that do not meet the requirements for Government aid of any type; many of the replies furnish information requested of this Department.

Two recommendations were made to the production-expansion group before the procedures were changed for processing foreign proposals. One of these was for a 5-year tungsten-procurement contract and a 1,000,000-dollar loan for M. Hochschild, S. A. M. I., of Bolivia, for expanded production from the Bolsa Negra Mine; the other for a manganese-procurement contract with the Caja de Credito do Minero de Chile. Since the procedures have been changed, this Division has turned over to the Lead-Zinc Commodity Committee for their recommendation in the matter a proposal from the National Lead Co., covering the Santander Mine in Peru; likewise, a proposal to the Nonmetallic Committee from Fluorspar, Tolteca, S. A., covering an application for a loan of $98,750 for the construction of a flotation plant and the provision of other facilities to produce acid-grade fluorspar. The purchase of the resultant production would be the subject of further negotiation.

Discussions have also been held with high officials of the principal companies producing tungsten and tin in Bolivia and with two smaller concerns in connection with production expansion possibilities. No action has been taken with respect to these possibilities, except in the case of the Bolsa-Negra proposal, pending receipt of formal proposals which are to come forward as the result of the discussion. The deferment of action is due primarily to the fact that, except as noted, the Bolivian companies are unwilling to expand their capacity without first obtaining certain concessions from the Bolivian Government relating to relief from the current incidence of export taxes and foreign exchange restrictions; this they consider vital to any important expansion of production facilities. It is the intention of the Division to take the whole matter up with the State Department as soon as we can ascertain what the total expansion possibilities will entail and evaluate what they might mean to the Bolivian economy.

Difficulties being experienced

The procurement of strategic minerals from foreign countries is adversely affected by the following factors:

(a) The United States is at a great disadvantage in procuring many vitally needed minerals because of the higher smelting and processing costs and lower domestic prices, as compared to European costs and prices. As a consequence, true normal imports are being curtailed rather than increased.

(b) Despite the fact that the United States produces very little or no chromium, cobalt, tin, strategic grade mica, monazite, and beryl, utterly insufficient quantities of manganese and tungsten, and not enough lead, zinc, and copper, the emphasis seems generally placed by most of the agencies, as well as by Congress, on purchases at domestic prices on short-term procurement contracts. Most of the foreign projects offered to Defense Minerals Administration simply cannot meet these requirements.

(c) Restrictions prejudiced to mining activities and/or exports of certain mineral by foreign governments, as shown in relation to Bolivian tin and tungsten.

Prior to retirement at the beginning of 1948 from an active association with mining, the writer was managing director for Lake George Mines, Ltd., Captain's Flat, Australia. This position was held from 1937, following on a long engagement as general manager of the Fresnillo Co., Fresnillo, Zacatecas, Mexico. The writer also acts in a retaining capacity for Lake George Mines and in this capacity visited in 1949 some 29 different mines to obtain information regarding mining and milling practices. His present title is Director of the Foreign Division of Defense Minerals Administration with the duties and responsibilities outlined in the foregoing paragraph.

STATEMENT OF C. O. MITTENDORF, DIRECTOR, PRODUCTION EXPANSION DIVISION, DEFENSE MINERALS ADMINISTRATION

EMPLOYMENT HISTORY

On January 3, 1951, I joined the staff of the Defense Minerals Administration in the capacity of Acting Director of the Production Expansion Division. I was on loan from the Economic Cooperation Administration. On March 11 I was terminated by the Economic Cooperation Administration, and on the following day was officially transferred to the Department of Interior as Director of the Production Expansion Division. The previous 2 years, December 16, 1948, to

January 3, 1951, I was Director of the Industry and Mining Division of the ECA Special Mission to Turkey. Acting in that capacity I was directly responsible for making investigations, with appropriate recommendations, of the mining and industrial projects which were submitted to the ECA by the Turkish Republic, and also responsible for the initiation of private mining and industrial enterprises which had not been programed by the Turkish Government, nor for which any United States Government funds had been officially requested by that Government.

