THE DEFENSE MINERALS PRODUCTION PROGRAM FRIDAY, MAY 11, 1951 HOUSE OF REPRESENTATIVES, COMMITTEE ON INTERIOR AND INSULAR AFFAIRS, SUBCOMMITTEE ON MINES AND MINING, The subcommittee met, pursuant to adjournment, at 10 a. m., Hon. Ken Regan (chairman of the subcommittee) presiding. Mr. REGAN. The subcommittee will come to order, please. Gentlemen, will you again occupy the semicircle that we formed yesterday morning? We are glad to have the Under Secretary back again with us this morning. Mr. Wolf, you, I believe, will be seated next. I believe all the members have met Mr. Wolf, the man who occupied, or didn't occupy the vacant chair yesterday. We are glad to have you with us this morning, Mr. Wolf. The committee are quite concerned with this mineral program and your name has been frequently mentioned as one of those cogs in this machinery that wasn't getting its share of lubrication or something, because it seemed there was a squeak in your particular cog, and we wanted to know what we could do to get that removed, if possible, and I think the members of the committee may want to ask you a few questions as to your particular function in this mineral program. We have another member. Mr. GUMBEL. Mr. Harding, Mr. Chairman, taking Mr. Elliott's place from General Services. Mr. REGAN. Glad to have you with us, Mr. Harding. You are an attorney of the General Services, is that right, Mr. Harding? Mr. HARDING. That is right. Mr. REGAN. Yesterday, Dr. Boyd, I believe Mr. Budge asked for some information. Did you plan giving him the answers to his inquiry in a memorandum or otherwise? 427 82354-52- -29 STATEMENTS OF RICHARD SEARLES, UNDER SECRETARY, DEPARTMENT OF THE INTERIOR; ALFRED C. WOLF, EXECUTIVE ASSISTANT TO THE SECRETARY, DEPARTMENT OF THE INTERIOR; DR. JAMES BOYD, ADMINISTRATOR, DEFENSE MINERALS ADMINISTRATION; DR. JOHN D. MORGAN, JR., DIRECTOR, MATERIALS REVIEW DIVISION, DEFENSE PRODUCTION ADMINISTRATION: IRVING GUMBEL, SPECIAL ASSISTANT TO THE ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION; AND BYRON HARDING, ATTORNEY, AND MAX MEDLEY, GENERAL SERVICES ADMINISTRATION Dr. BOYD. I gave him the memorandum this morning. Is that satisfactory to you, Mr. Budge? Mr. REGAN. Was that memorandum sufficient answer to the questions you had in mind? Mr. BUDGE. No, it is not, Mr. Chairman. When we reach mica on the list, I would like to put the memorandum in the record and then continue with some questions of Dr. Boyd. Mr. REGAN. If there is no objection, the memorandum that Dr. Boyd submitted will be placed in the record at this point, and you might proceed with the questions now. MEMORANDUM TO CONGRESSMAN BUDGE FROM DMA REGARDING LOAN Memorandum. To Dr. James Boyd. From James A. Barr. Subject: Loan application Idaho Beryllium Corp. Docket DMA 333. Amount, $125,000. The proposal is to recover an old dump at the applicant's mine at Caldwell, Idaho, and produce beryl to an estimated amount ranging from 50 to 300 tons, averaged at a probable 300 tons by the DMA field team. Period about 400 working days. The principal product will be nonstrategic ground mica scrap. It is possible that some sheet mica of strategic grade can be recovered from the pegmatite dike but same does not come within the written proposal but has been discussed. Samples were first requested in February and were received by the Bureau of Mines (DMA field team region II) April 16. Reported on tests May 4. Project was inspected by DMA field team on March 5, and a preliminary report made April 10. Further instructions asked. Instructions phoned from Washington April 27. Report made by field team May 4. Original proposal was for 50 tons per day mill; changed as a result of conversations in Washington to 250 tons per day; included in phoned instructions to field team. The first proposal did not appear to be profitable. Indicated The field teams conclusions are substantially: The only feasible proposal ap pears to be No. 2 at 250 tons per day. Life 400 working days on dump. profit $374,000. Based upon sample that may not be representative of whole dump. Chief products roofing grade and wet ground mica. Recovery of block mica probably small. Maximum yield of beryl probably not exceeding 150 tons. The applicant deserves credit for pioneering with the D Anza mill and it is probable that his metallurgical processes will be found applicable in other mica districts. The field team is