of that date, of the available reserves containing 35 percent or more manganese indicated supplies not exceeding 200,000 tons. Reserves containing from 10 to 25 percent manganese were estimated at 500,000 tons, and those containing from 5 to 10 percent manganese were judged to be 150,000 or more tons. Additional areas having large amounts were also listed in Georgia. Because, in the past, the ore prepared for shipment from these deposits generally contained less than 50 percent manganese, it could not compete with imported ore of higher grade. Except in periods of emergency, steel companies have preferred to buy imported ore. The Georgia Department of Mines, in efforts to improve this situation, in cooperation with the Tennessee Valley Authority, and the United States Bureau of Mines, has sought means of producing a more salable, higher-grade product, with promise of success. The various processes devised would increase the over-all usable and recoverable reserves of Georgia's manganese ore from 200,000 tons to more than 800,000 tons. Coking coal Testimony relating to reserves of coking coal was offered by Dr. Boyd. Although there is an adequate supply of coking coal and coke to meet emergency requirements, the reserves of coking coal are relatively smaller than those of other types, especially if the needs of future generations are considered. Because of this latter limitation, the Bureau of Mines is conducting investigations to determine minable coking coal reserves and methods to improve the quality of coals with coking characteristics. Coking coal comes principally from the Appalachian coal region, with the balance coming from the Midwestern and Rocky Mountain areas. Bureau of Mines surveys are adding to reserves in these areas, and technical advances made by steel companies, commercial coal producers, and the Bureau result in the improvement of marginal coking coals, the preparation of coke, and the utilization of lowergrades of coal. The chief limiting factors to future supplies of coke are the possible reduction of the number or capacity of mines for producing coking coal by economic difficulties, the use of coking coals for other purposes, and the extent to which coke oven capacity can be maintained or increased to meet emergency needs. Although some steel companies or their affiliates have large reserves of coking coal, it is believed that no one firm or group predominates in the extent of holdings. Mr. H. B. McCoy, Director of the Office of Domestic Commerce, Department of Commerce, also supplied information concerning the importance of coking coal to steel production.14 The coal and coke supply is one of the three "dominant factors" in the location of the iron and steel industry, although successful plants may be located if iron ore and markets are more accessible. The location of the Nation's best coal deposits in the Appalachian region played a major part in the location and growth of the American steel industry around Pittsburgh. Flux stone Another of the necessary components of steel production is flux stone, or limestone, as it is ordinarily known. According to the state ment of Dr. Boyd, reserves of limestone in the United States are "extremely great." Nevertheless, "a steel company establishing a plant will * * have some difficulty in establishing a metallurgical stone supply." ." 15 Specifications permitting only small amounts of impurities limit available supplies or cause their rejection. Specifications are flexible, however. Although the Bureau of Mines has made no comprehensive study of limestone supply, it is believed the supply is adequate. It has been found in the last few years, however, that it is becoming increasingly difficult to discover deposits of commercial size. Limestone reserves are estimated to be ample for 25 years, perhaps declining somewhat in average grade. Refractories The refractories industry, 16 as described in Dr. Boyd's statement, is well developed, based largely on domestic materials such as clays, quartzite, and magnesia ores. So-called fire clays are widely distributed throughout the United States, but because the industry has, within recent years, emphasized higher-quality products, clays of certain areas have become more important. This tendency also has limited the areas in which refractories can be produced competitively, and to introduce serious problems of quality into the supply of raw materials. Thus, there is an increasing shortage of supply of clays with a high alumina content, found principally in Missouri. Exploration carried out by companies in the industry indicates that the problem is one of "accelerated exhaustion of a limited resource.' For the future, companies manufacturing refractories will use the highest-grade clays available, and supplement them with such raw materials as bauxite ore. 99 17 Magnesite brick, also required for the refractories supply of the steel industry, can be made from a number of materials, including magnesite, brucite, and magnesia from sea water. This latter source assures the refractory magnesia supply for the future. There are a number of raw materials, comparatively small factors in the industry, having specialized applications. These include some important materials, however, such as chrome, for which this country is mainly dependent upon foreign sources, and such refractory substances as graphite, silica, carbide, kyanite, and zircon. II. DEVELOPMENT OF COMPLEMENTARY SOURCES OF LOW-GRADE ORES AND FOREIGN ORES A. DEVELOPMENT OF DOMESTIC SOURCES OF LOW-GRADE ORES Although deposits of low-grade ore are widely scattered, occurring to some extent in every region and most States within the country, principal attention is devoted to the development of the low-grade ores known as "taconites" which are found in the Lake Superior district, surrounding or grading off from the ores of higher iron content on the various ranges. In effect, the high-grade ores are "pockets" in larger beds of ore having lower iron content.' 