NICKEL Senator MALONE. What about nickel contracts? Mr. WALSH. The stockpile has contracts in Canada with International Nickel and Sherritt Gordon Co. Senator MALONE. Give the addresses of those companies as you go along. Mr. WALSH. I do not have that. I will do so. Senator MALONE. I would like you to provide the name of the president and secretary or general manager of the companies also (included in earlier exhibit.) Mr. WALSH. Very well, sir. Would you like information on the domestic contracts for the stockpile on copper? Senator MALONE. What about this nickel contract? Mr. WALSH. International Nickel has contracts in the overall totaling 33,000 tons of nickel. Senator MALONE. Over what period? Mr. WALSH. That requires completion about June 30, 1958. Mr. WALSH. It began on August 1, 1951. Senator MALONE. The deliveries started? Mr. WALSH. Yes. Senator MALONE. What was the date of the contract? Mr. WALSH. I do not have the date of the contract here, but it would be just shortly prior to that. I can provide that information. Senator MALONE. All right. (The information referred to follows:) GENERAL SERVICES ADMINISTRATION, AMENDMENT No. 2 to Contract No. GS-OOP-461 (SCM)—NICKEL, COPPER, Cobalt BETWEEN SHERRITT GORDON MINES, LIMITED AND GENERAL SERVICES ADMINISTRATION, EMERGENCY PROCUREMENT SERVICE THIS AMENDMENT, made and entered into between Sherritt Gordon Mines, Limited, 25 King Street West, Toronto 1, Canada, hereinafter referred to as the "Contractor," and the General Services Administration, hereinafter referred to as the "Government," witnesseth, WHEREAS the Contractor and the Government entered into contract number GS-OOP-461 (SCM) dated April 19, 1951, which together with all amendments is hereinafter referred to as the "contract"; and WHEREAS the contract provides for the delivery of nickel in the form of pellets at a discount of $0.0025 per pound from the market price defined in Article 9 (a) of the contract; and WHEREAS the Contractor has offered to furnish metallic nickel of a purity equivalent to that of electrolytic nickel in the form of ingots of approximately twenty (20) pounds each which are quoted at premium of $0.0265 per pound above the said market price, and further offers as consideration, to sell such ingots under the same price terms, including the discount, as presently provided for by the contract; and WHEREAS for long term storage in the National Stockpile and for wider latitude with respect to consumption by the steel producers, ingots are more desirable than pellets in addition to the fact that such ingots will be of a higher minimum purity than the minimum requirements of National Stockpile Material Purchase Specification P-36, dated February 13, 1952. NOW, THEREFORE, it is agreed that: ARTICLE 1. Article 3 of Amendment No. 1 to the contract is hereby amended to provide that the Contractor shall deliver nickel ingots weighing approximately twenty (20) pounds each. 39888-54-pt. 2----17 ARTICLE 2. The unit price provided for by the contract, as amended, shall remain unchanged. ARTICLE 3. This Amendment is in the best interest of the United States Government. All terms, conditions and stipulations not inconsistent herewith shall remain in full force and effect. This Amendment is made pursuant to the authority contained in the Strategic and Critical Materials Stockpiling Act (60 Stat. 596) and the Federal Property and Administrative Services Act of 1949, as amended (63 Stat. 377, 64 stat. 578). Acceptance by the Government: AMENDMENT No. 1 TO CONTRACT No. GS-OOP-461 (SCM)-NICKEL, COPPER, COBALT BETWEEN SHERRITT GORDON MINES, LIMITED, AND GENERAL SERVICES ADMINISTRATION, EMERGENCY PROCUREMENT SERVICE THIS AGREEMENT, made and entered into between Sherritt Gordon Mines, Limited, 25 King Street West, Toronto 1, Canada, hereinafter referred to as the "Contractor," and the General Services Administration, hereinafter referred to as the "Government," witnesseth, WHEREAS the Contractor and the Government entered into contract number GS-OOP-461 (SCM) dated April 19, 1951, which together with all amendments is hereinafter referred to as the "contract"; and WHEREAS the contract provides, in part, for furnishing 50,000,000 pounds refined nickel, 25,000,000 pounds of refined copper and 750,000 pounds of refined cobalt, delivery of which is contingent upon the obtaining by the Contractor of certain funds required to finance a long range development program including the construction of a nickel refinery at Edmonton, Alberta, Canada, and the construction of a branch line railroad by the Canadian National Railways from the Contractor's mine at Sherridon, Manitoba, Canada, to Lynn