During the calendar year 1948 I was Chief of the Mining Section of the Industry Division under the American aid to Greece program, which agency was absorbed by the Economic Cooperation Administration on July 1, 1948. My direct responsibilities were to evaluate the mining industry of Greece and to make appropriate recommendations for specific rehabilitation projects in order to increase exports of essential metals and minerals as a means of increasing foreign exchange earning capacity, or, on the other hand, to increase the production of materials needed for indigenous consumption and thereby lessen the import requirements of the Nation.

During the entire calendar year 1947 I served as Director of the Office of Premium Price Plan for Copper, Lead, and Zinc. The Office of Premium Price Plan was established by directive dated January 16, 1947, for the purpose of consolidating the personnel of the Office of Price Administration and the Civilian Production Administration, who were jointly administering the premium-price plan through the medium of a quota committee.

On January 14, 1943, I was employed by the Office of Price Administration as one of their three mining engineer representaitves on the Quota Committee of the Premium Price Plan for Copper, Lead, and Zinc. I served in that capacity for 31⁄2 years and during that period I had organization titles as Assistant Director of the Metal Mining Analysis Office, Chief of the Nonferrous Metals Division, and finally Chief of the Office of Subsidy Operations, which took over the residual functions of the Office of Price Administration at its termination.

For the previous 22 years I was constantly active in California, Arizona, and Nevada in the operation of mines. My first mining employment was in the capacity of assayer and later as staff mining engineer. After 1926 I was employed in the capacity of general superintendent of various mines operated by the Engineers Exploration Corp., Randsburg Silver Mining Co., and the P. H. Greer Co., Inc., of Los Angeles. During the period 1934 to 1942 I also independently operated lead, zinc, and silver mines.

I served 21 months in the Army during World War I. I was born in California in 1897, and am presently a resident of the State of Nevadą.

Duties and responsibilities

In the capacity of Director of the Production Expansion Division I am directly responsible to the Administrator and his deputy. My Division is immediately responsible for effectuating the recommendations made by the Supply Division for the expansion of productive capacity of critical metals and minerals. In this connection I direct the analyses and evaluation of the recommendations received, on a project-by-project basis, in terms of their merits for accomplishing the established goals and determine the type and extent of assistance required in order to encourage the project. After such needs are determined an appropriate recommendation, together with technical and economic justificaiton, is made to the Administrator for his transmittal to the Defense Production Administration. My Division works closely with the Chief Counsel's office and legal representatives of the General Services Administration who participate in all major contract negotiations.

The Production Expansion Division maintains liaison with GSA, RFC, DPA, Export-Import Bank, and other Government offices necessary for accomplishing its functions.

The Production Expansion Division collaborates with all other divisions of the Defense Minerals Administration in the establishment of standards and procedures for extending Government assistance in the expansion of productive capacity and for the encouragement of exploration, development, and mining of strategic and critical metals and minerals. In this connection we assist in formulating the plans, and the development of procedures, forms, and general instructions to be used by the mining industries as a guide in applying for assistance under the Defense Production Act. We also develop the procedures necessary for the establishment of ore depots for the purchase of critical metals

and minerals and develop the schedules and conditions under which payment for ores will be made.

I am directly responsible for the development, installation, and maintenance of a Controls Branch which will keep current accounts and make periodic reports on progress and deliveries resulting from the projects approved by the Production Expansion Division. The recruitment of suitable personnel to staff the Controls Branch is now under consideration.

