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ANACONDA COPPER MINING COMPANY DRAWER 1961 K. B. FRAZEB Assistant Secretary and Arsistaut Treasurer dA BUTTE, MONTANA Hay 4, 1950 Mr. B. S. McGlone, Vice President Anaconda Copper Mining Coupany Hennessy Building Butte Dear Sir: Herewith, copy of report of Mr. B. C. Jacobson, Metallurgical Auditor, cowering audit of the metallurgical operations of the Slag Treating Plant - Bast Helena, Montana, for the month of February 1950. Copies of sy letters to Hr. V. K. Daly, Comptroller, and Mr. V. P. Sneddon, Chief Clerk, are also enclosed. lours very truly. WJF*JS Bne. cc -- Kr. W. I. Daly PNYC 00012345 DifTMEB f bus VMtCOr/DT OOBBBB Hraiy.e COH] ANACONDA COPPER MINING COMPANY DRAWER 1961 K. B. FBAZEB AssistanatnSdecretary Assistant Treasurer dA BUTTE, MONTANA MV>1?0 Hr. if. P. Sneddon, Chief Clerk Great Falls Reduction Department Great Falls, Montana Dear Sirs Herewith, three copies of report of Hr. 5. C. Jacobson, Metallurgical Auditor, covering audit of the metallurgical operations of the 3lag Treating Plant - East Helena, Montana, for the month of February 1950. One copy of the report is for Hr. Capias and one is for your files. The other copy is for use of anyone who may find it advantageous to review it. In conclusion, on page 4 tbs Auditor cements that with the exception of the omission of 10,000 pounds of fume shipment to the Great Falls Zinc Plant, all clerical work was in good order. Adoption of the unifam tare weight on trucks and pots in the opinion of the Auditor has been and tdll continue to be a very worthwhile saving in time and effort on the part of personnel involved* Faring down of work involved might also result in money saving ttiere jobs may be combined* Tours very truly. KJF*J3 Sac, M Mr* E. 3. McGinns - Mr, w. . Daly Pegson, Peloubet k Company PNYC 00012346 N13394.01 ANACONDA COPPER MINING ` COMPANflg^ SI-AG TREATING PLANT :f;1'rP? REPORT ON AUDIT OF 51 AG TOUTING PI ANT , / / / E. C. Jacobson MO?.TH OF FEBRUARY 1950 HME REQUIRED FOR'AUDIT April 14th,;1950 ^toApril 25th, -1950,: inclusive;^- . Audit of the Slag Treating Plant, East Helena, Montana, embraced] examination of;.records for the montl T 1950 as outlined in "Books and Records Checked11 / "-* v r-y.> . -~ -? Audit of slag receipts included tracing of scale ticket weights for 7 day's (approximately 2%) to . ? reportso All daily totals from the scalemen's reporto were then traced to sunmarle* of slag receive* per buyers and seller's certificates were compared for adherence to checking limit, averages were vnd use of average or umpire assays was reviewed* Settlement was calculated as per schedules provided : contract* . \' . Scale tickets, assays, bills of lading or any other records pertaining to shipments of fume to outsid were audited in detail, some data being available at'East Helena and the balance at Great Falls. As t fume at Great Falls constitutes shipment from East Helena, and /receipts at the fdmer-plant are audits o further audit was currently made* ' ' **V-'- ' ' All records pertaining to inventories were reviewed to determine .correctness of plant aid in transit ,, No inventory observations were made as no predetermined plana were,; formulated ^to make the audit. T re of the audit permitted completion before the Auditor expected to^leave for. an^assigpaent at Miami, -. * ;*- * *.**- r4! *-*>' ./ ' . <p-. The report includes comment only on new features or;chang<ea^since;prior audit'qc^ering^June l949* :Xn ort is as followsi *. 7-. :. SYNOPSIS OF PLANT OPERATION RECEIPTS - HOT AM) COLD SLAG SHIPMENTS - BAGHOUSE FUME INVENTORIES - BAGHOUSE FUME INVENTORY VALUATION ERRORS AND DISCREPANCIES CONCLUSION ,,v -iT. " v.