Lake, Manitoba, Canada, approximately 150 rail miles north of Sherridon; and WHEREAS the contract further provides that should completion of the said construction program be delayed beyond January 1, 1954, and should the Contractor as a result thereof, fail to commence deliveries of metals in accordance with the contract terms and conditions, the Government will have the right to terminate the contract without cost to the Government; and WHEREAS the Contractor has informed the Government that by reason of the said termination provision it has experienced considerable difficulty in obtaining the required financing from private interests and that the source from which the Contractor endeavored to obtain such monies has indicated that it will favor the application provided the Contractor is protected in the event the aforesaid nickel refinery is not completed on schedule; and WHEREAS the Contractor has requested the Government to agree to make partial payments of forty-five percent (45 percent) of the contract price of nickel contained in the concentrates delivered at the proposed refinery site at Edmonton, Alberta, such partial pyaments to be made during the period January 1, 1954, through December 31, 1955, on concentrates which have been produced at the Contractor's mine at Lynn Lake, Manitoba, Canada, during the period commencing from the date of commencement of production of nickel concentrates at Lynn Lake, Manitoba, Canada, up to and including December 31, 1955; and WHEREAS the Contractor has requested modification of the contract to permut delivery of pellets of approximately 4 inch diameter and 4 inch thick each weighing approximately 1 ounce, in lieu of discs as presently provided for by the contract, since experimental work to date indicates that this form of metal can be produced at slightly less cost utilizing standard equipment, whereas equipment required to produce discs must be specially designed and manufactured involving a higher capital outlay; and WHEREAS the Government desires to exhaust every possibility of obtaining delivery of all refined nickel for storage in the National Stockpile: NOW, THEREFORE, it is agreed that: ARTICLE 1. (a) In the event the Contractor is unable to complete the construction and to attain satisfactory operation of its nickel refinery at Edmonton, Alberta, Canada, before January 1, 1954, and should the Contractor, as a result thereof, fail to commence deliveries of metals under the terms of this contract before January 1, 1954, and should the Contractor present satisfactory proof to the Contracting Officer that such failure was in spite of the best efforts of the Contractor, the Government will accept delivery of nickel concentrates at the refinery site, Edmonton, Alberta, during the period January 1, 1954, through December 31, 1955. Such concentrates shall have been produced at the Contractor's mine at Lyrn Lake, Manitoba, Canada, during the period commencing from the date of commencement of production of nickel concentrates at Lynn Lake, Manitoda, Canada, up to and including December 31, 1955. If the Contractor fails to complete the construction and have in operation by December 31, 1955, its proposed nickel refinery at Edmonton, Alberta, Canada, and fails by the aforesaid date to commence delivery of refined nickel derived from such concentrates in accordance with the contract terms, the Government will have the right to terminate the contract without any cost to the Government. (b) Under the conditions stated in the preceding paragraph and during the period January 1, 1954, to December 31, 1955, the Government will make a partial payment of forty-five percent (45%) of the contract price of the nickel contained in such concentrates, which nickel content shall be determined by sampling and analyses of the concentrates by the Contractor in the presence of a Government designated representative, and sampling and analyses to be in accordance with standard commercial practice. (c) The Government designated representative and/or Government inspector shall be notified at least 10 days in advance of anticipated arrival of nickel concentrates at the said proposed refinery site at Edmonton, Alberta, Canada. The Government Inspector's approval of the analysis shall be indicated in writing. (d) It is intended that the Contractor refine the aforesaid nickel concentrates as provided under the terms of the original contract. Upon the delivery of refined nickel produced from nickel concentrates which the Government has purchased hereunder, the Contractor shall be paid by the Government the contract price less the amount paid the Contractor under Article 2 of this amendment. After