industry 1957

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  • 8/9/2019 Industry 1957



    Archives consist of articles that originally appeared in Collier's Year Book (for events of 1997 and

    earlier) or as monthly updates in Encarta Yearbook (for events of 1998 and later). Because they

    were published shortly after events occurred, they reflect the information available at that time.

    Cross references refer to Archive articles of the same year.

    1957: Mineral Industries

    Economic Picture.

    In general, mineral production continued to rise in 1957; however, the rate of increase thathad been established in recent years showed signs of slackening. Some softening of prices ofmetallic commodities was noted, particularly in the nonferrous metals, copper, lead, and zinc.By the end of 1957 there did not appear to be any serious shortages of major mineral

    products. In spite of these indications, the so-called creeping inflation, which appeared to be

    world-wide, resulted in higher prices being established by producers for some basic metals,such as steel and aluminum.

    Mineral Commodity Prices.

    The lowering of many mineral commodity prices had begun to show up in the spring of 1956but the Suez Canal crisis reversed or slowed the downward trend late in the year. By themiddle of 1957 lower market prices again began to assert themselves and a primarycommodity index (including agricultural as well as mineral items) showed a 10 per centdepreciation from January 1957 to September of that year. From a peak price, in March 1956,of 437 a ton, copper declined to about 200. Lead and zinc prices declined about 25 per centduring the year, tin about 5 per cent. Even market prices on aluminum were closer to the

    producer's price than for some time. Similarly, the market price of nickel moved closer to thatof the producers.

    World Consumption and Productive Capacity.

    Lower prices apparently cannot be charged to any serious slackening in world consumptionof primary mineral commodities for there did not appear to be any prospect of a seriousdecline or slump. Rather, it appeared that economic activity in both Western Europe and theUnited States, the largest consuming centers, was leveling off while mineral production wasstill expanding. Therefore, it appeared that production of primary minerals and metals hadcaught up with demand, and in some cases was outrunning it. As an illustration of the

    peculiarities of the position of some industries at the end of 1957, the U.S. steelmanufacturers operated at about 80 per cent of capacity during the latter half of the year.Concurrent with these under-capacity operations, the industry was producing steel verynearly at the same rate as in 1955 when peak production was recorded. The reason for thisincongruity was that capacity had been increased since 1955 but demand of steel consumerswas demonstrating a weakness by the end of 1957 and the current steel production was eatinginto the backlog of orders faster than new orders were being placed. With production able tomeet demand without a serious time lag, there appeared to be an inclination for steelconsumers to reduce their own inventory and to pass the burden of inventory keeping back to

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    the producer. This meant that the producer had to adjust either to accepting the inventoryload, or to fit his production schedule so that future orders could be supplied out of current

    production. In either event, the outlook was for a continuation of under-capacity operations insteel at least until the adjustment had been made.

    Raw Materials Production.

    The forecast for the future of a continuation of under-capacity operations in steel reflecteditself in the production of raw materials, because the industry felt no urgency to lay in largesupplies of raw materials such as iron ore, manganese ore, and fuel. Raw material prices have

    been lowered to attract purchases which will be placed in temporary storage.This type of adjustment is particularly hard on raw material producers and is causingdifficulties for some countries whose economics are geared to primary metal product output.Such areas are faced with a reduction of income from their exports at a time when theirambition for economic development is high.While it is true that some countries are being pinched, only a few high-cost mines have beenforced to close. Most mines were managing to continue operations in the face of falling prices

    by increasing efficiency and technological advances. However, some primary producingcountries were shortening their sails on economic development programs. Chile, anticipatinga drop of $30,000,000 in foreign exchange earnings for 1957, largely owing to the fall incopper prices, obtained loans of about $40,000,000 from the United States and theInternational Monetary Fund. The Federation of Rhodesia announced that it will have to becautious in regard to government spending because development plans had been based on thehigher copper prices of 1956. Areas dependent upon tin for foreign exchange earnings are ina somewhat better position because of the floor price on the metal which will tend to limitand define the amount of the losses.

    Rocket Fuels.

    The intense interest in rockets and missiles, which reached a climax toward the end of 1957with the launching, by the Soviet Union, of earth satellites, focused attention on the so-calledexotic fuels. Conventional fuels, kerosene and liquid oxygen, can be used for propellingrockets but are not capable of producing the desired energy.In general, rocket fuels should be cheap, readily available, and capable of high energy output,and should also be of high density and easy to ignite. High density is extremely important

    because of the effect on the over-all size of the rocket. Beryllium fuels answer most of theserequirements, as do boron and lithium fuels, but the former have a high toxicity and arerelatively scarce. Such solid fuels have a decided advantage in that the structure of the rocketcan be greatly simplified. Problems of uneven burning and overheating of the surroundingrocket shell have been at least partially overcome by leaving holes through the center of thefuel load. Burning occurs from the middle of the fuel. The heat, which would destroy the

    shell of the rocket body, is insulated by the unburned fuel. Variations in the size of the holesin the fuel mass can be made to control the amount of surface exposed to burning at any onetime. This provides for a control of the burning rate and assures the most effective timing anduse of the developed thrust. Thikol Chemical Corp. has developed an elastic compound withwhich solid fuels may be mixed and which aids in controlling the burning rate.

    Liquid Fuels.

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    Probably the greatest energy can be obtained by using liquid hydrogen and liquid ozone (O2).This combination gives a reaction rated at 373 specific impulse. Another dream combination

    would be liquid fluorine and liquid ozone. All liquid fuels are difficult and dangerous tohandle and when used in a rocket require small, high-capacity pumps, valves, and tubing, all

    subject to operational breakdowns. In addition, these fuels are expensive, a large factor in anymissile earmarked for mass production and use.

    Boron and Lithium Fuels.

    Not having as high a specific impulse rating as liquid fuels, but possessing other attributes,are the boron and lithium fuels. Boron itself is capable of producing 32,000 Btu's per lb. Thiscompound is relatively easy to prepare and is inexpensive. It can be obtained by reactinglithium hydride with boron trifluoride. Several U.S. companies are manufacturing this andother boron fuels: Olin Mathieson Chemical Corp. at Niagara Falls, N. Y., and CalleryChemical Co. at Muskogee, Okla.

    United States.


    Coal production in the United States for 1957 was down somewhat from the 1956 record withbituminous coal output estimated at about 508,000,000 net tons and anthracite output about25,000,000 net tons. The drop in bituminous coal production was less than 2 per cent;however, that of anthracite was over 10 per cent. The lower coal output for 1957 was areflection of the slower activity in the general over-all U.S. economy toward the end of theyear and was particularly affected by reduced steel operations which in turn, caused aslackening in the demand for metal-lurgical coke. The turndown in production did not occuruntil mid-year; activity in all grades of coal was about equal to 1956 until July-August whenthe slump began.

    Anthracite proved to be more sensitive to the slower economic pace than bituminous coalowing to the fact that it is limited largely to consumption for heating and electric power

    production. Increases in the production of coal chemicals, derived from bituminous coal,aided in supporting the demand for the year. There was no midsummer slump in productionof coke in 1957 similar to that in 1956, so that this type of consumption showed sufficientincrease to almost offset the drop in the demand for bituminous coal in other segments of theeconomy such as railroads, retail sales, etc.Exports of coal increased in total as foreign markets continued to express strong demand forU.S. coal, and reductions in ocean-shipping rates made the import of foreign coal suppliesmore attractive to Europe in particular. Although coal stocks in Europe were unusually highat late summer owing to the relatively mild 1956-1957 winter and the usual summerslowdown, total exports for the year 1957 reached an estimated 83,000,000 net tons, higher

    than in 1956 by about 15 per cent and setting a new all-time record.Again in exports, the demand for bituminous coal in 1957 proved stronger than that foranthracite. Exports of anthracite decreased on the whole, largely because of a sharp drop inthe shipments to Canada. The European take of anthracite showed a slight gain which was notsufficient to counterbalance the Canadian losses. Bituminous coal exports to Canada werealso lower than in 1956 but to a lesser degree than anthracite deliveries. Further, the increasesin demand for bituminous coal in Europe, 20 per cent greater than in 1956, not only made upthe losses on the Canadian market, but were sufficient to account for the record total export.

