Dr. BOYD. The gross total commitment would be $6,100,000, but the expected actual cost would be about $2,400,000. In other words, you have to buy manganese and sell at a loss and the loss would be about $2,400,000. Mr. REGAN. In other words, you have a plan to authorize the purchasing office to start buying this ore? Dr. BOYD. That is right. Mr. REGAN. Over a period of about how many months before a mill would be constructed to begin processing that ore? Dr. BOYD. It would depend upon how well the supply started coming in. When you give a market to the producers in the area they will open up mines and begin bringing it in. Then we will get an idea of how big the mill should be. Mr. REGAN. It would be your idea that the mill would not be constructed until you had a sufficient stockpile of ore? Dr. BOYD. That is correct. Mr. REGAN. You would not authorize the establishment of the mill unless you knew the ore was available? Dr. BoYD. That is right, and knew quantities so we would know what size the mill would be. Mr. REGAN. You know the ore is available at the source? Dr. BOYD. Yes. Mr. REGAN. What I am trying to get at, Doctor, is this: You are setting up this procurement office in El Paso to buy a maximum of 40,000 tons of manganese ore that will run about 49 percent. Then you are going to wait until you get that there before you authorize the establishment of a mill that will take another year to build? Dr. BOYD. Not quite, sir. When we see the volume of flow in there we can determine the size of the mill. Mr. REGAN. Haven't you information now as to the supply, the potential supply of ore that might come into El Paso? Dr. BOYD. Yes. We have the general information about the total possible production from the area, but how fast it will come in will depend upon the miners that bring it in, and what kind of grade will come in. We can't determine that in advance. Mr. REGAN. You do know there is ore in X quantity? Dr. BOYD. That is right. Mr. REGAN. It appears to be sufficient to run the operation of a mill? Dr. BOYD. That is right. Mr. REGAN. Over a period of maybe 5 or 50 years? Dr. BOYD. That is right. Mr. REGAN. Why couldn't this program, at the same time the ore was being accumulated, start in with the building of the mill so that in 6 months' time you have 25,000 or 30,000 tons of ore on hand, enough to keep the mill going for another long period of time while more ore comes in. Dr. BOYD. That is what will be done as soon as we can determine the volume. We don't want to get in the same position Mr. REGAN. I understand you are not going to be able to determine the volume from up here until you know they have actually stockpiled on some lot in El Paso, 40,000 tons of ore? Dr. BOYD. The rate at which it comes into that stockpile. Then we will know what size mill to build. We won't until all the ore is mined before we build the mill; no, sir. We might well have gone ahead with the plant within a month or two. Mr. REGAN. But right now you question there being enough ore to run a mill? Dr. BOYD. Yes. Our field engineers have had some doubt about it; yes, sir; about the size or volume of that ore that will come into that area. Mr. REGAN. Hasn't the geological survey had some information on this ore or these ore bodies down there for a long time? Dr. BOYD. Yes, sir. Mr. REGAN. Aren't those reports sufficient to indicate to you that there is enough ore to operate a small mill over a long period of time? Dr. BOYD. There is considerable doubt about it in the minds of the geologists; yes, sir. They have some doubt. Mr. REGAN. Of course, that is something you want to clear yourself. You want to say yourself it is there? Dr. BOYD. Yes, sir. MEXICO SOURCE OF MANGANESE ORE FOR PROPOSED EL PASO MILL Mr. REGAN. Have you sent any geologists to the source of the ore itself? Dr. BOYD. We haven't sent them into Mexico; no, sir. Mr. REGAN. That is the principal source? Dr. BoYD. That is the principal source for the El Paso mill. Mr. REGAN. If the ore to operate this mill is to come from Mexico, wouldn't it be in line to have a geologist go down and check this body of ore? Dr. BOYD. Yes, sir. We have sent somebody down there but we had difficulty getting clearance to go into Mexico and do it and he had to come back. We are going through it again now. Mr. REGAN. It isn't far from the