Relic of Empire

In the days when colonialism was a young and respectable word, Empire Builder Cecil Rhodes dispatched small bands of his agents into the wilds of Africa to make treaties with entire tribes. In 1890 the agents struck a shrewd bargain. In return for -L-2,000 sterling a year and the "protection" of the British crown, King Lewanika of Barotseland granted Rhodes a monopoly of the natural resources of his kingdom. As it turned out, the king's domain covered quite a bit of territory, and under charter from Queen Victoria, Rhodes directed his newly formed British South Africa Co. to exploit, explore and settle thousands of square miles of south and central Africa.

Last week in London that historic deal was the source of a bitter dispute between the last of Britain's old royal charter companies and the latest of its colonies to win independence. King Lewanika's territory included what is now Northern Rhodesia, which is preparing to become the independent nation of Zambia--and wants to banish British South Africa's mineral rights along with the Union Jack. Accepting the inevitable, the company agreed to turn over its rights to the new government, but held out for fair compensation. When the British government failed in its efforts to arrange a settlement, Zambian Finance Minister Arthur Wina angrily flew home, threatening to cancel all mineral rights immediately after independence day Oct. 24.

Duped Chiefs. Whatever happens, Zambia's independence will mean a mighty comedown for the London-based holding company that once ran the Rhodesias as a corporate fief. Simply known as "Chartered," the company raised its own army to cut through the bush and opened up the copper belt. As both ruler and landlord, Chartered also built railroads, clinics and some schools. But Zambian nationalists, who dispute the legality of the company's rights, claim that it duped Lewanika and other illiterate tribal chieftains into signing away their rights.

Not until after 1924, when the British Colonial Office took over control of the colony and the expense of running it, did Chartered begin to reap stable financial rewards. Though it operated no mines itself, it handed out concessions to South African companies. It now owns an interest in most of the territory's mines, which produce 15% of the world's copper; royalties from their operations accounted for $18 million of the British South Africa Co.'s net earnings of $22 million last year.

Spreading the Risks. Always cautious, Chartered has taken care not to be left as a ruined relic of empire. Ever since taking office in 1962, the company's president, Paul Vychan Emrys-Evans, 70, a former Conservative M.P., has been busily spreading the risks: of total investments of $186 million, only $32 million is now in Northern Rhodesia. The wide-ranging portfolio includes, in addition to British companies, minority holdings in South African gold mines, Italian rubber manufacturing, Australian and New Zealand aluminum, Canada's Hudson's Bay Co., and several U.S. companies. Nevertheless, Chartered is bracing for some less than royal days ahead: it had expected to collect as much as $740 million in royalties on its monopoly mineral rights in Northern Rhodesia before they expired in 1986.

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