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    The cost of coal at the mine head has been rather consistently lowered since World War II byan increase in mechanization in the actual mining activity. Meanwhile, the costs of shipping

    to market have more than doubled since 1948. The economy of coal at the mine has increasedto such a degree that the area of the Ohio River valley near Steubenville and Marietta, Ohio,

    has experienced a new influx of industry. These new plants have been located in the area totake advantage of the cheap coal-fired electric power available there. Some power plants have

    been constructed on the bank of the Ohio River within a few hundred feet of coal mineslocated in the hills overlooking the valley. Coal is literally delivered by conveyor belt fromthe mine to the power plant storage yard. Electric power generated here is sold at four mills

    per kilowatt hour compared with the national average of seven or eight mills.All coal deposits are not so conveniently located and, in an effort to overcome the transportcosts of moving coal to consumer areas distant from the mines, the Pittsburgh ConsolidatedCoal Co., largest U.S. producer excepting captive coal mines operated to supply the steelindustry, opened its new 108-mi. coal pipeline in early 1957. The coal is pulverized andmixed with water; it enters the pipeline at Georgetown, Ohio, and travels at 3.5 mi. per hourto the Eastlake steam electric power plant of the Cleveland Electric Illuminating Co. The coal

    is dewatered and burned in special equipment designed to handle pulverized coal.These pipelines, should the operation prove successful in both a physical and an economic

    sense, may become more numerous and provide a means for coal to not only retain its presentshare of the energy market but even expand. Naturally, such applications would require a

    fairly large and consistent consumer market in order to justify the expense of the originalinstallation. This precludes the use of the system to supply the retail market without major

    adjustments in the method. About half of the consumption of coal in 1957 was in industrieswhich might qualify as consumers and could be serviced by pipeline coal. In perhaps half of

    these cases, pipeline coal would offer sufficient savings to justify installation of the facilities.A switch from conventional coal transport in which railroads play a large part would be aserious blow to these carriers. The three rail lines which had to be crossed by the pioneer

    pipeline have already obtained an option to purchase 45 per cent of the pipeline operatingcompany's stock in exchange for permission to violate their rights-of-way.A new technique of fire fighting has been developed in the United Kingdom and will soon betested in the United States. The method employs the foam-producing qualities of detergentssimilar to many products being used in households as cleaning agents. A net or screen is

    placed across a passageway as close as possible to the scene of the fire. This surface providesa myriad number of holes which act as bubble producers when wet with the detergent andsubjected to a current of air. The bubbles so produced can be forced to the scene of the fire bya current of air and actually can be used to completely plug the passageway. The plug cutsdown the volume of air available to continue combustion and as the bubble mass moves intothe hot area the vaporization of the water exercises a cooling effect. Both of these actionstend to subdue the flames and render the area safe for the workers to move in and completelyextinguish the blaze.


    The 1957 output of crude steel in the United States was expected to approach that of 1955and 1956 which were 106.1 million tons and 104.5 million, respectively. Capacity for

    production, however, was much higher in 1957 than in 1955, and no significant workstoppages were experienced as in 1956. The last half of 1957 saw the industry operating atnearly 80 per cent of capacity, and the optimism for an improvement by the end of the year

    began to fade. Some forecasters were predicting that 1958 operations would be likely tocontinue at the late 1957 pace.

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    Although the industry was operating at considerably less than capacity, it did not necessarilyfollow that profits would be reduced the same amount. In fact, the opportunity to select the

    most efficient producing units and idle those units closer to a marginal position is sometimeswelcomed, and experience of this sort may even result in the complete abandonment of some

    old, outmoded equipment which would have been kept in operation at a minimum profitmerely to keep up the over-all production level.

    The price of scrap, which supplies around half of the total metallics to the industry, waslowered during the latter half of 1957. The costs of purchased scrap have proved veryresponsive to supply and demand factors and appear to have depreciated more than any othermajor raw material cost. It should be noted that considerable tonnages of scrap are generated

    by the mills themselves and that a reduction in purchased scrap prices does not representsimilar net savings in this captive metal; while the book cost to the industry of internallygenerated scrap may imply a saving in raw material costs, the book value of the production ofthis material must similarly be lowered, so that the saving and loss serve only to cancel eachother.Late in 1957 there were indications that inventories of some types of steel products were

    reduced to normal minimums and that further reductions in output did not appear to beimmediate. The reduction in Federal Reserve discount rates in November 1957, after a long

    period of steady increases, may prove quite beneficial to the industry. It appeared that thelarger corporations, other than steel, may be interested in going ahead with expansion

    programs previously postponed or slowed. The new expansion in weapons fostered by thegovernment was not expected to affect the steel industry as greatly as might have been

    anticipated a few years ago because of the shift to newer types of arms, such as rockets andguided missiles. They will probably not require the tonnages of steel products on the same

    order of magnitude as battleships and tanks, etc.Some concern was expressed over the failure of worker productivity to increase as much asmight have been hoped during 1957. Preliminary labor union activities indicated that ashorter workweek might be advanced in contract negotiations. Price rises, common to thesteel industry in 1957, elicited Congressional examination. Some industry circles felt thatshorter workweeks without commensurate increases in labor productivity would inevitablyresult in even higher steel prices.

    Iron ore.

    For some time it has been obvious that the United States is becoming more and moredependent upon imported iron ore to feed its expanding steel industry. Domestic reserves ofiron-bearing minerals, sufficiently high in iron for economic use as direct shipping ores, arelimited and are being exhausted at a rapid rate. It has been known that there are huge reservesof taconite in the Mesabi iron range area. This material contains only 25-30 per cent of iron

    as compared to the regular hematite ore which analyzed at twice that amount.Use of taconite as an economic ore depended on the solution of many problems. Experiments

    had shown that the iron-rich portions of the ore could be captured by conventional methodsof magnetic separation, but the difficulty lay in mining economically the extremely hardtaconite and then grinding the material to sufficient fineness to permit separation of the iron-

    bearing particles from the barren rock. Mining the taconite presented the major problem.Percussion drilling of the ore bodies was useless and rotary drilling was able to obtain

    penetrations of only 25-30 ft. per shift. Some new type of drilling technique had to bedeveloped that would be economically feasible. Fusion drilling proved to be the answer. Itapplies a new principle to drilling wherein no abrasion of the rock by mechanical tools isneeded. Instead, the drill head consists of a heat-resistant piece of metal pierced with several

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    holes. Oxygen and kerosene are fed down the drilling rig to the drill head where the keroseneis atomized and burned in the presence of the oxygen. This produces a heat approaching

    5000F. While the taconite is being heated by the burning kerosene, water is injected into thearea of the drill head and, in addition to keeping the equipment cool, spalls and fractures the

    extremely hot rock. The water turns to steam at the bottom of the drill hole and uponexpanding develops sufficient pressure to carry the chips and dust of the taconite up and out

    of the hole. With these drills a penetration of 250 ft. per shift has been established. Blastingof the taconite is accomplished by conventional means using the fusion drilled holes.The increased penetration rates obtained by fusion drilling provide economies in miningtaconite which permit production of concentrate in competition with direct shipping ore.Taconite production in 1957 will be measured in millions of tons, and extension into thefuture envisages that taconite will supply 30,000,000 tons of the anticipated 180,000,000 tonsof iron ore needed by 1975. The present success of taconite processing in the Great Lakesarea is opening up the possibilities of similar deposits elsewhere in the United States. TheColumbia-Geneva Division of U.S. Steel has been investigating the building of a mill inWyoming to mine and process the vast tonnages of taconite in the Freemont County area.

    Iron ore production in the United States appeared to be running at a higher rate than in 1956,and the total for 1957 was estimated as approximately 105,000,000 metric tons, about 5 per

    cent greater than last year.

    Lead and Zinc.

    The sharp drop in world lead and zinc prices in 1957 had a disturbing effect on the U.S.producing industry, both mines and smelters. A considerable part of world production is frommines which, for various reasons, can produce lead and zinc at a considerably lower cost thanthose in the United States. As the price dropped more and more, domestic mines were forcedto suspend operations, and consequently a larger share of the U.S. consuming market wassurrendered to foreign producers.With the closing of these domestic mines, the demand for tariff protection quickly grew.

