Nonferrous Metals: Industry Structure

September 1990

OTA-BP-E-62

NTIS order #PB91-104919
Recommended Citation:

U.S. Congress, Office of Technology Assessment,

Background Paper, OTA-BP-E-62 (Washington,

September 1990).

Nonferrous Metals: Industry Structured: U.S. Government Printing Office,

For sale by the Superintendent of Documents

U.S. Government Printing Office, Washington, DC 20402-9325

(order form can be found in the back of this report)
Foreword

The 1980s were turbulent for the domestic nonferrous metals industries. Many mines and

plants were closed during the decade, because of a variety of factors including aging facilities,

environmental regulations, and low metals prices. The corporate structures of the industries

also changed drastically as companies bought, sold, and merged businesses in order to become

more competitive.

OTA examined the copper sector of the nonferrous industry in its 1988 report Copper:

Technology and Competitiveness. That report describes the conditions the copper industry

faced during the early 1980s. It documents the steps U.S. copper companies took to improve

their position in the mid- 1980s, and evaluates the industry’s present and possible future status.

This paper, requested by the Subcommittee on Mineral Resources Development and

Production of the Senate Cornrnittee on Energy and Natural Resources extends the analysis

of the earlier report. This report profiles the structures of four domestic nonferrous metals

industries (copper, aluminurn, lead, and zinc) and the changes they have undergone since

1980. The study also outlines the U.S. position in the world markets.

The study found that the four industries are not homogeneous. They are distinct with each

having its own experiences, problems, and structure. The copper industry had many temporary

mine and plant closures during the 1980s, but rebounded late in the decade as a result of cost

cutting programs and high copper prices. Though there were major changes in copper mine

and plant ownership, most of the shifts consolidated assets among existing producers. There

were, however, major changes in the ownership of the companies themselves. The last

aluminum smelter built in the United States opened in 1980. Since then, about 20 percent of

U.S. capacity has closed. The four ‘major’ U.S. firms have emphasized the fabrication sector

of the business in the United States and expanded their primary aluminum capacity overseas.

In the lead industry, much of the mine and plant capacity changed ownership in the 1980s.

kad production declined by about a quarter to a third in the various primary sectors of the

industry. The secondary (recycled) lead sector, which now accounts for 65 percent of domestic

lead production, is a major influence on the market. Much of the primary zinc industry also

changed ownership during the decade. The zinc processing sector experienced the greatest

decline of the four industries. Its decline started in the mid- 1970s. The outlook for lead and

zinc has improved somewhat in recent years. Several new mines opened late in the decade.

The Red Dog, Alaska mine (slated to open in 1990) will greatly increase the U.S. presence in

lead and zinc mining industries.

OTA wishes to thank the reviewers for their generous help in ensuring the accuracy and

completeness of this report. OTA, however, remains solely responsible for the contents of this

background paper.

. . .

Ill
OTA Project Staff—Nonferrous Metals: Industry Structure

Lionel S. Johns, Assistant Director, OTA

Energy, Materials, and International Security Division

Peter D. Blair, Energy and Materials Program Manager

John Newman, Project Director

Contributing Staff

Vickie Boesch

Administrative Staff

Lillian Q. Chapman Linda L. Long

Acknowledgments

Tina Brumfield

Lance Antrim

Washington, DC

Julie Beatty

Resource Strategies Inc.

Vickie Boesch

Bethesda MD

Andrew A. Brodkey

Magma Copper Co.

John Dickinson

The Aluminum Association, Inc.

Peter P. Dupac

J.P. Morgan Co.

Dr. Roderick G. Eggert

Colorado School of Mines

Dr. Robert E. Johnson

Phelps Dodge Mining Co.

James H. Jolly

Bureau of Mines

Janice L. Jolly

Bureau of Mines

Susan Kollins

U.S. International Trade Commission

Robert Lesemann

Resource Strategies Inc.

David Lundy

U.S. International Trade Commission

Norman McLennan

U.S. International Trade Commission

David Moison

Resource Strategies Inc.

Steven Oman

J.P. Morgan Co.

Patricia A. Plunkert

Bureau of Mines

John Tidlow

Resource Strategies Inc.

Dr. John Tilton

Colorado School of Mines

William D. Woodbury

Bureau of Mines

Keith Knoblock

American Mining Congress
Contents

Page

Chapter 1. Introduction . . . . . . . . . . . . . . . . . . . . . 1

SCOPE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

COPPER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

ALUMINUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

LEAD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

ZINC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Chapter 2. Copper Industry . . . . . . . . . . . . . . . . . 9

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . 9

Uses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Production Methods and Technologies . . . . 9

THE 1980s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

PRODUCER PROFILES, 1990 . . . . . . . . . . . . 12

United States . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Chile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . 21

Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Zambiaa.ndzaire . . . . . . . . . . . . . . . . . . . . . . . 22

Peru . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

The Philippines . . . . . . . . . . . . . . . . . . . . . . . . . 24

PapuaNew Guinea (PNG) . . . . . . . . . . . . . . . 24

SouthAfrica . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

West Germany . . . . . . . . . . . . . . . . . . . . . . . . . 24

Belgium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Other Countries . . . . . . . . . . . . . . . . . . . . . . . . . 24

Chapter 3. Aluminum Industry . . . . . . . . . . . . . 25

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . 25

use s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Production Methods and Technologies . . . 25

THE 1980s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

PRODUCER PROFILES, 1990. . . . . . . . . . . . 27

United States . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Jamaica . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Guinea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Suriname . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Yugoslavia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Greece . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Guyana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Sierra Kane . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Venezuela . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Norway . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Page

West Germany . . . . . . . . . . . . . . . . . . . . . . . . . 38

France . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Switzerland . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

The Middle East . . . . . . . . . . . . . . . . . . . . . . . . 39

Other Countries . . . . . . . . . . . . . . . . . . . . . . . . . 39

Chapter 4. Lead Industry . . . . . . . . . . . . . . . . . . 41

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . 41

Uses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Production Methods and Technologies . . . 41

THE 1980s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

PRODUCER PROFILES, 1990............43

United States . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Peru . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Spain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Sweden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Ireland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Yugoslavia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

West Germany . . . . . . . . . . . . . . . . . . . . . . . . . 50

France . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

United Kingdom . . . . . . . . . . . . . . . . . . . . . . . 50

Belgium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

The Netherlands . . . . . . . . . . . . . . . . . . . . . . . . 51

Italy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

Finland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

Norway . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

Other Countries . . . . . . . . . . . . . . . . . . . . . . . . . 51

Recent Producer Mergers and Alliances . . 51

Chapter 5. Zinc Industry .... ...............53

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . 53

Uses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

Production Methods and Technologies . . . 53

THE 1980s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

PRODUCER PROFILES, 1990. . . . . . . . . . . . 55

United States . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Other Countries . . . . . . . . . . . . . . . . . . . . . . . . . 59

Appendix A. Historical Rankings of

Nonsocialist Copper, Aluminum, Lead, and

Zinc Producing Countries . . . . . . . . . . . . . . . 61

Appendix B. Country and Company

Producers . . . . . . . . ..000.... . . . . . . . . . . . . . . .65

Appendix C. Company Abbreviations . . . . . . 71

v
Boxes

Box Page

3-A. The Big Six Aluminurn Companies . . . . . 30

Figures

Figure Page

1-1. Nonsocialist World Consumption of Copper,

Aluminum, Lead, and Zinc, 1950-88. . . . . 2

2-1. Copper Prices, 1975 -89 . . . . . . . . . . . . . . . . . 11

2-2. U.S. Copper Production and

Consumption, 1975-89 . . . . . . . . . . . . . . . . . 11

2-3. NSW Copper Production and Consumption,

1975-88 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

2-4. NSW Copper Production, Country Profile,

1988 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

2-5. U.S. Copper Industry, Company Profile,

1988 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

3-1. Aluminum Prices, 1975 -89 . . . . . . . . . . . . . 26

3-2. U.S. Aluminum Production and

Consumption, 1975 -89 . . . . . . . . . . . . . . . . . 27

3-3. NSW Aluminum Production and

Consumption,1975 -88 . . . . . . . . . . . . . . . . . . 27

3-4. NSW Aluminurn Production, Country

Profile, 1988 . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

3-5. U.S. Aluminum Industry, Company

Profile,1988 . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

4-1. Lead Prices, 1975 -89 . . . . . . . . . . . . . . . . . . 42

4-2. U.S. Lead Production and Consumption,

1975-89 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

4-3. NSW Lead Production and Consumption,

1975-88 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

4-4. NSW Lead Production, Country Profile,

1988 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Page

4-5. U.S. Lead Industry, Company Profile,

1988 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

4-6. Cross-Share Participation Between

Metallgesellschaft-MIM-Teck-ComincoAsarco, 1990 . . . . . . . . . . . . . . . . . . . . . . . . . . 52

5-1. Zinc Prices, 1975-89 . . . . . . . . . . . . . . . . . . . 54

5-2. U.S. Slab Zinc Production and

Consumption, 1975-89 . . . . . . . . . . . . . . . . . 55

5-3. NSW Slab Zinc Production and

Consumption, 1975-89 . . . . . . . . . . . . . . . . . 55

5-4. NSW Zinc Production, Country Profile,

1988 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

5-5. U.S. Zinc Industry, Company Profile,

1988 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

Tables

Table Page

l-1. Profile of U.S. Nonferrous Metals

Industries, 1989 and 1990 . . . . . . . . . . . . . . . 4

l-2. Profile of U.S. and Nonsocialist

World Nonferrous Metals Industries, 1988. 4

2-1. Profile of U.S. Primary Copper

Production Industry,1980 and 1990 . . . . . 14

3-l. Profile of U.S. Primary Aluminum

Production Industry, 1980 and 1990 . . . . . 28

4-1. Profile of U.S. Primary Lead Production

Industry, 1980 and 1990 . . . . . . . . . . . . . . . 44

5-1. Profile of U.S. Primary Zinc Production

Industry, 1980 and 1990 . . . . . . . . . . . . . . . 56

vj
Chapter 1

Introduction

The 1980s were turbulent for the domestic nonferrous metals industries. Many mines and plants were

closed-some temporarily, some permanently-for

a variety of reasons including aging facilities,

environmental regulations, and low metals prices.

The corporate structures of the industries also

changed drastically during the decade. Companies

bought, sold, and merged businesses in order to

become more competitive. This report profiles four

domestic nonferrous metals industries (copper, aluminum, lead, and zinc) and the changes they have

undergone since 1980.

SCOPE

The report focuses on the primary sectors of the

four industries, little discussion is given to the

secondary (recycling) sectors. Unless noted otherwise, prices, costs, and expenditures are in nominal

(current) U.S. dollars, and global production and

consumption figures refer to the nonsocialist world

(NSW).1 All tonnage figures are in metric tomes

(1 metric tonne= 1.1 short tons = 2,204.6 pounds).

Companies are usually identified by their common

abbreviations. Their full names, headquarters locations, major nonferrous metals affiliates, and principal countries of operation are listed in appendixes B

and C.

BACKGROUND

The dominant feature of the nonferrous markets in

the past decade was the global slowdown in demand

growth. Following the oil shocks of the 1970s,

metals use grew at much slower rates than had been

common earlier in the post-war period (see figure

l-l). Consumption growth rates declined several

percentage points for each of the four metals in this

study. The annual growth rates in NSW consumption during 1950-74 and 1979-88 were as follows:

1950-74 1979-88

Copper . . . . . . . . . . . . . . . . . . 3.9% 1.1 %

Aluminum . . . . . . . . . . . . . . . . . 9.0% 2.3%

Lead . . . . . . . . . . . . . . . . . . . . 2.7% 0.5%

Zinc . . . . . . . . . . . . . . . . . . . . . 3.9% 1.2%

This long-term (secular) slowdown affected metals

producers worldwide not just in the United States.

U.S. metals producers faced other challenges, in

addition to the demand slowdown, during the 1980s.

In some cases, these problems had their beginnings

20 or 30 years prior. Since World War II, the United

States has seen its dominance in the production of

many nonferrous metals diminish greatly. In 1950,

almost half of the NSW’S output of refined copper,

aluminum, and zinc, and over a quarter of its lead

came from the United States.2 The dominance of

U.S. companies was made even greater by their

many foreign affiliates. By 1980, the U.S. share for

refined metal production had declined to 24 percent

for copper, 36 percent for aluminum, and 8 percent

for zinc. The U.S. share of the lead market increased

to 28 percent, because of the opening of the

Viburnum Trend in Missouri.

Production grew overseas faster than in the United

States for a variety of reasons. New deposits were

discovered in relatively unexplored foreign regions

(e.g., Australia and Brazil). Processing plants were

built overseas to keep costs low, to fiulfill countries’

development plans, and to be near growing markets.

For example, the development of abundant low-cost

power lured aluminum~ production to Australia,

Canada, Brazil, and Venezuela. The rebuilding of

the war torn countries, and the general economic

development of others, caused the overseas markets

for metals to grew faster than the North American

market. 3

1~ NW ~rnp~es ~ co~~es with market economies (including Yugoslavia). It excludes the Centrally Planned Economies: Alh- B~gX

Chin% Cub% Czechoslovaki& East Germany, Hungary, Kampuche% North Kore% Laos, Mongolk Poland, Romar.@ the Soviet Union (U.S.S.R.), and

Vietnam.

~bles showing the largest NSW mine and metal producing nations in 1950, 1960, 1970, 1980, and 1988 appear in app. A.

3These countries did not all, however, become large end-users of the metal they consumed. Their metals fabrication sectors (the principal markets

for metals) were developed for the purpose of making products for both domestic use and export.

–l–
Figure l-1-Nonsocialist World Consumption of Copper, Aluminum, bad, and Zinc, 1950-88

Millions of Millions

10

8

6

4

2

0

6

4

3

2

1

0

Copper

Millions of tonnes

26

I 1 1 1 I T 1 1 1 I I ! 1 1 I i I 1 1 I I 1 1 I 1 i I 1 I [ I 1 I 1 I I 1

66 60 66 70

Year

Lead

Millions of tonnes

80 85 88

[ I t 1 I 1 1 1 1 1 1 I I 1 1 1 i 1 1 1 t 1 t I I I 1 1 1 I I I I I I 1 1

10 65 60 66 70 76 80 86 88

Year

SOUROE: MefdSf8UsUa (wioue Ieeues), Metaflgeaelfeohaft Akliengeeellaohaft.

20

15

10

6

0

50

i 1 1 I I I I I i I 1 I 1 I I I 1 1 1 1 1 1 f 1 I 1 I 1 I I I I 1 r I I f

55 60 66 70 75 80 85 88

Year

Zinc

Millions of tonnes

6

1

1

0 ! 1 1 1 i I I I 1 1 I 1 1 I 1 I I I 1 T 1 i I 1 1 I I I I 1 I I I 1 1 I I 1

60 65 60 - 66 70 76 80 86 88

Year
Chapter I-Introduction ● 3

U.S. dominance was also weakened by the

iiagrnentation of the metals markets. Many companies independent of U.S.-based multinationals

began producing nonferrous metals. Among these

were State-owned operations and custom smelters/

refiners. 4 These companies complicate the markets

because they have goals that often diverge from

those of the traditional integrated producers. The

industry was also shaken up by the entrance of

non-mining firms (e.g., oil companies).

There was also direct market intervention (stockpile transactions and price controls) taken by the

U.S. Government. Such actions, along with the

establishment of floating exchange rates, caused

metals prices to become more volatile. This made

planning more difficult and the business generally

more risky.

High production costs also plagued the U.S.

industry. In the copper and zinc industries, the

United States was in danger of becoming a marginal

producer. Labor, energy, and environmental compliance costs increased during the 1970s especially.

Productivity at U.S. mines and plants had not

increased enough to offset the increased costs.

Domestic facilities were mostly older and in great

need of modernization.

COPPER

The United States is currently the NSW’S largest

copper refiner, and second largest miner and primary

smelter. Most of the production comes from Arizona, New Mexico, Utah, Michigan, and Montana.

The principal foreign competitors are in less developed countries (Chile, Zambia, Zaire, and Peru).

Except in Peru, the largest companies in these

countries are state-owned.

In the 1980s, the domestic copper industry

experienced many difficult years when prices and

production levels were both low. Prices ranged from

$0.66 to $0.77flb during 1982-86. U.S. primary

copper production remained in the 1.0 to 1.2 million

tonnes per year (tpy) range during 1982-87. The

market began recovering in 1987. In 1989, prices

rose to $1.31/lb and production increased to 1.5

million tonnes. The production levels at the end of

the 1980s were comparable to those of the late

1970s, except in the smelting sector which had

declined signicantly (see table l-l). Over the

1979-89 period, production was up 4 percent at

mines, down 16 percent at smelters, down 3 percent

at primary refineries, and up 7 percent at secondary

plants. In comparison, production elsewhere in the

NSW increased between 13 and 20 percent in the

various primary sectors and 41 percent in the

secondary sector during 1979-88 (see table 1-2).

Four major new domestic copper-producing

mines opened during the decade (see table l-l). Five

mines closed permanently and many more were

closed temporarily because of low prices, strikes,

and modernization shutdowns. From March 1981 to

January 1983,28 domestic mines closed or cut back

production and U.S. mine capacity utilization hovered around 65 percent.5 In the processing sector,

five smelters and three refineries (electrolytic and

fire refineries) closed permanently. No greenfield

plants opened, but several existing facilities underwent substantial modernization.G Environmental

regulations and aging facilities were major causes of

the decline in this sector. The picture was more

positive in the electrowinning sector, seven facilities

opened, five closed, and many were expanded.

The number of companies involved in the U.S.

copper industry declined during the 1980s. Large

producers such as Anaconda Copper, Amax, Duval,

Inspiration, Cities Service, and Noranda left the

industry while only Montana Resources and Cox

Creek Refining entered. Major changes occurred in

the ownership of severaI of the major producers.

Cyprus was spun off from Amoco in 1985. Magma

was spun off from Newmont in 1987. Copper Range

changed hands several times before it was bought by

Metall Mining (a Canadian subsidiary of Metallgesellschaft) in 1989. Kemecott was acquired by

SOHIO (a subsidiary of British Petroleum) in 1981

and then sold to London-based RTZ (the world’s

largest minerals firm) in 1989.

Five companies (Phelps Dodge, Magma, Cyprus,

Kemecott, and Asarco) currently account for most

of the primary copper production in the United

~stom smelters/refmers process concentrates (or other intermediate materials) produced by other companies. The feed material is either bought

or tolled. In the case of tolling, the material is processed for a fee, but does not change ownership.

W.S. Conmss, office of TCCh.IIOIOgy Assessmen~ Copper: Technology and Competitiveness, OTA-E-367 (Washington W: U.S. Gove-ent

Rinting OI%ce, September 1988).

%ere is, however, talk of building a new copper smelter in Texas.
4 . Nonferrous Metals: Industry Structure

Table l-l—Profile of U.S. Nonferrous Metals Industries, 1989 and 1990

Copper Aluminum Lead Zinc

Production and consumption in Change Change Change Change

thousands of metric tonnesa

from from from from

(preliminary statistics) . . . . . . . . 1989 1979 1989 1979 1989 1979 1989 1979

Mine production . . . . . . . . . . . . . . 1,498 4% 408 –24% 278 –5%

(smelter) (refinery)

Intermediate metal production . . . 1,120 –16% NA NA —

Primary metal production . . . . . . . 1,477

— — —

-3% 4,030 –1 2% 396 -31% 251 4 7 %

Secondary production . . . . . . . . . 477C 4% 1 ,931d 20% 790’ – 2 % 11Oc 107Y0

Metal consumption . ...........2,184 1% NA NA 1,228 –9% 1,063 IYO

Number of facilities

operating 1990 and number Change Change Change Change

opened/closed 1980-90° . . . . . 1990 1980-90 1990 1980-90 1990 1980-90 1990 1980-90

Major mines . . . . . . . . . . . . . . . . . . 25 4/5 -_b a 17 6/2 22 7/5

Smelters . . . . . . . . . . . . . . . . . . . . . 8 0/8 6 0/3 4 0/2 4 0/3

(electrolytic)

Refineries . . . . . . . . . . . . . . . . . . . 23 0/10 4 0/1

(electrowinning)

— —

NOTES:

aSOIJRcES: U.S. Department of the Interior, Bureau of Mines, Mineral Commodity Summm’es 1990 and Minerat Industry Surveys (Washington, DC).

bus. pr~u~ion of metallurgical-grade bauxite is small.

cRefined metal recovered from Okt and m3W -SCrap.

dA]l pr~u~s (rnetd, dwnkds, etc.) recovered from old and new scrap.

eSOIJRCE: U-s- Department of the Interior, Bureau of Mines, Minera/s yeafboo/( (Washington, DC), VafiOUS k3S.UWi.

Table 1-2—Profile of U.S. and Nonsocialist World Nonferrous Metals Industries, 1988

Copper Aluminum Lead Zinc

Change Change Change Change

Production and consumption in from from from from

thousands of metric tonnes 1988 1979 1988 1979 1988 1979 1988 1979

Mine production:

United States . . . . . . . . . . . . . . 1,420 –2% 588 -68%

Rest of nonsocialist world . . . . 5,283 13% 86,891 1570

Nonsocialist world . . . . . . . . . . . 6,702 9% 87,479 13%

394

1,930

2,324

–27%

- 4 %

–9%

256

4,842

5,098

–13%

1170

10940

Intermediate metal production: (smelter) (refinery)

United States . . . . . . . . . . . . . . 1,043 –22%0 5,105 –23%

Rest of nonsocialist world . . . . 5,372 15% 26,277 28%

Nonsocialist world . ..........6,415 7% 31,382 15%

—

—

—

—

—

—

—

—

—

—

—

—

Primary metal production:

United States . . . . . . . . . . . . . . 1,406 –7% 3,944 –13%

Rest of nonsocialist world . . . . 5,179 20% 9,909 3470

Nonsocialist world . ..........6,585 13% 13,852 16%

392

1,861

2,253

–32%

2%

–6%

241

4,548

4,790

-49%

18%

1O%

Secondary production:

United States . . . . . . . . . . . . . . 453a –1% 2,1 22b 32%

Rest of nonsocialist world . . . . 1,003a 4 1 % 3,275 b

46%.