border? Dr. BoYD. That is right. But they won't let us in to make the examinations. Mr. REGAN. If they won't let you in to make examinations, how are we going to get the ore out of there? Dr. BOYD. The ore will flow out all right. There won't be any question about that. Mr. REGAN. But they won't let you in to take a look? Do they have an iron curtain there? Dr. BOYD. I won't say they won't. It was the time it took to get the permission, over say, the time the man was down there. It hasn't come through yet. There is no question they will let us in eventu ally. In the meantime we want to get the program started and get the ore flowing in. We don't want to have happen what happened the last time. In the last war we accumulated great stockpiles of manganese which sat around the country in great dumps and we could do nothing with them. We had no way of concentrating usable ores. We still have those supplies of manganese produced during the last war that was real waste. Mr. REGAN. You mean you have stockpiles of ore that were never worked? Dr. BOYD. That is correct. They weren't usable manganese ore. Mr. REGAN. It was low in grade? Dr. BOYD. Yes, sir; and it was mixed up in the stockpile. MANGANESE STOCKPILE AT DEMING, N. MEX. Mr. REGAN. Is this program you are talking about, is $1.50 or $2 a unit, sufficient to work the stockpile ores now! Dr. BOYD. In the Deming area it will. Mr. REGAN. You have a stockpile of ore at Deming now? Mr. REGAN. About how many tons? Dr. BOYD. It is quite large 40,000, I believe. Mr. REGAN. Of ore now stockpiled at Deming? Dr. BOYD. I am not sure. It is quite a large stockpile. Dr. BOYD. That is right. Mr. REGAN. At what price per ton, do you recall? Dr. BOYD. No, sir. Mr. REGAN. Do you know how much money you have tied up in that, Mr. Gumbel? Mr. GUMBEL. No. I can find out for you. Mr. REGAN. We do have these stockpiles of ore from the last war that were never worked and at Deming there were about 40,000 tons. About what percentage does that run? Dr. BOYD. I am sorry. I can't remember that. I will have to get that for you. It is quite low, though. Mr. REGAN. Is it low as 25 or 30 percent? Dr. BOYD. Somewhere in there. Mr. REGAN. That will be $2 a unit. Mr. SAYLOR. In your report, Dr. Boyd, you say an average of 15 to 25 percent. Dr. BOYD. Thank you. Mr. REGAN. How many other places do we have stockpiles of ore, Mr. Gumbel, do you know? Mr. GUMBEL. There is the Three Kids. Dr. BOYD. One at Boulder City, Nev., some in California. Those are the only three I know of. They are smaller stockpiles. Mr. REGAN. None of those ores are as high in percentage as that, that is known to exist in Mexico? Dr. BOYD. That is right. Mr. REGAN. Which you say can be brought over? Dr. BOYD. That is right. Mr. REGAN. But you haven't been able to have a man go down on the ground and give an estimate of the volume that is possible there so that you are not at this time justified in recommending to the General Service that a loan be granted to private people to put in a mill at El Paso? SOUTHWESTERN MANGANESE PROCUREMENT PROGRAM Dr. BOYD. That is correct. We will go ahead with that and set up the procurement program first so there won't be any delay. Mr. REGAN. Tell me how this procurement program is going to operate? Who will be the buyer of this ore? Dr. BOYD. Well, there will be a depot established at El Paso and one at Deming and we will have an agent there who can buy the ore, the GSA agent. Mr. REGAN. A Government agent? Dr. BOYD. Yes, sir. Mr. REGAN. He will write them out a check for so many tons of ore when they dump it on the stockpile? Dr. BOYD. Yes, sir. We will require a sampling plant there to sample the ores and we will contract that out to the companies involved. Mr. REGAN. But up until you have stockpiled "x" tons of ore in El Paso, and know that you have a supply that is going to bring in five carloads a day, or whatever it is, you will not authorize the establishment of a mill there and the loan of money for private industry to put in the mill? Dr. BOYD. That is correct. Mr. REGAN. How long a time do you think it is going to take to get the information you need to authorize this? Dr. BoYD. I don't think it will take very long, Mr. Chairman. I think it will probably be not more than a couple of weeks on that point. Mr. REGAN. Is that what you meant