17 Hearings, p. 99. 18 18 Generally, high-grade ores include those having an iron content of 45 percent or better as mined. Standard high-grade ore contains 51.5 percent of iron. Taconites are ore forms of mineral containing iron, averaging from 30 to 49 percent in iron content. The more important factors in the problem of obtaining usable ore from taconites according to the testimony, include the technical difficulties of extraction, refining, and concentration; the increased cost of ore requiring such extensive treatment in order to adapt it to the steel furnaces; and the production of sufficient quantities of usable ore from taconites to provide for the needs of the industry, supplemented by other sources. Secretary of the Interior Chapman, in his statement, described the taconite problem as an "extremely difficult one from the technological standpoint." The technique of taconite utilization has been developed by the industry to a point where it is now predictable, according to Secretary Chapman, that 2.5 million tons of usable ore will be available in 1954. By 1970, it is estimated that taconites may supply annually 25,000,000 tons of acceptable grade of iron ore. The Director of the Bureau of Mines estimated that 13,000,000 tons of taconite may be expected by 1950, and that there are some 5 billion tons of magnetic taconites, which could ultimately yield 1.7 billion tons of concentrates. Total iron ore currently used is about 100,000,000 tons per year. Reserves of taconites in the Lake Superior district are estimated by the United States Geological Survey, in a table submitted by Dr. Boyd of the Bureau of Mines, to amount to 61 billions of tons.19 According to estimates quoted by Mr. John G. Munson, vice president of United States Steel, the taconite reserves of the Lake Superior area are about 72 billions of tons. Dr. Boyd, in response to inquiry stated that this difference would not alter estimates materially, as these are round figures, influenced by the percentages of iron content specified. Dr. Boyd testified that while steel companies have been engaged in research on the use of taconites for 10 years, no production on a commercial scale has yet been achieved, although large pilot plants have been constructed, and larger ones have been recently begun. The requirements for preparation of suitable iron ore from taconites include large amounts of available electric power, large beneficiating plants and equipment, and correspondingly large capital investment. It has been estimated, according to Dr. Boyd, that a capital cost of from $15 to $20 per ton of capacity per year will be needed to finance taconite production. A commercially feasible plant, with 1,000,000 tons of capacity, would require an investment of $20,000,000. Mr. C. M. White, of Republic Steel, estimated the plant and equipment investment necessary for taconite production as falling within a range from $12 to $20 per ton per year, or from 120 to 200 million dollars to produce ten million tons annually. Commissioner Mead, of the Federal Trade Commission, stated that the cost of a taconite plant "of minimum commercial size," to produce 2.5 million tons of ore per year, would be $50,000,000, and cited an estimate by the United States Steel Corporation that the investment required to replace present Lake Superior ores by taconites would probably be from 1.5 to 1.75 billions of dollars. In a memorandum submitted to the subcommittee by the United States Steel Corp., it is stated, with respect to taconite development, that 19 The table lists 61 billion tons of low-grade ores, including the "enormous" taconite deposits. Elsewhere this figure is used for taconites alone. This table is reproduced in Steel Exhibits, pp. 2-4 capital expenditures will be required to provide for the procLow-4 de ores as the grade of material available in the ground gradually It is estimated that the capital expenditure for each annual ste ore concentrating capacity might approximate $20, which might 1× NA3000,000 if 15,000,000 tons were provided. chical processes of taconite production, as described by % of the witnesses referred to above, include a number of steps. e case of so-called magnetic taconites, upon which research is fe advanced than in nonmagnetic types, ore is ground to a fine con so that the iron-bearing material can be magnetically sepa This material is then agglomerated, that is, molded into or by mixing with water and rotating the mixture in drums, and axed with coal. The products of this process are marble-sized ors containing a relatively high percentage of iron-60 percent or my, as compared with standard commercial high-grade ore with an on content of 51.50 percent-which constitute a desirable blast*, -race material. Thus, according to some estimates it is difficult to determine precisely what the cost of steel made from taconite material wil be because the higher iron content permits some savings in the making process once the ore has been beneficiated. As a general stement, it is asserted by several witnesses that since taconite ors will be more expensive than present high-grade ore, the manuacture of steel using taconites will also be more expensive. Mr. Fless, of United States Steel, stated in response to inquiry on this subject