Nonsocialist world . . . . . . . . . . . . 1,456a 24% 5,397b 40%

737a

1,569a

2,306 a

– 9 %

1 1%

4%

89a

345’

434”

66%

9%

1770

Metal consumption:

United States . . . . . . . . . . . . . . 2,214 2% 6,720 1 %

Rest of nonsocialist world . . . . 6,051 13% 13,122 37%

Nonsocialist world . . . . . . . . . . . 8,265 10% 19,842 23%

a Refined metal recovered from old and new Wrap.

bAli produ~5 (metal, chemicals, etc.) recovered from old and new scrap.

SOURCE: h4eta/ Statistics 1978-1988, Metallgesellschaft Aktiengesellschaft.

1,236

3,090

4,326

–8%

11%

4%

1,089

4,146

5,235

3%

14%

11%
Chapter 1-Introduction ● 5

States. They are integrated producers that have been

producing copper for many years. Most of their

mines, smelters, and refineries are in the United

States. Their strategies generally emphasize lowcost production and, except for Asarco, specialization in copper rather than broad-based minerals

activities. 7 Over the last decade, these companies cut

their costs drastically. Some of the measures (e.g.,

delayed maintenance) yielded short-term cost gains,

but many resulted in permanent savings. Wage rates

were renegotiated, and in some cases tied to metals

prices. The number of workers was also cut. In

addition, a great amount of money was invested to

modernize mines and plants. As a result, the

domestic industry is now relatively cost competitive

and among the world’s most modern. It is the leader

in the use of low-cost solvent extraction-electrowinning

(SX-EW) technology.

Little of the recent U.S. investment has gone into

either exploration or research and development

(R&D). Exploration has been limited because of the

financial risk of building new mines, especially

when several large new projects (e.g., Olympic Dam

in Australia and Neves Corvo in Portugal) have

recently come on stream and several others are

expected soon (e.g., La Escondida in Chile and

Salobo in Brazil). R&D efforts are also minimal. The

general feeling is that technology transfers too

quickly in the industry to allow any particular

company to make exclusive gains from R&D. The

problem is particularly acute in the area of product

development. Little attention is paid to product

differentiation. Copper is seen basically as a commodity, with consumers basing their purchase decisions almost solely on price.

Acid rain legislation tops the list of the industry’s

environmental concerns. U.S. copper producers feel

they contribute little to overall sulfur dioxide (SO2)

emissions, and the associated acid rain, and therefore

should not be subjected to more stringent regulations. They also argue that they have already

invested greatly to reduce their SO2 emissions under

legislation enacted in the 1970s. Producers are also

concerned about increases in energy costs that

would result from energy utilities’ compliance with

potential regulations in this area.

ALUMINUM

The United States mines little bauxite, but is

currently the NSW’s second largest alumina refiner

and largest aluminum smelter. 8 Except for one plant

in the Virgin Islands, all of the domestic alumina

refineries are located near the Gulf Coast. The

smelter capacity is located primarily in the Pacific

Northwest and the Ohio Valley, but also in the

Carolinas, New York, and Texas. The major foreign

producers are in Western Europe, Canada, Australia,

Brazil, and Venezuela. Most of the industry’s new

capacity is being built in the latter four countries,

because of their abundant, low-priced electricity.

The cost and availability of electricity, which

accounts for about one-third of primary aluminum

production costs, are principal factors in the siting of

new smelters and the competitiveness of existing

smelters.9

The U.S. aluminum market went through several

cycles during the decade. Prices fluctuated between

$0.47/lb and $0.76/lb in the 1980-87 period, but

ended the decade somewhat higher ($1.10/lb in 1988

and $0.89/lb in 1989). U.S. primary aluminum

production fell as low as 3.0 million tpy (in 1986),

but recovered to around 4.0 million tpy in 1988-89.

Primary production in 1989 was 12 percent lower

than that in 1979. Secondary production, however,

was up 20 percent over the same period. In other

NSW countries, primary aluminum production increased 34 percent and secondary production increased 46 percent during 1979-88.

During the decade, four alumina refineries and ten

aluminum smelters closed. More smelters were

closed temporarily at various times, because of low

prices. The only new facility to open was the Mount

Holly, South Carolina smelter which began production in 1980.

Three companies (Conalco, Anaconda Aluminum, and Revere Copper and Brass) left the U.S.

industry during the 1980s. A fourth, Martin Marietta

sold one of its smelters and leased the other to an

7GW A, c~pbell, “me ReSpO~e of U.S. Copper Companies to aan@% Market COndi~Ons, “ Resources Policy, vol. 15, No. 4, December 1989,

pp. 32G336.

s~s ~wrt does not cover the U.S. bauxite mining sector. Most domestic bauxite goes for nonmetallurgical uses such as abrasives, chemicals,

proppants, refractories, or specialty aluminas.

%lerton Peck (cd.), The World Aluminum Industry in a Changing Energy Era (Washington, DC: Resources for the Future, 1988).
6 ● Nonferrous Metals: Industry Structure

independent producer. Six companies (Columbia

Aluminum, Columbia Falls, Alcan, Vanalco,

Ravenswood, and Northwest Aluminum) entered

U.S. industry in the 1980s. A seventh (Ornet) was

essentially new to the industry also. It was sold to its

current owners, Ohio River Associates, in 1986.

The “U.S. majors” (Alcoa, Reynolds, Alumax,

and Kaiser) operate almost two-thirds of U.S.

smelter capacity. They are multinationals with

aluminum smelters and fabricating plants all over

the world. Except for Alumax, they all own bauxite

mines and alumina refineries. Most of these companies’ recent investment in the primary aluminum

sector have been in overseas facilities. For example,

Alcoa is investing in Australia, and Reynolds and

Alumax are spending in Canada. In the United

States, they are emphasizing the fabricating end of

the business (cans, foil, packaging, architectural

products, etc.).

10 All four companies invest heavily

in R&D for these more value-added products.

The remaining one-third of U.S. aluminum

smelter capacity is operated by two Canadian firms

and seven ‘independents. The Canada-based firms

are Alcan and Noranda. The independents are

Ormet, Southwire, Columbia Aluminum, Columbia

Falls, Vanalco, Ravenswood, and Northwest Aluminum. Except for Southwire, all were formed in the

1980s.

Recycling is an important factor in the U.S.

aluminum industry. The production of secondary

aluminum consumes about 90 to 95 percent less

energy than does primary aluminum. About 60

percent of secondary aluminum recovered from old

scrap comes from used beverage containers (UBC).

In 1988, the UBC recycling rate was about 55

percent in the United States. Most UBC is recycled

by aluminum sheet producers, many of which are

also primary aluminum companies. Industrial scrap

is processed by secondary smelters. About 40

secondary aluminum producers are in operation in

the United States.

Acid rain legislation, because of its effects on the

electric utilities, is the principal environmental

concern of the aluminum industry. All proposed SO2

emissions regulations will raise costs at coal-based

utilities to some degree. The extent to which the cost

increases will be passed on to aluminum smelters is

uncertain. The impact will be mitigated somewhat

by the variable rate contracts that tie electricity rates

to the price of aluminum. A U.S. Bureau of Mines

study of 10 domestic smelters found that the various

acid rain proposals would increase their electricity

rates by 3.5 to 5.5 mills/kWh and increase their costs

by an estimated 2.5 to 4¢/lb of aluminum. 11 The

increases, however, are very site-specific. In Ohio

and West Virginia, costs would increase 5.2 to

7.7¢/lb; in other regions, the effects would be

smaller. Smelters tied to hydropower utilities would

see minimal rate increases. The 10 smelters studied

account for 90 percent of the aluminum capacity that

is tied to coal-fried generating facilities-those most

liable to experience cost increases from acid rain

legislation. 12 They account for about half of domestic aluminum capacity overall.

LEAD

The United States is a major producer of lead. It

currently ranks second in the NSW in mine output

and first in refined lead production. The principal

mines and plants are in southeastern Missouri’s

Viburnum Trend. There are additional leadproducing mines in Colorado, Idaho, Montana, and

Alaska, and processing facilities in Montana and

Nebraska. The main integrated foreign competitors

are Australia, Canada, and Mexico. In addition, Peru

is a major mining country, and Western European

countries and Japan have large processing sectors.

The U.S. lead industry faced hard times in the

mid-1980s. Lead prices started the decade at around

$0.43/lb, fluctuated downward to $0.19/lb in 1985,

and then recovered to the $0.35 to $0.49/lb range in

1987-89. Production of primary lead declined over

the decade. During 1979-89, U.S. mine production

declined 24 percent and primary metal production

fell 31 percent. Secondary production declined in the

early 1980s, but rose later in the decade to nearly

match its 1979 level. In other nonsocialist countries,

t~e majom ~ve not, however, abandoned tdl of tieh dommticP-~ uminum capacity. It helps them manage their business risk.

llne smelters studied were Sebree, KY (Alcan); Frederick, m(AIWIMX ); Mt. Holly, SC (Al umax); Badi% NC (Alcoa); Evansville, IN (Alcoa);

Rockdale, TX (Alcoa); Hawesviile, KY (Southwire); New Madrid, M() (Noranda): Hannibal, OH (Ormet); and Ravenswood, WV (Ravenswood). John

B. Bemett, The Potential Impact of Acid Rain Legislation on the Domestic Alum”num Industry, OFR 58-88 (Washington, DC: U.S. Department of the

Interior, Bureau of Mines, October 1988).

12u.s. cowe5S, congm5ion~ ReWh Service, Acid Rain Legislation and the Domestic Aiuminum Industry, CRS Report for Conwess, 89-327

ENR, my 1989.
Chapter 1-Introduction ● 7

primary production held fairly steady and secondary

production rose 11 percent during 1979-88.

Six new lead-producing mines opened during the

decade. 13 Two mines that produced lead were

permanently closed. Many more mines closed temporarily at some time during the 1980s, because of

low prices. In the processing sector, two smelters

and one refinery were closed permanently and no

new ones opened.

Much of the U.S. primary lead industry changed

ownership during the 1980s. Ten firms (Doe Run,

Asarco, Cominco-Dresser, Montana Tunnels,

Greens Creek, Washington Mining, Hecla, Bunker

Hill Mining, Star-Phoenix Mining, and New Butte

Mining) currently mine lead in the United States.

Only Doe Run and Asarco operate smelting/refining

facilities.

Cominco-Alaska will operate the new Red Dog

zinc-lead mine in Alaska. The mine is slated to open

in 1990. The project is a joint venture between

Cominco (a Canada-based multinational minerals

producer) and NANA (an Alaskan Native corporation) which owns the mineral rights to the property.

Red Dog is being developed primarily for its zinc.

However, at full capacity it will be the United States’

third or fourth largest lead-producing mine and will

increase domestic production by 16 percent over

1989 levels. The mine will ship its concentrates to

British Columbia, the Far East, and Europe for

processing.

Lead’s health effects are the industry’s most

important environmental issue. Health concerns

have weakened demand for the metal in some sectors

(e.g., gasoline additives, indoor paints, and various

building products). There is also concern regarding

the health and safety of workers exposed to lead

particulate during the production process. Most of

the industry is not in compliance with the current

National Ambient Air Quality Standards (NAAQS)

particulate standard for lead.14

Compared with other metals industries, lead has

a relatively easy time meeting the SO2 emissions

standards of the Clean Air Act. The economics of

sulfur recovery are further aided by existence of

large nearby sulfuric acid markets. However, one of

the four existing primary smelters does not have an

acid plant, and could be forced to close in the

not-too-distant future under contemplated regulations.

Currently, about 65 percent of U.S. refinery

output is secondary lead. Lead acid batteries account

for 85 percent of total recycled lead material at

domestic secondary plants. The major secondary

smelters in the United States are RSR Corp., Pacific

Dunlop/GNB Battery, Schuylkill Metals, Exide

Corp. Battery, and Sanders Lead, which represent

over 70 percent of domestic capacity. Environmental factors caused recycling to become more

difficult in the 1980s. Spent lead batteries are

classified by the U.S. Environmental Protection

Agency (EPA) as hazardous waste under the Resource Conservation and Recovery Act (RCRA).

Many scrap collectors and dealers refuse to handle

batteries for fear of incurring liability under Superfund. 15 However, the integrated metal producers,

battery manufacturers, and large independent smelters have backward integrated into this market

segment to a large degree.

ZINC

The United States is a relatively small zinc

producer. In the NSW, it ranks sixth in mine

production, eighth in primary refinery production,

and first in secondary output. The principal zinc

mining State is Tennessee. It accounts for over half

of U.S. production. Additional zinc-producing

mines are located in Missouri, Colorado, Alaska,

Idaho, Montana, New York, and Nevada. About 20

percent of total zinc production comes as a byproduct of Missouri lead mines, but most comes from

mines where lead is of minor importance. Processing

facilities are located in Tennessee, Pennsylvania,

Oklahoma, and Illinois. The main foreign integrated

producers are Canada, Australia, and Western European countries. In addition, Peru and Mexico are

major mining countries, and Japan has a large

processing sector. The major area for new primary

zinc capacity is Australia.

ls~s ficludes tie R~ Dog zinc-lead mine, slated to begin fdl production in lm.

IdRaymond J. Is&~ood et ~., The Impact of Existing and ProposedRegulations Upon the Domestic tiadIndusw, OR55-88 (was@3toQ ~:

U.S. Department of the IMerior, Bureau of Mines, 1988).

IsSuP.fmd is tie ~omon nne for tie comprehensive Environmen~ Response, compensation, and Liability /kt.
8 • Nonferrous Metals: Industry Structure

Zinc prices, unlike those of copper, aluminum,

and lead, fluctuated upward during the 1980s. The

price of zinc remained above its 1980 level of

$0.36/lb for the entire decade. Prices rose their

greatest in the later years, when they increased from

$0.38/lb (1986) to $0.82/lb (1989). U.S. secondary

production rose during the decade, but primary

output fell. Compared with 1979 levels, U.S. production in 1989 was down 5 percent in mining, down

47 percent in primary slab processing, and up 107

percent in secondary slab processing. In other

nonsocialist countries, production increased 11, 18,

and 9 percent in the mining, primary slab, and

secondary slab sectors respectively during 1979-88.

In the United States, one new zinc mine (Pierrepont) and two zinc-producing precious metals mines

(Greens Creek and Montana Tunnels) opened during

the decade. In addition, zinc is recovered from the

West Fork lead mine which opened in 1985. Five

zinc mines, and one zinc-producing precious metals

mine, were permanently closed during the 1980s. In

the processing sector, three smelter/refineries were

closed permanently and no new ones opened.

As in

industry

Fourteen

Miniere,

the lead industry, much of the U.S. zinc

changed ownership during the 1980s.

firms (Zinc Corp. of America, Jersey

Big River, Asarco, Alta Gold, ComincoDresser, Doe Run, Montana Tunnels, Greens Creek,

Hecla, Washington Mining, Bunker Hill Mining,

Star-Phoenix Mining, and New Butte Mining) currently produce primary zinc in the United States.

Only the first three operate primary smelting/

refining zinc facilities. All but Big River operate

mines.

When it opens in 1990, the Cominco-NANA Red

Dog mine will greatly boost the United States’

stature as a zinc producer. At capacity, it will be the

world’s largest zinc mine and nearly double U.S.

zinc mine production over 1989 levels.

The decline in the U.S. zinc industry during the

last two decades has been more pronounced than in

the copper, aluminum, and lead industries. Primary

slab zinc capacity fell from 980,000 tomes in 1970

to 570,000 tonnes in 1980 to 320,000 tomes in 1988.

The closures were the result of declining local

supplies of concentrates, rising energy (primarily

natural gas) costs , and environmental regulations.16

Compliance with environmental regulations does

not appear to constitute a major competitive disadvantage to current U.S. producers .17 Of the four

primary slab plants that remain, three are electrolytic

plants which are relatively easy to modify to meet

environmental standards.

ISGW A. c~pbel], Anil Jambekzu, and Brian Frame, “Zinc Processing in the USA: An Analysis of a Declining Industry, ” Resources Policy, vol.

12, No. 4, December 1986, pp. 317-334.

17u.s. con~ess, con~eSSion~ReSe~ch Service, The Competitiveness ofAmen”can Mining andProcessing, repOflprepWdfOr tie HOUSe committee

on Energy and Commeree, Subcommittee on Oversight and Investigations, Committee Print 99-FF (Washington, DC: U.S. Government Printing Office,

Jdy 1986).
Chapter 2

Copper Industry

INTRODUCTION

Copper has been used in jewelry, utensils, weapons, and tools for thousands of years. Such objects

were hammered from native copper-the naturally

occurring pure metal-in areas around the Mediterranean Sea and Lake Superior as long ago as

6000-5000 BC. The metal was first smelted from

ores around 4000-3500 BC. Ancient mines have

been found in Israel, Cyprus, Spain, and Britain. The

Industrial Revolution and the

created the need for a highly

industry.

use s

age of electricity

developed copper

Copper’s excellent electrical conductivity makes

it important for power, lighting, and communications. In addition, its strength, durability, malleability, and resistance to corrosion and fatigue make it

useful in a variety of structural applications.

In the United States, the largest market for copper

is the construction industry. An estimated 41 percent

of domestic copper mill shipments went to this

industry in 1988.1 Uses there include electrical

wiring, plumbing and heating, air-conditioning and

refrigeration, and architectural applications (e.g.,

gutters and roof and wall cladding). The second

largest market (22 percent of shipments) was the

electrical and electronics industry for uses such as

telecommunications, power utilities, industrial controls, business electronics, and lighting and wiring.

Other major markets include the industrial machinery and equipment industry (14 percent), the transportation sector (12 percent), miscellaneous consumer goods (e.g., appliances, cooking utensils,

jewelry, and objets d’art), military applications,

coinage, pharmaceuticals, and chemicals.

Across all markets, copper is used primarily for

electrical and electronic applications. Copper use in

these applications accounted for 70 percent

apparent domestic consumption in 1988.2

Production Methods and Technologies

of

Modern copper production techniques were established around 1900. Until then, only very rich ores

(those containing 5 to 30 percent copper) could be

processed economically. The commercial exploitation of lower grade ores became possible with the

development of precipitation and flotation technologies and large-scale mining and processing methods.

Today, most copper comes from ores containing 0.5

to 2 percent copper.

Copper is produced primarily from sulfide minerals such as chalcopyrite (CuFeS2

), chalcocite

(Cu2S), bornite (Cu2FeS4

), and covellite (CuS).

Some production, though, is based on oxide minerals such as malachite (Cu2

(OH )2C O3), azurite

(CuSiO3), chrysocolla ( Cu3(OH)2( C03)2), and cuprite (Cu2O). Copper ore may be mined by either

open pit, underground, or solution mining methods.

Open pit mines account for about 60 percent of

nonsocialist world (NSW) production and 85 percent of U.S. production. Copper is extracted from the

ore by two principal methods: pyrometallurgical

(concentration-smelting-refining) and hydrometallurgical (leaching-solvent extraction-electrowinning).

The pyrometallurgical route is the more common

production method. The first step, ore concentration,

occurs at the minesite. It involves crushing, grinding, and flotation of the ore into concentrates which

contain 20 to 30 percent copper. Concentrates are the

crudest intermediate product that is marketed.

The next processing steps (roasting, smelting, and

converting) are performed at the smelter.4 Roasting

is an optional step which is sometimes used to

upgrade the concentrates. Smelting breaks down the

IAnnuz/ Data 1989, COpper Development Association Inc. (GreenticL CT).

zJ~ce L.W. Jolly and Daniel ~ektehj ‘‘ Copper,” Minerals Yearbook, vol. I, 1988 ed. (Washingto% DC: U.S. Department of the Interior, Bureau

of Mks, 1990).

3u.s. Conge55, Office of Tec~olo~ Assessmen~ Copper: Technology and co~pe~tivene~s, om-E.3(57 (Washgto~ DC: U.S. Government

Printing Office, September 1988). John G. Peacey, “Copper Metallurgy,” McGraw-Hill Encyclopedia on Science and Technology (New York:

McGraw-Hill, 1987). Janice L.W. Jolly, “Copper,” Mineral Facts and Problems, 1985 ed. (Washington, DC: U.S. Department of the Interior, Bureau

of Mines, 1985).

4~e tem “smeI~g” COrnrnOnly refers to all processes carried out at the smelter.

-9–
10 ● Nonferrous Metals: Industry Structure

complex minerals to produce a liquid copper-sulfide

matte (35 to 75 percent copper). There are four basic

smelting technologies: flash, reverberatory, electric,

and continuous.5 Converting, usually carried out in

a Pierce-Smith converter, oxidizes the matte into

blister copper (98.5 to 99.5 percent copper). Environmental regulations and process economics make

the control of sulfur dioxide (SO2

) gas a very

important aspect of the various smelting processes.

In recent years, concerns about the air quality

impacts of reverberatory furnaces have led to the

widespread adoption of electric and flash furnaces in

the United States.

Most of the impurities remaining in the blister

copper are removed at the refinery. First, the molten

blister copper is fire-refined (to further reduce its

sulfur and oxygen content) and then cast into anodes.

The anodes are then electrolytically refined (electrorefined). They are hung vertically between cathode starter sheets in long tanks (cells) filled with an

acidic copper sulfate solution. An electric current is

run through the solution (between the electrodes)

and the copper gradually corrodes from the anode

and plates onto the cathode. The end product,

cathode copper, is 99.99+ percent copper. Cathodes

are melted and cast into wirebar or continuous bar

stock (for wire manufacture), slabs (for mechanical

use), or ingots (for alloying).

In the hydrometallurgical production route, copper is recovered from the ores using aqueous

(water-based) solutions. This method is applied

mainly to oxide ores, and to low-grade oxide and

sulfide mine wastes.6 It is a very low-cost method of

producing copper. When mining costs are excluded

(or nonexistent as in the case of waste dump

leaching), copper can be produced for around

$0.30/lb. In 1988, about 16 percent of domestic

primary copper output was produced by hydrometallurgical techniques.