- 7^ ' ;V ' ' X v, :C: ;* " Ito ;2^ inclusive * /# '1 1few -C~. <Z V. <w.. r *' . ` ' - r* 2 to 3 '>{ inclusive ... ^Auditor > < )$ vi<$ ,-4, PNYC 00012347 / :?`J/'.i "'`I: ' :* ... ^ 'v v V * *' \ l r / /J:l , ; '* ;* : i ".. N13394.02  : &1<&c h w ANACONDA COPPER MIHINO COMPANY ^ oiAO Ti;i;ATj:n p l a n t - e a s t He l e n a / waj11a h a MOIiTH OF FEBRUARY 3.950 ANT OPERATION physical plant vwrin? substantially the same as previously reported* " However^:`an; additional .ghouse is under conrXxv.c.tion* There are presently four units, the new imit^tOvincrease the number inatic. bag shak#r3 will be used in the new unit and present plans anticipate installation of such. :ti'B in the old unit9 Slightly shorter bags will be used-- in'-the! neV-unitJ - LSlag '.luded in audit of June 19A9 was considerable detail on weighing practice used in arriving at '.king settlement with the American Smelting and Refining Company.; for slag purchased* In tk*t audit >f pot and truck weights wa.3 made showing the fairly uniform poundage of most potiweights1 and 'airly uniform poundage of most truck weights. A table, was in use'showing combined pot and truck r ary possible combination. It was noted that the use pf the table required considerable time; .sidecable time on the part of various scalemen and the assistant superintendent was necessary in .onn of tare weights* The Auditors therefore suggested that sufficient weight be added to all icks and pots to arrive at a uniform weight for all. By balancing the scale to the weight of truck le, the content of the Cull ladle could thereby be obtain-^ without deduction of tare weight* 3 Auditors' recommendation ha3 been substantially carried out.' ^ftuunnififoorrmm weight of 6,,550000.. pouurrris has led for all trucks. This entailed adding iron rods to those which did not. weigh1 that amount. The k I in place to insure constant weight* In addition, iron plate has been built on some trucks in shape to divert all falling slag, thereby keeping trucks clean0 Compressed air is also used to ?.n. ' the addition of weight to pots presented a more difficult problem^ decision was made to use an t on all pots except one. The odd pot weighed 5,200 pounds,ithe others about7,.600.to'8,000.pounds0. tr> of the latter pots duting separate weeks in Februa^:1950^jra[^^ *' ~ . t. February 7, 1950 February l/, 1950 Febn.ie.ry 21, 1950 . '*. vjr- . ;' ' "V. I%7,70& pounds* 7,680 pounds 7,690 pounds" . '. Februaiy 28, 1950 .... 7,690 pounds . om this it i3 apparent that a beam weight of 14,200 pounds. (6^500 for truck, 7,00..for pot) or the tare weight of most loads of slag0 As the odd ` ppthweighsbalance 500 plus 5#200) pounds is used. Each week the potsjareyweigH^^|chieck*the:^exageV^In case of nted for by repairs or other cause, the cospmsatlng^beaa^wel^tJ to or " all washers which may be enclosed in it, 1~ wparisons nro frequently made by Mr. Baldwin to determine thefaccuracy of the uniform tares as thus . In one instance the actual tares for one day totalled B71,7Cp^pounds.as againstr873,200 using the rffor a difference of 1,503 pounds. Another canparison showedJaldd^ference ofj 2,160 pound*. In both; f uniform tares were the larger. However, it is possible:tOiMve}Vcpensatingtdifferences. f .'o Baldwin, Mr, Thompson, and several scalemen were. questi(^;itaf:t^ ming the results ise of the method. All agreed that it has saved t *h-o---u--r-s,vof woxic^--an*d*f*W-"e -r-e-----e---n-4,t1husj iastic/ab--ou*t +tuh-e j t ing prior audit it was noted that scale tickets were not available for slag skulls returned to the sheet also ?lowed only net weight, no record having.been .kepV^fJ'gross and .tare!weights. At that Iwjji agreed to make arrangements to save the tickets,!Upon which^all data would be rscorded. Current sd t]*at all d:jta was fully available. Two truucckks `` ` ` ** * *l^^e^a .Atare we'ig'h^ty ids. t was el so noted in prior audit that scale tickete were, not^^silal^oncold diimp^slag treated. ^ 3 were now available with full detail. On "hats11 audited;thel^areiwei^it8^were/uniforxaly 3,000 pounds -r hats weighed 2,600 , 2,900 and 3,200 pounds. Correct;,tareslarejuised:as occasion requires. lag is purchased urvler tero of contract written for^ a 10 year^ period .originallytscheduled to termiry1, 1951* Hovevjr, vu*der `'Force 2Iajeure,, provisions the ^contract ihas-been extended:tof April 25, 1951*. l3 exton j.icn ^3? included in letter of Mr. R. B. Caples to Mr.^Frederick laist, *J\ine 17, 1947-wherein tjites ``The total extension of the contract, because of .the operation of the Force Majeure clause, is > j-3 year beyond December 31# 1950. The 1946 strike`uses up 115;days of this period,:.bringing the i,e of the contract to April 25, 1951, and leaves a totalvof 250 days additional tine for which the. > *}irough operation of the Force Majeure clause.1!. No fath.. er correspond.ence was noLted nation c2 :oiil^?.ct. nnOA2348 PNVC 0 's -^ty ..v,v . - ;.. v-, ; '-AG TREATING PLANT ~ EAjST'HEEBJA*? Cold $3r r r.-. Auditor check*:' not and cold slag settlements according to .contract' schedules t*a, ?.&*/and c/ the- i}g used officially as the most beneficial to the American Smelting^and Refihi^Jftca^aii/* 1Ho'discrep- re noted. In co^v-Aing schedule "a" clerk adjusted slag parrot directlyr-bar^deduction{due^ to We--vd o increases. Ac contract provides for additions to base .chargedij^ form provide a s-ction dealing entirely with base charge.Uaoludj^^ ^thereto.V ,, eed to revise his form at the next opportunity.-. Other. suggestions^we;:also|^e1^dfi^Wd \ippn cone poration of moi^ contract data on forms used in computing settlement vwrtj All letters pertaining to cost of labor have been properly reported!to the American Smelting end Rei '^ .. : ': e Fume ; .r- * Shipments of bagiiouse fume during February 1950 were made ' tothe Great Falls' Electrolytic Zinc Plant can Chemet Corporation# the Eagle Picher Company, the Ozark Smelting and Hining Company and to local ' s. The latter included shipments to the Anaconda and Great Falls Purchasing Departments. ; No change has been made in-accounting procedure relative to shipments to the Great Fails Electrolyti t. Receipts at that plant consist of cars dumped and inventorlea,.in transit are for the account of th ting Plant0 ' ' *. ' The American Chesv't Corporation still maintains its plant on ground adjacent to the Slag Treating PI s of fume are mat!*? fully loaded railroad cars. As the Chemet Compary has*bagging facilities it bag shipment to other A aconda Copper Mining Company consignees, the charge usually being $5.00 or more pe pmonts to the Cheme- Company are made under terns of original letter agreement of June:7, 1948 which ... for delivery of a maximum of 100 tons per month during period from July 1, ; 1948 to July 1, 1949. This quently extended for en indefinate period, beyond June 30, 1949^cubject to,, cancellation'by. either part^ /ing of thirty days notice. No cancellation is yet on record^[Original.1 agreement,1 as noted above ; 100 tons per month. It was noted that Februaxy 1950 shipmmts|equalled 180 tonsJ* Hr. Baldwin stated ad received verbal orders from Mr. Capias to make this'tomage|eonce8aion.2 In, letter of^Pebru&ry 8, 1{. W Shropshire, President of American Chemet Company, Mr.Caples; statedour*inc!?concentrate ' appears to require that we limit you to & maximum of -10Q:. tons/peir,month,* beginning*wjth - the month of Mi ?m further assuming that your February requirementevwilX-nbt^e^wdtajmardMtt of.H'JsO tons.