« PreviousContinue »
Mr. ROGERS. Could you pinpoint what you mean by the equivalent of the past program in dollars?
Mr. HOFFMAN. The past program brought the miner $110 a ton for concentrates.
Mrs. Prost. Right there, may I ask a question? I am a little confused about the $35 per long dry ton in comparison to $110 for concentrates.
Mr. HOFFMAN. That is something that I would like to mention. Actually at fair market prices and the $35, we would be receiving about $30 a ton less for our product, which is a whale of a price cut. That is why I say we are willing to try this. We do not know if we actually can succeed under it but at this moment we are still in business, even though we are not operating. A year from now, 6 months from now, we could not possibly attempt to do anything. We would rather try under any support we can receive from Congress and see if we cannot make out, we can at least come back and say we could not do it. If it works, then we will be happy and I know you all will.
Mrs. Prost. I should like to pursue the question because I did not understand the answer, if you did give it to me. That is, can you give me what percentage of concentrates that $35 per long dry ton is at $35 or $36 as compared to the $110? Is the $110 ore a much higher concentrate than the $35 we are speaking about?
Mr. HOFFMAN. Essentially they are the same product. However, under the old program the Government purchased this material directly. Under the present program we are to sell to industry and the Government will give us a bonus for the sale with the idea being that the bonus plus the sale price to industry will give us an equivalent return.
Mrs. Prost. In other words, then, the bill H. R. 13270, by our colleague, Mr. Miller of Nebraska, which provides $35 per long dry ton, is approximately one-third of what is needed according to what you people have testified ?
Mr. HOFFMAN. A third less, yes, that is right.
Mr. MILLER. If the lady will yield there, that is the amount suggested by the Department of the Interior, Bureau of Mines.
Mrs. Prost. I am attempting to evaluate whether we are speaking about the same quality of ore.
Mr. HOFFMAN. Yes, we are.
Mr. ROGERS. As I understand it, the $35 a ton ore that is talked about in Dr. Miller's bill would produce an income to you of about $80 a ton for concentrates.
Mr. HOFFMAN. That would be $80 gross f. o. b. our shipping point. Under the past program we received for the same material $110— excuse mef. o. b. price is f. o. b. reduction plant in the Midwest. There is a $25 freight bill to come out of that $80.
Prior to this we received $110 f. o. b. our shipping point. In other words, you could almost add the $25 to the $110 which would bring it to $135 a ton compared to $80 a ton.
Mr. Rogers. In other words, the figure contained in Dr. Miller's bill—in order to bring you up to the equivalent of what you say you got under the old program, the figure would have to be increased to about $55 ?
Mr. HOFFMAN. With $55 I believe we could make a strong effort, yes.
Mr. HOLMAN. I would like to state that the whole principle of this price incentive is after we have sold industry at the world market price we get som uch money back through the agency established by the Department of the Interior. Your price for 48 percent chrome oxide content, 3 to 1 iron ratio, from South Africa delivered f. o. b. or off the ship, c. i. f., I believe it is called, Atlantic seaboard, is around $41 to $44.
Turkish ore, same grade, is around $51 to $55 c. i. f. Atlantic seaboard.
That is the price that we have to meet when we are selling to industry, either $44 or $50.
In talking about 46.1 chrome oxide content with a 28 to 1 chrome iron ratio, we are talking about $40 ore from South Africa and around a $45 to $48 ore from Turkey. Add to that $35 and see how it compares to our $115 we are getting under GSA and I think your question is answered.
Mrs. Prost. I thank the gentleman.
I notice the presence of our colleague, Mr. Porter, of Oregon. Mr. Porter, we had set aside yesterday morning, as you know, for these hearings for all Members of Congress. Did you want to present a statement?
Mr. PORTER. I will submit my statement for the record. It outlines my intense interest in this program.
Mr. ROGERS. The committee certainly recognizes your intense interest in this program. We are glad to have you here. If you would like to join the committee for the other part of the hearings, we will be glad to have you.