The first step, leaching, involves percolating

sulfuric acid (H2SO4

) through the ore or waste. The

acid (leachate) dissolves the copper minerals and

carries them away. The copper is recovered by

solvent extraction and electrowinning (SX-EW).7 In

solvent extraction, an organic chemical that dissolves copper but not impurity metals is mixed with

the leachate.8 The organic solution collects the

copper and is then treated with sulfuric acid (H2SO4)

to strip the copper into an electrolytic solution.

Copper is recovered from the electrolyte by electrowinning, a process similar in principal to electrorefining (described above). The main difference is

with the anodes. Electrowinning uses inert (nondissolving) anodes since the copper is already in the

electrolyte. Application of the electric current deposits the copper on to the cathode. The cathode

copper is then stripped from the starter sheets (which

are reused), and shipped to the rod mill or fabricator.

THE 1980s

The U.S. copper market started the 1980s in a

shortage situation (see figures 2-1 and 2-2). In 1980,

domestic primary copper production (1.2 million

tonnes) was low and prices (averaging $1.01/lb)

were high compared with previous years. Production

increased in 1981, but then fell to the 1.0 to 1.2

million tonnes per year (tpy) range during 1982-87.

Prices were also low in this period. They averaged

$0.75/lb in 1982-83 and $0.67/lb in 1984-86. These

prices were similar in nominal terms to those of the

sFIzsh process~ (IUCO ad CMohunpu) combine roasting and hearth smelting. The sulfide particles in the cOn=nt@tX r-et witi an fi/oxYgm

mixture to produce a large proportion of the thermal energy needed for smelting. As a result flash furnaces have relatively low fuel costs. Further, their

waste gases are rich in SOZ, permitting economic pollution controLThe reverberatory procms was widely favored over the last 50 to 60 years because

of its versatility; all types of material, lumpy or free, wet or dry, could be smelted. However, the reverberatory furmce has relatively high fuel

requirements, and its sulfur dioxide gas is too dilute for economic conversion into sulfuric acid or treatment with other pollution control methods.The

electric process uses an electrically heated hearth furmce that is similar in operation to the reverberatory furnace, but with more advantageous control

of tbe effluent gases. The process makes limited use of heat generation from sulflde oxidatioq and the heavy reliance on external energy can result in

relatively high energy costs. Two continuous processes (Noranda and Mitsubishi) are in limited use. They combine roasting, smelting, and converting

in one operation that produces blister copper directly from concentrates, while taking advantage of the heat generated by the oxi&tion of sullldes. The

benefits of continuous processes include lower capital cost, reduced materiak handling, low heat losses, very low energy requirements, econoznical sulfur

dioxide gas recovery, and the ability to apply online computer controls to the entire copper-making process. Neither of these processes, however, has

yet proven to be truly continuous. Their slags, which have high copper contents and must be recyclm can only be processed with auxiliary equipment.

GRom~g, a pYome~wgic~ proc~s, is sometimes used to convert sulfide minerals to more easily leachable oxids and su~ata.

TM older me~od of ravefig cop~rfiom tie l~c~te is tie ~on pr~ipi@tio@ or cemen~tiou process. The pre~nt l~ch SOhltiOIl flOWS hllgh

a pile of scrap ironhteel. Copper flakes and powder precipitate onto tbe steel surfaces, but are carried away under the force of the flowing solution. The

copper is relatively impure, however, and subsequent treatment is required, usually through normal smelting and refining.

gSoIvmt ex~ction is largely confined to copper oxides. This includes IMhMdly oc caning oxide ores and sul.tide ores that have been oxidized by

the atmosphere (e.g., in waste dumps) or by roasting. Similar processes for sultldes and complex ores are still being developed.
Chapter 2--Copper Industry ● 11

Figure 2-l-Copper Prices, 1975-89

100

i

8 0

i

4 0

20

I

75-79 80 81 82 83 84 85 86 87 88 89

Year

NOTE: U.S. producers pri~athodeeopper delivered. Prices in constant 1980 dollars were calculated using producer price index. Bars

labeled 75-79 represent averages for the period 1975-79.

SOURCE: U.S. Bureau of Mines.

1975-79 period, but about one-third lower in real

(inflation adjusted) terms. The market began recovering in 1987. In 1989, production had reached 1.5

million tonnes and prices had risen to $1.32/lb in

1989.

U.S. production of secondary (scrap-based) copper followed a similar pattern to that of primary

copper. It started the decade around 470,000 tpy, fell

to 310,000 tomes in 1984, and then recovered to

500,000 tonnes in 1989. Over the entire decade,

secondary material accounted for 26 percent of total

U.S. refined copper production (compared with 20

percent in 1975 -79).9

The United States consumed 1.9 million tonnes of

copper in 1980.10 Consumption rose in 1981, but

then fell to 1.7 million tonnes in 1982 (a recession

year). In 1983, consumption increased even though

production continued to fall. By 1985, consumption

had risen to 2.1 million tpy. It has grown an average

of 1.3 percent per year since. The difference between

consumption and total refined production changed

greatly over the decade. This gap, which is met with

imports or inventory reductions, grew from 165,000

Figure 2-2—U.S. Copper Production and

Consumption, 1975-89

Million of tonnes

2.5

2.0

1.5

1.0

0.5

0.0

75-79 80 81 82 83 84 85 86 87 88 8 9

Year

W Mine production = Primary production

[ ) Secondary production — Consumption

NOTE: Secondary production is refined metal recovered from old and new

scrap. Bars labeled 75-79 represent averages for the period

1975-79.

SOURCE: Metal Statistics, Metallgesellschaft Aktiengesellsehaft.

tpy in 1980-82 to 615,000 tpy in 1983-87. The gap

narrowed somewhat in 1988-89.

For the nonsocialist world (NSW) as a whole,

copper production and consumption were relatively

stable during the 1980s (see figure 2-3). Over the

period 1980-88, primary refined production grew at

annual rate of 1.5 percent and consumption rose at a

rate of 1.9 percent. Secondary production averaged

17 percent of total NSW refined copper production.

The openings, closings, and ownership changes

that occurred in the U.S. primary copper industry

during the 1980s are profiled in table 2-1. Three new

copper mines (Troy, Pines Altos, Miami) opened

during the decade. A lead mine (Casteel) which

produces copper also opened. Five mines (Sacaton,

Copperhill, Magma, New Cornelia, and Continental) closed permanently during the 1980s. Many

more mines closed temporarily at some time during

the 1980s because of low prices, strikes, and

modernization shutdowns.

In the processing sector, five smelters and three

refineries (electrolytic and fire refineries) closed.

Environmental regulations and aging facilities were

%ese figures represent the refried copper recovered from both new and old scrap. As such they overstate the amount of refined copper that is actually

entering the manufacturing stream. Old scrap comes from discarded products, new scrap is waste from fabricating and other manufacturing processes.

IrI 1988, 1.3 million tonnes of secondary copper were recoveredfhwn old scrap (5 19,000 tonnes) and new scrap (793,000 tomes), and recoveredas refined

metal (453,000 tonnes) and brass, foundry products, and other ‘‘non-refined” products (861,000 tomes). Janice L.W. Jolly and Daniel Edelsteim

“Copper,” Minerals Yearbook, vol. I, 1988 ed. (Washington DC: U.S. Department of the Interior, Bureau of Mines, 1990).

l% this ~P~, Comumption is defined in tem of u~n~act~~ met~ products, Consumption does not include the metal contained k imported

manufactwed products such as automobiles or electronics.
12 ● Nonferrous Metals: Industry Structure

Figure 2-3—NSW Copper Production and

Consumption, 1975-88

Million of tonnes

10

8

6

4

2

0

75-79 80 81 82 83 84 85 86 87 88

Year

~~”~ Mine production = Primary production

I ] Secondary production — Consumptio n

NOTE: Seeondary production is refined metal reeovered from old and new

scrap. Bars labeled 75-79 represent averages for the period

1975-79.

SOURCE: Metal Statistics, Metallgesellsehaft Aktiengeselischaft.

major causes of the decline in this sector. No

greenfield plants were constructed, but several new

facilities were built at existing sites (the Hayden

smelter, the Sam Manuel smelter, and the White

Pine refinery). There is talk, however, of building a

new smelter in Texas in the early 1990s. The picture

was more positive in the electrowinning sector,

seven facilities opened and five closed. In addition,

existing facilities were expanded. Electrowinning

production grew from 118,000 tonnes in 1980 to

228,000 tonnes in 1988 and the expansion is

continuing. During 1980-88, U.S. smelter capacity

declined 36 percent to 1.2 million tonnes, electrolytic refining capacity fell 22 percent to 1.6 million

tonnes, and electrowinning capacity rose 57 percent

to 300,000 tonnes.

The number of companies involved in the U.S.

copper industry declined during the 1980s. Large

producers such as Amax, Anaconda Copper, Cities

Service, Duval, Inspiration, and Noranda left the

industry. All of their facilities, except for one mine

and one refinery, were purchased by existing copper

producers. Montana Resources and Cox Creek

Refining were the only new companies to enter the

industry. Major changes occurred in the ownership

of many producers. Cyprus was spun off from

Amoco in 1985. Magma was spun off from Newmont in 1987. Copper Range changed hands several

times before it was bought by Metall Mining in

1989. Kennecott was acquired by SOHIO (a subsidiary of British Petroleum) in 1981 and then sold to

RTZ in 1989.

PRODUCER PROFILES, 1990

Chile and the United States dominate all sectors

of the primary copper industry: mining, smelting,

and refining (see figure 2-4). They have been the

industry leaders for much of this century. Japan, the

third ranked smelting and refining country, has little

mine capacity and relies on imports of concentrates

to feed its industry. The medium-sized producers are

Canada, Zambia, and Zaire. Together, these six

countries control about two-thirds of the NSW

primary copper output. The United States, Japan,

and Western European countries are the largest

secondary copper producers.

Less developed countries (LDCs) play a larger

role in the copper industry than in the aluminum,

lead, and zinc industries. Chile, Zambia, Zaire, Peru,

Mexico, and the Philippines are involved in all

aspects of the primary copper industry, not just the

mining sector. In 1988, developing countries world

accounted for 57, 48, and 39 percent of NSW mine,

smelter, and refinery production respectively.

Copper production is a major part of some LDCs’

economies.

11 Consequently, the governments of

these countries keep tight control over, and often

own, the production companies. In 1981,62 percent

of LDC mine capacity was held by companies which

12 

were majority government owned. The tendency

for developing countries to run their industries for

political as well as financial goals exacerbated the

problems for the U.S. industry in the 1980s.

Chile, Peru, Zambia, Zaire, Indonesia, Australia,

Papua New Guinea (PNG), and Yugoslavia belong

to the Intergovernmental Council of Copper Exporting Countries (CIPEC).13 Established in 1967, this

trade association conducts marketing studies, disIlcopper amo~ted for 80 to 97 percent of the total export earnings of Zambia (1983-88),20 to 58 percent for Zaire (1981-83),41 to 50 Pement for

Chile (1983-89), 34 to 65 pereent for Papua New Guinea (1983-89), and 13 to 22 percent for Peru (1983-87). International Monetary Fund (IMF),

International Financial Statistics.

12MaI-ian Rade~, State Mineral Enterprises (Washington DC: Resources for the Future, 1985).

Iqcomil ~tergouvemementaf des Pays Exporters de Ctivre.
Chapter 2-Copper Industry ● 13

Figure 2-4—NSW Copper Production, Country Profile, 1988

Mine Production Smelter Productio n

6.7 million tonnes 6.4 million tonne s

United

Canada 11%

- Zambia 7%

Primary Production

6.6 million tonnes

United States

United

3%

NOTE: Secondary production is refined metal recovered from old and new scrap.

SOURCE: Meta/ Statistics, Metallgesellschaft Aktiengesellschaft.

seminates information on copper developments, and

seeks to promote expansion in the industry. During

1974-76, in the wake of the Organization of Petroleum Exporting Countries (OPEC) success in raising

oil prices, CIPEC attempted to establish itself as a

cartel. It tried, but failed, to stabilize then falling

copper prices through production cutbacks. The

group has discussed price stabilization numerous

other times but has been unable to agree on a

program. CIPEC’s power to manage supply and

stabilize markets has never been established.14

w

, Other 19%

\

W. Germany 3%

Australia 3%

South Africa 3%

Peru 4%

Canada 8%

Secondary Production

1.5 million tonnes

South Korea 3%

Brazil 3%

UK 5%

Iv 5%

Japan 10%

United States

The United States ranks as the first or second

largest producer in all sectors of the NSW copper

industry. Most U.S. producers are integrated from

mining through to the refining stage. Several companies also have facilities to produce copper rod and

other semi-manufactured products.

There are currently approximately 35 domestic

copper mines in production. The 13 largest ac14u.s. ConweSS, Office of T~&~olog Assessment, Copper: ~ec~~~f~gy ad c~mpef~five~e~$, OTA-E-367 ~MhklgtO~ DC: U.S. Government

Printing Office, September 1988).
14 ● Nonferrous Metals: Industry Structure

Table 2-l—Profile of U.S. Primary Copper Production Industry, 1980 and 1990

1980 1990

Major mines:

Ray, AZ . . . . . . . . . . . . . . . . . . . .

Mission Complex, AZ . . . . . . . . .

Eisenhower, AZ . . . . . . . . . . . . . .

Pima, AZ . . . . . . . . . . . . . . . . . . .

Troy, MT . . . . . . . . . . . . . . . . . . .

Silver Bell, AZ . . . . . . . . . . . . . . .

Sacaton, AZ.. . . . . . . . . . . . . . . .

Copperhill, TN . . . . . . . . . . . . . . .

White Pine, Ml ... , . . . . . . . . . . .

Bagdad, AZ..... . . . . . . . . . . . .

Sierrita, AZ..... . . . . . . . . . . . .

Miami, AZ...... . . . . . . . . . . . . .

Bluebird, AZ . . . . . . . . . . . . . . . .

Twin Buttes, AZ. . . . . . . . . . . . . .

Pines Altos, NM. . . . . . . . . . . . . .

Mineral Park,AZ . . . . . . . . . . . . .

Casa Grande (Lakeshore), AZ..

Casteel (Viburnum #35), MO..,

Bingham Canyon, UT . . . . . . . . .

Carr Fork, UT . . . . . . . . . . . . . . .

San Manuel, AZ.. . . . . . . . . . . .

Pinto Valley, AZ . . . . . . . . . . . . .

Miami, AZ...... . . . . . . . . . . . . .

Magma, AZ . . . . . . . . . . . . . . . . .

Butte Mines, MT. . . . . . . . . . . . .

Morenci/Metcalf, AZ . . . . . . . . . .

Tyrone, NM . . . . . . . . . . . . . . . . .

Chino, AZ . . . . . . . . . . . . . . . . . .

New Cornelia(Ajo), AZ . . . . . . . .

Continental, NM . . . . . . . . . . . . .

Kennecott

Asarco

Asarco-Anamaxab

Cyprus-Utah lnt’lc,d

—

Asarco

Asarco

Cities Service

Copper Rangef

Cyprusc

Duvalh

Inspiration

Asarco

Asarco

Asarco

Asarco

Asarcoe

Asarco

—

—

Copper Rangeg

Cyprus

Cyprus

Cyprus

Rachers Exp. & Dev. Cyprus

An amaxa’b

—

Duvalh

Noranda

—

Kennecot

Anaconda Copperb

Magmak

Cities Service

—

Magmak

Anaconda Copperb

Phelps Dodge

Phelps Dodge

Kennecott

Phelps Dodge

Sharon Steel

Smelters:

Great Falls, MT.. . . . . . . . . . . . . Anaconda Copperb

Hayden, AZ . . . . . . . . . . . . . . . . . Asarco

EI Paso, TX..... . . . . . . . . . . . . Asarco

Tacoma, WA . . . . . . . . . . . . . . . . Asarco

Hayden (Ray), AZ . . . . . . . . . . . . Kennecott

Copperhill, TN.... . . . . . . . . . . . Cities Service

White Pine, MI... . . . . . . . . . . . . Copper Rangef

Miami (Globe), AZ . . . . . . . . . . . . inspiration

Garfield, UT...... . . . . . . . . . . . Kennecott

McGill NV...... . . . . . . . . . . . . Kennecott

San Manuel, AZ. . . . . . . . . . . . . Magmak

Hildago, NM . . . . . . . . . . . . . . . . Phelps Dodge

Hurley, NM.,... . . . . . . . . . . . . . Kennecott

Douglas, AZ . . . . . . . . . . . . . . . . Phelps Dodge

Morenci, AZ.... . . . . . . . . . . . . . Phelps Dodge

Ajo, AZ . . . . . . . . . . . . . . . . . . . . . Phelps Dodge

Texas City, TX... . . . . . . . . . . . . —

Cyprus

Cyprus

Cyprus

Cyprus

DoeRuni

Kennecottj

Kennecottj

Magma

Magma

Magma

—

Montana Resourcesi

Phelps Dodgem

Phelps Dodge

Chino Minesn

—

—

Sold to Asarco 1986

Comprises Mission, Eisenhower San Xavier, and

Pima mines.

Anamax share sold to Asarco 1987; made part of

Mission Complex

Sold to Asarco 1985; made part of Mission Complex

Opened 1981

Closed 1983

Closed 1987; sold to Tennessee Chemical 1982

Sold to Echo Bay 1984, Northern Copper (ESOP)

1985, Metall Mining 1989

Note1

Sold to Cyprus 1986; includes Sierrita and Esperanza

mines-combined 1986

Note 2; includes inspiration and Ox Hide mines

Sold to Inspiration and integrated with Inspiration

(Miami) mine 1984; Note 2

Sold to Cyprus 1988

Opened 1987; owned by Exxon until 1982; sold to

Boliden 1982, Cyprus 1987

Sold to Cyprus 1986

Sold to Cyprus 1987; renamed Casa Grande 1987

Opened 1984; owned by Fluor (St. Joe); later became

Doe Run; see Table 4-1

Modernization 1985-1987; Note 3

Sold to Kennecott and integrated with Bingham

Canyon mine 1985; Note 3

Note 4

Notes 5&4

Opened 1983; developed by Cities Service; Notes

5&4

Closed 1982

Sold to Montana Resources 1985; minority share sold

to Asarco 1989

Minority share sold to Sumitomo 1985

Modernization 1981-84; Note 6

Closed 1984

Closed 1982

—

Asarco

Asarco

—

—

—

Copper Rangeg

Cyprus

Kennecottj —

Magma

Phelps Dodge

Chino Minesn

—

Closed 1980

Reverberatory furnace replaced with flash 1982-83

Closed 1985

Closed 1982; sold to Asarco 1986

Closed 1987; sold to Tennessee Chemical 1982

Note 2

Modernization 1985-87; Note 3

Closed 1983

Reverberatory furnace replaced with flash 1986-88;

Note 4

Note 6

Closed 1987

Closed 1985; minority share sold to Sumitomo 1985

Closed 1984

Construction under consideration by Texas Copper, a

joint venture led by Mitsubishi
Chapter 2-Copper Industry ● 15

Table 2-l—Profile of U.S. Primary Copper Production Industry, 1980 and 1990-Continued

1980 1990

Refineries:

Electrolytic and fire refining:

Great Falls, MT. . . . . . . . . . . . . . Anaconda Copperb

Amarillo, TX . . . . . . . . . . . . . . . . . Asarco

White Pine, Ml . . . . . . . . . . . . . . . Copper Rangef

Baltimore, MD . . . . . . . . . . . . . . . Kennecott

Miami (Globe), AZ . . . . . . . . . . . . Inspiration

Garfield, UT . . . . . . . . . . . . . . . . . Kennecott

Hurley, NM . . . . . . . . . . . . . . . . . . Kennecott

San Manuel, AZ . . . . . . . . . . . . . Magmak

El Paso, TX . . . . . . . . . . . . . . . . . Phelps Dodge

Laurel Hill, NY. . . . . . . . . . . . . . . Phelps Dodge

Carrolton, GA . . . . . . . . . . . . . . . Southwire

Electrowinnlng:

Arbiter, MT , ... , , . . . . . . . . . . . . —

Braithewaite, LA . . . . . . . . . . . . . Amax

Hayden (Ray), AZ . . . . . . . . . . . . Kennecott

Miami (Globe) , AZ . . . . . . . . . . . Inspiration

Casa Grande, AZ . . . . . . . . . . . . Noranda

Twin Buttes, AZ , ., . . . . . . . . . . . Anamaxab

Bagdad, AZ . . . . . . . . . . . . . . . . . Cyprusc

Sierrita, AZ . . . . . . . . . . . . . . . . . —

Johnson, AZ . . . . . . . . . . . . . . . . Cyprusc

Battle Mountain, NV , . . . . . . . . . Duvalh

Sierrita, AZ . . . . . . . . . . . . . . . . . Duvalh

San Manuel, AZ . . . . . . . . . . . . . —

Pinto Valley, AZ . . . . . . . . . . . . . —

Miami, AZ , . . . . . . . . . . . . . . . . . . Magmak

Tyrone, NM . . . . . . . . . . . . . . . . . —

Morenci, AZ . . . . . . . . . . . . . . . . . —

Chino, NM . . . . . . . . . . . . . . . . . . —

Globe, AZ . . . . . . . . . . . . . . . . . . Ranchers EXp. & Dev.