*.. Reference J metallurgical report showed that deliveries to the*Chemet Corporation[were- 102#25 dry tons,-indicatii Naples1 agreement was substantially being carried out.^Payments" for* sales'haade^to-the; ChematCorporatj Ltted to the East Helena Office which in turn forwarded them^toIthejGreat' Falls[Office*-? ' Yi a Shipment of 7 cars of baghouse fume was made to the Eagle Picher Company during/Febru&ry 1950. Audil 48 gives a synopsis of letter agreement of June 19, 1947;>dti^h.[Eagle Picher Ccwpany^which expired 01 1.9/48. Considerable correspondence was Teviewed by the Auditor^^verify terns of current sales. Pertii loted in letter of February 5# 1948 from Mr.- R.:B. Cap^Syto^to.^Pr^e^ck Laiet/ia^idiich Mr. Caples would further propose that we contract with Eagle Pi^er^fo^J^J^nsipf^fuae^per^mcnth;for a period c `ollowing July 1, 1948, under present purchase terms,;'^aesisoingXtha^thsy wi^^wantV;toT,continlle the prei it." No such control, was found in the files, sales since: Ju3y|r,f1949 having.evidently!been made on ?rders, terms having been arranged with the New Xoric ..Office. ^For^eiaaple, * one -February*1950 order fro* Picher Company for 3 cars specified Confirming arrangementstmade Cwith you by [our ..Cincinnati Office.0 of correspondence between Messrs. R. 6. Caples and F. 0. Case Vindicate "that sale Tof [fume is dependent ipon the available receipts of concentrate at the Great Falls^Slec^^lytic:Eino' Plant.^JSales terms ire dependent upon relative profits as between sales;anditr^tment*^W^^ agreement Tor splitting limits on zinc and lead, present sales {[are'bast ^Copper:Mining Compi tnaconda* 8 weights likewise are final. Terns of tbe^origi * `prices [for zinc and,, .n the same and, for review, are here quoted! ' * Zinc: When the quoted price is 6$ per pound,' or .cost of the; zino; content - \ g shall be Uf per pound, to wliich there sball bejladdi >rorataj:!fpr:eiu!h''lf;that -a the quoted price is above 6# par pound;^|^v| i.'- *r* ^f3^c| v ......... . Lead: Ho charge will be made for the leadiConten^untjJLvthe cjrotpdj per pound. For each 1* and fraction!intPIpporWMtl^jtttbefo^ * mSS**:' i'.^r -I'-Vu-nr, ' " " (goes :abpve^6.5Qii ---is* above 6.50# per pound the cost will beo80#;per^poyndi^fei^^^|!|^ . .) ^ ' .. .. F*0Lls laboratoiy makes the assay determinations and the Anaconda[Sales Company-prepares Hbe invoice*. Lon of $1.00 per ton for the combined zinc and lead content is.'charged by the Anaconda Sal*s Company. 1 an Chemet Corporation had agreed to bag the shipments for |8.60;per ton. ^This cost, paid by the . Is Office is charged to "Operating Expenses0 and is in-turn offseti.by.-afaimlJL^^cyi^^ is f; ;ing the Anaconda Sales Company for proceeds andvbagging cos&t^The^ time to ;* ident upon costs at the Chemet Company. , ** * LA ''. ' PNYC 00012349 ^' ?%:a life:: * ,j < ^r rv ' ' (Continued) Fume (Continued) : A Fight car3 of bsghoup* **.*e shipped during February 1950 to The Ozark Smelting and Mining Company le, Kansas* This cc^-^y i" a subsidiary of the Sherwin-Williams Company* : Terms of sale are as per- .noted in letter of Mr. q # Case to Kr,, R. B. Caples on August 29,1949 as follows; "In our discuss! communications you h'd ^rom Mr* Hurless, you know that our sales of East Helena fume to Shervdn-WiIlia n the basis of the Er'gl* richer price formula. This also includes arrangements whereby your weights are to govern." In the peroe letter Mr. Case details proposal by Sherwin-Williams Company to use the Lghts and moistur* deliminations and