Mr. PORTER. I would think so, yes. Because I cannot say what these other materials, what their value would be, because at the present time there isn't any value on them. Senator MALONE. Columbium-tantalum and uranium, do you think you could compete with the low-wage countries in the production of uranium when the fixed price runs out? Mr. PORTER. I don't think so, no, sir. Senator MALONE. Then you come right back to the fact that there has to be some protection on a principle either a long-range fixed price long enough so you could go to your people and say, we can invest this money and get it back within this fixed price or a principle, a limited duty or tariff or something to protect you. Mr. PORTER. That is correct. Senator MALONE. I have an idea that it is nearly time for men like you to start thinking about this if you are going to stay in business. Mr. PORTER. Yes. Senator MALONE. Because when you get east of the Potomac River and the Hudson River, you haven't very many friends to stay in business. Do you realize that? Mr. PORTER. That is correct, sir. Senator MALONE. Well, if you know that, that is a great start in your favor. Would you then at your convenience round out any testimony you would like to complete what you have said in view of the questioning? Give us some idea of what you have to depend on, and what amount money you would have to invest in exploration and equipment to really go into this business and make this country selfsufficient? Mr. PORTER. Yes. Senator MALONE. Would you like to do that? Mr. PORTER. Yes. Senator MALONE. The committee will appreciate it greatly. Mr. PORTER. Thank you. Senator MALONE. Dr. Paul A. Krueger. Mr. KRUEGER. Mr. Porter spoke for us. We have nothing to add to Mr. Porter's statement. We are the chemical company he spoke about. If my name is on the list, it is a mistake. I do not wish to testify. Senator MALONE. Mr. Bruce Manley, attorney representing the Oregon Chrome Producers and Mr. Joe Holman. Mr. Manley, you may identify yourself for the record and make any statement that you have prepared or otherwise. STATEMENT OF BRUCE MANLEY, ATTORNEY, OREGON CHROME PRODUCERS, ACCOMPANIED BY JOE HOLMAN Mr. MANLEY. Mr. Chairman and Senators, I very much appreciate this opportunity to appear before this committee. My name is Bruce J. Manley, of Medford, Oreg. I am engaged in the practice of law in Medford. I am president of the California Oregon Chrome Producers Association. I represent the High Plateau Mines, the Waldo Milling Co., and a number of small mineowners and leaseholders. They sent me here to assist in any program that will keep them at work. In commenting on the bill before this committee, S. 3816, while it is a step in the right direction, it is not a long-range program which is the thing that is so very much needed. The capital and the amount necessary for a large mining operation will not be invested unless there is assurance of more than a 2year program. The result will be retarded development. The price of $46 a ton when sold to industry will mean that only a few of our operators can exist; for most of our operators will be unable to do the necessary selling job. Any immediate sales to industry will be most difficult because of the large accumulated inventories now on hand. Senator MALONE. Would you pardon me right there. I thought it was a 5-year program? You called it a 2-year program. Mr. MANLEY. I understand from the bill that at the end of 2 years he makes a report; and at that time may end the program. Senator MALONE. All right. Go ahead. Mr. MANLEY. Moreover, most of our operators are too small to be able to contract for delivery of sufficient tonnage and grade for a long enough period of time to interest industry. The bill might work by permitting the operators to form their own brokerage firm. A sale to this firm would be considered a sale to industry. The brokerage firm would have its own sales representative. It would be in a position to offer a standard grade of ore in large amounts over a long period of time. This would be attractive to industry, and it is a thing that the small operator cannot do. The $46 a ton price does not take into consideration the different grades of ore, nor the charges for handling and storage which the Government has been doing. To make the bill work the price should be $42 a ton for 42 percent chromic oxide. The minimum of iron ratio would be 2 to 1 and the maximum silicon content of 10 percent. The miners will be happy for any program that will make it possible for them to compete with foreign labor. That is the sole thing that is putting them out of business. They feel they should have an equal chance to develop their ores. The average grade of ore brought into the Grants Pass stockpile is 4612 percent. Senator MALONE. What do you think you could do in this industry, in the chrome industry, of the United States, or a long-range, if a principle were adopted, say a fair and reasonable competition against the rather with the foreign producer? Either tariff or duty to make up the difference of the cost of doing business here and effective wages or a long-range price? Mr. MANLEY. Senator, judging from what I have been told by geologists and engineers, I refer to some of them a little further along, we could develop one of the large chrome-producing areas of the world, I believe. Senator MALONE. Well, what is the consumption annually of chromite in the United States? Mr. MANLEY. It is approximately a million and a half tons. Senator MALONE. What part of that can be produced on an adequate price at difference in wages and cost of doing business here, and in the cheap competing country in a reasonable time-5, 10, 15 years? Mr. MANLEY. I would hesitate to say, because our development has not gone far enough. But judging from what we have done during the time that we have operated, I would say that we could come very close to meeting our requirements. I am again relying very much on what I have been told by geologists and engineers; because I do not have the scientific background to answer that. Senator MALONE. You said the consumption was 1,400,000 tons. Mr. MANLEY. One million and a half tons, approximately. Senator MALONE. Now what percentage of-what specification of this 1,500,000 tons? Mr. MANLEY. That is metallurgical grade. I believe it gains at 42-it is 42 to 48 percent. Senator MALONE. 