    Should these requests for protection on lead and zinc be answered with higher tariffs, itwould be in direct opposition to the over-all U.S. policy as expressed under GATT whereefforts are being made to move closer to international free trade and achieve a reduction of alltariffs in an orderly fashion.

    Not only would increased tariff protection on lead and zinc be contrary to the general trend,but it is not a certainty that such a move would equally satisfy all segments of the U.S. lead-zinc industry. There appear to be three camps among U.S. producers: 1) producers withinterests primarily in domestic mines and smelters; 2) producers with interests in both foreignand domestic mines and smelters; and 3) producers operating domestic smelters but suppliedlargely by foreign ores and concentrates, essentially of zinc. Obviously, each of these groups

    would have a different reaction to tariff increases. Those individuals and companies confinedto all-domestic operations are most likely to suffer by lower prices and have been among

    those most insistent on tariff protection. Members of the other groups are less injured by theprice decline and are less anxious to impose a change in tariffs on the present situation. It isoften less easy to make adjustments in production rates of foreign mines than of domesticoperations. Some of the foreign primary producing countries, for example Mexico, exactheavy penalties against companies which reduce operations and thereby are forced todischarge employees. Operations in this type of economic climate are most satisfactory if

    permitted to run at a consistent level. Increased import tariffs in the United States wouldnaturally cut into the already reduced profits of foreign mines and might result in forcing the

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    operating managements to choose between producing at a loss or cutting production andsuffering the locally imposed penalties.

    Producers caught in this position would naturally be cautious regarding tariff increases andcertainly would be greatly interested in the amount of such increases should they eventually

    be granted. On Nov. 19, 1957, the U.S. Tariff Commission opened hearings on the question,to determine the most advantageous path of action. The international ramifications of the

    hearings were demonstrated by the abnormal numbers in attendance of persons representingforeign interests.Smelter production of lead and zinc in the United States was expected to decline somewhat inthe latter part of 1957, lead more sharply than zinc. Estimated outputs for 1957 are 480,000metric tons of lead and 885,000 tons of zinc. Domestic mine production was estimated atapproximately 300,000 tons of lead and 470,000 tons of zinc, a sharp reduction from the 1956levels.


    U.S. copper producers were caught in 1957 in a price squeeze similar to the one involvingdomestic lead and zinc producers. No such involved tariff questions were raised regardingcopper, however, and the adjustments to the lower prices were being accomplished less bymine closings and more by reduced operations and lower net profits. Financial reports ofsome of the copper producers released late in 1957 showed that profits per share for the yearwere going to be halved from those of 1956. Mine production of copper was expected to dip

    below the 1,000,000-ton mark, down perhaps 5 per cent from 1956. Smelter productionindicated it would suffer a smaller decline and the 1957 output was estimated at 1,112,000metric tons.


    Output of tungsten from domestic mines continued to operate under the U.S. stockpile

    subsidy price during the first half of 1957. The subsidy was reduced during the year andoutput apparently would not equal the 7,380 tons of concentrates produced in 1956, rather itwas estimated that the total for the year would be about 4,000 tons.The subsidy program came under heavy attack from the House Appropriations Committeewhich heard evidence that the government already had sufficient quantities of tungsten onhand to supply industry for from six to 18 years. Kennametal, Inc., consuming tungsten fortoolmaking, has been purchasing imported tungsten at about half the price its own subsidiarymining company, Nevada Scheelite Corp., was being paid by the U.S. Government fortungsten produced from its domestic western properties. Sharp reductions in the subsidyresulted in the closing of some U.S. mines and reduced operations in most of those still openduring the last half of 1957.


    In the rush to get titanium metal into production after World War II, the U.S. Governmentcommitted over $200,000,000 in loans, grants, and purchase contracts. This program resultedin a production of 14,000 tons of titanium sponge in 1956. By 1957 it became obvious thatthe metal was not living up to the great things that had been predicted for it back in the early1950's.Titanium had been touted as a wonder metal and was considered to be an important key tomany of the problems of supersonic flight and missile development. In application, the metal

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    began to demonstrate characteristics which had not been appreciated. Unalloyed titaniumproved to be subject to fracture and tearing, so that engine parts made of the metal failed

    under stress. Temperatures over 900F. emphasized these weaknesses. Solutions to theseproblems began to impose strict metallurgical processes on producers. It was discovered that

    the metal had an affinity for gases like nitrogen and oxygen and that small quantities of theseelements had deleterious effects on the strength of finished products.

    Competition began to develop as research into stainless steels began to find special alloyswhich could match the physical characteristics of titanium at only a fraction of the cost.Further problems were imposed on producers when the market, substantially all for militaryaircraft and missiles, was reduced by either abandonment of programs or by stretching out of

    production. As a result, productive capacity, rated at about 15,000 tons per year, wasoperating at a 50 per cent rate by the fall of 1957.Two of the larger companies in the titanium field, Mallory-Sharon, and National Distillersand Chemical Corp., announced plans to merge. Mallory-Sharon will contribute its titanium-fabricating facilities and know-how, while National Distillers has a new $25,000,000 plantfor producing titanium and zirconium sponge metal. National's new plant is based on the use

    of sodium instead of magnesium in titanium production which effects a considerable saving.The merger will create the world's largest integrated producer of titanium and zirconium and

    place the new company in an advantageous position to combat competition from othermetals. Apparently the producing industry is going to have to depend more on civilian

    consumption of titanium than had been anticipated. Some producers reported that they hadalready achieved some success in making the transition but the immediate future was for

    excess capacity for some time owing to sharp reductions in U.S. government purchases forstockpiles.

    Indicating one of the more likely markets in the civilian area is the order of Freeport SulphurCo. for a considerable quantity of titanium piping for use in its new nickel-cobalt plant inCuba where the material will be used to carry a highly corrosive and abrasive mixture.Revived interest in missiles and air power dictated by events late in 1957 may reverse thegovernment attitude regarding the metal and provide a measure of relief in the sharp cutbackin military uses such as jet aircraft engines when titanium has proved it can be applied. In anyevent, Kennecott Copper Corp. in co-operation with Allied Chemical and Dye Corp. iscontinuing with its announced plan to invest $40,000,000 in a new titanium production plant.


    U.S. bauxite production has been declining annually since 1954 when almost 2,000,000metric tons were produced. This lower trend continued into 1957 when an estimated1,500,000 metric tons were recorded. Imports meanwhile have been increasing from year toyear and the 1957 total will probably come close to 6,000,000 metric tons. The major part of

    the U.S. import continued to be derived from Jamaica and Surinam which supplied over 80per cent of the total in 1957. British Guiana was increasing its share of the U.S. market, and

    1957 saw the first shipments from Haiti as a result of the development of deposits there by anaffiliate of the Reynolds aluminum interests.


    The increase of aluminum facilities in the United States, which will be brought about by thecompletion of projects under way in 1957, will not change the relative position of the threemajor, virgin-metal producers. In 1956 Alcoa produced 44.6 per cent, Reynolds 27.5 per cent,and Kaiser 24.5 per cent of domestic primary aluminum. The most significant change in the

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    corporate positions will be the increase in the proportion accorded Anaconda, Ormet, andHarvey which may hold a 10 per cent share of the production by the end of 1958. More

    important will be the shift in the geographical areas where the producing units will beconcentrated.

    Prior to World War II all aluminum facilities for primary metal were located east of theMississippi River. The wartime expansion saw eight plants constructed west of the river,

    seven in the Pacific Coast states and one in Arkansas. By 1943 about 50 per cent of U.S.capacity was in the western half of the country. Increases in production in the Northwest have

    been straining the developed electric power potential of that region. In addition to the need ofthe industry for cheap power is the requirement for a firm, uninterrupted power source. At

    present the demand for electric energy exceeds the available supply in the Northwest so theindustry has been forced to look elsewhere for new aluminum plant sites. The Ohio Valley,where cheap, coal-fired, steam-generated power has proved to be attractive, has seen threesubstantial new additions placed in the area; 145,000 tons capacity at Ravenswood, W. Va.,150,000 at Evansville, Ind., and 180,000 tons at Clarington, Ohio. These plants will increasethe capacity in the Ohio Valley from nothing to 18 per cent by 1958 and are largely

    responsible for the anticipated decrease in the position of the Northwest from 37 per cent to29 per cent by the same date.