not entirely satisfied with the applicant's proposals but because of experimental nature will not oppose a loan if 150 tons of beryl that might be recovered can be considered justification. This proposal has been discussed at length by the DMA, survey and bureau members. The Program Section has been consulted and they have rendered the opinion that the estimated recovery of the beryl will justify the loan providing the economies indicate that the loan can be repaid. While the proposal scope has been changed and the application may be lacking in thoroughness of presentation still the opinion is that it deserves careful consideration. First. Beryl is needed in the defense effort. Second. The mine has a record of production of strategic grade mica which could continue. Third. The area in general is a good pegmatite region and should be able to produce substantial quantities of mica and beryl and a mill such as proposed would serve the region not only as an outlet but as a guide. Fourth. The applicant has done useful pioneering work in mica metallurgy. While we do not consider the loan a sound risk we do think that the probable results justify the risk, providing an audit confirms the financial claims of the applicant. JAMES A. BARR. DISCUSSION OF IDAHO BERYLLIUM CORP'S. LOAN APPLICATION Mr. BUDGE. Thank you, Mr. Chairman. Doctor Boyd, in pursuance of this memorandum, just what will happen to the Idaho Beryllium and mica application? Dr. BOYD. Their application, Mr. Congressman, is for a loan, for construction of a mill to process mica and beryllium in that area, and as soon as the terms of that loan are drawn up which we are working with them on, they will be submitted to DPA for certification to R. F. C. Mr. BUDGE. What is your recommendation going to be? Dr. BoYD. At the moment, we are recommending that that loan be granted, yes. We have approved it now in our internal structure and we will enter into negotiations as to the terms of loans. Mr. BUDGE. Your memorandum is just a succession of ifs and buts. It doesn't say you are going to recommend it. Dr. BOYD. But that is the memorandum I gave you from one of my staff members to me. He is making a recommendation. We have to make a decision on it. Mr. BUDGE. But your office now is going to recommend the granting of the loan? Dr. BOYD. On the basis of that recommendation, I would recommend the granting of the loan. Mr. BUDGE. Tell me something of the mica in that deposit. Dr. BOYD. I have never seen that deposit. It is largely commercial grade of low-grade mica which is used for other than strategic uses. Now, in deposits of mica of that type, you sometimes do get a small proportion of that strategic mica, which will be useful in the defense program, but the reports from the field would indicate that that particular deposit would not be a great producer, either of beryllium or strategic mica. It is largely a low-grade mica deposit. Mr. BUDGE. Did you read this memorandum? Dr. BOYD. Yes, sir. Mr. BUDGE. I call your attention to the fact that in stating your reasons for consideration of this project you say first, beryl is needed in the defense effort, second, the mine has a record of production of strategic grade mica which could continue. Dr. BOYD. That is right. Mr. BUDGE. What do you mean by telling me it is primarily commercial grade? Dr. BOYD. Still that is not inconsistent, Mr. Budge. They did produce strategic mica from that mine under certain circumstances, & small proportion. Mr. BUDGE. Do you know how much mica that mine produced during the last war? Dr. BOYD. No. Mr. BUDGE. It is in your files, isn't it? Dr. BOYD. I expect so. Mr. BUDGE. For your information, that mine produced over a million dollars worth of mica in the last war and I think your files will show that approximately 40 percent of that mica was strategic. Dr. BOYD. I don't know, Mr. Budge. I couldn't answer that. Mr. BUDGE. I think that is somewhat obvious, Doctor. This application has been in your office since January, and your own files, I know, indicate that, that there was $400,000 worth of strategic mica produced in that mine in the last war, and yet, you have been sitting on this application from January until now, the 10th Dr. BOYD. I beg your pardon; we haven't been sitting on it, Mr. Budge. The proposal made by that company originally was not a feasible project under the Defense Production Act. We had to