INDUSTRIAL A N D ENGINEERING CHEMISTRY
Vol. 44, No. 6
foreign sources loom larger in u-s- supplg ELMER W. PEHRSON, Regional Director, Foreign Minerals Region, Bureau of Mines, Washington, D. C.
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to make a major effort to increase production closer to home. Yet, despite the urgency of the situation, the prohlem of developing the largeat manganese ore deposit in the western hemisphere is still unsolved. Repeatedly, we fail to learn that the expansion of existing mining operations or the development of new deposits IP quires several years, and even then large increases in piwluction will not be forthcoming unless adequate incentives are provided to spur industry on to extra effort. Political events are now threatening continuation of the movement of tin from Bolivia and copper from Chile. These are just a few of the uncertainties that exist in United States security on the raw material front and which require the implementation of a sound national mineral policy and dynamic action to carry it out. The important part imports play in supplying minkrals to United States industry is illustrated in the chart “Sources of Minerals,” which shows the source of 1951 supply of principal industrial minerals. Of the 38 Commodities listed, the United States is self-sufficientin only 9, and it produces only 10% or less of its needs of 12. From a mineral viewpoint we are indeed a “have-not” nation in several indispemble minerals and for many of thane there is virtually no hope for the United States to improve its position significantly through increased domestic output. There are some who advocate that the United States should withdraw from the international arena and establish its frontiers on the fringe of the western hemisphere. A glance a t the chart reveals that a very large part of our deficiency in mineral supply is made up by imports from the eastern hemisphere. We cannet live without these imports unlesswe are wiUig to accept a substantial dowuwad adjustment in our standad of living. Known western hemisphere m u r c e s cannot relieve our dependency on eastern hemisphere supplies in most of the commodities we obtain from that side of the world. Realism requires that we take a global new of our raw material problem and conduct ourselve~ accordingly. The decline in self-sufficiency in the United States has resulted from the ever-increasine variety of minerals required b; industry and failure of discovery to keep upwith expandOUR SHARE’OF THE WORLD’S WEALTH ing demand. Seventy-five years ago about 35 minerals satisfied the industrial needs of the nation. Today nearly 100 are required and many of the new minerals are not found in adequate quantity or quality within our borders and are thereforeimported. Thefailure of resources to keep up with the nation’s industrial growth is illustrated hytheaccompanying chart which shows our declining self-sufficiency in copper, lead, zinc, and petroleum. The shift from a net export to a net import posi-
mce time Immemorial, gold, silver, and gem stones have provided man a means of measuring values and storing wealth, and even the more lowly elements-tin, copper, lead, and iron-have served mankind in peaceful pursuits and conflict for milleniums. But the world’s vital dependence on mineral resources is a development of the past 75 years of industrial expansion. Maea production of steel, the develop ment of modern machinery, and the introduction of electricity-all three phenomena of the latter part of the nineteenth century-together with the unprecedented advance in the use of the internal combustion engine and the multitude of magical products that have resulted from the wuardry of the chemical profemion during the twentieth century have pyramided greatly the demand for minerals. Today minerals provide the materials from whicb machines are made, the fuels which imp4 them, and the raw materials for countless industries, including the manufacture of synthetic products formerly obtained exclusively from the animal and vegetable kingdoms. Minerals are thus indispensable to the normal industrial l i e of any nation, and because industry is the keystone of military security in these days of mechanized warfare, it is not surprising that emphasis on the production and distribution of minerals occupies a pasition of priority in international &aim. Indeed, acces4 to mineral s u p plies is an impertant factor behind the political and military maneuvering of nations in the international arena. In this respect, man has not changed much throughout the ages, for conflict over possession of mineral wealth is as old as history. The machine and chemical age has wrought one significant change in that major emphasis has shifted from precious m e t als and gems to gold, iron ore, petroleum, sulfur, and many other critical industrial raw materials of mineral origin. Thii industrial expansion has greatly increased United States dependence on foreign sources of raw materials and this has brought in its wake hazards to our wurity. Experience in two world wars has provided ample evidence of the unreliability of ocean-borne supplies in times of emergency. More than 100 American ships engaged in the hauling of hauxite from Caribbean sourcea to enemy action during World War 11. Recent events have demonstrated that the nation cannot always rely on foreign sources of supply even in timas of peace, and thisisparticularly sign8cant in view of the fact that experience has proved the inflexibility of mineral production both a t home and abroad. We cannot change the pattern of mineral supply overnight. TheU.S.S.R.taught usalesson late in 1948 when she announced a virtual embargo on shipments of manganese and chromite to the United States. One beneficial result of this episode is that it has forced us
J v ~ e1952
INDUSTRIAL A N D ENGINEERING CHEMISTRY
tion, particularly in the m e a , may be attributed to the fact th& known ~ ~ ~ B Ncannot B B support economidy production rates tbat would supply all of the nation's n d s . Despite nBspdi888trous experiences with mineral shortages during World War I, thls nation undertook no &ective m e w we to improve the situation. In the early postwar years am attempt was made to encourage the production of materii in which the nation waa deficient througb the impmition of protective tslifis, but the dart proved futile. The militsry and Congress turned a deaf ear to thm who advowted the adoption of legislation that would permit the accumulation of stookpiles for emergency uea. Gathering war clouds in Europe in the late 30'8 S d y induced Congresetopnea a shkpiiing law in 1939, but in leae than u year after the -of the act the United Statewaaforced into defense preparations and it became obvious that the provkiom of the newly enacted law were Boesly inadequate to cope with the rapidly develop ing threat of our entrance into the war. As a result, we entered World War IIalmost as unprepared on the raw material front aa we were in 1917. Hsd it not been for the fornight of industry which had accumulated abnormally large stocks of minerals,the nation would i n d d have been seriously impded by shortages of raw materials during the war. D e qite industry's efforts, the situation waa crucial and the d e fense progam aa well aa the civilian economy and m o d e was adversely &ected by mineral shortagea. After the war, in July 1946, with war experiences t i l l vividly in mind C!