tion payments on sales of tungsten ores and concentrates from the inventory of producers which were produced after July 1, 1956, but prior to the effective date of this Act; in no event, however, shall payments on sales from such inventories exceed an aggregate of twenty-five thousand short-ton units to any one producer from production originating in any one mining district, nor shall payments on sales from such inventories, together with sales from newly-mined production, exceed in any quarter an aggregate of fifteen thousand short-ton units for any one producer from production originating in any one mining district. (c) No payment shall be made on any material which is sold to or eligible for sale to the United States Government, or any agency thereof, pursuant to a contract made under the provisions of the Defense Production Act of 1950, as amended, the Strategic and Critical Materials Stock Piling Act, or the Domestic Tungsten, Asbestos, Fluorspar, and Columbium-Tantalum Production and Purchase Act of 1956. Any such material shall be applied to reduce the annual and quarterly limitations specified in this section. (B) The Secretary shall provide that no stabilization payment made pursuant to this section on the recoverable content of any ores or concentrates shall exceed the following, for: Copper, 3.50 cents per pound; lead, 3.375 cents per pound; zinc, 2.50 cents per pound; fluorspar (acid grade), $8 per short ton; tungsten, $18 per short-ton unit of WO3. (C) Whenever the Secretary determines that the total quarterly production of any of the materials on which stabilization payments are to be made, as provided in this section, has exceeded the quarterly limitation for each of two successive quarters by an amount in excess of that shown in the following schedule: Copper, 30,000 tons; lead, 9,000 tons; zinc, 15,000 tons; fluorspar (acid grade), 5,000 tons; tungsten, 55,000 short-ton units, he shall provide that all stabilization payments on such material sold thereafter shall be suspended until such time as he shall be satisfied that the annual rate of production from domestic mines will approximate the amounts set forth in section 2 (A) (2) (a). SEC. 3. The Secretary is hereby authorized to establish and promulgate such regulations and require such reports as he deems necessary to carry out the purposes of this Act, including, but not limited to, such regulations as will assure equitable distribution of the benefits of this program throughout the industries affected. SEC. 4. For the purposes of this Act, the following terms are defined: (A) The term "Secretary" when used herein means the Secretary of the Interior. (B) The term "producer" when used herein means any individual, partnership, corporation, or other legal entity engaged in operating a domestic mine and selling the material produced in normal commercial channels. (C) The term "sale" when used herein means a bona fide transfer for value of ores and concentrates from a producer to a processing plant. (D) A "domestic mine" is any mine located within the United States, its Territories, or possessions. (E) The term "newly mined" refers to material severed from the land subsequent to the effective date of this Act. The term does not refer to material recovered from mined dumps, mill tailings, or from smelter slags and residues derived from material mined prior to the effective date of this Act. (F) The term "quarter" means the calendar periods commencing on the first day of the months of January, April, July, and October. SEC. 5. This Act shall take effect on the first day of the first quarter next following approval by the President and shall terminate on June 30, 1963. SEC. 6. There are hereby authorized to be appropriated to the Department of the Interior, out of any moneys in the Treasury not otherwise appropriated, such sums as may be necessary to carry out the provisions of this Act. [S. 3892, 85th Cong., 2d sess.] AMENDMENTS Intended to be proposed by Mr. ALLOTT to the bill (S. 3892) to stabilize production of copper, lead, zinc, acid-grade fluorspar, and tungsten from domestic mines by providing for stabilization payments to producers of ores or concentrates of these commodities, viz: On page 1, between lines 2 and 3, insert "TITLE I". On page 1, line 3, strike out "That this" and insert in lieu thereof "SEC. 1. This". On page 7, line 21, strike out "Act" and insert in lieu thereof "title". "TITLE II "SEC. 21. There is appropriated for each fiscal year, beginning with the fiscal year ending June 30, 1959, an amount equal to 70 per centum of the gross receipts from duties imposed under paragraphs 391, 392, 393, and 394 of the Tariff Act of 1930, as amended, during the period January 1 to December 31, both inclusive, preceding the beginning of each such fiscal year. Such sums shall be available until expended and shall be maintained in a separate fund that shall be used by the Secretary as provided in this title. "SEC. 22. In addition to any payments under title I of this Act, the Secretary shall make limited tonnage payments, upon presentation of evidence satisfactory to him of a sale of newly mined ores, or concentrates produced therefrom-"(1) to producers of lead, "(a) as long as the market price for common lead at New York, New York, as determined by the Secretary, is at or below 144 cents per pound, at the rate of 1.6875 cents per pound on not to exceed 350 tons per quarter per producer; or "(b) as long as the market price is above 144 cents per pound but is below 17 cents