Asarco

Copper Rangeg

Cox Creek Refiningo

Cyprus

Kennecottj

Magma

Phelps Dodge

Southwire

Anaconda EnvironRefining

—

Asarco

Cyprus

Cyprus

Cyprus

Cyprus

Cyprus

—

—

—

Magma

Magma

Magma

Phelps Dodge

Phelps Dodge

Chino Minesn

—

Closed 1980

Fire-refining process replaced with electrolytic

1982-86

Sold to Cox Creek 1986

Note 2

Modernization 1985-87; Note 3

Closed 1984; Note 6

Note 4

Closed 1983

Closed since 1977; to reopen 1990

Closed 1985

Sold to Asarco 1986

Note 2

Sold to Cyprus 1987

Closed 1985; reopened 1989; leased to Cyprus 1988

Note 1

Opened 1987

Closed 1986; Note 1

Closed 1984

Closed 1982

Opened 1986; Note 4

Opened 1981; Note 4

Note 4

Opened 1984; operated by the Burro Chief subsidiary

Opened 1987

Opened 1988; Note 6

Closed 1982

NOTES: nchino Min~ is a subsidia~ of Phelps Dodge and Mitsubishi.

aAnamax was a subsidiary of Anaoonda Copper and Arnax. O~x cr~k Refining is paflial[y owned by Mitsubishi 20%, Southwire 200/&

bAn=~a Comer wss a subsidiary of Atlantic Richfield (Arco). and Ha[stead Industries 20%.

~yprus was a subsidiary of Standard Oil of Indiana (Amoco). Iqpms spun off from AmocxI 1985.

dpima was owned 75% by Cyprus and 25% by Utah International. 2Cyprus acquired Inspiration’s copper mines, smelter, refine~, and rod mill

e~=m own$ 7’5 percent of the Troy, MT mine. 1988.

fcopper Range was a subsidiary of Louisiana l-and. 3Kenn_R was aquir~ by standard oil (SOH 10), a rnajmity+wned

9Copper Range is a subsidiary of Metall Mining COrp, a subsidiary of subsidiary of British Petroleum (BP), 1981. Kennecdt was held under the

Metallgesetlschaft. BP America subsidiary. BP became full owner of SOHO and merged

hDuval WaS a Subidiq of Pennzoil. Kennecott with Amselco to form BP Minerals America 1987. Most of BP’s

iDoe Run is a subsidiary of Fluor. metals assets were sold to RTZ 1989.

jKennecott is a subsidiary of RTZ. ~agma spun off from Newmont 1987.

~agma was a subsidiary of Newmont. ~ities service sold Pinto Valley and Miami mines to Newmont 1983.

IMontana Resourms is a subsidiary of Washington Corp. The Butte Mines Newmont combined them with its Magma subsidiary 1988.

are owned by Montana Resources and Asarco. 6Mitsubi$hi aquir~ a one.third sh~e of Kenn~tfs Chino Mines Division

Vhe Morena/Metcalf mine and smelter are 85% owned by Phelps Dodge (including the Chino mine and the Huriey smelter and refinery) 1981.

and 15% by Sumitomo. Kennecott so!d its share of Chino Mines to Phelps Dodge 1986.

SOURCE: Office of Tdnology Assessment, 1990. Compiled from Minerals Yeartwok(various issues), U.S. Bureau of Mines (Washington, DC).

counted for more than 95 percent of production in characterized by a high proportion of surface mines

1989. 15 A small amount of copper is produced as a (85 percent of capacity), low feed grade (average

byproduct of gold, lead, silver, or zinc at an 0.65 percent copper), and high wage rates. Although

additional 30 mines. The largest copper-producing most operations produce at least some byproduct,

States are Arizona, New Mexico, Utah, Michigan, revenues from byproducts are on the average fairly

and Montana. Mining in the United States is low. The number of surface mines, the use of modem

ISU.S. r)ep~ent of tie ~ta-ior, Bureau of Mines, Mineral Commodity Summuries, 1990 ~. (Was~@oU ~: 1~).
16 ● Nonferrous Metals: Industry Structure

technology, and the establishment of good management practice make U.S. mines and mills among the

most productive in the world in terms of workhours

per tonne of ore. In this regard, U.S. facilities

improved dramatically in the 1980s.

There are currently eight domestic primary smelters in operation. Reverberatory smelting furnaces

are used at El Paso (Asarco) and White Pine (Copper

Range). The one electric furnace smelter, Miami

(Cyprus), has been among the most costly of the

domestic plants to operate because of high electricity rates. Newer, more efficient, flash furnaces are

used at Hayden (Asarco), San Manuel (Magma), and

Chino and Hidalgo (Phelps Dodge). The Noranda

continuous process is used at the Garfield (Kennecott) smelter. Smelting in the United States is

characterized by stringent air pollution controls and,

until recently, an unattractive sulfuric acid market. 16

There are currently eight electrolytic and twelve

electrowinning refineries in operation operating in

the United States. In 1988, approximately 16 percent

of U.S. refined production came from the electrowinning process. Leaching and SX-EW technologies, because of their low costs, were an important

aspect in the U.S. industry’s financial turnaround in

the late 1980s.

The United States is the world’s largest secondary

copper producer. The secondary sector accounted

for about a quarter of total domestic production in

1988. There are five secondary smelters, two electrolytic refineries, and six fire refineries in operation.

Seven domestic companies (Phelps Dodge, Cyprus, Magma, Asarco, Montana Resources, Cox

Creek, and Southwire) and two European firms

(RTZ and Metallgesellschaft) have major holdings

in the primary copper industry in the United States

(see figure 2-5). In addition, two Japanese firms

(Mitsubishi and Sumitomo) have partial holdings in

U.S. mines.

Phelps Dodge

Phelps Dodge is North America’s largest, and the

world’s second largest, copper miner.17 In 1988, it

produced one-third of the copper mined and about a

one-quarter of the copper smelted and refried in the

United States. It is primarily a copper company, but

it makes other products as well. The corporation is

organized into two major divisions. The Mining

division includes the company’s domestic copper

operations (from mining through rod production,

marketing, and sales), the foreign mining operations

and investments, and the exploration programs. In

1986-88, this division accounted for 62 percent of

the company’s revenues and 81 percent of its

earnings. The other division, Industries, runs most of

the corporation’s manufacturing operations. It includes Columbian Chemicals (a carbon black and

synthetic iron oxide company), ACCURIDE (a steel

wheel manufacturing company), and the Phelps

Dodge Magnet Wire Co. It also includes interests in

companies that produce wire, cable, and rod in 14

foreign countries.

Phelps Dodge’s major domestic mines are

Morenci/Metcalf in Arizona and Chino and Tyrone

in New Mexico. Each mine has an associated

electrow inning plant. The company owns smelters at

Hurley (Chino) and Playas (Hildalgo) in New

Mexico, and a refinery and rod mill at El Paso,

Texas. Phelps Dodge has holdings in several foreign

operations that produce primary copper. It owns 16

percent of the Southern Peru Copper Corp. (SPCC)

which runs two copper mines and a smelter in Peru.

Smaller amounts of copper are produced by the

wholly owned Ojos del Salado copper-gold mines in

northern Chile and the 45-percent-owned Black

Mountain lead-silver-zinc-copper mine in South

Africa. Phelps Dodge also has a feasibility study

underway for the La Candelaria deposit in Chile.

This mine could possibly be producing 100,000 tpy

by the mid- 1990s.

The company’s domestic mines produce much more

concentrate than its smelters can handle. In 1986, Phelps

Dodge sold 15 percent of the Morenci mine to

Sumitomo to divert some of the concentrate to

Sumitomo’s smelters, and more importantly, to raise

cash for restructuring programs. Mitsubishi owns

one-third of the company’s Chino mine and smelter.18

16SMC acid is r~overed by tie fi-poflution control processes in copper smelting and is often sold as a byproduct or used in SX-EW opemtions.

17Among all NSW mining companies, Phelps Dodge ranks well behind Codelco (Chile), but just ahead of Gecamines (Zaire) and ZCCM (Zambia).

It is the largest private producer, these other leading producers are all state-owned. In several years though the company will rank behind RTZ in mining,

but not in the smelting/refiig seetor.

18A p~or Ower, Ke~eco~ sold a one.third fiterest in ~ of the output of Chino Mines to MC MiIlfXdS, a joint venhKe between Mitsubishi COW.

and Mitsubishi Metal Corp. Phelps Dodge purchased the remaining two-thirds from Kennecott in 1986.
Chapter 2-Copper Industry ● 17

Figure 2-5--U.S. Copper Industry, Company Profile, 1988

Phelps

Phelps

Mine Production

1.4 million tonnes

Other 1% MG 3%

%

Dodge 29 tana

arco

Chino 8

15%

RTZ 16%

Electrolytic Refinery Capacity

1.6 million tonnes

Resources

13%

As

ire 7%

Creek 9%

Dodge 12%

MG 5%

3%

Phelps

Smelter Capacity

1.2 million tonnes

Electrowinning Refinery

0.3 million tonnes

17%

Cyprus

Capacity

19%

RTZ 13% Phelps Dodge 32%

NOTE: Phelps Dodge’s mine production includes 40,400 mt produced for other’s accounts. Asarca’s mine production includes 5,200 mt produced for other’s

accounts.

SOURCES: Minerals Yearbook (various issues), U.S. Bureau of Mines; Non-Ferrous Meta/ Data 1988, American Bureau of Metal Statistics Inc.; company

annual reports.

The Sumitomo and Mitsubishi shares together Phelps Dodge has invested heavily (and continues

account for about 5 percent of total U.S. mine to do so) in SX-EW facilities. In 1988, the company

production. 19 Even after Mitsubishi takes its portion processed 80,800 tonnes (18 percent of its mine

of the mine output, Phelps Dodge still has surplus output) by the SX-EW method. That figure may rise

concentrates. In 1988, the smelters handled only to 40 percent in the 1990s.

about 70 percent of the company’s concentrate

share, the rest was toll smelted. Production should be Phelps Dodge has established itself in the copper

more in balance when the Tyrone mine closes in the fabrication sector. It is the world’s largest producer

early 1990s. of copper rod (the basic feed for the electrical wire

l~~Ubishi d~~ ~Ot ~v~ ~r~~~~~ fa~ifitiesin the United States. The U.S. concentrate is shippd to smelters in Japan. The COmp~y has @ked,

however, of building a new smelter in Texas which would presumably process its U.S. concentrates as well as those from the La Escondida project in

Chile.
18 ● Nonferrous Metals: Industry Structure

and cable industry). The domestic continuous cast

copper rod mills are in El Paso, Texas and Norwich,

Connecticut. The rod production exceeds the company’s internal sources of refined copper, so the

supplies are supplemented with purchases.

Phelps Dodge is credited with leading the U.S.

copper industry out of the 1980s recession. It was the

first company to deal aggressively with its unions,

cut its costs, and return to profitability .20 Its business

plan, in effect since 1984, has three elements. The

frost is to reduce production costs in the copper

operations and to enhance their profit margins rather

than to maximize production. The second is to build

and strengthen the non-copper businesses to help the

company better withstand copper price swings. In

this regard, the company stresses significant market

share, internationally competitive costs and quality,

specialized engineering capabilities, and stable earnings and cash flow. The third element is to

strengthen the financial structure of the corporation.21

Kennecott/RTZ

Kennecott (owned by London-based RTZ) is the

second largest copper mining company, and the

fourth largest smelting and refining company, in the

United States. The company’s Bingham Canyon

mine and its Garfield smelter and refinery are

located in Utah. The Bingham Canyon mine, which

underwent a $400 million modernization from

1985-87 under the ownership of BP America, is the

largest copper mine in the country. RTZ obtained

these facilities in 1989 when it purchased most of

British Petroleum’s (BP) metals mining division.

The operation was renamed Kennecott (after the

company that ran the mine for much of this century).

RTZ is one of the world’s largest metal mining

corporations. It produces copper, aluminum, iron

ore, lead, molybdenum, tin, zinc, gold, and silver at

various subsidiaries and related companies throughout the world. It also produces energy (coal, oil, and

uranium) and industrial products including borax,

silica, specialty chemicals, fabricated and engineered products, and construction materials and

services. In 1987, prior to the BP acquisition, RTZ’s

earnings profile was: industrial sector (63 percent),

metals sector (24 percent), and energy sector (13

percent).

22 

RTZ’s companies operate under a decentralized management style. The chief operating units

are left to manage themselves under strategic

guidelines that are agreed to every two years.23

RTZ’s foreign copper holdings include Bougainville (PNG), Highland Valley (Canada), Palabora

(South Africa), Somincor (Portugal) and ER&S

(Australia). 24 It also has a 30 percent stake in the

300,000 tonne per year (tpy) Escondida project in

Chile. With its acquisition of BP and its interests in

these major new mines, RTZ will be the largest

private copper mining company in the world (surpassing Phelps Dodge) in several years. It will be a

somewhat smaller presence in the smelting/refining

sector.

Cyprus

Cyprus is the third largest domestic copper

mining company, but is smaller in the smelting and

refining sectors. It has mines at Bagdad, Sierrita,

Miami, Twin Buttes, Casa Grande, and Mineral Park

in Arizona and Pines Altos in New Mexico. About

a third of the mine production is oxide ore. The

company has leaching and SX-EW facilities at five

of its mines. It also has a roaster at Casa Grande

which is used to prepare sulfide ore for leaching and

SX-EW processing. In addition, there is a smelter,

refinery, and a rod plant at Miami (Claypool),

Arizona; and a rod plant in Chicago, Illinois. Until

1988, when Cyprus acquired the Miami facilities

from Inspiration Copper, most of the company’s

copper concentrates were toll smelted under shortterm contracts. Now, about half of the concentrates

are processed at the Miami smelter or the Casa

Grande roaster. The remainder are smelted at

Magma’s San Manuel plant under a long-term

contract.

Cyprus, once the mining subsidiary of Amoco,

was spun off as an independent company in July

mphelps Dodge led the u.S. industry’s drive to lower wages and relax work rules. In 1983, Phelps Dodge continued production despite a Pm1014@

strike at its facilities. Workers at the company’s Arizona mines (at that time Morenci and New Comelia) and El Paso refinery voted against continued

union representation in the fall of 1984.

Zlphelps Dodge Annual Report, 1988.

2RTZ AKUIti Repoz 1987.

~~enmn -gConWss, AA4C Journal (Washington DC: October 1989).

~OIPpic Dam in AUS@tia is part of BP, not R’IZ. The tWO COmpanieS t erminated their agreement regarding the sale of Olympic Dam in late 1989.
Chapter 2-Copper Industry ● 19

1985. Since then it has grown through a very

aggressive acquisitions program. All of its copper

properties, except Bagdad, have been purchased

since the spinoff. It has acquired properties from

Duval, Noranda, and Inspiration Copper. The company keeps its labor costs low by insisting prior to its

acquisitions that the facilities be closed and the

workers be terminated. When Cyprus takes possession of (and restarts) the mine or plant, it rehires the

workers it needs without union contracts.

Cyprus is strongest in the mining sector of the

minerals business. Besides copper, Cyprus produces

molybdenum, lithium, zinc, silver, gold, coal, and

industrial minerals. It is the largest domestic producer of molybdenum, which it mines as a primary

product in Nevada and Idaho and recovers from the

copper ores at Sierrita (coproduct) and Bagdad

(byproduct). The molybdenum processing facilities

are in New Jersey. Cyprus acquired Foote Mineral,

the largest NSW producer of lithium, from Newmont

in 1988. The lithium mines are in Nevada and Chile,

and the processing facilities are in Virginia, Pennsylvania, Tennessee, North Carolina, and Chile. Cyprus

began recovering zinc and silver, as well as copper,

from the Pines Altos mine in New Mexico in 1989.

The company is evaluating a zinc-silver deposit in

northern Mexico and a beryllium deposit in Texas.

Copper and coal have been at the center of

Cyprus’ business. During 1986-88, these two products accounted for about 80 percent of sales.

However the proportions have changed significantly. In 1986, 50 percent of sales was from coal

and 30 percent was from copper. In 1988, the

proportions were reversed.

Asarco

Asarco is the second largest U.S. smelter and

refiner and fourth largest miner. 25 It has copper

mines at Ray and the Mission Complex in Arizona

and at Troy in Montana. In addition, it owns half of

the Butte, Montana mine. It has smelters at Hayden,

Arizona and El Paso, Texas, and a refinery at

Amarillo, Texas. Of the U.S. copper producers,

Asarco is perhaps the most active in foreign projects.

It is the majority shareholder (52 percent) in SPCC,

the Peruvian copper mining and smelting concern. It

also owns (through Medimsa) about 30 percent of

Mexicana de Cobre which runs the La Caridad

copper mine and Nacozari smelter in Mexico.

Asarco also has ties to the Australian concern MINI,

which owns copper facilities at Mt. Isa and has

interests in base metal operations all over the world.

Asarco owns 19 percent of MIM, and MIM owns 25

percent of Asarco. This link is a passive relationship

that does not involve operational control.

Asarco was originally a smelting and refining

company. However, in recent years it has become

more involved in the mining sector to ensure its

supply of concentrates. It got caught short on its

concentrate supplies in the 1980s and has been

buying mines to prevent this from happening again.

The company thinks “the custom smelting and

refining business has limited growth potential because there are fewer mines and mining companies

today than in the past” and plans to “continue to

make investments to increase its own mine production and expand ore reserves.”26 When the expansions are complete (in 1992), Asarco expects to have

the capacity to provide all of the feed required by its

copper smelters, compared to less than 25 percent in

1985. In 1989, Asarco joined with Montana Resources in the operation of the Butte, Montana

copper mine. Asarco also has a large project

underway to modernize its El Paso, Texas smelter.

Magma

Magma is the third largest domestic copper

smelter and refiner and fifth largest miner. It had

been a subsidiary of Newmont until 1987, when it

was spun off. The company’s operations are characterized by their physical proximity and technological interaction with one another. All the facilities are

located in Arizona. Magma has two mining/milling/

leaching complexes (San Manuel and Pinto Valley),

three SX-EW facilities, a smelter and refinery (San

Manuel), and one rod plant (San Manuel).

In 1989, Magma produced 22 percent of its copper

by leaching and SX-EW methods. The company has

excess smelting, refining, and rod making capacity.

In contrast to Asarco, it is striving to develop its

position as a custom smelter. The new flash furnace

at San Manuel has a capacity of more than 1 million

tpy of concentrates (about 270,000 tpy of blister

copper) and is the largest copper smelting furnace in

the world. It was scheduled to finish its commissioning period at the end of 1989. In 1989, tolling

- — —

~AsNco is also a major lead and zinc producer (see chs. A and 5).

26A5MC0 AIIIIUal Report, 1988.
20 ● Nonferrous Metals: Industry Structure

accounted for 27 percent of Magma’s refined copper

production.

In 1989, Magma sold 65 percent of its copper as

continuous cast rod, down from 93 percent in 1988.

The company is decreasing its rod capacity to focus

on producing cathode (primarily for Asian markets).

It sold its Chicago rod plant to Cyprus in December

1989.

Magma is primarily a copper company, but it

produces some molybdenum disulfide, gold, and

silver. The company’s strategy stresses modernization (e.g., the capital investment in San Manuel) and

marketing (e.g., product quality, technical service,

and customer relationships).

Montana Resources

Montana Resources, a smaller copper mining

company, operates the historic Continental pit in

Butte, Montana. In 1985, Washington Construction

purchased the Butte operations from Anaconda

Copper (a subsidiary of Arco) intending to salvage

them for scrap. After conferring with Anaconda’s

former general manager, however, Washington Construction determined that the mine and mill could

reopen profitably. The State and local governments,

eager to see the operation contributing to the

economy once again, procured credit lines, granted

tax cuts, and quickly approved the necessary permits. The company obtained a $0.12/lb reduction in

the transportation and refining costs Anaconda had

paid to ship the concentrate by rail to California and

have it processed in Japan. The local power company granted lower rates for electricity. Finally, the

number of workers was cut almost 50 percent, and

the top wage was reduced from $22 to $13/hr. As a

result, when the East Berkeley Pit reopened early in

1986 as Montana Resources, it was reportedly

mining copper for $0.58/lb, compared to Anaconda’s $0.97/lb.27 In 1989, Asarco purchased 49.9

percent of a new partnership that owns and operates

the Montana copper properties.

Copper Range/Metallgesellschaft

Metall Mining, a Canadian subsidiary of Metallgesellschaft (MG) bought the Copper Range

mine, smelter, and refinery in Michigan in 1989. The

high-cost underground operation had at various

times in the 1980s been owned by Louisiana Land,

Echo Bay, and Northern Copper (an Employee Stock

Option Plan). MG (based in Frankfurt, West Germany) is a large metals trading company whose

other copper interests are minority holdings in

Cominco (Canada) and Norddeutsche Affinerie

(West Germany). The Michigan refinery was converted from the fire-refining process to the electrolytic process in the 1982-86 modernization program.

Cox Creek

Cox Creek began full production at its Baltimore,

Maryland refinery and rod mill (formerly owned by

Kennecott) in 1988. The company has no mine or

smelting capacity. It purchases blister and scrap (for

anode production), anode (for cathode production),

and cathode (for rod production). Most of the

primary feed is imported. Mitsubishi, a partner in the

venture, supplies some of the raw material for

cathode and rod production. Other partners include

Southwire and Halstead Industries.

Southwire

Southwire operates a refinery in Carrolton, Georgia. It produces copper from both primary and

secondary source material.

U.S. Interests in Other Countries

Several U.S. firms that do not have domestic

primary copper facilities are involved in copper

projects overseas. Exxon operates the Disputada

mine and smelter in Chile. Freeport McMoRan owns

85 percent of the Ertsberg mine in Indonesia. Cerro

Copper (part of the Marmon Group) and Newmont

have interests in SPCC in Peru.28 Amoco owns 30

percent of the Ok Tedi mine in Papua New Guinea,

USX until recently held equity in Prieska in South

Africa. In 1989, the mine closed and USX sold its

interest,

Chile

Chile is the United States’ strongest competitor in

the copper business. It ranks first in mine and smelter

production and second in the refining sector. Copper

mining began in Chile in the 1850s. After several

periods of growth and decline, the country became

a consistent producer early in the 20th century. Chile

exports 97 percent of its copper production, twothirds in the form of refined copper. Its primary

— —— .

2TC’~ere’s a Gleam fi he Eye of Copper Producers, ” Business Week, 1986.

2scemo Copper ~5 a secondary copper smelter in Sauget, n~ois.
Chapter 2-Copper Industry ● 21

markets for refined copper are Europe (about 50

percent), Asia (20 percent), and the United States (15

percent).