yesterday when you said 10 days or two weeks you thought you would clear up these points that were delaying the commencement of operations there? Dr. BOYD. We were referring then to the Butte-Philipsburg contracts which have already been negotiated. Mr. REGAN. As I recall it yesterday, I asked you how near this El Paso program is ready to become in operation and you said you estimated 10 days or 2 weeks. Dr. BOYD. That is correct. Mr. REGAN. Does that mean the 10 days or 2 weeks was not to wait until the money changers had the money but to find out whether or not you actually had the ore? Dr. BOYD. Well, the first program of buying the ore would go in as rapidly as we could possibly get it in. That would be, maybe in 10 days or 2 weeks. The decision on the mill itself will take a little longer than that. Mr. REGAN. Assuming then, two weeks, you are going to start buying ore right away? Dr. BOYD. Yes, sir. It will take a little while to get somebody down there to set it up. Mr. REGAN. During that 2 weeks, you are going to get this geologist or minerologist to duck under the Rio Grande some way and go down to Mexico and look over this source of supply to satisfy yourself that there is an adequate source of supply. Dr. BOYD. That is right. Mr. REGAN. This will be done to justify your authorization of putting a mill down there and recommending to Dr. Morgan and the GSA, and the Reconstruction Finance Corporation, and all, to get the money to put in the mill? Dr. BOYD. That is right. Mr. REGAN. That will probably be 2 weeks, 3 weeks, 30 days, 60 days? Dr. BOYD. I hate to make those promises. Mr. REGAN. I would like over-all to know. Dr. BOYD. I would say 30 days on that. I hope to do it in 30 days. Mr. REGAN. Let me ask you further: Initially, the Government is going to have a procurement man there and an assayer to see that the value of the ore is running and the Government is going to pay off the purchase of this ore? Dr. BOYD. Yes. Mr. REGAN. Now, is that going to be a continuous policy of the Government to buy the ore or if you gave a certificate of necessity and convenience to this private enterprise, are you going to turn over the purchasing of ore and everything from then on to them? Dr. BOYD. Well, it may well be we can do that directly, and let a contract to the company for the delivery of ore or specification grade at a certain price in which case he can do the whole thing on a private enterprise basis. That hasn't been quite settled yet. We can settle it in the next day or so. We will be talking to the companies in the next 2 or 3 days. FURTHER DISCUSSION OF THE DEMING STOCKPILE Mr. REGAN. Mr. Saylor, did you have some questions? 4 Mr. SAYLOR. Following out the question in regard to this Deming project, in accordance with the brief of the district manganese programs which you submitted, I gather that at least tentatively you have decided to pay $1 a unit delivered in Deming for 20 percent ore; is that right? Dr. BOYD. I think that is correct, yes. I am not aware of the details under negotiation. Mr. SAYLOR. Plus or minus 2 cents a unit for each percentage of manganese above or below 20 percent? Dr. BOYD. Yes, sir. I think that is right. Mr. SAYLOR. Now, then, in addition to the ores which you expect or say there are down there, I notice you say there are also 40,000 tons in the stockpile at Deming. Dr. BOYD. That is correct. Mr. SAYLOR. If the mill is established at Deming they will be able to mill the 40,000 tons that are there; is that correct? Dr. BOYD. Yes, sir. They will have other ores coming in to warrant. a mill. It wouldn't pay to construct a mill just to process 40,000 tons. Mr. SAYLOR. And you say that the reserves in the area in New Mexico are about 40,000 tons, or about 200,000 tons averaging 15 or 20 percent according to your report? Dr. BOYD. That report is better than my memory. Mr. SAYLOR. In addition to that, it would be necessary for any other ore to be brought in from Mexico; is that right, at this plant?" Dr. BOYD. Are you talking about Deming? Mr. SAYLOR. Deming, El Paso. Dr. BOYD. There are two places we will be working, one in El Paso, and one in Deming. Mr. REGAN. They are a couple of hundred miles apart. It isn't your plan to bring ore in from Mexico to the Deming plant? The brief referred to appears on p. 693 as exhibit 116. |