TUNGSTEN PROGRAM SAID TO BE DESIGNED TO PROTECT MINE OFERATORS Dr. BOYD. Yes, sir. I think the only way we can do it is as Mr. Schwartz has mentioned. As soon as this appropriation is passed or this authorization is passed we increase that to cover all the estimated possible production of tungsten in this country. Then he is definitely covered but in the meantime we have put this limitation on because we had to for lack of funds. That gives him encouragement to go ahead and do it. His market is supported fairly substantially. He used to get it at about $18 or $28. Now it is $63. That is a pretty good gamble, to show that he has got a good block of tungsten that can be taken off the market by the Government and a good price support. Now it is not as full as we would like to have it. In working this program out we fully recognize what Mr. Murdock said and we tried to develop our program at this time to give this protection and assurance, but unfortunately we ran up against this budgetary problem. TOTAL OF $1,600,000,000 NEEDED FOR DEFENSE MINERALS Mr. REGAN. In other words, the $600 million that was provided for last year was estimated then to be adequate and is now known to be inadequate? Dr. BOYD. Yes, sir. Mr. REGAN. And you will have to have a further amount and that is the billion dollars that you referred to? Dr. BOYD. Yes, sir. Mr. REGAN. Is that an additional billion dollars or an additional $400,000? Mr. SCHWARTZ. No; that will bring the total Congress will have authorized to $1,600,000,000. Mr. REGAN: So it is an additional billion dollars? Mr. SCHWARTZ. Yes, sir. Congress did set a top limit of $200 million that it authorized for this purpose. The appropriations, together with the $600 million will cover $1,600,000,000. That is the amount that will be available. Mr. REGAN. Is that now liberally estimated to be adequate to cover all of these plans that we have for these defense minerals? Dr. BOYD. That is only for the rest of this fiscal year, Mr. Chairman. There will be another request for authorization for the fiscal year 1952, and our total program, in this kind of a program to support the mineral industry will amount to a great deal of that because we got the thing authorized and the various contracts let. There will be a presentation to the Congress of a considerably larger amount than that of authorization for the following fiscal year. Mr. ASPINALL. Mr. Chairman Mr. REGAN. Mr. Aspinall. Mr. ASPINALL. Dr. Boyd, you are speaking about a minerals program. Most of this $600 million has been allocated to other strategic materials rather than minerals; is that right? Dr. BOYD. Yes, sir; to iron and steel, some to tungsten, some to rubber, and I can't remember them all. $95 MILLION TUNGSTEN FUND DERIVED FROM ALUMINUM EXPANSION ALLOCATION Mr. ENGLE. I have the figures here and I can't figure out where you got the $95 million. You have $150 million to rubber, $10 million to caster beans, $60 million to tin, $10 million for exploration and development, $5.7 million for aluminum sheet, $1.3 for oxygen-free copper; tungsten, $14 million; machine tools, $100 million; and aluminum expansion contracts, $240 million, and that adds up to $591 million. Where have you scratched $95 million out of that to guarantee this program? Mr. SCHWARTZ. Mr. Engle, Mr. Elliott can supplement what I say, but the amount that is in there for aluminum had not been formerly transferred by DPA to GSA for an allocation of funds at the time that statement was prepared. Some of the contracts had not been signed, I understand. Now, when this billion dollars becomes available, the aluminum plants will have to be taken care of out of the billion dollars. Mr. ENGLE. In other words, this was earmarked money and there weren't any firm contracts on it so what you did is pick up $95 million out of the $240 million for aluminum expansion; is that right? Mr. SCHWARTZ. That is another way of expressing it. Mr. REGAN. What was left for aluminum? Mr. ELLIOTT. I would like to explain, we do have some contracts outstanding on aluminum but we are backing up those contracts temporarily with stockpile funds because some of that aluminum is going into the stockpile until the additional billion dollars becomes available so that there is no delay in the aluminum program. POSSIBILITY OF USING STOCKPILING FUNDS FOR DEFENSE MINERALS Mr. D'EWART. I have a question. Mr. REGAN. Mr. D'Ewart. Mr. D'EWART. The other day we had the stockpile appropriation before us and there was a statement in it under independent offices that show $3 billion was available to the end of the current year and at the end of the year a billion dollars would be left over as unused. How much of that was made available for mineral purposes? Mr. ELLIOTT. Can you answer that, Mr. Gumbel? Mr. D'EWART. Of the $2 billion authorized this year how much was used and how much have you asked for