Document YG9g5M6Jeqb49q7eaKkGY7z1E

. .' - V. :4 `H lirt-- ti irfi)>n > i I f I ii i i i f t i t t M i h i ^ % LEAD INDUSTRIES ASSOCIATION 4*0 LCXINOTON AVtNUt NtW rOMC IT. H. V. ST1TDCEHT OF ROBERT LIHDLET ITEOriXS, SICTmB Cf THE LEAD liJXJaTRIES ASSOCIATION BEFORE THE KiTIOtm. r e s o u r c e s scoNcmc suBCcx^irTEE c f THE 'coainxE oil PUBLIC urns QF THE UNITED STATES SDUI*. Denver, Colorado, February U, lvLS. Ky nae ,'e Robert Llndlcy Zlegfeld. I u i mining anginrer And secre tary of tho Lead ."alua tries Association. I aa rubeittli^- for the record a table showing 0. s. leed Mine produc tion, aecondary production, Inporte, consumption and price for the paat 23 years, I will try to summarise It briefly here. cmtsuxpnog It shows that lead consumption reachod a peak In IS .7 but that if the lu cre a*e in population between 1929 and 19L7 la considered, the per capita con sumption in the tro yearw did not differ greatly. In fact. It was 15.6 lb, pur capita in 19?9 and 15.9 lb. in 19ii7. In the intervening depression years lead consumption was as such as cut In half. I aention this to show the wide varia tion in consumption that is poatlblu in relatively short periods of time. FROJUCTTOS Lead mine production in the sane period shoved a similar trvnd and closely followed the price of the n:tal. However, nine production has not recover*! to the levels of the late 1970's for several reasons -hioh I will discuss in a mo. *<nt. The value of the lead mined in 19L7 is in excess of $100,000,000. SECONDART PRODUCTIC* Secondary production ever the saae years hit averaged about 36 per cent of total consumption but In the last year or two has been above that rate. lUPCRTS Imports also have followed the swing of consumption. They were substan tial in the boom years of the latu '?0'a# wore negligible In the '30's, and reached record proportions during tho war. Since the war they have continued at levels above pre-war for both ore and pig lead. Ihe only change it that whurvas before the war Imports were largely ii( the forr c T or-a, concentrates and bullion, during and since the war r* fined pig l.vl increased. rts have gristly i--nnjev-.. sesiy* * U!ffJ"9%P>1 "...^11^; i J. N I^S^p- -^TC "WPPWP ,' V 5 1 sfc- ; e,, t uIfc23l8cJ aft.rtn. \m .1. Ulr Ifi^icrfjfittlaitaiak 2- PRODUCTION ATrp RESERVES Tha rcucnj for sene 01' thesa fluctuations ara lnportant In looking to tha futura interest of tha laad ainin* industry of tha United States. Lead sine productiwj has not fully recovered to the levels of tha 1920`s .td* has VI acae to conclude that we are a "have-not* nation with respect .o lead. Z can not subscribe to that theory and this is why. for tha sixteen years froa 19J0 to 19h5 there wa? ..'.rat little lnr.e-.tire and then little opportunity to do devalopoent or exploit! u nrt, first, tha low price and low rata of consumption of,ered little Incentive and, secncd tha rar with ita emphasis on current production and the shorurgt of labor actually prevented exploration end development. With the end cf U>e war tha sines were, by and large, left in auch a condition that considerable developovRt work had to be done before naximun production c uld be realised. Reserves have also natu rally been affected by the sirteco-year lapse la all but the aoet essential ex ploration and development. We are often told that the high rate of production of our ad.'as during the war has shortened their lives by working thee out prematurely. The statis tic* show that that is not the case, that In etrlicr peaca-tiae years the nines were operated at a hlcr.tr rate. What happened is that "known* reserves were depleted, not by a high production rate, but o.. an inability, caused by labor shortages end emphasis on production, to keep dewlcpacnt sufflcivntly ahead cf production tc open up the new reserves wMeh are there. The labor shortege is still with os but during the past year baa gradual ly isproved. Uucn of the nteded deVelopoent uork baa boon acaccplirnod but such la rtill In progress. At the sam tics. reOuvcl cf the celling p-ict, wnich dur ing aoet of the war ran 6.5# per lb. has permittod the price to reach a acre realistic level at 15#, the highest price for lead in history, and hr.s encouraged exploration, development and production. let at 15# lead is not disproportion ately high. Taking 1926 as *. base, the leid price index is lower than thu far* cocaodity index ol the Bureau cf Lit. nr Statistics and only alightly higher than the index of ell caaooditica. Tbua lack of don-.nd, lew price and labor and ecuip-xit ahortagea hevs be-on deterrents in recent years to full lead-nine prt- .c.ion. out there are other contributing factors, perhaps equally laport-'j.t. TAXES Mining is at best a risky venture. It requires large amounts of risk cap ital wtdeh will only be risked if the returns arc adequate should thu project be successful. Thu tax structure has been such in recent year* os to discourage the ihvertnent of risk capital In wining v.