per pound, at the rate provided in preceding clause (a) reduced by an amount equal to 75 per centum of the amount by which such market price exceeds 14 cents per pound, on not to exceed 350 tons per quarter per producer; and "(c) no payment shall be made under the provisions of this section to producers of lead when such market price is equal to, or exceeds, 17 cents per pound; and "(2) to producers of zinc, "(a) as long as the market price for prime western zinc at East St. Louis, Illinois, as determined by the Secretary, is at or below 124 cents per pound, at the rate of .9625 cent per pound on not to exceed 350 tons per quarter per producer; or "(b) as long as such market price is above 124 cents per pound but is below 142 cents per pound, at the rate provided in preceding clause (a) reduced by an amount equal to 55 per centum of the amount by which such market price exceeds 124 cents per pound, on not to exceed 350 tons per quarter per producer: and "(c) no payment shall be made under the provisions of this section to producers of zinc when such market price is equal to or exceeds 14 cents per pound. "SEC. 23. Out of funds made available for the purposes of this title and not expended under the provisions of section 22 the Secretary may "(1) under such terms and rules and regulations as he may deem appropriate and necessary, make loans for financing and refinancing operations of (including standby operations), and for maintaining, replacing, repairing, and equipping and reequipping, mineral producing facilities in the United States, its Territories, and possessions, and for research into the basic problems of mineral production; and any such loan "(a) shall bear interest at a rate of not less than 3 per centum per annum ; "(b) shall mature in not more than 10 years; "(c) shall be made only in cases where necessary financial assistance is not otherwise available on reasonable terms; and "(d) may be modified with the consent of the Secretary with respect to the rate of interest, time of payment of any installment of principal, or terms of security; and "(2) provide for such programs of research by public or private organizations, other departments or agencies of the Government, or within the Department of the Interior, as he may deem appropriate to assist in the development of the domestic mineral resources of the United States, its Territories, and possessions." [S. 3892, 85th Cong., 2d sess.] AMENDMENTS Intended to be proposed by Mr. MURRAY to the bill (S. 3892) to stabilize production of copper, lead, zinc, acid-grade fluorspar, and tungsten from domestic mines by providing for stabilization payments to producers of ores or concentrates of these commodities, viz: On page 2, line 1, strike out "and tungsten trioxide" and insert in lieu of thereof "tungsten trioxide, mercury, cobalt, and antimony." On page 2, lines 5 and 6, strike out "and tungsten" and insert in lieu thereof "tungsten trioxide, mercury, cobalt, and antimon". On page 3, between lines 2 and 3, insert the following: "Mercury, $224 per flask, free on board shipping point. "Antimony, 60 cents per pound, free on board shipping point :". On page 3, line 17, after "trioxide" insert a comma and "33,000 flasks of mercury, 4,000,000 pounds of cobalt in concentrates, and 3,000 tons of antimony". On page 4, line 5, after “3,000 short ton units" insert a semicolon and “mercury, 300 flasks; cobalt, 100,000 pounds; and antimony, 100 tons". On page 5, line 23, before the period insert a semicolon and "mercury, $50 per flask; cobalt, 40 cents per pound; and antimony, 25 cents per pound". On page 6, line 6, strike out the comma after "short-ton units" and insert in lieu thereof a semicolon and "mercury, 2,000 flasks; cobalt, 2000,000 pounds; and antimony, 450 tons,”. On page 7, between lines 14 and 15, insert the following: "(G) The term 'flask' means a steel container holding 76 pounds of prime virgin mercury 99.95 per centum pure or better." The CHAIRMAN. The first witness will be Mr. Karasik. Mr. Karasik represents the Fluorspar Importers and Producers Institute. TESTIMONY OF MONROE KARASIK, WASHINGTON, D. C., WASHINGTON COUNSEL, THE FLUORSPAR IMPORTERS AND PRODUCERS INSTITUTE; ACCOMPANIED BY WARREN J. SINSHEIMER, SINSHEIMER & SINSHEIMER, NEW YORK, N. Y. Mr. KARASIK. My name is Monroe Karasik. I am partner in the Washington law firm of Surrey, Karasik, Gould & Efron. We are Washington counsel for the Fluorspar Importers and Producers Institute. With me this morning is my cocounsel, Mr. Warren J. Sinsheimer, Jr., of New York. Ácid-grade fluorspar, with which S. 3892 is in part, concerned, is a nonmetallic mineral containing more than 97 percent calcium fluoride. This is the material from which hydrofluoric acid is made. From hydrofluoric acid is made the necessary electrolyte for the reduction of aluminum oxide to metallic aluminum. Hydrofluoric acid is also essential to the production of uranium hexafluoride, an essential product in certain processes connected with nuclear fission. Hydrofluoric acid is also essential in the production of certain fuels which play an important part in the development of our long-range missile program. In more conventional, but very widely spread uses, hydrofluoric acid serves as the starting point for the manufacturer of the fluorinated hydrocarbons. These fluorinated hydrocarbons are very widely used as refrigerants, and in the manufacture of the so-called Aerosol bombs, of which more than 150 million are used every year for insect sprays, fire