also proposal to establish splitting limits on assays and use ssayers. In reply of 5*ptr.mbr 1, 194? Hr. Caples stated that the fume was sold on a break-even with l Great Falls and Mint. h<? wuld not accept the proposals* He did, however# suggest the use of a rep- by the Sheivrin-Wi3 U Company when samples were taken and car was weighed. In conclusion he states can establish soie discrepancy in results, I think that we should insist on continuing the present All data r*vi*v>.' by the Auditor was in conformance with Mr. Caples desires and pricing was * that used on E*rd richer shipments. Car3 w*re loaded in bulk, however, instead of in bags. The .es Company also re.ci*^-d its commission of $1.00 per ton of combined zinc and lead content. h errors or discrepancies were noted on either the shipments to Eagle Picher or Ozark Smelting and say. ' *vth the Anac^ptl? s! Grat falls Purchasing Departments ordered 10,000 pounds of fume during February orders v-r? b?.>y ihe AoierJ.can Cheanct Company whose charge of $5*00 per ton for bagging was cliarg* . Foil r* Office* T>.t ' ffice in turo bills the Purchasing Departments for combined cost of fume, xn ard bogging :*-!.. T., pile" audit it was noted that average assays of high grade fume shipped to *llfi Plant -*.* u~-d in arriving at rretul content of fume shipped to Furchasing Departments and on was made to us a?i"y pertaining to cars from which fume was bagged. In preference to Auditor^ on theSlag Plant now assays local fume sales and reports such assays to the Great Falls Office for ring metallurgical report. The Northern Pacific Transport Company and the Consolidated Freightways ie to Anaconda and Great Falls respectively, both "collect". Two hundred bags were included in each rice for fume 1il s benn determined by the management at 2# less than current market price. or errors and emirs inn:? in accounting for local shipments see under "Errors and Discrepancies." >oess throughout- Flent ? change has br>en made in the method of arriving at the inventory of fume throughout the plant. The *njitender.t adds hi? calculated production to the inventory on hand at first of month from which he Isanti ties shipped during the month, to arrive at an overall inventory at the plant. Further calcula te to convert -Mi* content of the inventory to equivalent 55# and 70 fumes, a portion of thf? 'toiy being visually observed and identifiable as to grade. No discrepancies were noted in the c&l- msit tp Great Falls irs stripped from East Helena which have not been dumped at Great Falls are classified as in transit, ig East Helena for Great Falls the Auditor arrived at the cars in transit by comparing bills of lading >f oars dumped at Great Falls. By tills method car G. N. 7323$ with bill of lading dated 2/23/50 *d to be included with the in transit cars. In auditing the .Great Falls records this car was not .he in transits. Investigation revealed that Mr. Holland used: a daily report, issued by the .Slag Treat- his basis for determining last lot shipped instead of using hUlaj'of lading.: Under beading "To Be ? listed the cars leaving the East Helena Plant. Car number ;73238jwas designated "To Be Shipped March * ascertain whether or not this car was omitted from inventoryItherAudltor again called at the East *. It was there found that the bill of lading dates were not usedfas Official shipment record dates . : car in question was included in the Assistant Superintendent*^ inventory. ;. cts obtained from Mr. Walter Schmitz, Cashier, were as lbHows* Mr*. Coughlin of-the Traffic Departmen .t completion of loading constituted release of car for shipment^ although car was sprinkled the next event loss in