    Equally interesting is the shift in the source of the electric power for aluminum production.Hydroelectric power, now supplying 72 per cent of the energy needed will only supply 65 per

    cent by the end of 1958. Natural gas will decline from 24 per cent to 18 per cent. Coal andlignite will increase from 4 per cent to 17 per cent by the end of 1958. This latter is perhaps

    the most unusual shift as it provides a new stimulus to the flagging U.S. coal industry. As ofmid-1957 the U.S. aluminum industry had a capacity of about 1,600,000 metric tons, but

    already planned or under construction were sufficient facilities to increase this quantity tomore than 2,250,000 tons. In the slower pace of the U.S. economy during 1957 aluminum

    production and demand were more evenly in balance and the 1956 production of 1,532,000metric tons of virgin metal will probably be very nearly duplicated by the 1957 output. Crudealuminum base prices were increased during the year due to rising production costs even inthe face of slackening demand.


    Production of indigenous manganese ore increased slightly in the United States to about320,000 metric tons. The states of Montana and Nevada between them supplied about half ofthe total production. Imports of manganese ore were running at considerably higher levelsthan in 1956 and indicated that they might total as high as 2,700,000 metric tons for the year.The immediate market for spot sales was slow throughout the year and most of the 1957deliveries of ore were made under long term contracts.

    Synthetic Diamonds.

    Early in 1955 the General Electric Company announced that its research laboratory hadaccomplished the synthesis of diamonds as well as a substance harder than diamond, called

    borazon. The synthesis of diamonds was made possible by the development of pressurevessels capable of sustaining at least 1,500,000 lb. per sq. in. and temperatures of 5,000F.,simultaneously for long periods of time. The company stated that it was not interested in the

    production of gem stones but of industrial diamonds as an extension of the hard cuttingmaterials (cemented carbides) being produced by its Carboloy Department. Again in 1957General Electric made public the news that it had perfected the diamond-making process and

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    that its synthetic diamonds were duplicates of natural stones in color, clarity, and hardness.The company stated that it was in a position to mass-produce industrial diamonds at a price

    higher than natural stones, but envisaged the possibility of being competitive in price within ayear.

    This accomplishment represents a possible end to U.S. dependence on African sources ofindustrial diamonds and may have a serious effect on the operations of the Diamond Corp.

    For many years the Diamond Corp. has held a virtual monopoly on the marketing ofdiamonds, both industrial and of gem quality; about 95 per cent of world diamond productionhad reached consumers through this channel. Nearly 80 per cent of all diamond productionhas been of industrial quality and the U.S. industrial complex has absorbed about threefourths of the production. Prior to World War II the production of industrial diamonds hadexceeded demand and the Diamond Corp. had acquired large stocks of these stones. Theincrease in industrial activity owing to World War II and the expanded industrial activitysince then created a heavy demand for the industrial stones. The Diamond Corp. was able todispose of its stocks of the commodity and since the war has been supplying demand out ofcurrent production. The new source of industrial diamonds indicated by the General Electric

    announcement poses a potential threat to the producers of natural stones. Because the supplyof industrial diamonds has been a monopoly of the corporation, it will be interesting to watch

    the adjustments that may be made in the price of natural stones should General Electricthreaten to win a substantial part of the market with its synthetic product. The over-all take of

    industrial diamonds in the United States was slightly lower than it had been for some timeowing to the decrease in the demand for stones by the U.S. Government for stockpile



    Southeast of the much publicized 'Four Corners' uranium area, where Arizona, Colorado,New Mexico, and Utah meet, lies the Ambrosia Lake region of New Mexico. In 1955 LouisLothmann and Stella Dysart located a seam of uranium at 360 ft. depth. Since then, new

    discoveries have indicated that the Ambrosia Lake region around the towns of Bluewater andGrants is rich in potential and by 1957, it was believed that the locality contained about twothirds of the United States known reserves of uranium. In September the New Mexico areagot perhaps its biggest boost when the Phillips Petroleum Co., already opening two mines,contracted with the Atomic Energy Commission to construct a $9,500,000 processing plant tomake uranium concentrate from 1,720 tons of crude ore per day.The fact that the uranium ore in the area is found mostly at relatively deep levels makes itdifficult for the small prospector to proceed with mining. Big money is required to developthe reserves and several large firms have begun to demonstrate an active interest. AnacondaCopper Co. is operating a mine; Kermac Nuclear Fuels Corp., owned by Kerr McGee Oil

    Industries, is opening four mines and putting up a 3,000-ton-per-day mill to cost $16,000,000.The U.S. Homestake Mining Co. has an interest in two mills going up, one for 1,500 tons a

    day and the other for 750 tons; Lisbon Uranium Corp., Floyd Odlum owned, is activelyprospecting; and Superior Oil Co. has made what appears to be a good strike. In total, some$75,000,000 was being invested in uranium in New Mexico.Other large amounts of money were involved in uranium in the western states. In Utah, StateSenator Cord and his associates sold their uranium claims to a mining syndicate for about$17,000,000; Atlas Corp., part of Floyd Odlum's holdings, found that the Delta Uraniummine, for which $9,000,000 had been paid, had only a fraction of the uranium ore it wasoriginally supposed to contain. Odlum's other interests, Hidden Splendor Mining Co. andLisbon Uranium Corp. were doing well and the losses at Delta provided almost $3,000,000 of

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    non-taxable credit which could be applied to the earnings of Atlas, the parent company intowhich five of Odlum's uranium holdings, including those above, had been merged.


    In August 1957, the first private U.S. plant to process gilsonite was opened near Grand

    Junction, Colo. Gilsonite is an oddity among minerals and is actually a solid hydrocarbon, apetroleum-like substance which failed to turn to liquid. The American Gilsonite Co. refinery(associated with Standard Oil) is geared to produce gasoline, fuel oil, and metallurgical cokefrom the mineral. The major problem in exploiting gilsonite was that of transportation fromthe mine at Bonanza, Utah, in the middle of the Uinta Mountains. The solution has been theconstruction of a 72-mi. long pipeline from the mine, through the mountains, and to therefinery. The ore from the mine is reduced and watered to form a slurry which is then piped,700 tons per day, to the plant. This method of moving ores and mineral materials appears to

    be gaining new adherents in mining circles and its success depends upon the designing ofspecial pumps and special dewatering equipment which make the pipeline comparable withconventional methods of mineral transportation.


    The mining industry of Canada continued to expand during 1957 but at a slower pace than in1955 and 1956. One of the deterrents to the investment of U.S. funds in Canadian miningconcerned the differential between the U.S. and the Canadian dollar. For many years U.S.currency was higher in value than Canadian so that there was a gain in funds of a few percent when moving north across the border. During 1956 the values shifted to a high of almost6 per cent in favor of Canadian currency. U.S. funds being invested in Canada were thereforesubject to immediate depreciation. Toward the end of 1957 the two currencies became moreequal with the advantage of Canadian dollars reduced to about 3 per cent.


    The activity in uranium mining in the Blind River area continued to boom; however, somepublic announcements which indicated that atomic fusion was closer to being a reality causeda sharp dip in uranium stock values. Fusion processes would use the lightest of atoms as fuelas opposed to fission which relies on uranium at the heavy end of the atomic table. Theobvious advantage of fusion over fission is the lack of dependence on a relatively scarce andexpensive mineral commodity. So far, no useful fusion energy method has been announcedand, as far as is known, the present advance of research is such that it will be many years

    before atomic fusion will threaten atomic fission as a commercial energy source.Cayzor Athabaska Mines which has a contract to deliver 2,730,000 lb. of contained uraniumoxide by 1962 to the Lorado Uranium Mines custom mill began the first of its deliveries in

    1957. Faraday Uranium Mines started up its mill on an initial feed rate of 400 tons per dayand plans to work up to the 1,000-ton-per-day rated capacity. Algom Uranium Mines put itstwin plants in the Blind River area into operation early in 1957. Both plants are designed tohandle 3,000 tons of mill feed per day; one plant is located at Nordic Lake, the other atQuirke Lake and both are controlled and managed by the Rio Tinto Mining Co. of Canada. In1955 this company contracted with the Eldorado Mining and Refining Co., the CanadianGovernment company, for delivery of uranium precipitates valued at over $200,000,000.Total annual production from the Blind River area is expected to reach about 10,000 tons ofuranium oxide by 1959.