extinguishers, etc. TRENDS IN DEMAND AND SUPPLY From this general listing of the uses of the chief derivative of acid grade fluorspar, it can be inferred that consumption in this country has steadily risen. The inference is correct-this is the fact. United States Tariff Commission and United States Bureau of Mines figures show that the trend of consumption has steadily risen since World War II. In 1946 United States consumption (exclusive of delivery to United States stockpile) was a little over 85,000 short tons, in 1957 it was almost 329,000 short tons. Shipments by domestic producers (inclusive of stockpile deliveries) have shown a similar steady rise, from just about 79,000 short tons in 1956 to somewhat over 189,000 short tons in 1957. Likewise, imports have risen. Including imports for United States Government use, stockpile, use, that is, imports steadily rose from 6,600 tons in 1946 to over 412,000 tons in 1957. Grades of fluorspar containing less than 97 percent calcium fluoride not included in this bill, of course, are necessary in the production of steel, glass, enamel, and other industries. If we look at overall consumption of fluorspar-both the acid grade and all other grades-we see the same picture rises in consumption, in domestic shipments and in imports. Consumption has risen from over 426,000 tons in 1950 to over 639,000 tons in 1957. Domestic shipments during that period ran from 301,000 tons in 1950 to 310,000 tons in 1957. Imports rose from over 164,000 tons in 1950 to over 631,000 tons in 1957. All of these figures, except the one given for consumption, reflect purchases for United States Government use. The mineral is therefore an important one, and its inclusion in S. 3892 should be carefully considered. It should not be treated as just another mineral thrown into the legislative hopper. EXPECTED FUTURE DEMAND Moreover, it has long been clear that our future needs for fluorspar will be great. Our productive capacity in aluminum and steel continues to increase, and with those increases will come increasing demand for fluorspar. Inevitably, as private industry comes into the field of producing power from nuclear fission, greater demands will be made for the raw materials involved, again increasing the demand for fluorspar. The spectacular rise in the production of home refrigeration units, new uses found for the aerosols, such as the packaging of hair lacquer sprays, all clearly spell increased demand. In 1952 the President's Materials Policy Committee, the Paley Committee, predicted a 1965 consumption of fluorspar. That is, the crude fluorspar mined, at about a billion and a half tons per annum. One of the most active members of the Independent Fluorspar Producers Association, domestic producers, recently estimated that by 1960 United States annual consumption of fluorspar, the ore, would be at the rate of 1 million short tons. This is also the view of prominent independent geologists. In delivering the 1957 Jackling lecture at the New Orleans meeting of the American Institute of Mining Engineers, reprinted in Mining Engineering for May 1957, Joseph L. Gillson, chief geologist of Du Pont, a former councilor and vice president of the society, whose experience as a geologist goes back to the early 1920's, covered the broad subject of industrial minerals and economic geology. In speaking about the many uses of fluorspar, and its constantly increasing consumption, Mr. Gillson says: In my opinion, it is not the producers who should be worrying about where they are going to sell their fluorspar, but rather the consumer as to where he will obtain his supplies. SUPPLY We believe that Mr. Gillson is right, so having considered the question of demand, let us now turn toward the question of supply. The most recent estimate of reserves we have been able to find is the combined Office of Minerals Mobilization and Geological Survey estimate of fluorspar reserves of the United States, dated November 23, 1956. It sets forth these reserves as about 221⁄2 million short tons. Of this, 13,800,000 tons are measured and indicated, and 8,760,000 tons are given as inferred. The estimate states that those reserves containing at least 35 percent calcium fluoride or equivalent in fluorspar and sulfides could support mine production for 30 years at the 1951-55 rate of about 750,000 tons of crude ore annually. However, as the Aluminum Company of America, in a statement to the Ways and Means Committee of the House of Representatives earlier this year points out, the ratio of crude ore to finished product is a little over 3 to 1. This means that to supply an annual consumption rate of 1 million tons of finished fluorspar, some 3 million tons of crude ore would have to be mined. On the basis of the estimated measured and indicated ore of 13.8 million tons, this amount of crude would only be about a 4-year supply. If the total estimated reserves, including those inferred, as well as those proven and indicated, is to be used as a basis a rate of mining at 3 million tons per year would represent a 7-year supply of the ore. This raises a very serious problem of national security as well as a problem of consumer interests. While I am perfectly sure that the domestic producers who are to appear before this committee will take the position that more exploration will find more ore bodies, on analogy with the petroleum industry, the views of the major consumers of acid-grade fluorspar in this country would seem to coincide with those expressed by the Aluminum Co. |