~ngressamended the e a r h Stockpiling Act and authorid the acquisition of adequate 8tockpiles and an inquiry into the possliilitiea of Btimulating the development of domestic m m to m i n i i or eliminate oostly dependence on foreign sources of supply. A m m p l i i e n t under this legislation has been far from adequate. Although a government StOcLpiltrg program was developed which d e d for the completion of objectives within 5 years, at the outbresk of the Korean War government Btocks were far from the o b j w tives previously annound. At the end of 1951, the estimated value of stoekpii objectives bawd on c m t market conditions wan S9,298,ooO,ooO, of which only 53,34O,ooO,ooO represented valve of materiala & p d y in the atockpiie. Thus, 5% years after the enactment of the new legidation, only 36% of the stockpile objective waa a&& in atorage in the United States. An additional Za% was obligated and saheduled for future delivery. In considering these percentsgee, it should be borne in mind that some studate of the strategic material problem rsgsrd the present objectives as g d y inadequate to meet a prolonged global war. 6
TarNh and Other International Considerations
The Reciprocal Trade Agreaments program Gmgurated in 1934 was designed in part to remove tar8 barriers that might lostrain the &w of raw materii to the United States. Under this authority and other speciSc Acts of Con-, mineral tslifis, never very hi,have been greatly reduced and in m e ~ 8 8 8 8e n t i y eliminated on a temporary b e . Thruughout the entire period of the Reciprocal Trade bmente activity, world markete for minerals have been slmost comtantly in an a b n o d state due to depmsion, boom, or war. Consequently, there is no sound basis for evaluating the ultimate effects of the program. T d cuts on m i n d when domestic m u w d e r virtually no hope for substantial domestic production ehould facilitate importation and cmeequently should have a bene6cial &e&. On the other band, there are some who believe that the reduction in tslifis on tbm minerals such as copper, lead, and zinc in which the country baa enjoyed a large measure of 8elf-su5ciency in the pwt will weaken the nation'%pmitin in these vital raw r m ~ hi&.The cuts discoursge venture capital from seeking
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Vol. 44, No. 6
and developing new deposita in the United State, and the competitive position of L'nited States pruducen with foreign produceis has been considerably reduced. This will have IUI adverse eftect when world markets return to normal. A logical argument from the viewpoint of the United States can be made for tariff recessions during periods of emergency when searcities are the oder of the day, but t a r 8 policien that alternately encourage and discourage importation are causing foreign suppliers to view the United State as a "fair-weather" market and to look elsewhere for more permanent outlets. The Marshall Plan has made wme contribution to the nstion's mineral supply situation, but its over-all effect has been small. Congress p r o d e d in the basic legislation that counterpart funds equal to 5% of the dollar grants to foreign nations should be made available for the procurement of raw materials in which the United States was deficient and for other purpom. As of March 31, 1952,only 581,300,000of such funds has been expended on purchsses for United States accwnt and an additional t88,700,000hm been expended in the development of additional production of scarce raw materials. The sum total of t h w two activities is $170,000,000, r e p m t i n g less than 2% of the total estimated value of the United States stockpile objectives as of December 31,1951. The Point Four program offersan excellent opportunity for United States know-how to be applied to the development of dormant rwurces in the underdeveloped ares of the globe. The total funds made available for this program are very small in comparison with other government expenditures and only a b u t 1% of the total appropriated for Point Four has been made available for mineral development purposes. It is obvious that no major contribution to the amelioration of the world's mineral shortages has yet been d e , under Point Four, although signilicant progreas has been reported. The defense production program initiated after the K o m crisis m n encountered raw material shortages, and the need for positive action to bolster supply from both domestic and foreign sources became evident. Prompt action was tiken to expand domeatic production, but effective programs for stimulating importa were slow in developing. T6e Defense Minerals Administration, which was established to administer the mineral production and procurement phases of the Defense Production Act, was succeeded by the Defense Materials Procurement Agenpy in August 1951. DMPA has broad procmwnent and lending authority with which to function in the foreign aa well as the domestic field and through its Foreign Expansion Division is now actively engaged in negotiitihg for supplies from abroad. The Emergency Pmcnremen ce of 'General Services Administration and the ExportrImport Bsnk are cooperating agencies. The scramble for eagentisl materials for defense and civilian production, &nd military uses, that resulted from the outbreak of the Korean war, created chaotic conditions in international mineral markets. The rapid surge in demand in the light of the inflexibility of mineral production and the imposition of ceiling prices indicated clearly the need for intemtional ccoperation if the free world were to attain maximum effective use of available supplies. In January 1951, the Governmenta of France, the United Kingdom, and the United States proposed that a number of s t a n d i international commodity groups be set up to study the Situation in the various commodities and recommend collective action. Twenty& nations of the free world wcepted the prop+sal and the first conference was convened in February 1951. Eventually seven committees were eatablied d e a l i i with the following commodities: copper, led, and ainc, cotton and cotton lintera, manganese, nickel, and cobalt, pulp and paper, sulfur, tungsten and molybdennm, and wool. The principal work of the committees wa8 to assemble the necessary statistical information a d
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