the extraction of the nickel from the nickel concentrates and delivery to and acceptance by the Government, the Government shall have no further interest in or claim to the residue of the concentrates so refined. ARTICLE 2. (a) Title to the nickel concentrates shall pass to the Government on the date that payment is made to the Contractor as set forth in Article 2 of this amendment. The Contractor shall have complete responsibility for any loss or damage to the Government-owned nickel concentrates. (b) The representatives of the Government shall have full access to the premises of the Contractor at any reasonable time in order that the Government material may be inspected and the Contractor agrees to afford the Government its full cooperation. Storage of the nickel concentrates by the Contractor subsequent to the purchase by the Government, will be given by the Contractor without additional cost to the Government up to the completion of the refining process or the removal by the Government of the nickel concentrates from the premises of the Contractor. The concentrates must be segregated from any property owned by the Contractor or other persons and must be identified as the property of the United States of America. The Contractor warrants that there will be no impediment to the full, free, and clear title to the nickel concentrates which the Government will receive upon payment of the forty-five percent (45 percent) fee described herein. ARTICLE 3. The contract is hereby amended to permit delivery of refined nickel in the form of pellets approximately 4 inches in diameter and 3⁄4 inches thick each weighing approximately 1 ounce. The contract price for refined nickel delivered under this contract will be reduced $0.0025 per pound, this reduction representing the savings in cost to the Contractor in the production and delivery of refined nickel in the form of pellets rather than discs. ARTICLE 4. Notwithstanding any other provisions of this contract, the maximum obligation of the Government hereunder shall not exceed $61,600,000. In the event the amount due or payable to the Contractor for deliveries of material hereunder totals the aforesaid dollar amount prior to the completion of this contract, any undelivered quantities of material otherwise deliverable pursuant hereto shall be cancelled without liability to the Government. The Government reserves the right to itself to increase, if it so desires, the maximum obligation stated herein. ARTICLE 5. The words "ninety (90) days" which appear in Article 18, Force Majeure, paragraph (b) thereof, are hereby deleted and in their place are substituted the words "three (3) years." ARTICLE 6. This Amendment is in the best interest of the United States Government. The unit prices ultimately to be paid under the contract have been reduced. All terms, conditions, and stipulations not inconsistent herewith shall remain in full force and effect. This Amendment is made pursuant to the authority contained in the Strategic and Critical Materials Stockpiling Act (60 Stat. 596) and the Federal Property and Administrative Services Act of 1949, as amended (63 Stat. 377, 64 Stat. 578). Acceptance by the Government: CONTRACT No. GS-OOP-461 (SCM)-FOR THE SALE AND PURCHASE OF REFINED NICKEL, COPPER AND COBALT Metal BETWEEN THE UNITED STATES OF AMERICA AND SHERRITT GORDON MINES LIMITED THIS CONTRACT, made and entered into this 19th day of April 1951, by and between the United States of America, acting through the Emergency Procurement Service of the General Services Administration (hereinafter referred to as the "Government"), and Sherritt Gordon Mines Limited, a corporation organized and existing under the laws of the Province of Ontario, with its offices situated at 25 King Street West, Toronto, Canada (hereinafter referred to as the "Contractor"). WITNESSETH THAT: WHEREAS, nickel, copper and cobalt are strategic and critical materials within the purview of the Strategic and Critical Materials Stock Piling Act of 1946, Public Law 520, 79th Congress (60 Stat. 596); and WHEREAS, domestic production of such metals is presently insufficient to supply the industrial, military and naval needs of the United States for the purpose of the National Defense Program; and WHEREAS, the Contractor represents that it is the owner of certain nickelcopper (including cobalt) deposits located at Lynn Lake, Manitoba, which are capable of producing substantial quantities of ores containing said metals; and WHEREAS, certain financing is necessary for the development of these mining operations, including the construction of a branch railroad line extending approximately 150 miles from a point