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    On the basis of information at hand concerning the uranium reserves of Blind River deposits,it is believed that the area may become an important source of thorium, another metal of usein nuclear circles. Thorium can be used in atomic reactors in a fashion similar to uranium,

    but, at present, no attempt is being made to recover the metal. It appears that the problem of

    recovery could be solved economically should the demand for the thorium ever become greatenough to warrant it. Use of thorium in atomic reactors is limited by certain technicaldifficulties and by the fact that uranium is relatively cheap and plentiful. Present AtomicEnergy Commission demand for thorium is being supplied through by-product productionfrom monazite sands and the U.S. stockpile goal was substantially met by the end of 1957.

    No new contracts for thorium are envisioned in the near future.


    In the Highland Valley, British Columbia, the Phelps Dodge Corp., American Smelting andRefining Co. (ASARCO), and Kennecott Copper are all conducting extensive investigationactivities. Phelps Dodge has taken over the claims of the Jerico Mines, Ltd., under a five-yearlease and option. The Phelps Dodge Co. must carry out exploration activities for each of thefive years during the summer months and should the operating company be formed, theJerico Mines would retain a 25 per cent interest. Indications are that huge reserves of low-grade copper ore may be found and three mineralized zones have been delineated, two byoutcrops and one by diamond drilling. American Smelting and Refining has been drilling inthe Jersey zone of the area and indicated reserves are of the following magnitude: 30,330,000tons at 0.79+ copper, 22,000,000 tons at 0.51+ copper, and 5,400,000 tons at 0.35+ copper.Inferred reserves are estimated at much greater figures. Investigation of plant sites is also

    being carried forward by ASARCO because, by September 1958, the company is required toreport its intentions for production from the properties which are owned by the BethlehemCopper Corp., Ltd. Kennecott, working through a subsidiary, Northwest Explorations, Ltd.,

    has been drilling other Bethlehem properties but with no favorable reported results. Canadiancopper production for 1957 measured by smelter output is expected to be about 10 per centless than last year, down to 275,000 metric tons.

    Lead and zinc.

    Smelter production of lead and zinc in Canada declined in 1957, lead about 10 per cent butzinc less dramatically. This is attributable to the lower prices on the world market. Canadianlead-zinc mining is, in many ways, comparable to that of the United States; technology isvery similar and as well advanced, wages are comparable, and the product is often sold in theUnited States. Canadian producers are therefore vitally interested in the outcome of the U.S.tariff hearings.


    The Canadian steel industry was operating at less than capacity at the end of 1957 reflectingsomewhat the same slowdown as that experienced in the U.S. industry. Production of crude

    steel was anticipated at about 4,700,000 metric tons, down slightly from 1956 output.

    Iron Ore.

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    Production of iron ore was expected to be close to or slightly higher than the 1956 level.Considerable interest continued to be shown in Canadian iron ore deposits by countries which

    represent potential markets for exported material. Canadian Javelin iron holdings inNewfoundland are being considered for development by Pickands Mather and the Steel

    Company of Canada. Estimates place 1,100,000,000 tons of crude ore in the locality. Untilthe ore body is completely assayed and explored there will be no plans for a beneficiation

    plant or auxiliary facilities. It is believed that operation would have to be at a 2,500,000-ton-per-year rate to be economical. The Moose Mountain iron mine will be reopened by M. A.Hanna. The mine was abandoned after World War I and the reserves consist of low-gradeore. Hanna is building an $8,000,000 mill for grinding and magnetic separation while theCanadian National Railway is constructing a spur line to the mine. Four West German steel

    producers are joining with a U.S. firm in the development of Canadian iron ore deposits inLabrador. These include Friedrich Krupp of Essen, Hsch Bergwerk of Dortmund,Mannesmann Rhrenwerke of Dsseldorf, Htterwerk Oberhauser of Oberhausen, all fromGermany, and Cyrus Eaton from the United States.


    International Nickel Co. was refused permission to develop a new nickel discovery in theUngava district of Quebec although other companies have obtained concessions in the area.INCO already has under way a $115,000,000 development at Moak Lake, Manitoba, whichshould be producing 75,000,000 lb. of nickel a year by 1960. Nickel has long been in shortsupply, but in 1957 INCO's president, H. S. Wingate remarked that the supply situation wasmuch improved. Total production in Canada was expected to be over 180,000 tons of refinednickel and nickel in oxide and matte.


    The development of the Black Lake asbestos deposit is continuing. Lake Asbestos of Quebec,

    a subsidiary of American Smelting and Refining Co., is beginning benching operations toreach the deposit on the site of the now-drained lake. When complete, the operation willproduce 100,000 tons of high-grade chrysolite asbestos and the reserves indicate that thisproduction rate can be supported for 40 years. Total investment will top $32,000,000.

    Western Europe.


    Within the last three years a new pattern of coal demand and supply has apparently developedin Western Europe. Formerly, the area was generally able to satisfy its own demand for coaland only in emergency situations was required to import significant quantities. The rapid

    industrial recovery of Western Europe after World War II created a demand for coal both forenergy and as a metallurgical fuel which soon matched the ability of the area to produce itsown solid fuel. Continued industrial expansion and the concomitant expansion of coaldemand, increasing at almost 5 per cent per year since 1954, created the need for new coalsupplies. European coal mines have been unable to satisfy this insistent demand, and recourse

    was had to U.S. production. At the same time, U.S. coal mines possessed unused productivecapacity and thus have been able, without extreme difficulty, to provide an export quantity

    sufficient to close the gap between European demand and supply. The quantity exported to

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    Europe has recorded consistent growth over the past few years and reached an estimated53,000,000 tons in 1957.

    Several factors are involved in the inelastic condition of European coal production which hasbeen demonstrated by the fact that output has apparently reached a plateau of about

    530,000,000 net tons annually in spite of recognition of the need to boost output. Europeanmines which are in production at present are exhausting their reserves. Owing to war

    conditions, these mines have not been replaced by new operations commensurate withdepletion. On the average, about ten years are required to bring a European coal mine intofull production and this means that response to demand by initiating new mines is delayed forseveral years. In competing with other expanding industries for investment capital, theEuropean coal mines have been at a disadvantage. Costs of coal mining in Europe are at suchlevels that quite often U.S. coal can be delivered at European ports at the same or lower

    prices than indigenous coal. This fact limits the freedom of the price of European coal to rise,because as soon as the price threatens to exceed the price of U.S. imports, the consumers findrelief by increasing such imports, thereby dulling the effectiveness of the local supply-demand function and its effect on price. Thus European coal prices and profits are partially

    limited by the price of imported U.S. coal.The scarcity of coal mine labor has also caused difficulty. Mine wages are not a sufficient

    attraction to compensate the European coal miner for the inconvenience of workingunderground, particularly when the competition for the miners' services in other industries is

    so keen in the expanding economy. This factor has been recognized within the European Coaland Steel Community and working permits have been issued to coal miners permitting them

    to be employed in any of the six participating countries. This move is aimed principally atplacing the Italian miner, whose country has an employable excess, in other ECSC mines

    where he can produce effectively for the coal supply of the Community.Consistent efforts to increase output per man shift in European coal mines has met withvarying degrees of success. From 1953 to 1956 individual productivity increased in all themajor producing countries except the Netherlands and the United Kingdom. Preliminaryestimates for 1957 indicate that for the ECSC countries, over-all productivity exhibited only aslight increase.Toward the end of 1957, European coal stocks were extremely high and, unless the winter israther cold, they may have a depressing effect upon 1958 coal imports in the short rangeview.West Germany, with its resilient industrial complex, is heavily dependent on solid fuels forenergy. Coal, including anthracite, bituminous, pech, and brown, supplied approximately 92

    per cent of the total energy requirement in 1957. Production from indigenous mines declinedslightly to about 235,000,000 metric tons of coal and lignite. Consumption wasapproximately at the same level as in 1956 so that the deficit between production andconsumption was larger in 1957 and imports had to be increased about 30 per cent toapproximately 16,000,000 metric tons. In spite of over-all decreases in output, West Germancoal mines registered a slight increase in output per man shift.

