    2.26    1.13   0.46        1.11       5.46
1997      2.63    0.24    1.07   0.43        1.11       5.83
1998      2.48    0.12    0.65   0.49        1.26       5.82
(*.)Includes Australia, New Zealand, North
and South America and Africa. Source: Annual
Report (Arbic), various years, The Jordan
Phosphate Mines Company, Jordan
                     Direction of Jordanian Phosphate
                                  Exports
                              (Thousand tons)
S.
No.            Country        1984 1985 1986 1987 1988 1989 1990 1991 1992
A. East Europe
1.             Bulgaria         69   93   46    -   46   35    -   30   61
2.             Poland          225  333  424  899  555  908    -  135  140
3.             Czechoslovakia  112  116  110   73  116   97   94   12    -
4.             Romania         861  684  590  503  539  532  130   61   82
5.             Yugaslavia      342  233  571  543  707  462  287  186  236
6.             Albania           -   20   56    -    -    -    -    -    -
7.             Russia            -    -    -    -    -    -   71  242   20
B.West Europe
1.             Italy            68   53   37   72   66   42   16    -    -
2.             Greece           93  115   91   46   65   72    9   36   55
3.             France          164  110  173  132  114  322  108   36    -
4.             Norway            -    -    -    -    -    -    4    -    -
5.             Cyprus            -    -    -    -   16    -    -    -    -
6.             West Germany      -   14   42   11    -    -    -    -    -
7.             Austria           -   12    -    -    -    -    -    -    6
8.             Sweden          126   15   46   15   30    -    -    -    -
9.             Holland           -    -    9    -    -    -   44  184  302
10.            Britain           -   14    -    -    -    -    -    -    -
11.            Belgium           -    -    -    -    -    -    -    -    -
12.            Denmark           -    -    -    -    -    -    -    -    -
13.            Finland           -    -    -    -    -    -    -    -    -
S.
No.            1993 1994 1995 1996 1997 1998
A. East Europe
1.               58   67   69  139  218   97
2.                -    -    -   59    -    -
3.                -    -    -    -    -    -
4.                -   13    -   13    -    -
5.               93   84   70   52   22   23
6.                -    -    -    -    -    -
7.                -    -    -    -    -    -
B.West Europe
1.                -    -    -    -    -    -
2.               66  145  155  178   75   20
3.                -    -    -    -    -    -
4.                -    -    -    -    -    -
5.                -    -    -    -    -    -
6.                -   15   53  305  321    -
7.               11    5   21   45    5    -
8.                -    -    -    -    -    -
9.              421  393  448  452  427  508
10.               6    -    -    -    -    -
11.               -   28    -   90  102   28
12.               -    -    6    -    -    -
13.               -    -    -   65  143   97
C. Asia
1. India            812  968  960 1138 1135 1449 1726 1308 1275  835 1008
2. Pakistan         166  246  151  232  235  238  292  150  193  123  155
3. Bangladesh        93  123  114   62   98  183  101   98   42   55   72
4. Turkey           169  171  215  492  654  465  447  414  433  306  330
5. Lebanon            -    -    -    -    4    -    -    -    -    -    -
6. South Korea      136  168  192  145  163  152   76  125  131  121  105
7. Thailand           -    -    -    -    -    -    -    -    -    -    -
D. Far East and
South East Asia
1. Taiwan           217  177  225  289  277  339  314  283  266  260  231
2. Philippines        6    -   13   13   15   21   67   70   22    -    -
3. Indonesia        362  445  518  394  519  582  641  527  540  656  623
4. Japan            300  311  286  317  252  233  258  200  180  145  164
5. Malaysia          85   85   69   87  175  220  104   86  133  113   77
6. China             76   48   50    -    -    -    -   29   33   33    -
E. Oceania
1. Australia         55   22   23    -   30   59    -   33   92  192  341
2. New Zealand       58   45   14   33    -    -    -    -   27   71   55
F. Other Countries    -    -    -   63   48    -    -    -    -    -   11
TOTAL              4695 4611 5198 5544 5811 6411 4874 4245 4624 3565 3822
C. Asia
1. India           1208  976 1010 1224
2. Pakistan         204  124   81   27
3. Bangladesh        67   28    -    -
4. Turkey           128   72  311    -
5. Lebanon            -    -    -    -
6. South Korea       85  120  297  153
7. Thailand           -    -   90  188
D. Far East and
South East Asia
1. Taiwan           300  243   98   96
2. Philippines        9   11   15    -
3. Indonesia        543  687  496  600
4. Japan            152  141  170  161
5. Malaysia          74   92   53   23
6. China              -    -    -    -
E. Oceania
1. Australia        264  330  355  402
2. New Zealand       24  101   65   81
F. Other Countries    -   29   13    7
TOTAL              3880 4352 4376 3735
Source: Annual Report (Arabic) various years.
The Jordan Phosphate Mines Company, Jordan
                      Jordanian Exports of Diammonium
                   Phosphate (DAP), Phosphoric Acid and
                             Aluminum Fluoride
                            (Thousands of tons)
Year      Diammonium Phosphoric Aluminum
     Phosphate (DAP)       Acid Fluoride
1984             548         31        -
1985             509         32        6
1986             559         22       13
1987             565          5       11
1988             616          8       16
1989             579         22       16
1990             613         18       16
1991             579          6       13
1992             623         18       13
1993             465          -       10
1994             688          6       10
1995             690          1       21
1996             713          2       16
1997             558          2       12
1998             677          4       13
Source: Annual Report (various years),
Jordan Phosphate Mines Company.