on the railroad serving that area to the location of the deposits at Lynn Lake; and WHEREAS, the Contractor represents that the necessary financing is presently the subject of negotiations between the Contractor and certain private banking interests; and WHEREAS, the Government desires to exhaust every possibility of increasing its supply of nickel, copper and cobalt intended for storage in the National Stock Pile. Now, THEREFORE, the parties hereto do each respectively agree as follows: ARTICLE 1. Scope of contract. Subject to the conditions set forth in paragraph (a) and (b) of Article 2 during the period 1951 to and including December 31, 1958, the Contractor shall sell and deliver to the Government and the Government shall purchase certain quantities of refined nickel, cobalt and copper metals in the manner, at the prices, and at the times hereinafter specified. It is understood that no metals shall be delivered hereunder except those produced from ores mined at the properties owned or under the control of the Contractor which are located at Lynn Lake and/or Sherridon. ARTICLE 2. Condition precedent. The Contractor represents that delivery to the Government of the refined metals as hereinafter provided for shall be contingent upon the completion of a construction program which the Contractor shall endeavor to accomplish or cause to be accomplished by or in the interest of the Contractor by not later than January 1, 1954, and which shall principally consist of the following: (a) The construction of a branch railroad line by the Canadian National Railways from the Contractor's mine at Sherridon, Manitoba, Canada, to Lynn Lake, Manitoba, Canada, site of a nickel-copper deposit currently under development by the Contractor and situated approximately 150 rail miles north of Sherridon, and (b) The obtaining by the Contractor of certain funds needed to finance the development and the completion of a construction program including the construction of a nickel refinery to be located in Alberta, Canada. It is understood that the General Services Administration shall have no contractual interest in or responsibility for the fulfillment of the condition set forth in this paragraph. (c) It is agreed that the Contractor will keep the Government fully informed of its progress in fulfilling the objectives referred to in paragraph (a) and (b) of this Article. It is further agreed that should said construction program be delayed beyond January 1st, 1954, and should the Contractor, as a result thereof, fail to commence deliveries of metals under the terms of this contract before December 31st, 1954, the Government will have the right to terminate the contract without cost to the Government. ARTICLE 3. Quantity. (a) The Contractor shall deliver to the Government a minimum quantity of 50,000,000 pounds of refined nickel and the Contractor may at its option deliver to the Government an additional 30,000,000 pounds of such metal; provided, in the event that the Contractor elects to deliver such additional quantity, notice thereof shall be given the Government in the manner prescribed in Article 8 (c) hereof. (b) The Contractor shall deliver to the Government 12,500 tons (25,000,000 pounds avoirdupois) of electrolytic copper wire bars hereunder. (c) The Contractor shall deliver to the Government 750,000 pounds avoirdupois of refined cobalt metal hereunder. A variation in the quantity of each metal deliverable under the contract, not exceeding 1%, will be accepted as full compliance with the contract quantities specified in paragraph (a) through (c) above. ARTICLE 4. Quality. (a) The nickel to be furnished under this contract shall conform to the following chemical and physical requirements: 1. Chemical Requirements: Nickel (Ni) plus Co.. Cobalt (Co)--. Iron (Fe). Sulphur (S). Carbon (C)--. 2. Physical Requirements: The nickel shall be in the form of discs, approximately 21⁄2" in diameter and 1" thick, weighing 1 pound each or in such other form as may equally be acceptable to the General Services Administration. The material shall have a clean surface, free from dirt, slag or other foreign material. (b) The electrolytic copper wire bars to be furnished under the contract shall conform to the chemical and physical requirements of the American Society for Testing Materials Specification B-5, latest revision in effect on the date of each delivery. All material shall be in the form of 250 pound wire bars. (c) The refined cobalt metal to be furnished under the contract shall be suitable for the production of ferrous and nonferrous alleys. 1. Chemical Requirements: Each lot of cobalt metal shall conform to the following: |