Mr. D'EWART. I think if we are going to operate the program in Mouat area, sooner or later they will have to have an electrolytic beneficiation plant there?

Mr. HOLDERER. It seems to be running that way.

Mr. D'EWART. The distance is so great from Montana to Baltimore that shipping a product with a low percentage of chromium makes it very expensive. If you can get away from that by getting a high percentage of chromium, you would, relatively speaking, lower the cost at the point where it would compete.

Mr. HOLDERER. Yes.

Mr. D'EWART. I think that certainly is being investigated at this time.

STATUS OF MANGANESE PURCHASE PROGRAM IN BUTTE AND PHILIPSBURG, MONT., DISTRICTS

Now, I would like to ask you a few questions about the manganese situation in the Butte-Philipsburg area. Would you review that situation briefly for the committee?

Mr. HOLDERER. Purchase depots have been established at both West Butte and Philipsburg for the purchase of the carbonated manganese ore. There are a few producers of the oxide ores; there are some companies that have no market for their ore. If the ore is good enough grade they have a very good industrial market. But the quantities did not seem to be sufficient to make it worth while to establish purchase depots for that. The Taylor-Knapp Cos. received an exploration loan and they are going along very nicely in their explor atory work and are getting ready for production; they are using equipment of their own mills.

Even so, small producers have not seen fit to accept exploration loans; they are waiting for the Government to come in and do every thing. The Government cannot do that. They are not going to; we have no authority to do that. We have given them absolutely everything we can, but they are still waiting. They say they were promised some things at some of the hearings back here in January and they expect the Government to come out and give them loans on the undeveloped property-and I say undeveloped, meaning that there is no ore ready to mine, where mines need development.

They have got to go through the exploration program before they are ready for development of the mines. And they seem unwilling to do that. They say they cannot get subordination agreements from the owners of the properties. The Government has to have a priority right.

Mr. D'EWART. Have they done anything with the nodulation mill at Butte?

Mr. HOLDERER. There are not enough concentrates being produced to put it in operation.

Mr. D'EWART. As I understand, you established a purchase depot, one at Butte, one at Philipsburg, and you are ready to receive ores, but actually you have purchased none up to date?

Mr. HOLDERER. I was in touch with the General Services Administration man recently, and he said that some space is being rented and they have got scales and various other equipment which is needed, and

I imagine on the basis of that that the Government will probably be able to receive ore soon.

Mr. D'EWART. That is my understanding, that they are getting ready to go.

Mr. HOLDERER. It looks that way to me.

Mr. D'EWART. I think that answers my question, Mr. Chairman.

GRADE AND CONCENTRATION OF CHROMITE PROPOSED TO BE PRODUCED AT MOUAT PROPERTY FURTHER DISCUSSED

Mr. ENGLE. I want to be sure I understand what you said about the milling of these Montana chromes. Did I understand you to say that the Montana chrome, starting with the chrome percentage of 18 to 20 percent, can be brought to 42-percent chrome; is that it? Mr. HOLDERER. That is correct.

Mr. ENGLE. And the Montana chrome starts with 1.1, and the chromium-to-iron ratio can be brought, under this process, to 1.5-to-1 chromium-iron ratio?

Mr. HOLDERER. I believe that is correct; 1.5 to 1.

Mr. THAYER. The chronium-iron ratio in the ore is about 1.2 to 1; and the concentrate will be improved to about 1.5 to 1.

Mr. ENGLE. That is in effect what I had in mind; the percentage of concentrate 1.5 to 1 of chromium-iron ratio.

Mr. THAYER. From the Mouat mill it would be about 1.4 to 1; the concentrate 1.4, Cr to Fe. In other words, you get a 42-percent product, the chromium-iron ratio being somewhat better than 1.4. That makes it about 1.6 to 1.

Mr. ENGLE. I want to be sure that I understand you, because when · reference was made to the concentrate the figure was given as 2.5 to 1. By that, I understand you to mean that it takes 2.5 tons of chromium ore to make 1 ton of chromium concentrates.

Mr. THAYER. 2.5 to 1.

Mr. ENGLE. What I was trying to find out is what is the chromiumiron ratio under the proposal submitted by Mr. Eichelberger and Mr. Julian. As I understand-and please correct me if I am wrongthey propose to produce a 42-percent chrome concentrate, with 1.5to-1 chromium-iron ratio.

Mr. THAYER. That is correct.

PRESENT AND FUTURE UTILIZATION OF LOW-GRADE CHROMITE ORES

Mr. ENGLE. If that is true, do you know whether or not industry will use the chrome concentrate with a 1.5-to-1 chromium-iron ratio? Mr. THAYER. Not now, because they can get the 100-proof whisky. Mr. ENGLE. What you are saying is that they can use it but they are not using it now?