                    Destination of Diammonium Phosphate
                         (DAP) Exports from Jordan
                            (Thousands of tons)
Country       1990  1991  1992  1993  1994  1995  1996  1997  1998
India        381.0 259.0 2303.0 255.0 295.0 313.0  99.8 228.0 262.0
Iraq             -  27.2  64.3  50.7 111.5  40.0  46.7  40.0 115.5
Pakistan         -     -   1.3     -  94.3  24.8  33.6  55.3     -
Iran             - 185.8 133.1  68.9  31.5 105.0 127.3  31.3  95.5
Australia        -     -     -     -  26.3     -     -  14.0     -
Malaysia      18.0   9.9  13.3  12.5  26.4  13.9  24.2  14.6  15.3
Ethiopia     151.5  65.5 129.4  13.3  24.0  66.5 246.1  48.8 135.9
New Zealand      -     -     -   5.4  19.3   3.2   6.5  10.0     -
Saudi Arabia   9.7   7.4  22.4     -  10.8   3.7  15.0  21.0  24.0
Thialand         -     -     -  21.0  10.5  37.5  39.6  16.5     -
Nepal            -  10.0  21.7  24.0  10.0  32.2   6.5  13.1     -
Kenya            -     -     -     -  10.0     -     -     -     -
Philippines   11.3     -     -     -   6.6  43.7  59.2  56.8  23.0
Italy         13.2   9.4     -     -   5.4     -     -     -     -
Japan            -     -     -   4.0   4.0     -     -     -     -
Lebanon        2.2   4.5   3.8   2.3   2.0   2.5   2.0   4.0   4.0
Vietnam       15.0     -     -     -     -     -     -     -     -
Mauritius      4.9     -     -     -     -   1.0     -     -     -
Cambodia         -     -     -   7.5     -     -     -     -     -
Yugosalvia     5.7     -     -     -     -     -     -     -     -
Tanzania         -     -     -     -     -   3.0     -     -     -
Malawi           -     -     -     -     -     -   6.0     -     -
Afghanistan      -     -     -     -     -     -     -     -   103
Mozambique       -     -     -     -     -     -     -   4.0     -
Others         0.1   0.3   0.2   0.0   0.0   0.4   0.1   0.4   0.0
TOTAL        613.0 579.0 622.5 464.6 687.6 690.4 712.6 557.8 676.6
Local Market   9.9   9.1  11.8  13.2  13.0  14.1  17.3  18.3   7.9
Grand Total  622.9 588.1 634.3 477.8 700.6 704.5 729.9 576.1 684.4
Source: Annual Report, 1998, Jordan,
Phosphate Mines Company, Jordan.
                         Sales of Phosphoric Acid
                                  (Tons)
Country      1995 1996  1997  1998
Saudi Arabia  937 1093  1884  1759
Pakistan        -    -     -  3578
Local Market  950 1356  3159  2855
Japan Jordan    -    - 32698 67073
Company
Total        1887 2449 37741 75265
Source: Annual Report (Arabic) 1998, Jordan
phosphate Maines Company.
                       Jordanian Export of Aluminum
                         Fluoride (Thousand tons)
Country 1990 1991 1992 1993 1994 1995 1996 1997 1998
Dubai    2.4  2.7  4.0  4.8  3.5  3.9  3.7  3.7  4.4
Iran       -    -  2.5  3.0    -  3.0  1.7  0.5  3.0
Egypt    7.4  3.6  3.0  1.7  6.5  2.1  4.8  8.0  5.5
Russia     -    -    -    -    -  8.4  4.0    -    -
Bahrain  6.1  7.1  3.8  0.8    -    -    -    -    -
Romania    -    -    -    -    -  4.0    -    -    -
Turkey     -    -    -    -    -    -  2.0    -    -
Total   15.9 13.4 13.3 10.3 10.0 21.4 16.2 12.2 12.9
Source: Annual Report (Arabic), 1998
Jordan Phosphate Mines Company
                 Share of Fertilizers in Jordanian Exports
                      (Thousands of Jordanian Dinar)
Year Fertilizer     Total Percentage
        Exports   Exports      Share
1984     44,010   261,055       17.0
1985     30,593   155,346       12.0
1986     29,072   225,615       13.0
1987     30,143   248,773       12.1
1988     48,943   324,788       15.0
1989     69,047   534,106       13.0
1990     79,350   612,252       13.0
1991     86,471   598,627       14.4
1992     72,456   633,755       11.4
1993     55,623   691,282        8.0
1994     89,205   793,919       11.2
1995    113,100 1,004,534       11.3
1996    129,153 1,039,801       12.4
1997     95,256 1,067,164        9.0
1998    103,700 1,044,100       10.0
Source: Thirty Fifth Annual Report (Arabic) 1998 and Monthly Statistical
Bulletin, various Issues, Central Bank of Jordan.