that * * * if we just kept on using our high-grade ores until we reached exhausson, and then changed over-in the meantime, of course, developing the methods for concentrating the taconites, and then swung over, overnight, so to speak, to taconites, you would have a tremendous impact on our economy in the country because you would have a much higher cost iron ore unless our technological improvements and we are certainly working on it-can come up wath something that will alleviate that impact to some extent.20 * * * Mr. Fairless stated that taconite development should be considered one of three simultaneous efforts by the steel industry to cope with the natural resource problem: first, the development of all available high-grade ores in the United States; second, taconites development; third, development of supplementary foreign sources of ore. At a later point, Mr. Fairless stated, in reply to a comment by the chairman, Representative Celler, upon the dangers of relying on foreign ores in time of emergency: I think, Mr. Chairman, that the answer to your question-and it is a worthy question for consideration—is being solved. In other words, I agree with you that just as soon as we can this industry should begin using taconites, and the United States Steel Corp. realized that years ago. We have a concentrator * * in operation, and we have been using about a million tons per year since 1910 of this low-grade ore. The reason for doing it was so that we would * * be ready to meet this emergency when it came. Now, what we intend to do-and I hope others-we are not going to hold back our development of taconites because of the discoveries in Venezuela or Labrador; we are not going to do that; we are going to push them forward.21 B. DISCOVERY AND DEVELOPMENT OF FOREIGN SOURCES OF ORE The testimony concerning the utilization of foreign ore supplies may be divided into several distinguishable aspects, although they are not separated in discussion. These topics are the location and 20 Hearings, p. 547. description of the major foreign deposits; the ownership, lease, or access to these reserves by American steel companies; the extent of preliminary construction and transportation facilities necessary to render the ore available; the importance of these deposits from the standpoint of national defense; the probable relative prices of ore from these sources; and the differential effects of these new supplies upon integrated and nonintegrated, large and small, ore and steel producers. Secretary of the Interior Chapman introduced discussion of this subject by stating that: Another part of the solution to the problem of domestic iron ore depletion involves imports from other countries. Since 1946 these imports have increased sharply from 2,800,000 tons in that year to 7,400,000 tons in 1949. There are substantial iron ore reserves available in nearby countries of the Western Hemisphere notably in Venezuela and in Labrador. An ore supply from Venezuela of course, involves a long haul by sea, with a consequent increase in the vulnerability of supply lines during time of war. * * * The Interior Department will continue to encourage and foster the development of existing and additional foreign iron sources where it can; our cooperation with the industry on the technical level with special reference to foreign ore production will be intensified. In addition the development of foreign ore deposits will be furthered by the efforts of minerals attachés of our foreign legations. * * * The Department also will urge the authorization and construction of the St. Lawrence seaway on the grounds, among others, that it will provide the needed low-cost transportation of Labrador ores to established steel plants in the lower Great Lakes area.22 The Director of the Bureau of Mines, Dr. James Boyd, listed the principal areas from which iron ore is now imported, and from which it can be derived in the future. Canada, Chile, and Sweden supply important tonnages of ore to the United States at the present time. The territories under development by American steel companies include Liberia, Africa, where the Liberia Mining Co., subsidiary of Republic Steel Corp., is developing deposits which are expected to supply 2,000,000 tons of ore per year, beginning in 1952. It may be noted that Mr. C. M. White, president of Republic Steel, described the Liberian ore deposit as the most unusual ore Republic Steel had found anywhere in the world, as it runs to 68 percent of silica (an impurity considered difficult to remove if present in large proportion in iron ore). The second, larger anticipated development comprises the deposits in Venezuela which are in early stages of utilization. One of these, the El Pao deposit in which Bethlehem Steel Co. is interested, is expected to begin production at the rate of 2,000,000 tons per year by mid-1950, and then to increase output to 3,000,000 tons per year. The largest such deposit is that known as Cerro Bolivar (a high-grade ore field or iron mountain) which is being developed by the United States Steel Corp. This source is estimated to have a potential output of 13,000,000 tons per year, with production scheduled to begin in 1953. Another source, one not expected to be available until the late 1950's, is the large field of high-grade iron ores of the Quebec-Labrador area, located 360 miles north of the possible port of Seven Islands, on the Gulf of St. Lawrence. Although it is not specified in Dr. Boyd's statement, it may be noted that other data, including the testimony of Mr. C. M. White, of Republic Steel Corp., identified the development company interested |