Mr. PORTER. Thank you, Mr. Chairman. If I may submit this for the record, I will do so.
Mr. ROGERS. Without objection, your statement will be included. Would you like that included with the statements of the other Members of Congress, or at this point in the record ?
Mr. PORTER. Whatever the committee decides will be all right.
Mr. ROGERS. We will include it with the statements of the other Members. Leave was granted for all Members interested in this problem to submit statements.
If you care to join us, Mr. Porter, we will be glad to have you.
STATEMENT BY REPRESENTATIVE CHARLES O. PORTER, FOURTH CONGRESSIONAL
Mr. Chairman, much of the chrome ore produced in Oregon comes from the Fourth Congressional District, which I have the honor to represent. I am naturally deeply concerned over the closing of these mines.
The purpose of the Government stockpiling program has been to encourage de velopment of the mineral resources of the United States and to reduce our dependence on foreign sources for minerals.
In regard to chrome, the Secretary of Interior in preparing legislation in June 1957, stated: “The basically short world supply coupled with the strategic nature of three of these minerals; namely, beryl, columbium-tantalum, and chromite, as well as the heavy dependence of the United States on distant overseas sources of supply, underscore the desirability of making every effort to develop and maintain some production of these commodities from domestic
“Furthermore, the maintenance of some production will stimulate and give purpose to the research program.”
Now, I think this is an important objective. How pearly has it been achieved ?
When the chrome stockpile program began in 1951 there were no known reserves. At that time the Government program called for 200,000 tons of highgrade chromite. It took about 512 years to furnish 100,000 tons to the Grants Pass stockpile. It took less than 11/2 years to furnish the last 100,000 tons. There are now more than 100,000 tons of high-grade chromite reserves that could immediately move into the market.
Obviously the chrome-mining industry is beginning to become established and is approaching the place that it will stimulate and give purpose to research.
I need scarcely mention to this committee the value of research to the mining industry. Our future mineral supplies depend on it. Research has reduced the pound cost of aluminum from dollars to cents.
Research has produced thousands of barrels of oil that would never have been recovered, and it has made possible recovery of oil from vast shale deposits.
Research on the handling of quantities of sulfuric acid under heat and pressure has vastly increased our potential nickel supplies. Research will do no less for chromite than it has done for other minerals.
Chrome is produced in Oregon, California, Washington, and Alaska by small mine owners. The small mine owners have suggested that their problem be solved by joining together and forming a marketing cooperative.
I wish at this point to express my appreciation for the attention and aid that this committee has given to the mine owners' proposal and to Congressman Engle for introducing H. R. 13280.
This is a constructive proposal that places no burden on the Government and will put the chrome owners in business without interfering with our policies overseas.
The population of the west coast is expanding. This means an increase in industry with a burgeoning market for chromium products.
The airplane industry on the west coast is planning to convert to higher temperature steels. That will mean an increase in the use of chromite, and the steel plants have plans for expansion in the near future.
As we have the ore and from every indication a future market, it seems to me H. R. 13280 offers a workable solution to the chrome problem. I understand that the Department of the Interior does not approve this program, but favors a subsidy plan. I am sure the chrome miners will welcome any feasible program that gets them to work. This is an important aspect that means a great deal to southwestern Oregon.
Detailed information concerning this proposed development program has been presented by Mr. Bruce Manley, of Medford, Oreg. Bruce is a respected friend and constituent of mine and he has spent long hours on the problems related to chrome ore production. I am certain he and other gentlemen more knowledge able in this field will supply the committee with information it desires.
Mr. ROGERS. Mr. J. Carson Adkerson, president, American Manganese Producers Association.
STATEMENT OF J. CARSON ADKERSON, PRESIDENT, AMERICAN
MANGANESE PRODUCERS ASSOCIATION
Mr. ADKERSON. My name is J. Carson Adkerson, Woodstock, Va. I appear as a representative of the American Manganese Producers Association, including myself as an individual operator in manganese. The association was organized in 1927 and is composed of manganese producers in the United States. I appreciate that time is of the essence before this committee and I assure you my remarks will be brief. I will ask permission to file some letters which outline the position of the industry. First I would like to say that we would like to see the passage
of the minerals exploration bill, S. 3817.