Codelco, owned by the Chilean government,

controls about three-quarters of the country’s capacity. It is the world’s largest copper company,

operating four major mines (Chuquicamata, El

Teniente, El Salvador, and Andina) with a combined

capacity of about 1.1 million tpy.29 Current expansion programs are expected to increase the capacity

by 27 percent (300,000 tpy) by the early 1990s.30

Codelco also has three smelter/refinery complexes

(Chuquicamata, Caletones, and Potrerillos).

ENAMI, another government-owned company,

operates four concentrators, two smelters, and a

refinery. The company accounts for about 18 percent

of Chile’s smelter capacity and 25 percent of its

refinery capacity. The ENAMI facilities process

concentrates from small and medium-sized independent mines and surplus materials from the

Codelco mines.

Most private copper production in Chile is run by

foreign interests. These companies have been attracted by Chile’s moderately rich ores, favorable

investment climate, well-developed mining infrastructure, and low paid and highly skilled work

force. Exxon operates the Disputada mines and

smelter. Anglo American of South Africa has a

majority interest in the Mantes Blancos mine,

smelter, and refinery. Phelps Dodge runs the small

Ojos del Salado copper-gold mine in northern Chile

and is exploring the La Candelaria deposit. BHP

(Australia), RTZ (U.K.), Mitsubishi and Nippon

Mining (Japan), and the World Bank have invested

in the La Escondida project. La Escondida ‘‘the

hidden one’ is slated to come on stream in the early

1990s with a capacity of 320,000 tpy. It is the

world’s largest new copper project.

Chile’s long-term competitiveness is being challenged by declining ore grades. Chilean ore grades,

though still higher than average, are falling faster

than those elsewhere in the world. The decline is

especially pronounced at Chuquicamata where the

ore grade was 2.12 percent in 1980, but is projected

to fall to l.0 percent by 2000. Codelco has addressed

this decline through capacity expansion and exploitation of oxide resources. 31 The strategy has been to

expand ore processing capacity enough to keep total

refined copper output (and market share) constant or

expanding. Central to this plan are the exploitation

of oxide reserves from Mina Sur and the Chuquicamata pit, plus the leaching of waste dumps and

low-grade sulfide ores. 32 The divestment has been

substantial; Codelco has spent $300 to $400 million

per year since 1984 for capital improvements and

expansions. 33

Japan

Japan’s copper mining industry is very small, but

its smelting/refining sector has ranked in the NSW

top three since 1970. The industry was built in the

1960s to lessen dependence on foreign supplies and

to capture the added value of raw materials processing. Despite having such a large industry, Japan is

still a net importer of refined copper. It imports about

a quarter of its needs, primarily from Zambia, Chile,

and the Philippines. Exports of refined copper are

small.

To feed its industry, Japan has had to import

enormous quantities of concentrates.34 In fact, to

ensure supplies of concentrates, the Japanese supported the development of mines in the Philippines,

PNG, Indonesia, and elsewhere. During 1985-88,

Japanese smelters imported an average of 3.1

million tonnes of ores and concentrates. The major

suppliers were Canada (29 percent), the United

States (14 percent), the Philippines, Chile, Papua

New Guinea, Indonesia, and Australia. Approxi-

~~uquicamata and El Teniente are the two largest copper mines in the world.

3oFinancial Ti~s Mining International Yearbook 1989 (Chicago, IL: St. James Ress, 1989).

31c~e~~ “a~t re~e~e of Ofide re~owces and ~ ~lirnate that tends to oxid~e the wastes and tailings from sfiide operations. ThUS leZiChkg and

SX-EW have great potential in Chile. Leaching operations produced approximately 90,000 tonnes in 1986; their capacity is expected to triple by 2000.

szDrexel,B-Lambe~ Special Copper Report, December 1983.

ssJanice L.W. Jolly and Daniel EdelsteirL ‘‘Copper, ” Minerals Yearbook, vol. I, WUYOUS editions (Washington, DC: U.S. Department of the Interior,

Bureau of Mines).

34~e ~s~c~e inJ~pan (high for refined copper, but low for con~n~tes) has allowed Japanese smelters to outbid others fOrfWd COIICMMITikX,

and has been the source of trade friction.
22 ● Nonferrous Metals: Industry Structure

mately 60 percent of the copper concentrate traded

in 1986 was shipped to Japan.35

Six firms (Nippon Mining, Onahama, Sumitomo,

Mitsubishi, Hibi Kyoda, and Dowa) are engaged in

both smelting and refining in Japan. A seventh

(Mitsui) is involved in refining only. Given the

interests of Mitsubishi and Dowa in Onahama and of

Mitsui in Hibi Kyodo, the effective control of

Japan’s smelting capacity is Nippon Mining (26

percent), Mitsubishi (26 percent), Sumitomo (16

percent), Dowa (12 percent), and Mitsui (10 percent). The percentages are similar for the refining

sector.

Most, but not all, Japanese smelter capacity is

located on the coast. This greatly facilitates the

delivery of concentrates and the shipping of copper

and sulfuric acid to their markets. About 60 percent

of the capacity is based on flash furnace technology.

Reverberatory furnaces account for most of the rest.

In the 1980s, Japan sought new joint projects to

counter the tight concentrate markets and production

cutbacks by traditional suppliers. These new ventures included projects in Colombia and Chile and

equity positions in the United States. Mitsubishi

acquired a one-third interest in Chino Mines (including the Chino mine and Hurley smelter and refinery)

in 1981. Sumitomo acquired a 15 percent share of

the Phelps Dodge Morenci/Metcalf mine in 1985. In

addition, Japanese firms are expected to receive

much of the copper (in the form of concentrate) from

the La Escondida project in Chile when it goes into

production.36

Canada

Canada, a medium-sized copper producer, ranks

third in NSW mine production and fourth in smelter

and refinery production. The country’s mine output

is greater than its smelter capacity, so it is a net

exporter of concentrates. Canada exports over a third

of its concentrate production (primarily to Japan)

and over half of its refined production (mostly to the

United States and Europe).

About three-quarters of Canada’s mine production comes from five producers; Highland Valley

and BHP-Utah in British Columbia, Falconbridge

and Inco in Ontario, and Hudson Bay in Manitoba.

Highland Valley (jointly owned by Cominco, Rio

Algom, Teck, and Highmont) is the largest. It has no

associated smelting and refining capacity, and sells

most of its concentrate to Japan.

In general, Canadian mines are noted for their

large quantities of co-products and byproducts (e.g.,

nickel, gold, silver, zinc, and molybdenum). About

20 percent of copper mine production comes as a

byproduct of the Inco and Falconbridge nickel

operations in Ontario’s Sudbury district.

There are four companies (Noranda, Inco, Falconbridge, and Hudson Bay) involved in Canada’s

smelting and refining sector. Noranda with its

Quebec operations (the Gaspe and Home smelters

and the Canadian Copper Refiners division) is the

largest. The company has little copper mine capacity, but is a major custom smelter and refiner. In

1989, Noranda and Trelleborg acquired full control

of Falconbridge which has mining, as well as

smelting and refining, facilities in Canada. With the

acquisition, Noranda effectively controls an estimated 55 percent of Canada’s smelting capacity and

65 percent of its refinery capacity.

Zambia and Zaire

The central African copper industry was developed in the 1910s and 1920s by colonial interests.

The British operated in Zambia (then Northern

Rhodesia) and the Belgians were based in Zaire

(then the Belgian Congo). Shortly after Zambia and

Zaire gained independence in the 1960s, their

industries were nationalized.

Both countries export nearly all of their copper.

Zambia’s exports are mostly refined copper and are

destined for Europe, Japan, and India. Zaire exported

6 percent of its copper as concentrates, 51 percent as

blister (primarily to Belgium), and 43 percent as

refined copper (mostly to Europe) in 1985-88.

All Zambian copper facilities are run by the

state-owned Zambia Consolidated Copper Mines

(ZCCM). The major mines are Nchanga, Mufilira,

and Nkana. The ores are very rich (averaging 2.0

percent copper). Zambia’s developed ore reserves

are declining quickly and are expected to be depleted

by early next century. Large undeveloped reserves

exist, however. Recently, Zambia has supplemented

ssworld B~eau of Metal Statistics data.

36JOC. wu, ~’~e ~er~ ~dus@ of J~p~q” &finerazS Year~OO~, vol. ~, 1985 ed. (was~gton, DC: U.S. Department of tie Luterior, Bureau of

Mines, 1987).
Chapter 2-Copper Industry ● 23

its mine production by toll smelting Zairean concentrates. ZCCM runs three smelters, four refineries,

and three electrowinning facilities. Almost a quarter

of Zambia’s refined production comes from leach

and electrowinning operations.

The state-owned Gecamines operates Zaire’s

principal mines, Dikuluwe/Mashamba, Kov, and

Kamoto. The ores average 4.1 percent copper and are

the richest copper ores mined in the world. Zaire is

less involved in the processing sector than is

Zambia. Gecamines does, however, run a smelter

and two refineries.

The copper industries in Zaire and Zambia share

many operating characteristics and problems. They

both, for example, produce large amounts of byproduct cobalt. Also, most of their copper output is

exported, because the regional market for the metal

is small. Transportation is a particularly important

factor to these industries. The mines are remote and

the transportation network to the distant seaports is

cumbersome and unstable. Rail transportation in the

region may become more reliable in coming years,

because of improving prospects for political stability

in southern Africa. However, the investment required to renovate the railroads will be great. Zambia

and Zaire also have been plagued with internal

political strife, hard currency shortages, power

outages, and the acute threat of Acquired Immune

Deficiency Syndrome (AIDS). These factors make it

difficult to get and keep skilled expatriate personnel

and to obtain spare parts for maintenance of the

mining equipment.

Peru

Peru is a medium-sized copper producer which

exports 90 percent of its production. During 1985-

88, Peru exported 18 percent of its copper as

concentrates (to Japan and West Germany), 28

percent as blister (mostly to Japan and the United

Kingdom), and 54 percent as refined copper (to

Europe, the United States, and Japan).

Peruvian production is dominated by the Southern

Peru Copper Corp. (SPCC) open pit mines at

Cuajone and Toquepala and smelter at Ilo. SPCC is

owned by four U.S. companies-Asarco, Cerro

Copper, Phelps Dodge, and Newmont. The venture

accounts for about 60 percent of Peru’s production.

There are also numerous smaller operations in

Peru, some state-owned and some private, that mine

complex silver-copper-lead-zinc ores primarily for

the silver. State-owned Centromin runs a smelter

and refinery at La Oroya to process its own

concentrates as well as those from private mines.

Minero Peru, also stated-owned, runs a refinery at

Ilo. Peru’s perennial economic, political, and

weather problems make foreign investment there

generally risky.

Mexico

Mexico produces refined copper for domestic

uses and exports surplus concentrates. The United

States (primarily Magma) is Mexico’s largest customer for concentrates.

There are two major Mexican copper operations:

Mexicana de Cobre and Cananea. Mexicana de

Cobre, which is partially owned by U.S.-based

Asarco, runs the La Caridad mine and the Nacozari

smelter. The company accounts for about 55 percent

of Mexico’s mine production and 65 percent of its

smelter capacity. Cananea, owned by the government, runs a mine and smelter. The company has

been slated to be sold under a privatization effort, but

efforts in this regard have failed thus far. The

privatization is made even more contentious, because the mine is a sensitive national symbol. The

mine’s 1906 strike helped trigger the Mexican

Revolution. 37 Cobre de Mexico runs the country's

only refinery-the Atzcapotzalco plant in Mexico

City. The company has no mines or smelters.

Australia

Australia exports about a quarter of its concentrate

production and almost 40 percent of its refined

production. MlM’s Mt. Isa complex in Queensland

dominates the domestic industry. The complex

includes a mine (with very rich ore, 3.3 percent

copper) and a smelter. The company also has a

refinery at Townsville. The Electrolytic Refining

and Smelting Co. of Australia (ER&S) runs a

smelter/refinery at Port Kembla. The company is

partially owned by RTZ. Australia’s capacity recently rose with the opening of the 55,000 tpy

Olympic Darn (Roxby Downs) project. The operation, which includes amine, smelter, and refinery, is

owned by Western Mining and BP.

3TLarry Rohter, “Feelings Running High as Copper Mine Is Shu4° New York Times, Aug. 30, 1989.
24 ● Nonferrous Metals: Industry Structure

The Philippines

The Philippines is a major exporter of copper

concentrates. In the early 1980s, nearly all of its

copper was exported as ores and concentrates. Now,

about half of the production is exported as concentrates (mostly to Japan) and the other half is exported

as refined copper.

Philippine copper production is dominated by the

Atlas mines (Lutopan, Carmen, and Biga). Atlas

accounts for about 40 percent of the country’s mine

production. Other companies include Maricalum,

Marcopper, North Davao, Benguet, and Lepanto.

PASAR runs the country’s only smelter and refinery.

Papua New Guinea (PNG)

PNG began mining copper in the early 1970s.

Japan helped finance the PNG mines in order to feed

its smelters. All of PNG’s production is exported as

concentrates. About 40 percent of the concentrates

are sent to Japan and 30 percent are sent to West

Germany.

Two companies produce copper in PNG: Bougainville and Ok Tedi. Bougainvillea, accounted for

three-quarters of production in 1988. It was shutdown in May 1989, because of sabotage actions

protesting the mine’s location on ancestral lands.38

It is not expected to reopen soon, if ever. Ok Tedi

began production in 1987. Its capacity is about

600,000 tpy of concentrates, or roughly 200,000 tpy

copper. However, the operation been plagued with

problems and has yet to operate near its design

capacity. Ok Tedi is owned by Amoco (United

States), BHP (Australia), several West German

fins, and the government of PNG.

South Africa

South Africa is a smaller copper producer which

exports about two-thirds of its production. During

1985-88, the country exported 9 percent of its copper

as concentrates, 46 percent as blister, and 44 percent

as refined copper to Europe and Japan.

The major South African producer is the Palabora

operation with its mine, smelter, and refinery in the

Transvaal near the Mozambique border. Palabora

(partially owned by RTZ) accounts for about 80

percent of South Africa’s copper production. It also

produces uranium and zirconium. O’okiep runs a

copper mine and smelter in Cape Province near

Namibia.

West Germany

West Germany is a major copper smelting and

refining country, but its mine production is small. It

imports nearly all of the concentrates needed to feed

the smelting industry. The major sources during

1985-88 were PNG (34 percent), Mexico (19 percent), and Chile (10 percent). West Germany also

imports about 55 percent of the refined copper it

consumes. The principle sources in 1985-88 were

Chile (24 percent), Poland (18 percent), and Zaire

(15 percent).

The major West German primary copper smelter

is run by Norddeutsche Affinerie in Hamburg. The

firm is owned by MG, MIM, and Degussa.

Belgium

Belgium is a major copper refining country but

has no mining or primary smelter capacity. It that

imports nearly all its blister and anode copper. Over

one-half of the blister comes from Zaire (a former

colony). South Africa and Sweden accounted for

about 11 and 9 percent of imports respectively in

1985-88. Belgium’s sole primary copper producer is

Metallurgic Hoboken-Overpelt (MHO), a subsidiary

of Acec-Union Miniere. It runs the refinery at Olen.

Other Countries

Other large copper mining companies around the

world include: Boliden (Sweden), Freeport Indonesia (Indonesia), Rio Tinto Minera (Spain), and

Somincor (Portugal). Other major smelting and

refining operations include: Boliden (Sweden),

Caraiba Metais (Brazil), BICC (United Kingdom),

IMI Refiners (United Kingdom), Korea Mining &

Smelting (South Korea), Outokumpu (Finland), and

RTB Bor (Yugoslavia).

38$~~ Au&ci~uS Rebel ~ papua New Gfiea shakes Copper Market, ” wall .$treet JournuZ, Jan. 2, 1990.
Chapter 3

Aluminum Industry

INTRODUCTION

Aluminum is the newcomer among the metals

covered in this study. It was initially isolated as an

element in the 1820s and first produced commercially in the 1880s.

Uses

Aluminum is the most widely used nonferrous

metal. Its light weight, corrosion resistance, ease of

recycling, and high electrical/thermal conductivity

make it useful in a variety of applications. The

largest market is the containers and packaging sector

(beverage and food cans, foil, etc.). In the United

States, this sector accounted for 27 percent of

aluminum use in 1988. The other major markets are

the transportation sector (21 percent), buildings and

construction (18 percent), and electrical uses (9

percent).1

Production Methods and Technologies

Aluminum is the second most abundant metal

element (after silicon) in the Earth’s crust. It can be

recovered from many minerals (e.g., clays, anorthosite, nepheline syenite, and alunite), but is

produced most economically from bauxite, an impure form of alumina (Al2O3

).3 Approximately 90

percent of all bauxite is produced from surface

mines. To extract the aluminum, the ore is crushed,

washed, and dried (at the minesite) and then refined

and smelted.4

The refining step produces pure alumina from

bauxite. The Bayer process, discovered in 1888, is

the principal refining method. The bauxite is crushed

and ground, then digested in hot (280 to 450° F)

caustic soda (NaOH) solution. The alumina minerals

in the ore react with the caustic soda and dissolve as

sodium-aluminate. Most of the impurities in the ore

precipitate out as “red mud” which is removed by

countercurrent recantation and filtration. The solution is then seeded with starter crystals and agitated

to crystallize out alumina hydrate. This material is

then calcined in kilns (to remove the water) and the

result is pure alumina.

The smelting process reduces the alumina to

aluminum. Modern processes are based on those

discovered independently by Hall and Héroult in

1886. Alumina is dissolved in a molten cryolite

(Na3AlF6

) bath contained in carbon-lined steel cells

(pots). In each pot, a direct current is passed through

the bath (between a carbon anode and the carbon

bottom of the cell) to reduce the dissolved alumina

into aluminum. Molten aluminum collects at the

bottom of the pots and is siphoned off into large

crucibles. The aluminum (averaging about 99.8

percent purity) is poured directly into molds to

produce foundry ingot or further refined/alloyed to

make fabricating ingot. Scrap aluminum may be

added to the melt either at this last stage or when the

ingot is remelted at the foundry or fabricating

facility.

The smelting process is continuous. Alumina is

added, anodes are replaced, and molten aluminum is

siphoned off without interrupting current in the cells.

A potline may consist of 50 to 200 cells with a total

line voltage of up to 1,000 volts at current loads of

50,000 to 225,000 amps. Electricity use in today’s

smelters is 6 to 8 kWh/lb of aluminum. 5 Electric

power is one of the most costly raw materials in

aluminum production.

lpaticia A. Plunke~ “AI urninq” Minerals Yearbook, vol. I, 1988 ed. (Washington, DC: U.S. Department of the Interior, Bureau of Mines, 1990).

zAllenSo Russell, ‘ c~~q” McGraW.Hi//EnVc/opedia on Science and Technology (New York NY: McGraw-Hill, 1987). Fr~ x, McCawleY

and Luke H. Baurngardner, ‘AluminunL” Mineral Facts and Problems, 1985 ed. (Washington DC: U.S. Department of the Interior, Bureau of Mines,

1985).

s~e ba~te Oms used t. produce ~~nu metal typically contain 40 to 60 pereent alumina (~03) along wifi 1 to 15 Per@nt sfica (Si02)> 7 to

30pereent hematite @e203), 1 to 5 percent titania (Ti02), and 12 to 30 pereent combined water. Nonmehkgical grades of ba~te me used to produ~

abrasives, refractories, and chemicals.

dutie tie o~er metis in ws s~dy, ~uminum is refined before it is smelted.

5nough the basic process of ~uminum smelting is 100 years old, the technology has improved steadily. Just after World War II, about 12 kwh of

electricity was required to produce a pound of aluminum.

–25–
26 ● Nonferrous Metals: Industry Structure

THE 1980s

The U.S. aluminum market started the 1980s on a

good note (see figures 3-1 and 3-2). In 1980,

domestic primary aluminum production (4.7 million

tomes) was high and prices (averaging $0.76/lb)

were high compared with the late- 1970s. The market

went through several cycles during the decade.

Prices fluctuated between $0.47 and $0.76/lb in the

1980-87 period, before ending the decade somewhat

higher ($1.10/lb in 1988 and $0.89/lb in 1989). U.S.

production of primary aluminum also fluctuated, but

never rose above its 1980 level. It fell to around 3.3

million tonnes per year (tpy) in 1982-83 and 3.0

million tpy in 1986, and then rose to about 4.0

million tpy in 1988-89. The 1989 output was 13

percent lower than that of 1980, but comparable to

the levels of the late- 1970s.

Secondary production (from old and new scrap)

rose about 40 percent during the decade. Most of the

growth occurred in 1987-89. This category represented about one-third of total U.S. aluminum

production during the decade.6

Us. aluminum consumption also went through

several cycles during the decade. Consumption fell

from 6.1 million tonnes in 1980 to 5.3 million tonnes

in 1982. It then fluctuated between 6.0 to 6.2 million

tpy during 1983-86 and 6.4 to 6.7 million tpy during

1987-89.

The nonsocialist world (NSW) aluminum market

experienced more muted cycles than those that

occurred in the United States (see figure 3-3). After

the 1982 recession, NSW aluminum production and

consumption grew fairly steadily. In 1988, primary

production was 13.8 million tonnes (up 8 percent

from 1980), secondary production was 5.4 million

tonnes (up 40 percent), and consumption was 19.8

million tomes (up 27 percent).

The openings, closings, and ownership changes

that occurred in the U.S. primary aluminum industry

during the 1980s are profiled in table 3-1. The Mount

Holly smelter in South Carolina (which opened in

1980) is the most recent aluminum facility to be built

in the United States. During the decade, 4 alumina

refineries and 10 aluminum smelters closed. More

Figure 3-l—Aluminum Prices, 1975-89

Cents/pound

120 T

100 -

8 0

6 0

4 0 -

2 0 -

0

75-79 80 81 82 83 84 85 86 87 88 89

Year

_ current $ [ ~

 - `~ 1980 $

NOTE: U.S. spot market price-primary aluminum ingot. Prices inconstant

1980 dollars were calculated using producer price index. Bars

labeled 75-79 represent averages for the period 1975-79.