    Production of coal in France held close to 1956 levels in 1957 for an estimated 56,000,000tons and imports continued to be heavy. In the fall of the year 1957, French stocks of coal atthe mines accounted for more than 75 per cent of all such stocks of the ECSC countries

    combined. Other major producers among the Community nations suffered small setbacksfrom the 1956 levels of output.In the United Kingdom, coal output increased only slightly to approximately 227,000,000metric tons. Price increases in coal at pit head and increased costs involved in moving coalfrom mines to ports caused the price of United Kingdom export coal to rise sharply over 1956

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    levels. On the average, prices in the first seven months of 1957 were equivalent to $16.50 perton as compared to $14.25 per ton in 1956.

    Hydroelectric power production for Europe as a whole appeared to be greater in 1957 and thesupply of petroleum products was more normal as adjustments to the Suez Canal problem

    were made. Both these factors assisted in easing the burden on coal production and imports.In Austria, domestic production of solid hydrocarbon fuels continued to move upward as did

    imports of coal and coke. The energy supply situation of the country is complicated by theagreement between Austria and the Soviet Union, concluded in 1955 at the time of Austria'sre-establishment of her independence, for the export of 1,200,000 tons of crude petroleum forsix years and 1,000,000 tons for four more years. This places Austria in a position ofenforced export of a significant part of its liquid fuel production and a consequent abnormaldependence on coal and other energy sources to make up the difference. A large part ofAustrian coal production is credited to one mine and the output is poor in quality andeconomically marginal. Recent investments in the mine have aided the economies of

    production and permitted the moderate increase in 1957. Austrian iron and steel producers, animportant factor in the economy of the country, have been forced to import coking coals and

    foreign-produced coke for fuels and the total of this import increased about 12 per cent in1957 to about 5,300,000 metric tons.

    Iron Ore.

    Almost without exception, the Western European countries increased the output of iron ore in1957. The industrial pace in Europe apparently had not slackened as had that in the UnitedStates and the demand for ferrous materials continued high. France and the United Kingdom,among the major iron ore producers, expected to show a 5 per cent increase over 1956 andthe least encouraging production was probably going to be recorded in West Germany, whichwould about hold even with last year's output, and in Italy where a decrease of approximately5 per cent in volume was anticipated. One of the biggest problems facing West Europeannations is the general over-all shortage of iron ore to meet rising demands. Lack of ore

    stimulates a demand for replacement by steel scrap and European prices of the latter havebeen sufficiently high to attract significant imports from the United States. West Germanconsumers have been aggressive in attempting to identify themselves with foreign deposits ofiron ore to assure sufficient supplies of imported material. In 1956 West Germany imported30 per cent of all the iron ore, amounting to 18,000,000 tons, which moved in internationaltrade and is considering participation in the development of French North African iron orereserves as well as investing in Brazilian iron mines. These projects are considered worthy ofattention because of the need to supply the rapidly expanding West German steel industry.A large new deposit of iron ore has been located near the Bispberg mine in central Sweden. Itis close enough to the present workings to have been reached by a cross cut driven from

    there. While the exact size of the deposit is not known, it is expected that it will considerablyextend the productive life of the Bispberg operation.

    In northern Norway a pilot plant will be built by Rana Gruber to develop a suitableeconomical method for treating the extensive low-grade hematite-magnetite iron deposits inthe area. The plant will cost about $1,000,000 and have a daily capacity of about ten tons.


    Increases in steel production throughout western European countries were likely to be of alarger proportion than over-all increases in indigenous iron ore output. This fact pointed upthe shortage of iron ore from Western Europe deposits to supply the steel industry. Austria,

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    up 18 per cent in steel over 1956, and Italy, up 10 per cent, showed the most dramatic rise.Increases in the other countries of Western Europe, and the United Kingdom, ranged from a

    slight one to about 5 per cent the only possible exception being Belgium, where a laborstrike in midyear resulted in a loss of a considerable tonnage of crude steel.


    The Monte Amiata Company, largest producer of mercury in Italy, is modernizing itsinstallations at the Abbadia San Salvatore mine, the world's largest producing operation. The

    present ore being mined is of lower grade than in the past and is stimulating themechanization of the mine with shaker conveyors and haulage equipment. In addition, thecompany is installing two more Gould horizontal kilns to treat 150 tons of material each perday. The final plant, after these new kilns are in operation, will be able to treat 1,100 tons ofthe mercury ore per day.


    Can-Erin Mines, Ltd., began mining operations on the Allihies concession in west CountyCork, Ireland. The full mining plant is now installed.


    Montecatini and FIAT, the two largest industrial combines in Italy, have formed a jointenterprise, the Sorin Co., to construct a nuclear reactor and laboratory.


    Yugoslavia appears to be aiming at becoming the second largest exporter of aluminum in the

    world. A $175,000,000 loan was negotiated with East Germany and the Soviet Union for the

    development of Yugoslav bauxite deposits and construction of new aluminum plants.Production in 1957 was estimated at 15,000 tons of virgin aluminum; however, the estimated

    bauxite reserves of 100,000,000 tons could support extraction at a rate of 1,500,000 tons per

    year which would be, in Europe, second only to French production.


    Italian sulphur exports were expected to be 20 per cent greater in 1957 than in 1956 and maybe as high as 150,000 tons. This is a decided turn for the better for the Italian sulphur industrywhich has been in economic trouble for some time.

    Central and South America.

    The mining and mineral industry continued to show considerable activity; in 1957, however,a slight decrease in production was general. More important to most of the countries of the

    area were the lower prices on the world market for the base metals, copper, lead, and zinc.This was particularly noticed in Chile where so much of the economy of the country depends

    heavily on the income derived from exports of copper. Mexico instituted a plan in handlingits cotton exports which may have an effect on mineral exports in the future. Fearing that

    Mexican cotton would not find a world market, the government made it mandatory that in

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    copper ore averaging 1.6 per cent of the metal as against about one fourth this amountoriginally thought to be in place. This increase in reserves has caused the total investment

    planned for the property to be expanded from the initial $53,000,000 to over $80,000,000. Anew crushing and concentrating plant will be built, capable of handling 25,000 tons per day.

    The Chilean government has waived import duties on machinery and equipment for theproject and will permit the development cost to be amortized over a five-year period, starting

    when productive operations begin, for income tax purposes. The decree of approval sets theincome tax rate for the property at 50 per cent.Cerro de Pasco Corp. estimated that Antamina copper deposit in Peru contains 100,000,000tons of ore, with 1.5 per cent copper. Exploration of the property will begin in 1958.Meanwhile open pit mining with power shovels was begun in 1957 at the present Cerro dePasco mine. The company is also continuing investigation of the Rio Blanco ore body inChile and now estimates reserves at 85,000,000 tons of 1.5 per cent copper ore. This ore bodyis covered with snow more than half of each year and development can only be undertaken ifthe company can justify operations limited to five months per year.Production of Cuban copper concentrates was higher in early 1957 with the Matahambre

    mine accounting for over 90 per cent of the production.


    Brazil is considering prohibition of the export of manganese ore from the state of MinasGerais. The deposits would be reserved for the use of the Brazilian iron and steel industryrepresented by Volta Redonda, Cosipa, and Usiminas. Manganese reserves of Minas Geraisare rapidly being depleted and are calculated to be only one third of the 16,000,000 tonsoriginally in place. This move would not be imposed on the states of Amapa or Mato Grossowhere Bethlehem Steel Company and U.S. Steel, respectively, have large concessioninterests. Brazil produces up to 250,000 tons of manganese a year and the Amapa deposits,where Bethlehem is co-operating with the Brazilian firm, Industria e Comercio de Minerios(ICOMI), are in a position to supply about 1,000,000 tons per year over the new 120-mi.

    railroad and loading facilities at the port of Macapa.Union Carbide and Carbon Corp. through its subsidiary, Northwest Guiana Mining Co., willbegin production of manganese ore in 1958 from its properties in British Guiana. Originalshipments will be on the order of 10,000 tons a month increasing to 30,000 tons by 1961.Completion of the project will require the expenditure of $12,000,000 which will include theconstruction of a 38-mi. railroad.