The manganese industry at the present time is operating under a purchase program under ĞSA scheduled to run until January 1, 1961, or until 28 million long-dry-ton units are delivered. At the present rate of deliveries the present program would be exhausted toward the end of 1959. We have asked that that program be continued until a long-range program for minerals can be adopted so that manganese can be considered and a long-range program for manganese included.
The policy request has been outlined in two letters written by congressman Wilbur D. Mills of Arkansas. One letter was addressed to the Office of Defense Mobilization and I would like the privilege of inserting that letter in the record, together with the reply. The reply was not favorable.
There was also a letter addressed to Mr. Seaton, Secretary of the Interior, and this also has a reply. It outlines exactly what the industry asks.
We want the committee to note that manganese is not included in the Seaton bill, S. 4036. It was understood that the manganese program would be continued for a longer time than we now find it will and no recommendation came from the Department of the Interior for manganese to be included in this bill. We are not asking that it be included now. We are asking simply that the committee bear manganese in mind for consideration at a later date to be included in any long-range program that may be adopted and that the present program of buying manganese be continued until a longer range program can be worked out and put into effect for manganese.
In view of the fact that this bill has been given serious consideration by the Senate and is now being considered by the House, it is important to the welfare of the Nation, it is important to the economic welfare of the industries involved, and we suggest and recommend the approval of S. 4036, even though manganese is not included. That concludes my statement.
Mr. ROGERS. Thank you, Mr. Adkerson. Could we see those letters, please?
Mr. ADKERSON. Yes. I also have a brief one-page statement of the facts of the industry, which I would like to include for the information of the committee.
Mr. ROGERS. That will be included in the record, without objection, at this point as part of your staten
(The statement referred to follows:)
The following table shows domestic production and imports for 1953 to 1957 :
It will be noted that during the year 1957 domestic production of high grade manganese ore totaled approximately 365,000 short tons. Of this amount it is estimated that approximately 45 percent or 165,000 short tons was produced under the domestic manganese carlot purchase program; 125,000 tons or 35 percent from special contracts with GSA, and the remainder produced largely for sale to private industry.
Small producers are now delivering, under the Government's domestic manganese carlot purchase program, at the rate of about 500,000 long dry ton units or approximately 13,500 short tons of ore per month. The purchase price of this ore is at the rate of $2.30 per long ton unit, based on 48 percent metallic manganese, with premiums above 48 percent and penalties below 48 percent down to ore containing not less than 40 percent metallic manganese.
The program was scheduled to run until January 1, 1961, or until 28 million long dry ton units of manganese is delivered.
As of June 16, it was estimated that only 9,400,000 long dry ton units remained undelivered to the program. At this rate the quota will be reached before the end of 1959.
Mr. ROGERS. Is there any objection to the inclusion of these letters in the record? If not, they may be included in the record at this point. (The letters referred to follow :)
CONGRESS OF THE UNITED STATES,
HOUSE OF REPRESENTATIVES,
Washington, D. C., June 16, 1958. Hon. FRED A. SEATON, Secretary of the Interior,
Washington, D. C. MY DEAR MR. SEATON : In July 1956, by directive from the Office of Defense Mobilization, the regulations for the domestic carload-lot or high-grade manganese purchase program of the General Services Administration were amended to provide that the program be extended to January 1, 1961, or until 28 million long dry ton units of ore are delivered, whichever shall occur first. I am informed that, on the basis of the present rate of deliveries, this current maximum quantity will be attained in the latter part of 1959.
On May 24, 1956, in hearings before the Senate Committee on Interior and Insular Affairs, Dr. Arthur S. Flemming, Director of Office of Defense Mobilization, with reference to the extension of the manganese purchase program, testified as follows:
“As soon as the information referred to above has been received from the General Services Administration it will be authorized to take action to extend