SOURCE: U.S. Bureau of Mines.

were closed temporarily at some time during the

1980s, because of low prices. All of the permanently

closed refineries and smelters were in the southern

United States (Texas, Louisiana, Alabama, Arkansas, and Tennessee). During 1980-88, U.S. refinery

capacity declined 29 percent to 5.1 million tonnes of

alumina and smelter capacity declined 20 percent to

4.0 million tomes.

Amax (through its Alumax subsidiary) became a

major aluminum producer during the 1980s. The

company grew by building the Mt. Holly smelter and

by purchasing Pechiney’s shares of Intalco and

Eastalco in 1983. After consolidating its position,

Alumax sold about a quarter of each of its plants to

raise money to expand in Canada.

Kaiser experienced several ownership changes in

the 1980s. The company was acquired first by Alan

Clore, a British investor, and then by Maxxam.

Three companies (Conalco, Anaconda Aluminum, and Revere Copper and Brass) left the U.S.

industry during the 1980s. Another company (Martin Marietta) decreased its presence in the industry

by selling one of its smelters and leasing the other to

an independent producer. Six companies (Columbia

Aluminum, Columbia Falls, Alcan, Vanalco, Ravens-

~ese figures represent the total aluminum recovered from both new and old scrap. As such they overstate the amount of refined aluminum that

is actually entering the manufacturing stream. Old scrap comes from discarded products, new scrap is waste from fabricating and other manufacturing

processes. In 1988,2.1 million tonnes of secondary aluminurn were recoveredfiom old scrap (1.0 million tomes) and new scrap (1.1 million tonnes),

and recovered us refined metal (2.1 million tonnes) and other “non-refined” products (37,000 tonnes). Patricia A. Phmkert, “Aluminum,” Minerals

Yearbook, vol. I, 1988 ed. (Washington, DC: U.S. Department of the Interior, Bureau of Mines, 1990).
Chapter 3--Aluminum Industry ● 27

Figure 3-2—U.S. Aluminum Production and

Consumption, 1975-89

Millions of tonnes 7

5

4

3

2

1

0

75-79 80 81 82 83 84 85 86 87

Year

88 89

= Primary production ~ -] Secondary production — Consumptio n

NOTE: Secondary production is refined metal and other products recovered from old and new scrap. Bars labeled 75-79 represent

averages for the period 1975-79.

SOURCE: Metal Statistks, Metallgeseilschaft Aktiengesellschaft.

wood, and Northwest Aluminum) entered U.S.

industry during the decade. A seventh (Ormet) was

essentially new to the industry also. It was sold to its

current owners, Ohio River Associates, in 1986.

PRODUCER PROFILES, 1990

Since the second World War, two major groups of

countries have been involved in the production of

aluminum, the ‘‘miners’ and ‘‘smelters. ” Bauxite

was mined in tropical developing countries such as

Guyana, Guinea, Jamaica, and Suriname. Aluminum

was smelted in the electricity-rich developed regions

of North America and Europe. Alumina refining, the

middle processing step, originally took place in the

smelting countries, but is now done in the mining

countries also.

A new group of “integrated’ producing countries, active in all three sectors of the primary

aluminum business, has emerged in the last 20 years.

Australia and Brazil are two such producers (see

figure 3-4). Australia is the largest NSW bauxite

miner and alumina refiner, and ranks third in

smelting. Brazil’s industry is smaller, ranking third

in mining, fifth in refining, and fourth in smelting.

The other major bauxite producers are involved in

the processing sector to varying degrees. Guinea,

Guyana, and Sierra Leone have little or no refining

capacity and export most of their output. Jamaica,

Suriname, India, Yugoslavia, and Greece have

Figure 3-3—NSW Aluminum Production and

Consumption, 1975-88

Millions of tonnes

25

20 /

15

10

5

0

75-79 80 81 82 83 84 85 86 87 88

Year

~ Primary production ~–] Secondary production — Consumptio n

NOTE: Secondary production is refined metal and other products recovered from old and new scrap. Bars labeled 75-79 represent

averages for the period 1975-79.

SOURCE: Meta/ Statistics, Metallgeseilschaft Aktiengesellschaft.

significant refinery capacity, and export both alumina and bauxite.

Until the ascendancy of Australia and Brazil, the

smelting industry was located almost exclusively in

North America, Japan, and Europe. The United

States has been the largest smelting country since the

birth of the industry. Japan was the second largest

smelter in the mid- 1970s, but has since closed most

of its capacity because of high electricity prices.

Canada is now the second largest producer. In

Europe, where most nations have some smelting

capacity, Norway and West Germany are the industry leaders. Among the older smelting countries, the

United States, West Germany, and Canada have the

largest refining sectors.

Despite the industry’s geographical diversity, a

high degree of concentration and vertical integration

was attained by the major companies. The Big Six

(Alcoa, Alcoa, Kaiser, Reynolds, Pechiney, and

Alusuisse) operated as an oligopoly for most of the

post World War II period (see box 3-A). Although

these companies were principally smelters and

fabricators, they owned or controlled most of the

world’s bauxite production. Over the years, the Big

Six have lost some of their influence over the

industry, especially in the mining sector, but the

individual companies remain important.

The International Bauxite Association (IBA) was

established in 1974. Its members are Australia,

Ghana, Guinea, Guyana, India, Indonesia, Jamaica,
28 ● Nonferrous Metals: Industry Structure

Table 3-l—Profile of U.S. Primary Aluminum Production industry, 1980 and 1990

1980 1990

Alumina refiners:

Point Comfort, TX.. . . . . . . Alcoa Alma

Bauxite, AR . . . . . . . . . . . . . Alma Alcoa Has produced only specialty alumina (no metal-grade

alumina) since 1988

Mobile, AL . . . . . . . . . . . . . . Alcoa — Closed 1982; permanent closure 1984

St Croix, Virgin Islands . . . . Martin Marietta Clarendona Closed 1985; sold to Clarendon 1989; reopened 1990

Gramercy, LA . . . . . . . . . . . Kaiser Kaiserb Note 1

Baton Rouge, LA . . . . . . . . Kaiser — Closed 1983; permanent closure 1985; specialty alumina

plant sold to LaRoche Chemicals 1988

Burnside, LA . . . . . . . . . . . . Ormetc Ormetd Closed 1985; reopened 1988; Notes 2,3,4

ote 3/

Corpus Christi, TX . . . . . . . Reynolds Reynolds

Hurricane Creek, AR . . . . . Reynolds — Closed 1983; permanent closure 1984

Aluminum smelters:

Sebree, KY . . . . . . . . . . . . .

Rockdale, TX . . . . . . . . . . .

Evansville, IN . . . . . . . . . . .

Wenatchee, WA . . . . . . . . .

Alcoa, TN . . . . . . . . . . . . . .

Massena, NY . . . . . . . . . . .

Badin, NC . . . . . . . . . . . . . .

Palestine, TX . . . . . . . . . . .

Point Comfort, TX . . . . . . . .

Mount Holly, SC . . . . . . . . .

Frederick, MD . . . . . . . . . . .

Ferndale, WA . . . . . . . . . . .

Goldendale, WA . . . . . . . . .

Columbia Falls, MT . . . . . .

New Johnsonville, TN . . . .

Lake Charles, LA . . . . . . . .

Mead, WA . . . . . . . . . . . . . .

Tacoma, WA . . . . . . . . . . . .

Chalmette, LA . . . . . . . . . .

Anaconda Aluminum

Alcoa

Alcoa

Alcoa

Alcoa

Alma

Alcoa

Alma

Alcoa

Alumaxe

Eastalco e’

h

Intalcoe’

h

Martin Mariettaj

Anaconda Aluminum

Conalco m

Conalco m

Kaiser

Kaiser

Kaiser

New Madrid, MO. . . . . . . . . Noranda

The Dalles, OR. . . . . . . . . . Martin Mariettaj

Hannibal, OH . . . . . . . . . . . Ormetc

Ravenswood, WV . . . . . . . Kaiser

Scottsboro, AL . . . . . . . . . . Revere Copper& Brass

Longview, WA . . . . . . . . . . Reynolds

Massena, NY . . . . . . . . . . . Reynolds

Troutdale, OR . . . . . . . . . . . Reynolds

Listerhill, AL . . . . . . . . . . . . Reynolds

Jones Mills, AR . . . . . . . . . Reynolds

Arkadelphia, AR . . . . . . . . . Reynolds

San Patricio, TX . . . . . . . . . Reynolds

Hawesville, KY . . . . . . . . . . National-Southwirep

Vancouver, WA . . . . . . . . . Alcoa

Alcan

Alcoa

Alcoa

Alma

Alcoa

Alcoa

Alcoa

—

—

Alumax-Clarendonf,

g

Alumax-Mitsui f’

i

Alumax-Mitsui f’

i

Columbia Aluminumk

Columbia Fallsl

—

—

Kaiserb

Kaiserb

—

Noranda

Northwest Aluminumn

Ormetd

Ravenswoodo

—

Reynolds

Reynolds

Reynolds

—

—

—

—

Southwire

Vanalco

Note 5; sold to Alcan 1985

Capacity reduced 1986, restored 1987

Capacity reduced 1986, restored 1987

Capacity reduced 1986

Closed 1983; permanent closure 1985; experimental plant

Closed since 1978; permanent closure 1982

Opened 1980; Notes 6&7

Notes 8,6,9

Notes 8,6,9

Sold to Comalco 1985, to Columbia Aluminum 1987

Note 5; sold to Columbia Falls 1985

Closed 1986; Note 2

Closed 1981; Note 2; carbon plant sold to Reynolds 1983

Note 1

Note 1

Closed 1983; capacity written off 1986-87; Note 1

Northwest Al signed lease-purchase agreement 1986

Notes 2,3,4

Note 1; sold to Ravenswood 1988

Closed 1982; Note 3

Closed 1986

Closed 1985

Closed 1985

Closed 1981; permanent closure 1984

Note 10

Sold to Vanalco 1987

NOTES: l~lumbja Falls is a subsidiary of Montana for the first four years of production.

%Iarendon is a subsidiary of Marc Rich. Aluminum Investors. 5Atlantic Richfield (Arco) acquired Anaconda

bKaiser is a subsidiary of Maxxam. m~nalm was a subsidiary of Alusuisse 60Y0 and Aluminum 1982.

cormet was a subsidiary of Cenalco (owned by Phelps Dodge 40%. 6Ama ~me the sole owner of Alumax by

Alusuisseand Phelps Dodge) and Revere Copper nThe Dalles, OR, smelter is 87% owned by Martin purchasing the shares of Mitsui and Nippon Steel

and Brass. Marietta and operatad by Northwest Aluminum 1986.

dormet is a subsidiary of Ohio River Associates. under a lease-purchase agreement. 7Clare~on, a subsidiary of the Marc Rich tradin9

eAlum= was a subsidiary of Amax 50%, Mitsui oRavenswood isa subsidiary of Stanwich par_hIerS. company, acquired a 27 percent interest in the

457., and Nippon steel 5%. PNationai-southwire was a subsidiary of National Mount Holly, SC smelter 1987.

fAlumax is a subsidiary of Amax. Steel (later National Intergroup) and Southwire. 8Alum= became the sole owmer of Eastalco and

9The Mount Holly, SC, smelter is owned by Amax IAIm Clore acquired control of Kaiser 1986. Intalco by purchasing the assets of Howmet, a

73% and Clarendon (a subsidiary of Marc Rich) Maxxam acquired Kaiser 1988. subsidiary of Pechiney 1983.

27%. 2Alusui~~e ~me the sole owner of ~nal~ by 9A ~nsortium of Mitsui, TOyO Sash, and Yoshida

hEastalm and Intalco were subsidiaries of Alumax purchasing the share of Phelps Dodge 1980. Kogya acquired a 25 percent interest in the

. and Howmet, a subsidiary of Pechiney. 3Revere copper and Brass began operatin9 under Ferndale, WA and Frederick, MD smelters 1988.

The Ferndale, WA, and Frederick, MD, smelters Chapter 11 of the bankruptcy code in October lo~uth~re became the sole owner of the Haare owned by Alumax 75Y0, Mitsui 11%, Toyo Sash 1982.

.7%, and Yoshida Kogya 7%. @hio River Associates, an investor group, acwesville, KY smelter by purchasing the share of

National Intergroup 1990.

JThe Dalles, OR, and Goldendale, WA smelters quired Ormet through a leveraged buyout 1986.

were 87°/0 owned by Martin Marietta.

kcolumbia Aluminum is 30% employee owned.

Conalco and Revere Copper and Brass received

prorated shares of the Hannibal, OH plant output

SOURCE: Office of Twhnology Assessment, 1990. Compiled from Minerals Yearbook (various issues), U.S. Bureau of Mines (Washington, DC).
Chapter 3--Aluminum Industry ● 29

87.5

Austr

Figure 3-4—NSW Aluminum Production, Country Profile, 1988

Mine Production Refinery Production

million tonnes bauxite 31.4 million tonnes alumina

United States

Canada

Brazil 9%

Australia

United

3 3

razil 5 %

Primary Production Secondary Production

13.9 million tonnes 5.4 million tonnes

United S

I UK 2%

#

France 2%

India 2%

. . . . . . Venezuela 3%

. . . . . . .

. . . . . . . .

. . . . . . . . .

. . . . . . . . .

. . . . . . . . .

. . . . . . . . .

. . . . . . W. Germany 5% :.. .

Australia 8% Norway 6%

Brazil 6%

2%

NOTE: Secondary production is refined metal and other products recovered from old and new scrap.

SOURCE: hfefa/ Stafkfks, Metallgesellschaff Aktiengesellschaft.

Sierra Leone, Suriname, and Yugoslavia. These

countries produced about 85 percent of the NSW’s

bauxite and about half of the alumina in 1988. The

goals of the IBA are to promote the orderly and

rational development of the bauxite industry, to

secure fair and reasonable returns for the exploitation of the bauxite, and to generally safeguard

members’ interests in relation to the bauxite industry.7 The interest in establishing the organization

came in the early 1970s. Bauxite-producing nations

were dissatisfied with the revenues their resources

were generating. It was also during this period that

bauxite levies and government equity positions in

bauxite companies became popular. The final inducement for forming a producer organization came

when the Organization of Petroleum Exporting

Countries (OPEC) was successful in quadrupling oil

prices in 1973.

7G.R. p~t~rSO~ and S.J. ~belbid~, A/uminumAvailabi/i@arkel Economy Coun&ies, IC 8917 ~~~gto~ m: U.S. Department of the rnteriOr,

Bureau of Mines, 1983). .
30 ● Nonferrous Metals: Industry Structure

Box 3-A—The Big Six Aluminum Companies

Aluminum was not produced commercially until late in the 19th century, long after most other structural metals

had found widespread use. Alcoa (then the Pittsburgh Reduction Co.) controlled the North American aluminum

industry from its inception until World War II.

In the mid-1940s, the country’s capacity was tripled to meet growing military needs. The U.S. Government,

through the Defense Plant Corp., built new aluminum smelters which were then operated by Alcoa and several other

companies. Following the war, the smelters were leased and then sold to two of the operators, Kaiser and Reynolds

as part of an antitrust action against Alcoa. In 1950, Alcoa was ordered to divest itself of its Canadian affiliate Alcan

(then Aluminum Ltd.). Consequently, the North American monopoly held by Alcoa was replaced by the oligopoly

resulting from the emergence of Alcan, Kaiser, and Reynolds as major producers.

In Europe, a more oligopolistic aluminum industry developed in the early years. After World War II,

government actions consolidated the position of Pechiney and Alusuisse in this market.

Though their market control declined, these “Big Six” companies accounted for about 65 to 85 percent of

NSW aluminum production from World War II to the early 1970s. The leaders were able to set prices at cost plus

a margin of profits, know as ‘producer prices.” Prices remained stable, because changes in demand were met with

immediate adjustments to inventories and operating rates. In the long run, the major producers kept prices stable

by building capacity in anticipation of demand. This “planned excess capacity” enabled the major producers to

supply their customers as their demand increased and also provided an added barrier to entry into the industry.l The

high rate of growth in aluminum consumption and the coordination of capacity expansion among the major

producers made this strategy very successful.

During this time, the major producers strove for a high degree of vertical integration. Control of bauxite and

alumina resources enabled them to supply their own operations at cost, with profits realized at the latter stages of

production. Excess raw materials were selectively sold by the leaders so that they could decide, in effect, who their

competition would be. The same factors that strengthened Alcoa’s earlier in the century-control of natural

resources, high barriers to entry and access to the lowest cost energy—provided the oligopolistic leaders with the

competitive edge to control the industry from the 1940s until the 1970s.

In the early 1970s, the aluminum industry changed radically and the competitiveness of the top producers was

shaken. Electricity, labor, and capital costs rose sharply and demand slowed. As the profit margins declined, the

major producers began to pursue different strategies. LME pricing took effect in the late 1970s. The leaders no

longer operated as a cohesive group. Some sought to maintain prices by reducing production, while others built

capacity in low cost foreign locations. Both strategies were unsuccessful at maintaining the producers’ market

power.

Concentration of Primary Aluminum Production (percent of NSW production)

1955 1965 1970 1972 1981

Alcoa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.2 17.1 16.3 15.4 13.8

Alcan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.5 15.6 16.3 15.3 11.9

Reynolds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.5 13.2 12.8 11.0 9.8

Kaiser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.3 11.5 9.4 8.8 8.4

Pechiney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1 8.4 9.3 8.1 8.0

Alusuisse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.0 6.8 6.6 5.6 5.7

Big Six . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84.5 72.3 70.7 64.2 57.7

SOURCE: J.L. Mardones et al., “The Copper and Aluminum Industries: A Review of Structural Changes,” Resources Policy, March 19S5.

lpalo de S~ “smcti-esand price Formation in the Minerals snd Metals Industry,” Resources Policy, vol. 14, Me-r 1988.
Chapter 3--Aluminum Industry ● 31

United States

The United States mines little metallurgical-grade

bauxite, but is the NSW’s second largest alumina

refiner and largest aluminum smelter. All of the

domestic alumina refineries are located near the Gulf

Coast (see table 3-l). Smelter capacity is located

roughly one-third in the Pacific Northwest, one-third

in the Ohio Valley, and the rest in the Carolinas,

New York, and Texas.

Nearly all U.S. aluminum production is based on

imported raw material. In terms of recoverable

aluminum, the imports are about one-half bauxite

and one-half alumina The principal sources are

Guinea and Jamaica for bauxite and Australia for

alumina.8The major U.S. aluminum companies own

shares of many of their foreign suppliers.9

The United States produces about a quarter of the

NSW’s aluminum metal, but does not make enough

to meet its fabricating needs. During 1984-88, the

country’s net imports averaged 12 percent of its

consumption of primary and secondary aluminum.

Most of the imported metal comes from Canada.

Exports during this period were 17 percent of

domestic production.

Three companies (Alcoa, Reynolds, and Kaiser)

own about 90 percent of the country’s refinery

capacity (see figure 3-5). They, along with a fourth

firm (Alumax), own about 60 percent of domestic

smelter capacity. These companies are also heavily

involved in the downstream fabrication sectors of

the business. Having both smelting and fabricating

capabilities helps the companies manage business

risk. Though the various downstream products vary

in their exposure to aluminum ingot prices, rising

prices generally favor smelters and declining prices

favor the fabricated products.10 The remainder of the

primary aluminum industry is comprised of seven

domestic firms (Ormet, Southwire, Columbia Aluminum, Columbia Falls, Vanalco, Ravenswood, and

Northwest Aluminum) and two Canadian firms

(Alcan and Noranda).

Alcoa

Early in the century, Alcoa held a monopoly over

the aluminum industry. Though its influence has

since diminished greatly, it remains the world’s

largest aluminum company and the Nation’s leading

nonferrous metals producer.11 Its domestic facilities

include refineries in Texas and Arkansas, and

smelters in Texas, Indiana, Washington, Tennessee,

New York, and North Carolina. The six smelters

account for about 31 percent of total U.S. capacity,

and an estimated 60 percent of the company’s

worldwide smelting capacity. Alcoa’s major foreign

interests include bauxite and alumina facilities in

Jamaica, Suriname, and Guinea; and smelters in

Australia, Brazil, Norway, Suriname, and Mexico.

Alcoa has diversified over the years, but is still

principally an aluminum company .12 Aluminum

ingots, chemicals, and fabricated products account

for about 90 percent of the company’s sales. Some

of the aluminum is sold as primary metal, but more

is sold as packaging materials (e.g., can stock and

bottle caps) and sheet, plate, and extrusions for

aerospace and industrial applications.

The company’s emphasis on the fabricating business has left it with insufficient primary metal

capacity to meet all of its needs. Alcoa buys about

one-half of the aluminum used in its fabricated

products. To further its goals as both a buyer and a

seller of aluminum ingot, the company is an active

hedger in the commodities futures markets.

Alcoa has a reputation for being among the most

innovative of the companies in the nonferrous

metals industry. It spends heavily on research and

?IXuing 1985-88, bauxite imports came from Guinea (50 percent), Jamaica (23 percent), Australia (11 percent), and Brazil (5 percent). Alumina

imports came horn Australia (80 percent), Suriname (8 percent), and Jamaica (5 percent). U.S. Bureau of Mines, Mineral Commodity Summa ries, 1990

ed. (Washington DC: U.S. Department of the Interior, Bureau of Mines, 1990).

W.S. aluminurn companies do not typically own their foreign suppliers outright but in partnership with other multinational aluminum producers

and local governments.

locomp~~ am becoming increasingly aware Of tie Opportunity COSt Of d-um ingot and transferring metal at this cost (the going alumin Umprice)

to their fabricatingfacilities. Price increases cannot be passed on in the case of low-end fabricated products (e.g., common alloy sheet used in the building,

construction and transportation sectors) that have low margins. These products are typically undiiTerentiated and as such must compete in terms of price.