    A subsidiary of Gulf Sulphur Co., Compania de Azufre, of Veracruz, will assume control ofthe properties formerly owned by Pan American Exploration Co. of Mexico. The concessionis near Gulf Sulphur's present operations on the Isthmus of Tehuantepec. Gulf Sulphur will be

    required to drill ten wells on the property in 1958 in addition to the ten drilled in 1957.Reserves already known on Gulf Sulphur's original property amount to over 13,000,000 tonsof sulphur.


    The Bolivian government, operating the nationalized tin mines of Patino Mines andEnterprises, Inc., increased its payments to Patino during the first quarter of 1957. This wasmade possible by the increased shipments of tin concentrate. Although the situation appears

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    to be improving, the Patino group expressed dissatisfaction and considered that the Boliviangovernment is still in default on its payments.


    Brazilian steel capacity will be increased by 100,000 tons per year with the completion of the

    new plant of Companhia de Ferro e Aco de Vitoria in March 1958. Another steel mill forBrazil has been discussed with the Japanese. Major output of the proposed mill, to which theJapanese would contribute investment funds and technological skill, would be of ship plateand have an ingot capacity of 500,000 tons of steel per year.At San Nicolas, 150 mi. north of Buenos Aires, Argentina has started construction on a$250,000,000 steel mill project. The mill will be partly financed by an Export-Import Bankloan of $60,000,000. The mill is planned to have an integrated productive capacity of 558,000ingot tons and will be operated by Sociedad Mixta Siderurgia Argentina.


    A new mercury district has been discovered in the state of Guerrero, Mexico. Diamonddrilling in the Ixtola deposits has yielded apparently good results.


    During the closing months of 1957 the U.S. government disclosed plans to sell the NicaroNickel plant in Cuba to private interests. The plant, in which the United States has investedabout $85,000,000, has placed Cuba among the foremost free-world producers of nickelrunning neck-and-neck with New Caledonia for second place behind Canada. The question oftaxation in Cuba may be of serious importance to any prospective purchaser. The Cubangovernment permits a new project a five-year relief from significant forms of taxation and thenickel operation is already considerably older than that, having been started during World

    War II.

    The Soviet Union and Eastern Europe.

    The Soviet Union has expressed its outlook for expansion of over-all industrial activities in a

    series of five-year plans. The five-year plan encompassing 1957 apparently has, thus far,proved to be too ambitious for the actual progress and the program now calls for a seven-year

    plan to end in 1965. This will begin from the 1957 year-end level of achievement andprogress to the same or higher goals as originally set for the five-year plan ending 1965. Itwill avoid the possibility of revealing that 1960 goals have not been met and will permit ananticipated higher rate of progress up to 1965.

    Iron Ore.

    According to the recent trend, the 1956 iron ore production of 78,100,000 tons in the SovietUnion should have increased to about 83,000,000 tons. One of the more interesting points

    brought out by recent information from the Soviet is that the Soviet Union in common withthe United States, recognizes that future expansion plans for iron ore will create a rapidly

    increasing dependence on lower grade materials. In 1955, 86,000,000 tons of crude ore weremined to provide 71,900,000 tons of usable ore, a ratio of 1.2 to 1; in 1960 it is estimated that

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    167,000,000 tons of crude ore will provide only 119,600,000 tons of usable ore, a ratio of 1.4to 1. The Soviet Union claims total iron ore reserves of 57,742 million metric tons,

    representing 24 per cent of the world total and only second in size to the reserves of theUnited States. In terms of average quality, the Soviet Union ranks fourth behind the United

    States, India, and Sweden. An extension of the proposed planned increases in iron oreproduction projected against the known reserves indicates that in 15 years the iron mining

    industry of the Soviet Union will be forced to double the capacity of its mines andbeneficiation plants.


    The output of coal in East Europe and the Soviet Union is of major importance to thefulfillment of the planned expansion. Production of coal by the Soviet Union, includinganthracite, bituminous coal, and brown coal was probably close to 440,000,000 tons in 1957,

    but the other major producer in the area, Poland, suffered a decrease in output to about93,000,000 tons. Output of peat, of significance primarily to the Soviet Union, is dependentnot only upon demand but on weather conditions such as rainfall and wind velocity.Production for 1956 was lower than for 1955, apparently because of weather factors, and1957 production is estimated at 50,000,000 tons.


    Steel output measured in crude ingot tons probably increased in the Soviet Union to over50,000,000 metric tons. Poland apparently increased production about 6 per cent to 5,300,000tons, with Czechoslovakia and Hungary making slight gains over 1956 to 5,000,000 and1,500,000 tons, respectively.


    Production of uranium for the Soviet orbit seems to be concentrated in five general areas; thesatellite countries, the Fergbana region in the Central Asian Republics, northern Siberia,southern Siberia, and central Kamchatka, the latter four in the Soviet Union. By far the mostimportant of these is the well established Fergbana region which probably produces abouthalf of the total uranium available to the Soviet Union. This area resembles the area of theColorado Plateau in the United States and the primary mineral appears to be carnotite. Less isknown of the Siberian areas but it is certain that considerable mining activity is beingundertaken and perhaps as much as 4,000 tons of metal are being produced annually with

    perhaps an increase of 1,000 tons possible within the next two or three years. It is known thatconsiderable activity is taking place around Lake Baikal.Deposits in Kamchatka are thought to be extensive and, by 1958, about 1,000 tons of outputmay be expected. About 13 per cent of all uranium production in 1957 was credited to the

    satellite countries. East Germany and Czechoslovakia probably produced about 400 tons ofuranium between them, with Hungary, Bulgaria, and Romania accounting for the balance.Satellite uranium ores in producing mines appear to be nearing exhaustion; however, newdiscoveries have partially compensated for the depletion. Some circles believe that Russian

    plans are to deplete reserves in the satellite countries so that, should they defect from Sovietinfluence, they would have contributed all their fissionable material to the Soviet stocks.While this may be true, it should also be noted that the mining activities in the satellite areascan be undertaken at less expense to the Soviet Union's supply of capital investment. Over-all

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    efforts at expanding its mineral base are straining the Soviet Union's capital resources andany relief which can be obtained from the satellite economies would certainly be welcome.


    Aluminum production in the Soviet Union was estimated at 475,000 tons in 1957, an increase

    over 1956. Plant expansion and improved technology have increased capacity to well over500,000 tons per year and it is possible that 1,000,000 tons of aluminum will be produced by1961. Major plants are listed in capacity as follows: Krasnoturinsk, 110,000 tons; Zaporozhe,100,000; Stalinsk, 100,000; Kamensk, 100,000; Sumgait, 60,000; and Volkhov, 45,000.Another plant of 30,000-ton capacity is reported under construction at Stalingrad. Bauxitedeposits in Kazakhstan are being rapidly developed to supply the raw material for theexpanded output. Soviet bloc countries are reported to have the following capacity:Czechoslovakia, 10,000 tons; East Germany, 20,000 tons; Hungary 52,000 tons; and Poland,30,000 tons.


    Output of Hungarian bauxite apparently was down in 1957 to about 900,000 tons, onlyslightly higher than in 1956. Exports held up to over 1,000,000 tons including shipmentsfrom stocks. Production capacity is much greater and 1958 should see a return to nearly1,200,000 tons of output.

    Lead and Zinc.

    Bulgarian production of lead and zinc is slated for significant increases as is the output ofcadmium and sulphuric acid. Apparently the plant facilities are going to be expandedfollowing an inspection by Soviet experts. Lacking definite information, the Soviet Union'soutput of lead and zinc (smelter production), is estimated at 275,000 and 325,000 metric tons,



    Mineral development and extraction in Africa moved at approximately the same levels in

    1957 as in 1956; however, the slackening market in base metals was reflected in somewhatlower levels of activity in copper, lead, and zinc. Coal and iron ore output generally showed

    increases for the year.


    The Union of South Africa increased coal production moderately to about 34,000,000 tons.

    The North African coal areas appeared to have made substantial increases in outputpresumably in response to the general shortage of the fuel in Europe.

    Iron Ore.

    Iron ore production in the Union of South Africa was up 5 per cent to an estimated 2,180,000metric tons. Sierra Leone appeared to have set a new high record with about 1,400,000 tons

    as did Tunisia with 1,200,000 tons. Moroccan iron ore in 1956 was shipped largely to West

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    Germany (589,000 tons), Spain (290,000 tons), and the United Kingdom (280,000 tons). Thebalance was distributed to the Netherlands and France. Production in 1957 is estimated at

    1,400,000 tons, even higher than last year.