out of the billion that nobody is going to use this year? Dr. BOYD. I doubt if anybody here could answer that in precise terms, Mr. D'Ewart, but the large proportion of the stockpiling funds are involved in minerals. Mr. D'EWART. Of the $2 billion? Dr. BOYD. Yes, sir. Mr. D'EWART. How much have you asked for out of the billion that hasn't been used at all that will not be used by June 30? Dr. BOYD. I think we would have to ask the Munitions Board or GSA to answer that. Mr. SCHWARTZ. Mr. Congressman, I understand most of that will have been committed by June 30 and we have in the Bureau of the Budget a request for an additional amount for 1952. Mr. D'EWART. The report on the appropriations bill was submitted to the Congress showing that it would be unobligated at the end of the fiscal year: that the $2 billion would largely be obligated but the $1 billion would largely not be obligated. That was the report submitted by the Appropriation Subcommittee and it occurred to me with such sums as that, for which no one had found a use, we should be able to get a little bit for use in this defense minerals production and processing because under that law those funds are available and it is authorized to use them for any of these things we are trying to do. Mr. ELLIOTT. Mr. D'Ewart, I don't have those figures here but I would be glad to submit them for the record for the committee as to how much of that money has been used for minerals. I might say this, that of course we cannot obligate money or make contracts for specific strategic and critical materials beyond the objective set by the Munitions Board. Mr. D'EWART. And we have always found great difficulty in getting that Board to allot very much to mineral production or for processing. We have had you before us time and again on that in years gone by. It has been our impression the State Department would much rather spend that money overseas than they would in the West. That is the trouble, or one of the troubles we have had all the time. I think it would be interesting for the committee to have that breakdown of how much of that money was made available for mineral production or processing and how much is requested out of the unobligated balance for use in the next fiscal year. Mr. ELLIOTT. I will be glad to submit that. (The information requested is as follows:) INFORMATION PERTAINING to STOCKPILE FUNDS SUBMITTED BY General SERVICES ADMINISTRATION Of the estimated $2,000,000,000 that has been or is expected to be committed during fiscal year 1951, it is estimated that approximately $1,600,000,000 has been or will be used for the purchase of metals and minerals. Of the approximately $1,000,000,000 remaining for future commitment, it is estimated that approximately $400,000,000 will be used for the purchase of metals and minerals. TUNGSTEN PROGRAM BELIEVED INADEQUATE Mr. ENGLE. I think it is obvious there is a fatal loop-hole in the tungsten program. Now only the reaction from the producers themselves will show just how fatal that is, but I don't share Mr. Searles' optimism about it at all. If I was going to run a mining outfit in which I had to put a great deal of money, my own money, I would certainly look at the qualifications which have been put on this program. There is a practical problem I will admit in getting around that from the standpoint of budget but it certainly doesn't give the producer out in the field the kind of a guaranty we expect for tungsten production. We are going to watch it and see how it develops and if the industry shies on account of that, we are going to have to do something else I think to help out. What about manganese? Do you have any program going on manganese? LONG-RANGE MANGANESE PROGRAM SAID TO PRESENT ENGINEERING AND RESEARCH PROBLEMS Dr. BOYD. Yes, sir. I have a statement here that might be more concise than trying to do it verbally. In the case of manganese the problem is of an entirely different nature. At the present time the supply of manganese, while mostly imported, is adequate to meet the industrial demands and to provide some current addition to the national stockpile. Since this is a bulk commodity it can be mined economically in large quantities but we must solve the manganese long-range problem on the basis of largescale operations, such as that of recovering manganese from basis openhearth slags and that of preparing for the opening of the large low-grade deposits such as Artillery Peak, Cuyana Range in Minnesota, and the deposits in Aroostook County, Maine. However, until these programs can be satisfactorily put into operation by solving some of the basic engineering factors involved, and during the period of research required to provide the necessary technical data for the development of such an industry, it is essential that we obtain any reasonable quantities of manganese that can be produced for the next 2 