Under a recently issued procedural instruction which outlines the internal administrative responsibilities, the processing of all requests for accelerated tax amortization will be transferred to the Production Expansion Division. At the present time this category of assistance is being handled jointly by the commodity branches of the Supply Division, in collaboration with the Chief Economist's office. The transfer of this responsibility to the Production Expansion Division will be made as quickly as necessary specialized personnel is obtained. Activities of Division

The Production Expansion Division presently consists of a Director, six mining engineers, two stenographers, and a statistical clerk. All employees have had prior Government experience in their direct areas of responsibility during World War II, either with the premium price plan, Metals Reserve Company, Reconstruction Finance Corporation, War Production Board, or Foreign Economic Administration.

Such personnel process the applications received from the Supply Division and Foreign Division and perform the functions listed in the preceding section. Accomplishments

A. Procurement contracts (domestic) initiated and processed by DMA.— Twenty-one procurement contracts have been processed to date by the Production Expansion Division. Fifteen have already been recommended to DPA for certification to General Services Administration, and the remaining six are completed insofar as the duties of the Division are concerned. Under the terms of these contracts the following critical metals and minerals will be produced, during the term of the contract:

The total investment that will be undertaken by private enterprise to carry these expansion projects to completion is estimated at $505,300,000. In only three cases is the guaranty of the private loan required. The total present market value of the critical materials which will be produced under these contracts is estimated at approximately $1,450,000,000.

B. Other accomplishments.-A very large percentage of the accomplishments of the Division are of the type which cannot be expressed quantitatively as in the above tabulation. Such activity falls into general categories of (1) foreign projects initiated by DMA which require participation by other Government agencies and which may be transferred to them for finalizing, and (2) those which originate with other Government agencies and require DMA cooperation and participation. Some of the accomplishments falling in these categories are: (a) The reactivation of seven Plancor plants for productive expansion of magnesium;

(b) A procurement contract for the expansion of tungsten production from Bolivia. This project has been cast in two phases by the Production Expansion Division, the first step to be consummated by GSA, and the second step in cooperation with the Export-Import Bank, since a loan of $1,000,000 is involved.

(c) A recommended procurement contract for 425,000 pounds of mica to be produced in Brazil, and recommendations for further expanded production;

(d) The inauguration of an ore-purchase depot for manganese ores produced in Chile. The recommendations made by the Production Expansion Division entail (1) an Export-Import Bank loan of $300,000 to a Chilean Government agency, and (2) the granting of a purchase contract by GSA.

(e) The activation of the Government-owned (Nicaro) nickel plant situated in Cuba, which envisages a production of 31,000,000 pounds of nickel over a period of 5 years.

(f) The activation of the Three Kids manganese mine, the Government-owned facilities installed adjacent thereto, the beneficiation of a Government-owned stockpile of manganese ores, and the resumption of underground mining. It was estimated that 27,500,000 long-ton units in the form of commercial-grade manganese nodules will be produced under the terms of the contract. Domestic ore-purchase depots

A comprehensive study has been made as to the advisability of establishing orepurchasing depots in various locations in the United States for the purchase of small lots of chrome, manganese, and tungsten ores. Exhaustive studies have been made for the development of equitable purchase schedules covering each commodity and tailored to fit the requirements of the region within which the depot will be located.

A plan to establish an ore-purchase depot for chrome ores, to be located in the State of Oregon, has been completed. The necessary order for the announcement of proposed purchase schedule, a proposed application form for individual procurement contracts for large chrome producers, and the development of a contract form to be used for the larger domestic chrome producers have all been prepared. Similar documents necessary for the establishment of ore-purchase depots for manganese and tungsten ores are now in the final stages of completion.

Developed technical data sheet to be used in connection with filing applications for all types of Government assistance under DMA. This form was available for distribution March 15, and is to be used as a general guide in completing Form NSRB-146 and all subsequent forms which have also been developed and are awaiting approval by the Bureau of the Budget. Such forms are:

Application for mining loan under $100,000 (short form). Application for loan in excess of $100,000 (long form). General application for procurement contract. Application for exploration loan. Preparation of contract to be used for exploration loans.