-nturvi, I will not go into detail hors cn tha question of taxes, but w uld recoocvnd for the Cccaittee's study the report of tne American Mining Congress cn this subject -cide to the Ways and Kuans Ccw-- wittaa of thu House of Representatives in July, 19c7. I aa submitting a copy for tha Conceittee's lnforaatioa. riKANCINO Along sasewhat tha saar ones I w. uld recamend thu Casnlttoe's cireful consideration of nunc reus rve emendations node by various segnunts of tha mining Industry with rospwet to Securities Exchange Casalssicn ragulstions. L rj_m iu -h h u m sm i i f gi-' jy jyn .l /j il ., ' *' ` ;/7 ?V ;:j LIAZ 3190 ifeftr,rrtfflt -! < -3- t ar o t s for many years the lead mining industry of this country enjcyed moderate tariff protection which in the Act of 1930 enixaitud to 2-i/E# pur 1V -n jig lend and 1/1/2# per lb* on ore and concentrates. It should be nttod tfa'., tnv.he many other comoditits, the rate ertcoliehod by the 1930 Act was not an lnere.-u*c over the one then in effect, ostcblisnod by the Tariff Act of 1922. let, in thu r;ciprocul trace agreement with Ladco in January, 1963, tbo duty ce pig load end on ores and concentrates was cut in half, sc that today the effective rater ore 1-V16# and 3/6# per lb. respectively. It is true that the rates ere to be re stored automatically to 1-7/10# end 1-1/S# Per lb, respectively 30 days after the termination of the unlimited naticncl uaurgency proclaimed on May 27, 1961. On on ad valorem basis the present rate on pig le-d as cunts to only 7 per cert, compared with 3&J per cent when the Tariff Act of 1930 was enacted and 37 per cent when the Act of 1922 was enacted. Current labor rates in Latin American countries which ora important lead producers are well known tc be considerably below labor rates in United States mines. They range between SI.00 and So.00 per day, which smotsits to only about 10 to 30 par cent what American minora are paid. While Aneriean labor is admittedly much more productive it is hardly cunceivable that an American miner can produce as much as four cr five f.-reign niners. Labor makes up tbo largest single item of cost of Mining lead. LABOR SHuTAQg Ac I mentioned before, American lead mines ere ah.rt _f labdr end could use suse 1,000 more men or about 10 per cent OoTe than they are n^wr employing. The Sage-Hour law contributes to this shortage by dise.ur _isg Saturday work. This makes marl mm production difficult end make* it ir-r^cr for the star whose mine le marginal. SUBSIDIES The Executive Cccnlttee <_f the Lead Industries Association is nut of the opinion that the interests of the Country or thu lead mining industry are best served by the payment of subsidies in peace tine, While such s procedure may have been Justified e. long as price ceilings exist'd, In a free market such es we have had since N-vccbor, 1966, tfwy tend tc prolate inefficiency, retard pro duction, and make the- mining industry the servant of Oovurnsent, Since the end of the war-time premia* price plan last June 30, lead mine production has gradually increased and for each cuith for which figure* are avail able since the end of the plan has exceeded the prediction of the Corresponding months of 191*6 when the plan was in operation, a* shown by these figures of the Bureau of Minesi MIKE PRODUCTION OF RECOVERABLE LEoD IB THE U. S.* ---------------------------------- (In Short Ion*1----------------------------- 1966 July August September October 25,000 28,600 27,200 25,900 0. S. Bureau of Mines 1967 23,700 29,900 >0,000 32,200 ; ; MJon^iuw rr wrrr > .j a j `nwfywPTupi 11 - -;"cv ull^^' x-5 *-; ul^3iql . ' -k- Ko doubt there ars individual eases In which termination of prawiies has worked a hardship* That is always to be regretted. Tet no matter hew large premium is paid thars will always be subnarginal nines* But apparently the end ing of subsidies has resulted in the greatest good for the greatest number. Enployaent has increased* the total number of mines operating is not greatly changed* and the country is getting core of the lead it needs. Practically every western state has increased its lead production since termination of subsidies* It appears also that subsidies could be of little help towards acousultbing a Oovemaent stockpile of lead for defense purposes because they applied to such a small amount of production* According to a Bureau of Minos report mads in December only about 600 tons of lead production par month frtn rubnarglnd dries was