    It is reported but unconfirmed that a new, major copper area has been found within theterritory of South-West Africa. The Lorelei Copper Mines is negotiating with the SouthAfrican Minerals Corp. for an exchange of stock. Lorelei already has some 20,000,000 tonsof copper reserves and South African is working on an expansion and an extension of South-West African manganese deposits.The Union Minire du Haut Katanga at Luilu, in the Belgian Congo, was under constructionduring 1957. Modern automation techniques will be employed to the fullest throughout the

    plant. When operation of the plant is begun, in 1960, the output is scheduled to be 100,000tons of copper per year and 500 tons of the co-product cobalt. This capacity will be tripled inthe next ten years and some 50,000 employees will be needed to run the plant.Roan Antelope Copper and Mufulira Copper cut their production at the mines in NorthernRhodesia about 10 per cent in late 1957 so that copper supply and demand would be in better

    balance. Mine production from North Rhodesia is estimated to be about 390,000 tons for1957, down slightly from the 1956 output of over 400,000 tons.


    De Beers Consolidated Mines, Ltd., is building a new treatment plant for diamond recovery,costing over $5,000,000, near two operations, the Bulfontein and Wesselton mines. Ingeneral, the market for gem diamonds appears good; however, industrial stones are notmoving as well as in previous years, partly owing to the cessation of U.S. government

    purchases for stockpile and a slight decline in regular market demand. Block caving miningmethods have been successfully installed in some of the company operations and it is planned

    that the method will be used more extensively.


    The Moroccan government would welcome applications for some cobalt prospecting permitswhich have been allowed to lapse by their former holders due to lack of the requireddevelopment work. These permits cover areas in the Atlas Mountains. The government isalso interested in the construction of a cobalt concentrate plant in Morocco. Present miningoperations at the Bou Azzer du Graraa mines have been falling off, and were down about 15

    per cent in 1956 from 1955, when about 750 tons of cobalt were produced. It is believed thatproduction could reach 2,000 tons of cobalt per year and that the operation could contributemore to the Moroccan economy if the mine output were concentrated in Morocco before

    being exported.


    The new government of Ghana has apparently decided to delay making any commitmentsregarding the Volta River hydroelectric and aluminum project until the results of a surveyhave been received. The cost of the project is expected to be $700,000,000.

    Middle East.

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    The industrialization of India continued to move forward with increases being noted in steelproduction and general mining activity. The State Trading Corp., once thought to be a

    potentially disturbing factor in Indian mineral export trade, was apparently working outmarketing agreements very much in line with what had been historically established.

    Considerable mineral development activity was apparent in Israel with the major emphasis onconstruction materials such as cement and gypsum.


    India, the only significant producer of coal in the area, was estimated to have produced about43,000,000 metric tons of coal in 1957, an increase of approximately 7 per cent.

    Iron Ore.

    Among other minerals which will be sought in northeast Pakistan, iron ore may be of primaryimportance. New deposits of iron would be additions to those already known at Kalabaghwhich are considered to contain sufficient reserves to supply the Multan iron and steel plantunder construction in 1957. Limestone for the plant is still being sought nearby. Indian ironore output was estimated at over 2,000,000 tons for 1957, responding to demands ofincreased steel production.


    The Israel Mining Corp., a government company, is about to commence copper mining at theTimna deposits known as the King Solomon Copper Mines. Reserves of ore may be as highas 30,000,000 tons and production is expected to reach 7,000 tons of copper per year, ofwhich some 2,000 tons are needed in the Israel economy. This would provide an exportablesurplus. Copper will leave Israel as an 80 per cent cement copper to be electrolytically refinedoutside the country.


    Exports of manganese ore account for over half of the foreign exchange earnings of allmineral exports of India. Production in 1957 is expected to be down slightly from the

    1,665,000-ton output in 1956, owing to an easing of world demand, particularly in the UnitedStates. The Indian National Metallurgical Laboratory has been working for several years to

    conserve the reserves of the country, among the largest in the world. One problem has beenthat the production of a readily marketable grade of manganese has provided a large quantityof lower grade material which cannot be marketed at normal prices. Ore dressing studies have

    been carried out and the laboratory has announced that it has been investigating the domesticproduction of electrolytic manganese metal and electrolytic manganese dioxide. Installation

    of such facilities follow the same pattern as the efforts of some of the larger Indian miningcompanies to break into the international ferroalloy market with Indian-producedferromanganese.


    Turkey's production of chromite is estimated at 720,000 metric tons in 1957, slightly largerthan last year. In spite of some difficulty in sales of chromite on the market, Turkey has made

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    several agreements with importing countries to trade chromite for other items, such asindustrial plant equipment, which are being installed in Turkey's rapidly booming domestic

    economy. This factor puts a base under chromite output which is independent, to a largeextent, of market prices.


    A 3,300,000 ton ore deposit has been reported in northeast India by the Indian AtomicEnergy Department. The deposit, not located more completely, is reported to contain 10,000tons of uranium and 30,000 tons of thorium.

    Far East.

    China has released some figures which give an idea of the mineral extraction activity behindthe Bamboo Curtain. In 1957 planned production of electrolytic copper was 8,500 tons;tungsten, 30,000 tons of concentrates; and tin, 5,800 tons of metal contained in concentrates.Aluminum output at Fushun was to be expanded from the 4,000-ton production when underthe Japanese, to 12,000 tons. New electric power plants were put into production in 1956 inorder to reach these goals.The Japanese economy continued to dominate the minerals activity of the Asian sphere and aconsiderable part of the mineral production of the Philippines, among other Asian countries,found its way into Japan.The reduction in world base metal markets slowed the production of the ores andconcentrates in Australia during the first part of 1957, but smelter output of copper, lead, andzinc began to pick up well in the third quarter. Producers of rutile were disturbed over thedownturn in titanium metal in the United States.


    Japan and Australia showed increases in coal production for 1957, with Japan far the larger ofthe two. Japanese output is estimated at 58,000,000 tons in 1957 as against 48,000,000 in1956. Australian output appeared to be moving toward a slightly higher total than last year,after a lower first-half year.


    New Zealand is considering the construction of an iron and steel plant based on the use of thecountry's iron sands located on the west beaches of the North Island. Preliminary studiesindicate that such a plant may be economical but final decision must wait for large-scalesurveys and tests on the potential raw material sources. Kaiser Engineers, Inc., of Californiaare serving as advisors and are conducting the surveys for Fletcher Holdings, Ltd., a New

    Zealand government firm. Japan's steel industry continued to grow, producing during the firsthalf of 1957 at a rate sufficient to provide 13,000,000 metric tons for the year. If sustained,this would represent almost a 20 per cent increase over last year. Australia also madesubstantial gains in steel, going to an estimated 3,000,000 tons in 1957.


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    All three of Japan's titanium producers have been asked to increase their output to contributeto the increased demand for exports. The over-all increase is anticipated to be in the range of

    80 per cent. The output in 1957 is estimated at about 3,600 tons.


    Japanese electrolytic copper smelting facilities were expanded by 500 tons a month with thecompletion of the work at the Hibi and Takehara smelters owned by the Mitsui Mining andSmelting Co. Crude materials are now coming from the Philippines and the operation is of acustom smelting nature for Elizalde and Co. which operates the Sipalay mine. Japanese mine

    production of copper was expected to be close to 80,000 tons in 1957 and smelter productionover 90,000 tons.

    Iron Ore.

    Japanese interests are surveying some areas in Borneo, Indonesia, in hopes of findingsufficient reserves of iron ore to warrant the development of an open pit mining operation.


    Philex Mining Corp. is building roads as a start to developing a new chromite deposit onPalawan Island. Estimated reserves of 50,000 tons of metallurgical grade material have beenindicated.


    Ever since World War II the Indonesia tin industry has been limited to the production ofconcentrates, unlike the prewar practice of both mining and smelting. Signs are developing

    that the Indonesian government is encouraging a return to the old status. In 1957 a German

    firm, Wedexro, was reported to have obtained a contract to plan and design a complete tinsmelter for possible erection in Indonesia. Most tin producers within the area cut back

    production about 10 per cent; however, Thailand showed a slight increase and Burma's output

    held at 1956 levels.