Higher end products (e.g., aerospace plate) do not necessarily compete in terms of price and have large enough margins to allow producers to either pass

on price fluctuations or absorb them. These are generally niche markets. Based on reviewer comments by RSI Inc.

ll~ma is the o~y ~~enoW me~s company included in the Dow Jones 30 hdustrids stock index.

Izme ~owmy~~ no~~m activities ~my ~ tie mea of ~t~s sciences, including el~~~, c~tic, plastic, ad composite materials,

manufacturing equipment, and separations and defense systems.
32 ● Nonferrous Metals: Industry Structure

Figure 3-5--U.S. Aluminum Industry, Company Profile, 1988

Refinery Capacity Smelter Capacity

5.1 million tonnes alumina 4.0 million tonnes

Vanalco

Alcoa 41%

Alcoa 3

aiser 16%

33% ‘partners

NOTE: Alcoa’s refinery capacity includes 340,000 mt of capacity that was closed in 1988.

SOURCES: Minerals Yearbook (various issues), U.S. Bureau of Mines; Non-Ferrous Meta/ Data

annual reports.

Alcoa and its share of

affiliates (000s mt) 1986 1987 1988

Reynolds

randa 5%

et 6%

%

4% Reynolds 11%

1988, American Bureau of Metal Statistics Inc.; company

Sales: 452 493 796

Primary metal . . . . . . . . . . . . . .

Fabricated and finished

products . . . . . . . . . . . . . . . . 1,563 1,720 1,708

Total . . . . . . . . . . . . . . . . . . . . . 2,015 2,213 2,504

Production:

Primary metal . . . . . . . . . . . . . . 1,401 1,498 1,814

Recycled cans . . . . . . . . . . . . . . 200 225 270

Total . . . . . . . . . . . . . . . . . . . . . 1,601 1,723 2,084

development ($120 million to $167 million annually

during 1985-88) for both manufacturing technologies and product development.13

During the mid-1980s, Alcoa pursued a threepronged strategy. It sought to withdraw from the

primary aluminum business, to develop a higher

degree of downstream integration, and to diversify

into the production of engineering materials. The

goal was to have one-half of its sales come from new

nonaluminum businesses by 1995. The company has

since slowed its diversification into engineering

materials and concentrated its efforts on the aluminum metal and fabrication businesses.14

Reynolds, the second largest U.S. aluminum

company, has been in production since the 1940s. It

operates a refinery in Texas and smelters in Washington, New York, and Oregon. The three domestic

smelters account for 11 percent of U.S. capacity.

Reynolds’ major foreign operations include bauxite

mines in Brazil, Jamaica, Guinea, and Australia;

refineries in Australia, Jamaica, and West Germany;

and smelters in Canada, Ghana, Venezuela, and

West Germany. At yearend 1988, over 90 percent of

the company’s primary capacity was in North

America.

Aluminum products accounted for about 85 percent of the company’s sales in 1988. Reynolds sells

some aluminum ingot, but stresses its fabricating

business. The company’s emphasis on finished

goods, however, is greater than that of its competitors. It is the only aluminum producer that makes

cans from its can stock. Reynolds’ largest business

is its packaging and containers line, which includes

aluminum, plastic, and paper consumer products

(e.g., aluminum foil, plastic wrap, waxed paper, food

containers, and garbage bags). The company also

manufactures aircraft and automotive products. The

ls~coa i%nual Repo~ 1988.

l@llvler B~~el and patio de S4, Diversification: w~tDireCfiOnfOr Growth TO copewith price uncer@it@f, &mkar 011 hf.hled ECOIIOnliCS ~d

Strategy, Centre d’Economic des Resources Naturelles(CERNA), Ecole Nationale Sup6rieure des Mines des Paris, June 1989.
Chapter 3-Aluminum Industry . 33

Reynolds and its share of

affiliates (000s mt) 1986 1987 1988

Aluminum sales:

Primary metal . . . . . . . . . . . . . . 111 128 156

Fabricated products . . . . . . . . . 654 733 787

Finished products . . . . . . . . . . . 331 348 379

Total . . . . . . . . . . . . . . . . . . . . . 1,096 1,208 1,322

Aluminum production:

Primary metal . . . . . . . . . . . . . . 654 769 845

Recycled . . . . . . . . . . . . . . . . . . 281 311 369

Total . . . . . . . . . . . . . . . . . . . . . 935 1,080 1,214

5-year plan announced in 1987 calls for expansion of

the foreign operations, including a new can plant in

Brazil and new wheel plants in Venezuela and

Canada.

Since 1986, the company has been investing

heavily in precious metals. It has acquired interests

in two Australian gold mines (Boddington and Mt.

Gibson). In 1988, Reynolds share of the gold from

these two mines was 4.4 million grams.

Though Reynolds stresses that its emphasis remains with fabricated and finished products, it is

investing in additional aluminum ingot capacity. It

is expanding its Baie Comeau smelter in Canada

from the present capacity of 280,000 tpy to 400,000

tpy by 1992. Also, Reynolds acquired a 25 percent

equity position in the Becancour smelter in Canada

in 1987. The smelter is currently being expanded by

50 percent to 360,000 tpy.15 The company claims

that its present sources of bauxite and alumina

(including joint ventures and long-term supply

contracts) are more than adequate to meet its

requirements for the foreseeable future. Reynolds is

a net buyer of scrap and ingot.

Capital spending for modernization in the rnid1980s was primarily to lower basic metals costs

(reduced by about 25 percent during 1983-87). The

company’s emphasis is now on improving fabricating costs and expects to spend about $300 million

per year during 1988-93 in this effort. Its research

and development budget has been $32 million

annually during the mid-1980s. The emphasis is on

the development of products, such as the resealable

aluminum cans.

Alumax

Amax, through its Alumax subsidiary, is the third

largest U.S. aluminum producer. It operates three

smelters, located in Washington, South Carolina,

and Maryland. The company owns 11 percent of

U.S. smelter capacity.

16 It also has a one-quarter

share in the Becancour smelter in Canada.

Amax is a century-old minerals company that has

been involved in the aluminum industry (mostly as

a partial owner of Alumax) for 35 years.17 Alumax

only became a major producer in the 1980s. It

expanded by building the Mt. Holly, South Carolina

smelter in 1980 and purchasing the U.S. assets of

Pechiney (Howmet) in 1983. In 1986, Amax acquired full control of Alumax.

During 1987-88, Amax sold 27 percent of the Mt.

Holly smelter to Clarendon Ltd. and one-quarter of

its Washington (Intalco) and Maryland (Eastalco)

smelters to the Mitsui trading company and two

Japanese fabricating companies.18 Alumax has a

10-year tolling contract with Clarendon Ltd. The

agreement covers 50 percent of Mt. Holly’s production, but reports are that Clarendon Ltd. has been

taking about three-quarters of the smelter’s output.19

Amax has stated that it intends to rebuild its primary

metal business and be more involved in the sale of

aluminum metal.20 To this end, the funds from the

two equity sales were used to obtain the company’s

interest in the Becancour facility in 1988. Alumax

also has plans to build a 200,000 tpy smelter at

Deschamault in Quebec.

Amax produces aluminum, coal, molybdenum,

and gold.21 Aluminum accounted for about twothirds of the company’s sales during 1987-88. Most

lsRe~olds &umal Reporti 1988.

16~en ~e ~~es of the p~er ~ompafies me ~clud~, tie Alum= smelters acco~t for 15 Pement of domestic capacity.

ITFor most of itS histov, ~=~~ pficip~y a b~e mews producer. It was tie world’s f~th largest copper pr~ucer w)til it sold its &lllbiall

properties to that government in 1970. It has since left the copper business completely. Arnax also once held 60 percent of the world molybdenum market.

It is still a major producer, but has lost much of its control over the market.

lgClarendon Ltd., owned by trader Marc RicL is based in Switzerland ad markets ~* produced for the Jamaican Government by the Clarendon

JVrefmery. Clarendon is thought to control 30 percent of world aluminum trade. Paulo de S4 From Oligopoly to Competition: The C%angingAlunu”num

Industry, Centre d’Economic des Resources Naturelles(CERNA), Ecole Nationale Sup&ieure des Mines des Paris, February 1989.

l~avid Humphreys, ‘‘AtuminunL” Mining Journal, Mining Anrtual Review, 1988.

m- First @arter Report+ 1989.

21co~, moly~enm, gold, ad other ~e~s accomt~ for 18 percen~ b per~nt, z ~rcen~ ~d 7 ~rcat of 19*7-** Saks, respectively.
34 ● Nonferrous Metals: Industry Structure

Alumax and its share of

affliates (000s mt) 1986 1987 1988

Kaiser and its share of

affiliates (000s mt) 1986 1987 1988

Aluminum sales:

Primary metal . . . . . . . . . . . . . . 271 349 254

Fabricated and finished

products . . . . . . . . . . . . . . . . 533 532 501

Total . . . . . . . . . . . . . . . . . . . . . 805 881 755

Aluminum production:

Primary metal; . . . . . . . . . . . . . . 582 668 642

Sales:

primary metal . . . . . . . . . . . . . . 75 125 278

fabricated & finished products . 688 649 487

total . . . . . . . . . . . . . . . . . . . . . . 763 774 765

Production:

primary metal . . . . . . . . . . . . . . 578 633 641

of the aluminum is sold as fabricated products. The

company is especially strong in the architectural and

building products line.

Kaiser

Kaiser, the fourth largest domestic producer, is the

smallest of the U.S. majors. The company has been

producing aluminum since the 1940s. Its domestic

operations include a refinery in Louisiana and two

smelters in Washington. The smelters account for 7

percent of U.S. capacity. Kaiser’s foreign interests

include bauxite mines in Jamaica; alumina refineries

in Jamaica and Australia; and smelters in Ghana, the

United Kingdom, Australia, and Bahrain.

Kaiser was the target of several corporate takeover attempts during 1985-87. British investor Alan

Clore was successful in acquiring the company in

1987. However, he overextended himself in the

process and was forced to sell out to Maxxam in

1988. Maxxam has refocused the company’s businesses and reduced its debt by restructuring and

asset selling. Kaiser is being regrouped around the

aluminum metal products business. Since 1984, the

company has sold its agricultural, industrial, and

specialty chemicals, refractories, international trading, and real estate operations. The company’s

Ravenswood smelter was sold to the Stanwich

Partners in 1988. Further sales, particularly of

foreign operations, are expected.22

Kaiser fabricates most of the aluminum it produces. In 1987, the company sold 83 percent of its

aluminum in the fabricated form. The biggest

product groups are can stock and other sheet and

plate products. Other lines include rod, bar, wire,

forgings, and extrusions.

Alcan

Alcan is Canada’s principal aluminum company,

and most of its operations are in that country (see

next section). In the United States, it owns the

Sebree, Kentucky smelter, which it bought from

Atlantic Richfield (Arco) in 1984.

Noranda

Noranda is a diversified minerals producer that is

based in Canada. Its principal primary aluminum

facility is its New Madrid, Missouri smelter.23

Noranda’s aluminum fabricating plants are all located in the United States. Overall Noranda’s

aluminum operations contributed 9 percent of the

corporation’s operating profit (revenues minus costs

and depreciation) in 1988.24

Other U.S. Producers

Independent firms held 27 percent of U.S. smelter

capacity in 1988. National-Southwire ran the

smelter at Hawesville, Kentucky. The company, a

joint venture of National Intergroup and Southwire,

had operated the plant since the late 1950s. In early

1990, Southwire bought out National Intergroup and

became sole owner of the smelter. The other six

independent companies are all new to the aluminum

industry in the 1980s. Ormet, the largest, has a

refinery in Louisiana and a smelter in Ohio. Ohio

River Associates, an investor group, bought the

company from Conalco (Consolidated Aluminum, a

subsidiary of Alusuisse) and Revere Copper&Brass

in a leveraged buyout in 1986. The purchase

agreement calls for the two previous owners to

receive part of Ormet product for 4 years. Montana

Aluminum Investors purchased the Columbia Falls,

Montana smelter from Arco in 1985. Arco had

obtained the plant when it purchased Anaconda

Aluminum in 1982. Columbia Falls operates the

plant, which toll-converts alumina for Hydro Alumi-

~David Humphreys, “~uruimuq ” Mining JournaI, Mining Annual Review, 1989.

~Noran& is ~so a p- ownm of the FriWia mine ad refiiery iII Gfim.

~Noran~ bud RWO@ 1988.
Chapter 3--Aluminum Industry ● 35

num (Norway) and BHP (Australia). Columbia

Aluminum bought the Goldendale, Washington

smelter from Commonwealth Aluminum (a subsidiary of Comalco) in 1987. It tolls for Hydro Aluminum and Reynolds, and also produces metal for its

own account. Vanalco (owned by Bay Resources)

purchased the Vancouver, Washington smelter from

Alcoa in 1987. The company produces metal for its

own account. Its alumina comes from Alcoa of

Australia. Northwest Aluminum (an investor group

headed by a former Bonneville Power Authority

executive) negotiated a lease-buy arrangement for

The Dalles, Oregon smelter with Martin Marietta in

1986. Northwest Aluminum is operating the smelter

under a 3- to 5-year lease, and has the option to

purchase the plant when the lease expires. The plant

is tolling alumina for Clarendon Ltd. Ravenswood

(owned by Stanwich Partners) purchased its West

Virginia smelter from Kaiser in 1988.

Canada

Canada ranks second in the smelting sector of the

NSW aluminum industry. It is a much smaller

refining country and has no mine capacity. The

industry is based in Quebec, and to a lesser extent,

British Columbia. The major foreign sources of

alumin a are Jamaica and Australia. Canada exports

about three-quarters of its primary aluminum. During 1984-88, the United States received 75 percent

of Canada’s aluminum exports.

Alcan dominates the Canadian aluminum industry. It runs the country’s sole alumina refinery, the

Vandereuil plant in Jonquiere, Quebec. The facility

supplies an estimated 30 percent of Canada’s

alumina needs. Its bauxite feed is imported from

Brazil (mostly MRN’s Trombetas mine), Guyana,

and Guinea. Alcan has six Canadian smelters, five in

Quebec and one in British Columbia, which account

for 68 percent of the country’s capacity. The largest

smelter is the Arvida operation attached to the

Vandereuil refinery. Alcan’s foreign interests include bauxite mines in Brazil, Guinea, Ghana,

Jamaica, India, and Malaysia; refineries in Australia,

Brazil, Guinea, Jamaica, India, Ireland, the United

Kingdom, and Japan; and smelters in Australia, the

United States, Brazil, India, the United Kingdom,

Japan, and Spain.

Alcan and its share of

affiliates (000s mt) 1986 1987 1988

Shipments:

Ingot and ingot products . . . . . 731 787 832

Fabricated products . . . . . . . . . 1,388 1,410 1,446

Total . . . . . . . . . . . . . . . . . . . . . 2,119 2,197 2,278

Production:

Primary metal . . . . . . . . . . . . . . 1,641 1,587 1,619

*

Alcan, the world’s second largest aluminum

company, accounted for about 12 percent of NSW

primary metal production in 1988.25 It is a low-cost

ingot producer and is known as a fast moving

company which buys and sells metal to match the

rapidly shifting supply and demand levels worldwide. 24

The company remains committed to its traditional

aluminum business. A new smelter is being built at

Laterriere, Quebec to replace several potlines of

similar capacity at the Arvida plant that are to be

closed for environmental reasons. Facilities are

being upgraded to produce higher value ingots. The

company’s Kemano hydroelectric plant in British

Columbia is being expanded to power new smelters

that will be built when market conditions are right.

Alcan is also investing in new businesses such as

metal matrix composites, aluminum lithium alloys,

fiber optics, ceramics, and micro separation technologies. The company has adopted a conservative

approach to get into these new businesses. It is

building each business step-by-step through joint

research projects, small acquisitions, and strategic

alliances.

There are two Canadian smelters that are not

affiliated with Alcan. Both are in Quebec. The

larger, and older, is the Baie Comeau operation

owned by Reynolds. It currently accounts for 19

percent of the country’s capacity, and is being

expanded by 120,000 tpy. The other is the Becancour smelter, equally owned by Reynolds, Pechiney,

Alumax, and Albecour (an arm of the Quebec

Government). It started production in 1986 and

accounts for about 13 percent of Canadian capacity.

It is also being expanded by 120,000 tpy.

Several new smelter projects are underway in

Canada. Alouette (owned by VAW, Austria Metall,

Hoogovens, Albecour, Marubeni, and Kobe Steel)

——

~AIQn OmS about 13 percent of the NSW’S refinery capaciv.

%pa~o de $4 From Oligopoly t. Competition: The c~rlging Alum”rlum Industry, Centrc d’Economic des Ressour@s Naturelles (CERNA)> ‘iO1e

Nationale Sup&ieure des Mines des Paris, February 1989.
36 ● Nonferrous Metals: Industry Structure

has announced that it will build a new 278,000 tpy

smelter at Sept-Iles, Quebec. Alumax has plans to

build a 200,000 tpy smelter at Deschamault in

Quebec. When the expansion projects and the new

smelters have all been completed (probably in

1992), Canada will overtake the United States as the

world’s largest aluminum producer.

Australia

Australia is the NSW’s largest bauxite miner and

alumina refiner, and ranks third in aluminum smelting. It exports an estimated 95 percent of the

aluminum content of its bauxite output. Of these

exports, roughly one-quarter is in the form of

bauxite, 60 percent is in the form of alumina, and the

remainder is aluminum metal. Over half of the

primary metal exports are bound for Japan, and most

of the remainder go to other Asian countries.

Australia’s aluminum industry is comprised of

five groups of companies, Alcoa of Australia,

Comalco, Gove, Worsley, and Alcan Australia. Each

is affiliated with the major multinationals.

Alcoa of Australia (partially owned by Alcoa and

Western Mining) is Australia’s largest bauxite

producing concern. It has three large mines (Jarrahdale, Huntley-Del Park, and Willowdale) and

three alumina refineries in the Darling Range of

Western Australia. It is the world’s largest alumina

seller. The company also operates two smelters, both

near Melbourne in Victoria. It owns the Point Henry

facility, and has a 45 percent interest in the Portland

plant.27

Comalco (partially owned by CRA, an RTZ

affiliate) is the country’s second largest producer.

The company operates two mines (Weipa-Andoom

and Mitchell Plateau) in northern Australia. Bauxite

from the Weipa-Andoom mine is refined by Queensland Alumina or exported to Japan or Europe.

Queensland Alumina (owned by Comalco, Kaiser,

Alcan, and Pechiney) runs the Gladstone refinery on

the east coast of Queensland. Two smelters, Boyne

and Bell Bay, receive their alumina feed from

Gladstone. Boyne (owned by Comalco, Kaiser, and

a Japanese consortium) is located next to Queensland Alumina. Bell Bay (owned by Comalco) is

located in Tasmania.

Gove (partially owned by CSR) is the common

thread in the Gove Project mine and refinery and the

Tomago smelter. The Gove Project (owned by Gove

and Alusuisse) in the Northern Territories is managed by Nabalco. Bauxite from the mine is either

refined on site or exported. Tomago (partially owned

by Gove, Pechiney, and VAW) runs a smelter in

New South Wales.

Australia’s other producers are Worsley and

Alcan Australia. Worsley (owned by Reynolds,

Billiton/Shell Australia, and Kobe Alumina) runs

the Mt. Saddleback mine and the Worsley refinery in

the Darling Range of Western Australia. Alcan

Australia runs the Kurri Kurri smelter in New South

Wales.

Brazil

Brazil ranks third in the NSW in bauxite mining

and fourth in aluminum smelting. The refining

sector is disproportionately small, thus Brazil has

net exports of bauxite and aluminum, but net imports

of alumina. The bauxite is exported mostly to

Canada and Venezuela. During 1984-87, Brazil

exported 41 percent of its primary aluminum output,

primarily to Japan, Europe, and the United States.

Mineracao Rio do Norte (MRN) is Brazil’s largest

bauxite mining company. The company’s largest

holder is the partially government-owned Companhia Vale do Rio Doce (CVRD). Lesser stakes in

MRN are held by Alcan, Cia Brasileira de Aluminio

(CBA), Billiton, Reynolds, and Norsk Hydro.

MRN’s mine at Trombetas in the State of Para

accounts for about three-quarters of Brazil’s bauxite

production. Most of the operation’s output is exported. Brazil’s other mines are run by Alcan

Aluminio, CBA, and Alcoa Aluminio (partially

owned by Alcoa). Their bauxite is, for the most part,

refined and smelted domestically.

Four companies operate both refineries and smelters in Brazil. The largest is Alumar (owned by Alcoa

Alumini o and Billiton). Its facilities are located at

Sao Luis, Maranhao and currently account for about

28 percent of the country’s smelting capacity. The

Sao Luis smelter is being expanded from 245,000

tpy to 328,000 tpy. The other refinery/smelter

complexes are run by CBA (Sorocaba, Sao Paulo),

Alcan Aluminio (Minas Gerais operations), and

Alcoa Aluminio (Pocos de Caldas, Minas Gerais).

27~cOa (~ough Al~~~ of Au~tr~a) Oms 51 percent of the po~t Heq smelter, but has acwss to all of the metal produced.
Chapter 3--Aluminum Industry ● 37

Two companies, Albras and Valesul, are involved

only in the smelting sector. Albras (owned by CVRD

and a Japanese consortium) runs a smelter at Belem,

Para. A project to double the capacity of the Belem

smelter is underway. Albras has been dependent on

imported alumina, because finding problems stalled

the construction of the nearby Alunorte refinery. The

refinery should be in production by the end of 1990.

Valesul (owned by CVRD, Billiton, and Reynolds)

runs a smelter in Rio de Janeiro.