Objectives of Division

To perform these duties with the greatest dispatch possible. Difficulties and needs of mining industry

Difficulties that the mining industry has, or will experience, insofar as they fall within the jurisdiction of this Division, consist mainly of the time required to analyze and evaluate the project, to prepare the necessary documentation to justify the project, time required for negotiation with applicants and collaboration with GSA representatives, and to prepare the necessary contracts. Alleviation of this situation can be met only by staff increases of experienced personnel. Steps taken to correct the situation

To create closer working relationship with all branches within the DMA, and representatives of other interested Government agencies, in order to insure complete understanding of the responsibilities of each, the establishment of uniform criteria, and the compilation of necessary technical and economic data required before final action can be taken, all with a view of minimizing duplication of review of a given case.

Efforts to obtain budget approval for the recruiting of additional help

Mr. REGAN. We will adjourn-and thank you again for comingand the committee will reconvene at 2:30, and we may call on you in a week or two again. We certainly thank you very much for coming. Dr. BOYD. Thanks for having us.

(Whereupon, at 12: 10 p. m., the committee adjourned until 2:30 p. m. the same day.)

AFTERNOON SESSION

Mr. REGAN. The Subcommittee on Mines and Mining will come to order.

There is a quorum present.

At this time I would like to read into the record a telegram addressed to Mr. E. T. Cummins:

Magma Copper Co. owns 100 percent San Manuel Copper Corp. Newmont Mining Corp. owns 22 percent Magma Copper Co. No officer or director of Magma is an officer or director of Newmont except that the assistant secretary and assistant treasurer of Magma is the treasurer of Newmont. The corporate affairs, management, and operation of Magma and San Manuel are not controlled or directed by Newmont. You are authorized to so testify before any congressional committee. Letter follows.

A. J. MCNAB, President, Magma Copper Co.

Mr. ENGLE. May I reserve the right to insert at this point in the record the testimony of Mr. Fred Searls before the Senate Committee on Interior and Insular Affairs, in which he testified as follows regarding the companies which are associated:

Senator Cordon says, at page 234 of the transcript:

Give us the domestic and then we will get the foreign.

Mr. SEARLS. All right. We have an interest in Magma Copper Co. which operates in Arizona. We do not actually control that company, but we do operate it. Mr. REGAN. Without objection it will appear in the record.

The purpose of these hearings is to ascertain what can be done to expedite the development of the strategic minerals that this country so sorely needs under the laws passed in September of 1950. Before proceeding with the hearings this afternoon, with the Office of Price Stabilization, we would like to give just a couple of minutes to Mr. H. A. Savage, president of the American Tungsten Association, who would like to make a brief statement to the committee with respect to tungsten.

May we hear from you, Mr. Savage?

STATEMENT OF H. A. SAVAGE, PRESIDENT, AMERICAN

TUNGSTEN ASSOCIATION

Mr. SAVAGE. Mr. Chairman and gentlemen, I think it is only right that the committee have before it the condition of tungsten supplies in the United States. It is approximately 2 months on hand. The production is about 5 million pounds a year. At that rate we are using approximately 16 million pounds from a domestic viewpoint.

It is so critical that Kennamentals, Inc., of Pittsburgh, which is the second largest manufacturer of carbide tools and manufacturing ammunition and so forth, for the Government, could not get a supply. They came to California, paid a half million dollars for a mine that was 6 months ago in bankruptcy and are spending another half million dollars.

There is no supply of tungsten in sight to take care of more than about half of the civilian needs, to say nothing of the military. The foreign situation, if anything, is worse. The foreign price is $78 a unit. It has gone as high as $93. There is no chance of getting foreign tungsten here, so long as the price abroad is so much higher than our domestic price.

I don't want to take too much of your time. I do want to say this: that the tugnsten miners are unanimous. They would all like to work for the Government. Outside of the three major mining companies, they are all busted, they have been, most of them have two or three mortgages, they can't operate without some Government help.