Mr. THAYER. The time is not far off-say, within the next decade or possibly a generation, 10 to 20 years-when all the companies will be using it, because there will be no sufficient source of supply of highgrade chromite. The world's reserve of high-chromium ore is relatively small, and the consumption rate is very high. By a horseback guess, 80 percent of the world's reserves are not of high-grade ore; they are high-iron chrome ores, and 15 percent of the world's reserve are of high-chrome ores. The consumption ratio for all ores is about

50 percent of metallurgical ore as contrasted with 15 percent of the world reserve in metallurgical-grade deposit. Industry naturally will have to yield to nature; the steel industry recognizes that in the next 20 years it is going to have to substantially change its practice, but it will not change until it has to. The change will be expensive.

MR. ENGLE. I grant that is true, and I would like to see the time come, because it will make the American chromium ores much more usable, because the present minimum commercial grades have a 3-to-1 chromium-iron ratio; and, as I understand, the proposal submitted calls for 1.5-to-1 chromium-iron ratio.

Mr. THAYER. I overlooked the fact that the Timmins Co. is using ore with a chromium-iron ratio of 1.5 on a commercial basis.

Mr. D'EWART. And they are willing to buy 7,000 tons a month! Mr. THAYER. It is stated they would be willing to buy 7,000 tons a month from the Stillwater concentrate, provided they can get the Yellow Tail power.

Mr. ENGLE. You mean, by Yellow Tail power, power from the Yellow Tail Dam?

Mr. THAYER. Yes.

Mr. ENGLE. Are there any further questions?

Mr. D'EWART. May I say that I think you have been helpful in clearing up this situation, and I appreciate the remarks you have made today. You have brought us up to date on a problem that has been bothering this committee for some time-that is, where we are going to get more chromite and it seems that we may be on our

way.

Mr. ENGLE. Do you believe that the Montana chrome can be brought up to the minimum specification for chrome acceptable under the Government's Grants Pass chrome program, which now calls for a 42 percent chromium content with a 2-to-1 chromium-iron ratio, at a price comparable to the price paid for similar ores, which would be around $68 at the Government's Grants Pass, Oreg., purchase depot?

In other words, it is a comparative proposition: The rate for Grants Pass ore of 42 percent Cr2O, with a 2-to-1 chromium-iron ratio is approximately $68 a ton. Can you get Montana chrome up to the same grade for that price?

Mr. THAYER. I do not think there is much question but what you could produce a standard metallurgical product, 48 percent Cr2O, and 3-to-1 chromium-iron ratio, for the $115 base price at Grants Pass.

That, it seems to me, is the only fair basis for comparison-what would be the relative cost for a standard metallurgical productand I feel sure that the Mouat concern could produce a standard metallurgical product for considerably less than $115 a ton.

Mr. ENGLE. You are not comparing the minimum; you are using for comparison the price paid for the standard metallurgical grade at Grants Pass.

Mr. THAYER. My reason is that the minimum-grade ore at Grants Pass will be blended with the higher-grade material.

Mr. ENGLE. If they could get it.

The bell has rung, and I assume the Members will want to answer the roll call.

I wish to express our appreciation for your appearance and for clarifying this matter for the record.

I would like to say that this committee is concerned as to whether or not we have enough chrome in stockpile to meet our domestic requirements and our emergency needs. We have two propositions: We ought to stockpile enough to meet our needs, and then we ought to try to develop our own sources so that when the stockpile runs down we can still maintain a safe margin through the development of our own natural resources, and it is in that direction that this committee has been looking and with which we are deeply concerned. Thank you very much, gentlemen, for your presentation. The committee will stand adjourned, subject to call.

(At 11:25 a. m., an adjournment was taken, subject to call of the Chair.)

(The following letter and enclosures from Senator Murray to the Honorable Clair Engle, regarding the Timmins or Chromium Mining & Smelting Corp. proposal and their Chrom-X products, was presented for the record:)

Hon. CLAIR ENGLE,

UNITED STATES SENATE,
COMMITTEE ON INTERIOR AND INSULAR AFFAIRS,

October 30, 1951.

House of Representatives, Washington, D. C. DEAR CONGRESSMAN ENGLE: I have noted with great interest your hearings of October 4, 1951, on the chrome program.

I am interested in all the reasonable proposals for putting the Montana chrome deposits into operation. There has been entirely too much delay in getting these programs under way, when you consider that 80 percent of our chrome reserves are in Montana. According to the testimony, there seems to be some curious misconceptions and lack of information, especially with regard to the Timmins proposals.