go back to the field to discuss it with the company to bring it in line with something we could approve. That report just came back in the last few days. The samples have come from them. The report is dated the 4th of May. Mr. BUDGE. You had the samples from the last war, a million dollars? Dr. BOYD. You have to resample it now on the basis of what is left in the deposit. I can't tell the details of it, of course, but that deposit has been worked to that extent; if so, it might be considerably changed in that period of time. Mr. BUDGE. Your office has gone over that particular mine prob ably a dozen times. Dr. BOYD. I don't know that. Only twice that I know of in the recent times. Mr. BUDGE. Well, of course, they went over it and spent a lot of money out there during the Second World War. Dr. BOYD. That is correct. Also, as you have indicated, there was a lot of material produced from there which changed the situation in the mine. The mine doesn't remain the same all the time; it can be worked out, you know. Mr. BUDGE. Is there anything in your files that shows that this has even begun to be worked out? Dr. BOYD. No. I am merely postulating what conditions may be. When the mine is closed down again and in reopening it, you have to reexamine to see what the project is worthy of doing. Mr. BUDGE. I think those surveys were made during the last war. It hasn't operated because mica hasn't been at a price so it could profit. Dr. BOYD. But you indicated yourself there was a large quantity of mica produced since the last war. Mica and pegmatite deposits are spotty. They are not continuous deposits. Mr. BUDGE. I appreciate that. Now, you have told me that you are definitely going to recommend the granting of this loan for the production of the beryllium and mica from this mine? Dr. BOYD. On the basis of that recommendation, that is right. Mr. BUDGE. When is your recommendation to go out of your office? Dr. BOYD. As soon as they have negotiated with the contractor as to the terms of the loan. Mr. BUDGE. When will you do that? Dr. BOYD. They will be working on it right away. Mr. BUDGE. How long do you estimate it will be before some action is taken? Dr. BOYD. I couldn't estimate it, Mr. Budge. I don't know. It depends on the complexities of the problem. I couldn't tell from that memorandum. It depends a lot on the contractor himself. Mr. BUDGE. Your memorandum places the mine 300 miles away from where the mine actually is. Dr. BOYD. I don't know that. Mr. BUDGE. Your files would show it. What I want to get, Doctor, is this: My State has hundreds of producing mines. It has thousands of potential mines. I am getting dozens of inquiries and have been for months, getting dozens of inquiries every week from people who are out prospecting in pursuance to the notes that went out of your office. I am taking this particular application so that I can try and determine whether your office is just kidding these people or whether the Government is actually going ahead with this program so I can tell them one way or the other. Dr. BOYD. The only thing I can assure you, Mr. Budge is that our office is going to go ahead with any worth-while project in mining as fast as we possibly can. That is the only assurance I can give you. Mr. BUDGE. How long is it going to take to have this application approved and the money advanced so the mica and the beryl will be produced? Dr. BOYD. It would depend a great deal on the contract. It can be done in a matter of 2 or 3 weeks, or less. Mr. BUDGE. Do you feel it will be done? Dr. BOYD. I am sure I couldn't tell you. I don't know what the complexity of that particular problem is. I don't want to promise you something I can't live up to. Mr. BUDGE. That is what I asked you to get for me yesterday. Wr. BOYD. There is a report on it. The report just came in and the Chief of that branch has had a chance to study it. He only had a chance to study it yesterday and last night and he gave me that report. You just can't answer these things in a few hours. Mr. BUDGE. How much money do you have to use for this purpose? Dr. BOYD. We have none at the moment. Mr. BUDGE. What happened to the $10 million that was allocated? Dr. BOYD. This is not an exploration program. This is a loan for construction of the mill. The exploration program is not involved in this particular contract. Mr. BUDGE. Aren't they grouped together? Dr. BOYD. No, sir. |