or 3 years. SAMPLING DEPOTS AND CONCENTRATING PLANTS TO BE ESTABLISHED THROUGH PRIVATE INDUSTRY Consequently we cannot enter into a blanket arrangement as we have done in tungsten. We are now providing through private industry for the establishment of sampling depots, concentrating plants in strategic locations such as Deming, N. Mex.; El Paso, Tex.; Butte, Mont.; Batesville, Ark.; and in other places where the needs may arise. Here again, however, the activation of such a program requires substantial commitments of public funds. Contracts have now been negotiated for the producers in Montana and for the mill at Butte to permit the concentration of the products of the Philipsburg and Butte mines, but these contracts cannot be consummated until the funds are provided in the supplemental appropriations bill now be fore the Congress. DR. BOYD CLAIMS NO SIZABLE MANGANESE DEPOSITS FOUND IN CONTINENTAL UNITED STATES Unfortunately the continental United States has been searched without finding sizable manganese deposits through two wars and between the wars.1 There are many small deposits which do not lend themselves to economic operation, either because the deposits themselves will not support a concentrating plant or because they are too far from the consuming centers. This may be disappointing to a 1 SUBCOMMITTEE NOTE.-The implication made by Dr. Boyd, Director, Defense Minerals Administration, that no sizable manganese deposits have been found in the United States is not in accord with well-known facts. Factual information on the manganese one deposits of the United States as well as a number of known processes developed for the conversion of the ores of such deposits to high-grade manganese products is contained in committee Hearing No. 38, part I. Manganese, of hearings held on strategic and critical minerals and metals before the Subcommittee on Mines and Mining of the Committee on Public Lands, House of Representatives (80th Cong., 2d sess.). The statement made by Dr. Boyd that "There are many small deposits which do not lend themselves to economic operation" also is misleading, for none of the large manganese few small producers who have produced minor quantities of manganese in the past, but unfortunately the situation is such that they should not be encouraged to expend their efforts at this time. We are answering these questions directly to individual applicants, as they apply. Mr. ENGLE. In other words, you haven't any program? Dr. BOYD. We have the program; yes, sir, but there is a block in the way to getting it finally consummated. The research of course is going on at a tremendous rate. DISCUSSION OF PROPOSED MANGANESE MILL AT EL PASO, TEX. Mr. REGAN. Doctor, you stated that your plans contemplated some plants in Deming, N. Mex.; and Batesville, Ark., as well as El Paso, Tex. Dr. BOYD. And Butte, Mont. Mr. REGAN. Now as you know, I am quite individually interested in the El Paso area and several different prospectors and miners have come to me when I was there and written me that they have great bodies of manganese ore in Mexico. Dr. BOYD. That is correct. Mr. REGAN. I believe you replied to one of those inquiries for me. I understand you have had some discussion with people in private enterprise to put in some sort of a plant at El Paso and possibly at Deming. Dr. BOYD. That is correct. Mr. REGAN. What is holding that up and what could be done to put that into actual operation? Dr. BOYD. Well, one of the main problems in the El Paso thing, Mr. Chairman, is that the company itself has got to solve some of its problems before it can finally consummate the contract. They have been working at it quite assiduously and have been down negotiating with us, but they have to solve their problems before they sign the contract. It is an engineering problem they have to solve. Mr. REGAN. To satisfy themselves or the Government? Dr. BOYD. Both; themselves and the Government. Mr. REGAN. Are they problems that can easily be solved or will it take a year or two to work them out? Dr. BOYD. No, sir; it won't take a year or two. It is rapidly approaching completion right now. MANGANESE SUPPLY INCREASED FROM FOREIGN SOURCES Mr. REGAN. That is one of the minerals we are very much concerned about, manganese; is that right? Dr. BOYD. Yes, sir. Mr. REGAN. You have been getting it from various parts of the world, where our supply has been reduced and may be cut off entirely; is that right? deposits and very few small ones in the United States lend themselves to economic or profitable operation when mined for manganese alone under present market prices and conditions. The fact that the unit cost of the manganese to be obtained from the district manganese programs proposed by the Defense Minerals Administration is approximately double the recently increased market price of manganese from foreign sources serves as evidence. |