transit. The latter operation was presumably for the.railroad1 s benefit in minimizing s not a part of the loading procedure. By this interpretation'the bills of lading were dated when . ded, usually one day prior to date "To Be Shipped". The date`\"To ;Be Shipped":was'placed upon the repo ions of Mr. Weimer to assist him in determining when cars would -arrive at Great;-Falls for treatment* sing loading date for bill of lading date minimizes demurrage,.charges, as benefit of one full day is sen time car is received end shipped per bill of lading date, : b . > r* t ` . -r A;-- tbod presently used is contraiy to procedure used on *11 other company shipmentsvwhere till of lading ini shipment date and in transit inventories are calculated therefrom* Change in the bill of lading with date "To Be Shipped" might result in costly demurrage charges* Change in daily report to read ng Dale" would eljjninate data desired by Mr* Weimer. . v: ' pNVCOOO350 Continued) db to Great F*lls -tf. SLAG TREATING PIAKT -*EAST HET.TffitA, ' < ' ]W0i (Continued) k -mIM .tional bill of lading date on daily report would enable,Mrv^ If this procedure veroused Mr. Thompson at East Helena^wouldj arriving at his shipments and calculated inventory"at plant . . y >*> ii'/j-Si* " Auditor recommend* that Mr. Sneddon, Chief Clerk at Great;FaIIf^t:^igi& P**`5f? o of any change and be guided accordingly. Use of the 1 with the mathod. Change to orthodox method would'oliminate^anjn PsuPP9.?^Mq^tan?e;|v . TIONS hange has been made since last audit in method of inventory valuation, t~in, first-out basis on pounds of zinc content. Total-cosUof; Blag piirchased aniJtot|il coet of ^ ivided by pounds zinc produced to arrive at respective, purchase; and .treatment! cent ru p^nnd. y. oint for the last-in, first-out method of valuation `is' Pecembe^l31f^L9A3.^There&jias inp^lncreoent y ' at February 28, 1950, inventory being built up of - - -- * ".....* ` 1 1EPAMCIES * flTo Local Sales11 shipment of 10,000 pounds fine wa3 made to the Purchasing Department' at: Anaconda and another shipbounds was made to the Gr^at Falls Purchasing Departzaent. 1 The''-latter, shipment was erroneously ** i metallurgical report, shorting the February 1950*recovery iy^7i3A0/ppun4a zinc1;and:2.7Q ounces it was, however, included in March I95O report, : . . 'r ftjf: : ^5, ' ' : Irvk^ *'**$ * ** `. raviously mentioned prior practice hau been to use average aesay8;of';mohthly?'rshipments to the Great ; to arrive atir * ' ` * ` '- - - - - -**..................' ` `` 1 tars from which it has gone >ruaiy 1950 a _. , er from the East Helena Office reporting assays. was^,appa^ntly|^q9t&^^ er, on 10,000 pounds taken into March 1950 account. &Qctnparii^n^of ual assays is as follows: * j-- - v*........ - ,, .. ^ averager aa1 ssays" t :,v. Averages for February 1950 Actual . 1" U:4lLf 3*.. *v?i.vnj . - rK fiwp.- ..................i.....-s'. the exception of the omission of the 10,000 pound fume "shipzMi^toJthe Great.Falia; Zinc:Plant ' k was in good order. Adoption of the uniform tare ,of-H. been and will continue to be a very worthi^ile/saving g down of >*>rk involved might also effect money; g perusal of Great Falls correspondence concerning'8^pMnts^tb/:agl0^PicherJWrd^Ozs^vHining;Compai^ pies was noted re contending that negotiations. through/.the/^ewJXork^ffice^be.idiscpntinued and all %l\ handled through the Great Falls Office. No reply was lifouad^li^rfiles^butafter;-:Auditor^ paged`through^ ndence it was apparent that there was* much lost motion-between^to.^Capias ^anditheiNew^Ierk;,Office ately decided by Mr. Caples dependent upon his plantAoperation, --#-#A f the procedure would be desirable. . :;i ^