During your hearings, Mr. Thayer, of the USGS, stated there has never been a pilot-plant test of the Montana ore in making Chrom-X. Technically, this statement is true. The work was full-scale and not pilot-plant, and the material used was concentrates and not ore. Nevertheless, the records of your subcommittee show that some 30,000 tons of Montana chrome concentrates were used to make Chrom-X, and there is no reason whatever for the dubious attitude taken by the Government about the Timmins proposal.

About a year ago Mr. Timmins' company, the Chromium Mining & Smelting Corp., filed a proposal with the Munitions Board to handle the Stillwater chrome deposits from mining to the finished product. Nothing further was heard from it. A proposal was filed with the RFC in May of 1951.

Mr. Timmins formed the Montana Ferro-Alloys Corp. for the purpose of establishing furnaces in Montana, but due to the delays now is considering a location in Tennessee which would be of no value to the Mouat operation.

A proposal was filed months ago with Mr. Philip Bradley, at that time Chief of the DMA Chrome Section, and later discussions were had at length with Mr. Tom Lyon, Chief of the DMA Supply Division. Mr. Holderer was not present at these conferences. Nothing has eventuated to date.

I attach hereto a copy of a letter I wrote to Mr. Jess Larson on October 26, 1951, together with a commercial bulletin on high-carbon Chrom-X, called Sales Bulletin 2, which indicates that there should be no question about the marketability of the product. The whole situation was gone into before your committee in March 1948.

I enclose a copy of a letter I wrote to Dr. James Boyd on July 26, 1951, which refers to a conference with Mr. Lyon on June 8, 1951. Subsequently, I received a letter from Dr. Boyd implying there is no known method of utilizing the Mouat concentrates and that it was hoped to discover one soon. This seems incredible. Knowing your intense interest in the defense-minerals program and especially in chrome and manganese, I know you will want to have the record straight. therefore request that this letter and the enclosures above mentioned be made a part of the record of the October 4, 1951, hearing and be printed in the appendix thereto.

Sincerely yours,

I

JAMES E. MURRAY.

Mr. JESS LARSON,

UNITED STATES SENATE, COMMITTEE ON INTERIOR AND INSULAR AFFAIRS, October 26, 1951.

Administrator, Defense Materials Procurement Agency, General Services Administration, Washington, D. C. DEAR JESS: Enclosed you will find a copy of a letter from Frank Eichelberger and Associates about their program for producing chrome at the Mouat mine. You will remember discussing the Montana chrome situation with Charles Murray and Bill Broadgate, and it appeared that you had been given certain misinformation. You remarked that you would have the whole affair checked

into.

Both the American Chrome Co. and the Chromium Mining & Smelting Corp. and Montana Ferro-Alloys Co. proposals appear to be in an interminable snarl, and in the meantime chrome production in Montana is further away than ever. The present situation appears to be the outcome of DPA Order 139, which gave the RFC instead of to DMPA authority over defense loans.

If RFC is going to apply the same criteria to mineral-production defense loans as to its industrial loans under the RFC Act, we may as well give up the idea of a defense-minerals program as far as financing is concerned,

The way the Montana chrome program has been handled, prior to DMPA, is positively scandalous, and it is time something drastic was done about it. It is my impression that the Congress appropriated specific funds for putting the Montana chrome deposits into production, and I see no reason for RFC to control these funds.

Perhaps what we need, Jess, is a disaster-loan program for the minerals industry. I don't envy you inheriting this mess, but it is high time someone straightened it out so that we get some chrome instead of conversation. Sincerely yours,

DEAR DR. BOYD: Reference is made to your letter of June 8 regarding the American Chrome Co.'s proposal for reactivating the Stillwater chrome mines in Montana, and the conference that was held with Mr. Lyon by Mr. Charles Murray, Mr. Broadgate, of my staff, and Mr. Grady, representing the Timmins people of Montreal, Canada.

I am informed by Mr. Leo H. Timmins, president of the Chromium Mining & Smelting Corp., that shortly after this conference his company submitted a proposal to Defense Minerals Administration for the treatment of Stillwater chrome concentrates. It is now nearly 6 weeks since this proposal was submitted, and I am wondering what conclusions have been reached by Defense Minerals Administration.

I will appreciate it if you will look into this matter again and advise me.
Sincerely yours,

JAMES E. MURRAY.

EXOTHERMIC ALLOYS SALES & SERVICE, INC.

Chicago 27, Ill.

Sales Bulletin 2

HIGH-CARBON CHROM-X (EXOTHERMIC FERROCHROMIUM)

The use of high-carbon Chrom-X (exothermic ferrochrome) enables the foundryman to meet the most rigid specifications for alloy cast irons. When Chrom-X is added as the ladle is filling, higher recoveries of uniformly distributed chromium are obtainable without lowering the temperature of the metal.