adversely affected by termination of premiums* This la less than 2 per cent of total mine production and leas than 1 per oent of total lead eenrasp-* tied and has been more than compensated for by mirv.i cooing into production since Jura 30 and increased producti. r; from other mines. For stockpiling the best solu tion lies in the o'nc.'uragemant of audoua production and sounl development of the industry. That is whst wu seem to b* beaded for now* Ondcr the stimulus of a good price In a free market* and with the knowl edge that stockpile needs provide to see* extent a floor under the market* pro duction is increasing* development neglected of necessity for one end a half decades is being done* and exploration is In progress all ever the United States. In Idaho alone new exploration and development has attributed to a pro duction increase to more than 6*730 tons in October ear par ..a with a monthly April-- June* 19lt7, average of about 6*100 tons* MtS I don't want to close without another word about our lead reserves* Cm^ tain data about then were presorted to trus Caanitbte last Joy by the Bureau of Mines which* taken without all tnc qualifications cttach.-d to then by tho 3ureau* may bu usta to paint a dark pict_j\. cf us -j c *hav.--not* nation. It must be kept in mind that those data ren_ as of IrJU cma tuxt conditions hav. changed greatly. Tho impetus given exploration and o*7l rj-oont bj the end of the war and the restoration of a free marwet are already t-.ulng to our reserves. I am convinced that we have the resources in lead* vest resources yet untouched* but we need a period of prosperity and freed cm froa hairing controls to develop them into known reserves. I sincerely hope tkst t~m Icvcrraacr.t will not again attempt to impose allocations* priorities, and other regulations an the lead industry. Reoent developments in Idaho are a shining exs-ple of what may be ex pected t!wre and elsewhere. Arisons and California have taken thalr places la the last few years as important lead producers. Many other areas* both producers of lead at the present time and nonproductra* have potentialities* W fully recognise the importance of the small mine In the past and to the future of lead mining in this country, ke are strongly convinced that the small minor as wvll as the large ono, or.d I don't know hear to draw a line between the two* will here a brighter future whun hv does not have to depund upon Oovorn- aent to tell him when and how ho may operate, to believe that tne ncrmal demand for such a useful metal as lead in such an industrial cc-V.rj _s ours will give the small miner far more permanent ivcurity and prosperity ary subsidy dis tributed at the discretion of some Oowmaental oun.au - ..-cviu.d that taxes* tariffs and ottwr lews are such as to give Ida full frv o.u of opportunity. JW.'Ul' iwium ' 1.1 > e. .uu jus sje wsau w i)W-M wwy 1W T#ir b.T.Prlee Cent* per pound (a) Dcaestic (b) Mine Production Doaertlo (b) Secondary Production Isporta In (c) Ores and Concentrates Inporta (e) In Bullion Inports () of Refined Lead Total (e) Imports Dauille (d) Censunptlon 1925 l<J2-i r. 7 t l. TV 9.02 8.2*2 6.76 6.30 6.83 681*, 1*00 681,000 665,500 627,200 62*8,000 226,900 277,300 276,000 308,000 311,000 11,500 58,100 lo,6oo 25,-00 31*3-0 70,600 78,300 118.300 128,500 $3,100 7,000 11,200 2,500 700 1,700 122,100 117,600 161,100 155.100 116.100 656,500 900,900 813,950 93*, 600 9.V,300 I.J0 1931 193i 1933 -1931* 5.52 l*.2i* 3.1B 3.97 3.36 556,300 101,600 293,000 272,700 267,2*00 255.W0 231,700 198,300 221,500 208,100 39,100 20,900 21,000 6,000 10,600 38,600 32,300 13,500 1,600 2,500 200 100 300 78,200 53,200 31,500 7,600 13poo 768,600 567.700 106.700 1*1*9,500 1*88,000 tvJ5 1936 1937 1938 1939 191*0 191*1 191*2 191*3 192*1* 1.07 *1.71 6.01 1.71 5.05 5.18 5.79 6.18(e) 6.50(e) 6.50(e) 331,100 372.900 161.900 369,700 Oil, 000 157.100 161.100 2*96,200 153,3 2*16,900 270,100 262.900 275,100 221.900 22*1,500 260,300 397.100 323,000 312.KO 331.100 20,000 20,700 31,100 15,130 30,800 111,330 82,100 79,100 70,000 93,600 2, TOO 300 1,800 15,303 18,900 19,600 21,700 13,900 1,600 60 1,300 2,600 5.000 2.000 5,100 . 151,600 271,200 366,500 211,000 222,600 21,030 23,600 10,800 63.900 86.900 282,500 381,200 192,500 319,100 321,300 5>S,90C vn 633,550 678.700 51^,000 667,000 782,000 1,01*9,900 1,000,000 1,100,000 1,090,000 191*5 6.50(e) 191*6 8.11(f) 191*7tEaU)U*^7 390,800 332,500 375,000 363,000 392,800 150,000 70,000 11,500 53,000 125 2,000 227,500 112,200 150,000 299,700 160,900 205,000 1,000,000 99*5,000 1,11*1,000 S*a*rcea () Engineering and Kinln* Journal| (b) 0. S. Bure*u of Kinosi (e) Bureau of Foreign and Dcaartie Cc--rcn (4) Ann-lean Bureau of Hetal Statistics. v, / .\