42 to 48 percent? Mr. MANLEY. Yes. Senator MALONE. Now, this material of yours can be reduced to 48 percent. Mr. MANLEY. I am talking about metallurgical grades. Senator MALONE. Do you think they could produce adequate for the market? Do you put any stock in stories for the last 24 years that you must save what you know about? Or do you think your exploration would continue to discover new reserves? Mr. MANLEY. I will answer that positively; that it will discover new and large reserves. That I am positive of. I have run into that theory since I have been here a number of times. And I think that it is based on a misunderstanding of mining. It assumes that a mineral deposit is something that is very limited. It doesn't take into consideration that your minerals depend on your technical development. And I could, of course, cite numbers of examples of that. We have in the chrome industry developed types of drills that make it easier and faster to locate these deposits which Mr. Holman will cover, I think, a little later. Senator MALONE. What causes the continued exploration? Why do you keep looking for new deposits? Is it because it is profitable if you find them? Mr. MANLEY. Well, I think for no other reason than they intend to develop it and make something out of it. Certainly a person doesn't go looking for a mineral unless he intends to get something from it. What point would there be to going out and finding something and then doing nothing with it? Senator MALONE. Well now if you only have a 2-year program or a 1-year program, what is the result? Do you simply mine out what you see or high-grade the mine, or what? Mr. MANLEY. A 2-year program does result in high-grading the mine and especially in chrome. As a result of this short-term program they gouge out the high-grade kidney; and the rest is lost; in many instances permanently. Senator MALONE. Isn't that the case of all mining, that if you only have a 2-year life of the mine or 1-year life for 6-months life, get all out of it you can and pass up the low grade and take the so you can maintain heads and complete the job while that price is right? Isn't that what you do? Mr. MANLEY. Well, I think that where you have a long-range program Senator MALONE. I say, where you do not have a long-range program. Mr. MANLEY. Oh, yes; I think that is correct. Senator MALONE. Now where you have a mine--whether it is copper or tungsten or chromite or something else that runs a certain percentage, it is not all of a standard grade; is it? Doesn't it run from a low grade and a high grade? Mr. MANLEY. That is correct. Senator MALONE. Well then what you do in your mill is to establish a certain percentage of assay, and that is your job of milling foreman to keep those heads constant; you base that on whatever your mine produces and what is profitable after you get it done? Mr. MANLEY. Well, in those heads, if it is a short-term thing, they may increase the heads but decrease the quantity mined. And when you leave that low grade you never go back. Senator MALONE. It doesn't make any difference what it is? Senator MALONE. Or how long established? Mr. MANLEY. That is true. Senator MALONE. Isn't that true of every metal? Mr. MANLEY. Every one that I am familiar with I think that is true. Senator MALONE. Of course it is. So about the best way we could high grade all the chromite mines or the tungsten mines or anything else would be a short-term fix in price. Mr. MANLEY. That is correct. Senator MALONE. Go ahead. Mr. MANLEY. The chrome miners will be happy with any kind of program that will make it possible for them to compete with cheap foreign labor. That is the sole thing that is putting them out of business. They feel they should have equal chance to develop their ores. The average grade of ore brought into the Grants Pass stockpile is 462 percent. We have the statement of Hollis M. Dole, our State geologist on page 96, part 2 of the hearings last year, thatIt is my opinion that the chrome production potential of California and Oregon is large. I have a letter from Norman Whitmore, mining engineer, Los Angeles, Calif., which states: We have made extensive study of chrome in other countries and have made several trips to Turkey on just chrome. The more we learn of foreign and domestic reserves, the more convinced we become that one of the greatest areas for chrome is in this area. Now, if you would like, I will turn over to the committee, Mr. Whitmore's letter in full. Senator MALONE. Why don't we just make it a part of the record. (The letter follows:) Mr. BRUCE J. MANLEY, Care of William Berg, Jr., NORMAN WHITMORE, ENGINEER OF MINES, Los Angeles, Calif., May 26, 1958. Senate Office Building, Washington, D. C. DEAR MR. MANLEY: We understand there is a program pending in Washington, D. C., for a chrome processing plant in the California-Oregon border area. We cannot see why this has not been done in the past as this area contains so much chrome that it could make us thoroughly independent of foreign production in an emergency. In peace time sufficient kilowatts of electricity are available so the ferrochrome metal produced would also store power so needed in emergency. We have made extensive study of chrome in other countries and have made several trips to Turkey on just chrome. The more we learn of foreign and domestic reserves, the more convinced we become that one of the greatest areas for chrome is in this area. We feel that the politicians do not understand the great chrome reserves which we know this area to contain. Yours respectfully, NORMAN WHITMORE. Mr. MANLEY. Why we don't develop our own resources, I don't know. If we fail to do so and permit our mines to cave in and fill with water, we will be charged for foreign ores all that the traffic will bear, and past history indicates that will be very high. Mr. S. H. Wilson testified before this committee last year on page 120 of part 2 of the hearings, that just as soon as foreign producers eliminate American production, they jack up the price as high as they can go. Senator MALONE. A couple of those editorials this morning, very well written, indicated that the consumers were entitled to this lower price. What you say may surprise the writers of the editorials. Why do you say that? Mr. MANLEY. Well, in the first place it would seem logical that if we can't do it, what would hold anybody in line if they have the ore and we don't have it, or the means of producing it. The second thing is: I have known of instances, or heard of them, where it had happened. And in looking for support for those, something that I could refer to, some authority, I came across Mr. Wilson's statement. And also one, Senator, by you, last year. And that is on what I base my conclusion. Senator MALONE. We have had the considerable experience-I wanted you to elaborate on it-mercury, for example. Italy and Spain can produce it for about $40 or $50 a flask and make money apparently. Our people need about $150 to $1,750 a flask toinfluenced by changing conditions. And then the price goes down until our people are just out of business and then goes up to about $300 a flask. Mr. MANLEY. I think similar things have happened in manganese, and some of the other metals. Senator MALONE. So the consumers do not profit by the low-wage production in the long run. Mr. MANLEY. No; in fact not any longer than until we go out of business. Senator MALONE. Go ahead. |