Jamaica

Jamaica is the fourth largest NSW miner and

refiner, but has no smelting capacity. Most of the

country’s operations are partnerships between the

government and foreign fins. The largest bauxite

producer is Kaiser Jamaica (owned by the government and Kaiser). Its Water Valley mine has no

associated refinery in Jamaica; most of its bauxite is

sent to Kaiser’s Gramercy, Louisiana plant. Three

other companies operate both mines and refineries in

Jamaica. Alpart (owned by Kaiser and Hydro

Aluminum) has facilities at Nain. Clarendon Alumina (owned by Alcoa and the government) runs the

Breadnut Valley mine and the Clarendon refinery.

Jamaican (owned by Alcan and the government) has

operations at Ewarton and Kirkvine.

Jamaica’s alumina production was uneven in the

mid- 1980s. The government and the companies

disagreed on whether or not to close various

facilities. Alumina export levies and sagging alumina markets (especially the closures of U.S. Gulf

Coast smelters) were at the center of the disputes.

These problems have generally been resolved.

Significant expansion projects are being considered

by Alcan, Alpart, and Comalco.

Guinea

Guinea, which ranks second in NSW bauxite

output, is the world’s largest bauxite exporting

country. It has little refinery capacity and no

smelting capacity.

The Sangaredi-Boke mine is Guinea’s largest

mine, accounting for about two-thirds of the country’s capacity. It is run by Compagnie des Bauxites

de Guinea (CBG) which is owned by the government

and Halco (a consortium of Alcoa, Alcan, Pechiney,

VAW, Comalco, Aluminia SpA, Reynolds, and

Billiton). Most of the bauxite is shipped under

long-term contracts to refineries in Europe and the

United States. The Endasa plant in Spain and

Aughinish plant in Ireland are major recipients.28

The next largest mine, Debele, is run by the

state-owned Offices de Bauxites de Kindia (OBK).

The Soviet Union helped finance the mine and takes

a large portion of its output under a barter arrangement. The remaining mine, and the sole refinery, are

run by Friguia. The company is owned by the

government and Frialco (a consortium of Noranda,

Pechiney, British Alcan, Alusuisse, and VAW).

India

India is currently a medium-sized bauxite miner

and alumina refiner. It will become a comparable

aluminum smelter when ongoing expansion projects

are completed in the early 1990s. There are four

integrated companies producing aluninum in India.

Nalco and Bharat are both owned by the government. Indalco is partially owned by Alcan. Hindalco,

until recently, was partially owned by Kaiser. A

fifth, smaller company, Malco operates a refinery

and smelter, but has no mines.

Suriname

Suriname, once the third largest bauxite miner, is

a medium-sized bauxite producer with a small

amount of refining and smelting capacity. Suralco

(owned by Alcoa) and Billiton operate facilities in

the country. Suralco runs a mine and a smelter.

Suralco and Billiton jointly own another mine and a

refinery.

Yugoslavia

Energoinvest (owned by the government) is

Yugoslavia’s largest aluminum producer. It runs

four mines, two refineries, and a smelter. About half

of its alumina production is smelted domestically,

and half is exported, primarily to the Soviet Union.

The government also owns the country’s three other

smelters.

Greece

Greece exports most of its bauxite. Parnasse, the

countrys largest bauxite producer, accounts for over

half of the country’s output. The company exports

about 60 percent of its bauxite primarily to the

~AnnW[ Re~ie~ of the Wor[d Alu~”num I&usm’es 1985, Shemon Lehman Brothers.
38 ● Nonferrous Metals: Industry Structure

Eastern bloc and Europe. Greek Helikon, another

bauxite producer, also exports much of its product.

Elbaumin (owned by the government) sends its

bauxite to the country’s only refinery and smelter,

run by Aluminium de Grece (partially owned by

Pechiney). Hellenic Alumina (ELVA) is constructing an alumina plant at Thisbi. The plant, which is

being partially funded by the Soviet Union, is

scheduled for completion in 1992. All of the

refinery’s output will be exported to the Soviet

Union.

Guyana

Guyana has three mines and is estimated to

produce 60 percent of the world’s nonmetallurgical

grade bauxite. It exports most of its product. Guyana

nationalized its industry in 1971.

Sierra Leone

Sierre Leone Ore and Metals (SIEROMCO),

owned by Alusuisse, is the country’s the sole

producer. It exports all of its bauxite, primarily to

Europe.

Venezuela

Venezuela has carved out a niche as an alumina

refiner. It imports bauxite and exports alumina. The

country currently has ambitious plans to expand its

capacity in the smelting sector. The industry is

dominated by the state-owned Corporation Venezolana de Guayana (CVG). The company has some

stake in all of the country aluminum operations.

Venezuela began bauxite production with the

opening of the Bauxiven (owned by CVG and

Alusuisse) Los Pijiguaos mine in 1987. The mine is

expected to produce 4 million tpy of bauxite at full

capacity. At this rate, Venezuela would be the fifth

largest bauxite producer.

Inter-alumina (owned by CVG and Alusuisse) runs

the country’s sole refinery. It is located at Ciudad

Guayana next to two smelters. The larger smelter is

run by Venalum (owned by CVG and a consortium

of six Japanese companies). The other is operated by

Alcasa (owned by CVG and Reynolds).

Venezuela is undergoing an aggressive expansion

program to take advantage of its vast bauxite

resources and its position as the world’s lowest cost

aluminum producing country. The Interalumina

refinery is being enlarged. The Venalum and Alcasa

smelters, with a current capacity of 600,000 tpy, are

to be expanded to about 860,000 tpy in the early

1990s. Furthermore, seven other CVG-associated

companies Alisa, Alamsa, Aluguay, Alusur,

Aluyana, Vexxal, and Angostura have construction

plans. 29 If all of the plans were realized, Venezuela’s

capacity would rise to 1.4 million tpy by 1994 (2.0

million tpy by 2000) and the country would be

among the top three or four NSW aluminum

smelters.30 However, the construction schedules are

far from certain. The government has proposed

delaying five of the seven planned smelters, because

of financial problems. Only Alisa has arranged the

financing necessary to begin construction on its

120,000 tpy facility.

Norway

Norway produces no bauxite or alumina, but is the

world’s fifth largest aluminum smelter. It exports

about 90 percent of its production, primarily to West

Germany, the Netherlands, Italy, and the United

Kingdom.

Norway’s industry is comprised of three fins.

Hydro Aluminum (owned by Norsk Hydro) is the

largest. It has four smelters and accounts for almost

three-quarters of Norway’s capacity. Hydro Aluminum has tolling agreements with Columbia Falls and

Columbia Aluminum in the United States, and owns

a share of Alpart in Jamaica, to enhance its

geographical diversification.31 Norway’s other producers are Mosal (owned by Alcoa and Elkem) with

two smelters and Soral (owned by Norsk Hydro and

Alusuisse) with one smelter.

West Germany

After Norway, the largest of the European producers is West Germany. Its refinery production is

handled by three fins, Aluminium Oxide Stade,

Alusuisse, and VAW. Aluminium Oxide Stade

(owned by Reynolds and VAW accounts for almost

zg~ong CVG’.S partne~ in fiese ventures are Austria Metall and Pechiney for Alams~ and Alcoa and Sural for Ah.lsm, possibly ~usuisse and

Alumax for Aluguay. Alamsa will build its smelter in neighboring Guyana.

~t CVenemela Boosts ~uminum Output, ” Engineering and Mining Journal, May 1988. David Humphreys, “Aluminum,” Mining Journal, Mining

Annual Review, 1988.

slDavid Humphreys, ‘‘~umirmrq ” Mining Journal, Mining Annual Review, 1988.
Chapter 3--Aluminum Industry ● 39

60 percent of the country’s refinery capacity. The

major suppliers of concentrates are Australia,

Guinea, and Sierra Leone.

Four films are involved in the smelting sector.

VAW owns about half of the capacity and Alusuisse,

through two subsidiaries, accounts for a quarter. The

others are Hamburg Aluminum (owned by Reynolds, VAW, and the City of Hamburg) and Hoogovens. Imports of alumina come primarily from

Australia, Italy, and Guinea.

France

France’s sole aluminum producer is Pechiney

(owned by the government). The company is the

largest aluminum producer in Europe and the fourth

largest in the world. It has interests in bauxite mines

in France, Guinea, and Greece; refineries in France,

Guinea, Greece, and Australia; and smelters in

France, Greece, the Netherlands, Australia, and

Canada. Pechiney has a 30 percent interest in the

180,000 tpy Alamsa smelter being proposed in

Venezuela. It announced in 1988 that it would build

a new 210,000 tpy state-of-the-art smelter in Dunkerque, France. It recently purchased American

National Can to enhance its fabricating capabilities

in the United States.

Switzerland

Switzerland produces little aluminum, but is

home to Alusuisse. The company (also called Swiss

Aluminum) is the smallest of the majors. It owns

major shares of bauxite mines in Australia, Sierra

Leone, and Guinea; refineries in Australia and West

Germany; and smelters in Norway and West Germany. Minor interests are held in mines and

refineries in Venezuela.

In 1987, 69 percent of Alusuisse’s sales came

from aluminum products and the remainder came

from chemicals. The aluminum was sold mostly as

fabricated products (64 percent), but also as primary

metal (20 percent), and bauxite and alumina (10

percent). The major markets were Europe and, to a

lesser extent, North America. Because of the weak

European markets of the mid-1980s, the company

retreated from raw material production and expanded into fabricated products.

Alusuisse’s corporate strategy calls for a partial

withdrawal from primary metal to concentrate on

specialized, high-value aluminum products an d

ceramics, composites, and chemicals. The company’s primary metal capacity has been pared to less

than half of the 800,000 tpy it once was. About 30 to

40 percent of the metal required by the fabricating

operations must be brought from outside the corporation. The smelter capacity that remains is relatively high cost. The alumina and fabricated products segments are somewhat healthier.32

The Middle East

There are several producers in the Middle East

taking advantage of the low-cost energy (based on

natural gas) in that region. The current producers are

Alba (partially owned by Reynolds) in Bahrain and

Dubai Aluminum in the United Arab Emirates.

Capacity in the region is currently being expanded

considerably. Alba is expanding its smelter from

180,000 tpy to 225,000 tpy in a program to be

completed in 1990. The Bahrain Government is

considering further expanding the plant to 400,000

tpy. A consortium of Chinese, U. S., and British

investors have plans to build a 240,000 tpy smelter

in Qatar, UAE to be completed in 1992. Alujain

(controlled by Saudi shareholders) has talked of

building a 220,000 tpy smelter in Saudi Arabia.33

Other Countries

Other producers include: Aluminio Espanol and

Endasa in Spain; British Alcan and Anglesey

Aluminum in the United Kingdom; Hoogovens in

the Netherlands; Aluminia SpA in Italy; Austria

Metall and Salzburger (Alusuisse) in Austria;

Grange Aluminum in Sweden; and Aughinish

(owned by Alcan and Billiton) in Ireland.

szpa~o de Sk From Oligopoly to Competition: The Changing Aluminum Industry, Centre d’fionomie des Resources Naturelles(CERNA), Mole

Nationale Sup&ieure des Mines des Paris, February 1989.

ssDavjd Humphreys, “~umimq” Mining Journal, Mining Annual Review, 1989.
Chapter 4

Lead Industry

INTRODUCTION

Lead, one of the oldest known metals, has been

used since 3000 BC. In the 20th century, the

development of froth flotation techniques reduced

production costs dramatically and made previously

uneconomic deposits viable. The use of lead increased greatly with invention of the electric starting

system (which required storage batteries) for automobiles.

Batteries

States, lead

percent of

Uses

are lead’s largest market. In the United

acid storage batteries accounted for 78

domestic lead consumption in 1988.

These batteries are used for auto ignition starters,

uninterruptible power supplies (for computer systems at hospitals, banks, and communications networks), and standby power supplies (for emergency

lighting and telephone systems). Other major uses

include paints, glasses, and ceramics additives (5

percent of domestic consumption), ammunition (4

percent), solder (2 percent), building products,

pipes, traps, and cable coverings.1 Lead’s use as a

gasoline additive declined greatly in the last two

decades because of environmental regulations.2

This, and other, decreases in lead’s dissipative uses

has made the metal more recyclable and increased

the importance of the secondary market.

Production Methods and Technologies

Lead is produced from galena (PbS), and less

commonly, cerussite (PbCO3

) and anglesite

(pbSO4

). Commercial ores contain 4 to 12 percent

lead. Galena often contains silver/gold and is

associated with sphalerite (ZnS), pyrite (FeS2

), and

chalcopyrite (CuFeS2). Thus, byproduct and coproduct recovery are frequently important aspects of lead

production.

Over 80 percent of nonsocialist world (NSW) lead

mines are underground operations. After mining, the

ores are beneficiated (at the minesite) to raise the

lead content and to remove most of the associated

zinc, iron, and waste rock. Any copper, silver, and

gold, in the ore normally remain with the lead and

are recovered at the smelter or refinery. A variety of

separation processes are used to concentrate lead

ores, but froth flotation is generally used for sulfide

ores such as galena. The resulting concentrate

contains about 70 percent lead.

At the smelter, the lead concentrates are pelletized

and sintered to remove most of the sulfur. The lead

oxide sinter product is then charged (along with

coke, fluxes, and dross) into the top of the blast

furnace or the Imperial smelting furnace.4 As the

feed descends through the furnace, the burning coke

melts the charge and forms a gas which reduces the

lead oxide to metallic lead. The lead, called bullion,

and the slag are tapped from the bottom of the

furnace. The process is continuous. The slag carries

out most of the zinc, iron, silica, lime, and other

gangue. The bullion, which contains silver, gold,

and copper, is transferred to dressing kettles. As the

bullion cools, most of the copper becomes insoluble

and separates out into the dross which is skimmed

off.5 The decopperized bullion is then sent to the

refinery.

Most lead bullion is refried by pyrometallurgical

methods. 6 This involves a series of processes that

remove the antimony (softening), silver (Parkes

process), zinc (vacuum dezincing), and, if need be,

IWillim D. Woodbury, “M,*’ Minerals Yeurb~Ok, vol. I, 1988 ed. (Washington DC: U.S. Department of the Interior, Bureau of Mines, 1990).

%asoIine additives nevertheless still account for a signiflcaut portion of world lead use, principally in less developed countries (LDCS).

3A*L. PO*W, “had Metallurgy, “ McGraw-Hill Encyclopedia on Science and Technology (New Yorlq NY: McGraw-Hill, 1987). William D.

Woodbury, “Lead,” Mineral Facts and Problems, 1985 ed. (Wa.shingto~ DC: U.S. Department of the Interior, Bureau of Mines, 1985).

A~e ~pti srnel~g I%omss (ISP), developed in the 1950s, is used mostly in Europe, Japan, and Austrtia. It is basically a conventioti b~t

furnace with a zinc recovery section added, It can produce both lead and zinc from a variety of mixed, low-grade, and oxide concentrates. Two relatively

new lead smelting technologies have found limited use. They are the Queneau-Schumann-Lurgi (QSL) process developed in West Germany and the

Kivcet process developed in the Soviet Union. Both combine the sintering (oxidation) and blast furnace (reduction) functions into one autogenous, direct

reduction unit.

5A second dressing is performed if tin removal iS necessary.

G~ ~tmmtive me~od, el~~l~ic processing, is used to refine bullion with high bismuth levels. III t.hk process, softened bullion is c~t into ~od~

and placed in an electrolytic cell. The lead is refried when the electric current removes it fi-om the anode and redeposits it on the cathode starter sheet.

4 1 –
42 ● Nonferrous Metals: Industry Structure

bismuth (Betterton-Kroll process). The first step,

softening, removes the antimony, arsenic, and tin by

air oxidation in a reverberatory furnace or by the

Harris process. Next, in the Parkes process, zinc is

added to the melt to remove the silver and gold. The

zinc, silver, and gold form insoluble compounds

which are skimmed off the melt. The remaining

traces of zinc are then removed by vacuum dezincing

or by chlorine treatment. When necessary, bismuth

is removed from the lead by the Betterton-Kroll

process. The melt is treated with calcium and

magnesium which alloy with the bismuth to form a

crust which is skimmed off. In the United States

most lead ore is smelted and refined to a minimum

purity of 99.85 percent lead. Throughout the smelting and refining stages, the many dresses, slags, and

slimes are worked up to recover their values of

precious and base metals.

THE 1980s

The U.S. lead market started the 1980s on a mixed

note (see figures 4-1 and 4-2). In 1980, lead prices

(averaging $0.43/lb) were high compared with the

late 1970s. Primary and secondary lead production

(550,000 and 600,000 tonnes respectively) though

were roughly equivalent to late- 1970s levels.

Prices fluctuated downward to an average of

$0.24/lb in 1982-84 and $0.21/lb in 1985-86, but

then recovered to an average of $0.38/lb in 1987-89.

Fluctuations in lead production levels from 1980 to

1989, left U.S. mine production down 21 percent,

primary refried production down 28 percent, and

secondary production up 23 percent.

Secondary lead increased its importance in the

U.S. market during the 1980s. The ratio of primary

to secondary production shifted from roughly 50:50

in 1980 to 35:65 in 1989.7 U.S. lead consumption

held fairly steady at 1.1 million tonnes during

1980-87. It then increased slightly to 1.2 million

tomes in 1987-89.

For the nonsocialist world as a whole, the lead

market fluctuations were more muted (see figure

4-3). The 1988 levels for NSW mine production and

primary refried production were equal or slightly

Figure 4-1—Lead Prices, 1975-89

Cents/pound

50 1 ‘-

4 0

~

30-

20-

10-

I

75-79 80 81 82 83 84 85 86 87 88 89

Year

NOTE: North Ameriean primary producers list price-refined lead delivered. Prices in constant 1980 dollars were calculated using

producer price index. Bars labeled 75-79 represent averages forthe

period 1975-79.

SOURCE: U.S. Bureau of Mines.

lower than those of 1980. Secondary lead production

rose 18 percent, and consumption rose 12 percent,

during 1980-88.

The openings, closings, and ownership changes

that occurred in the U.S. primary lead industry

during the 1980s are profiled in table 4-1. Two new

lead mines (West Fork and Casteel) and two

lead-producing precious metals mines (Greens

Creek and Montana Tunnels) opened during the

decade. The Butte Hill zinc-lead-silver mine, which

had been closed since the early 1970s, reopened in

1990. The Red Dog zinc-lead mine is slated to begin

full production in 1990.8 These six new mines are in

Missouri, Alaska, and Montana. Two mines that

produced lead were permanently closed. Many more

mines closed temporarily at some time during the

1980s, because of low prices. In the processing

sector, two smelters and one refinery were closed

permanently, and no new ones opened. During

1980-88, U.S. smelter capacity declined 28 percent

to 515,000 tonnes and refinery capacity declined 17

percent to 595,000 tonnes.

Doe Run, the country’s dominant lead producer,

was created in 1986 through the merger of the lead

assets of Fluor and Homestake. Fluor had acquired

?’~e~e fiWe~ ~epre~ent tie refined lead recovered from both new and old scrap. As such they overstate tie amomt of refined lead tit is ac~~lY

entering the manufacturing stream. Old scrap comes from discarded products, new scrap is waste from fabricating and other manufacturing processes.

In 1988, 737,000 tonnes of secondary lead were recoveredfiom old scrap (691,000 tonnes) and new scrap (46,000 tonnes), and recovered as refined

metal (698,000 tonnes) and other “non-refined” products (39,000 tonnes). William D. Woodbury, “I_ead,” Minerals Yearbook, vol. I, 1988 ed.

(Washington, DC: U.S. Department of the Interior, Bureau of Mines, 1990).

8BY Convention tie elemenm ~ mul~ne~ o~s fiesme listed in order of thek descending value (based on price and ab~~nce) in fie ores.
Chapter 4--Lead Industry ● 4 3

1,000 I

I

750

500

250

0

75-79 80 81 82 83 84 85 86 87 88 89

Year

~ Mine production _ Primary production

m Secondary production — Consumptio n

NOTE: Secondary production is refined metal recovered from old and new

scrap. Bars labeled 7579 represent averages for the period

1975-79.

SOURCE: Metal Statistics, Metallgesekichaft Aktiengesellschaft.

its contribution to the venture through the purchase

of St. Joe in 1981. Homestake had acquired full

control of its lead facilities (the Buick mine and Boss

smelter/refinery) earlier in 1986. During 1986-90,

Doe Run was owned 57.5 percent by Fluor and 42.5

percent by Homestake. Fluor bought out Homestake

in May 1990 and is now the sole owner of Doe Run.

Asarco built one mine and bought another during

the decade. Previously, Asarco’s involvement in the

lead industry had been mostly in the processing

sector. Other new lead mining companies include

Montana Tunnels, Greens Creek, Washington Mining, Bunker Hill Mining, Star-Phoenix Mining, New

Butte Mining, and Cominco-NANA. Four companies (Ozark Lead, Bunker Hill, Amax, and Standard

Metals) left the U.S. industry during the 1980s.

Ozark Lead was a subsidiary of Kennecott.

PRODUCER PROFILES, 1990

Lead and zinc tend to occur in the same ores, so

they are often mined, and sometimes processed,

jointly. The same set of countries and companies,

therefore, dominate the production of both metals

(see figures 4-4 and 5-4). To avoid repetition, the

lead and zinc profiles of most countries are presented

together in this chapter. The two industries in the

United States, being more separate than those

Figure 4-3--NSW Lead Production and Consumption,

1975-88

3

2

1

n

“ 75-79 80 81 82 83 84 85 86 87 88

Year

= Mine production _ Primary production

m Secondary production — Consumption

NOTE: Seeondary production is refined metal reeovered from old and new

scrap. Bars labeled 75-79 represent averages for the period

1975-79.

SOURCE: Meta/ Statistics, Metallgesellschaft Aktiengesellschaft.

elsewhere, and are discussed in the respective lead

and zinc chapters.

Most lead is produced in industrialized countries.

Compared with copper, very little lead capacity is

government-owned. Developed countries account

for about 70 percent of mine capacity and even

greater percentages of primary smelter/refinery capacity. 9 Australia, the United States, Canada, and

Mexico are large producers in both the mining and

processing sectors. Peru is a large mine producer, but

has little processing capacity. Japan and Europe

have large smelting/refining sectors. Secondary

(recycled) lead accounts for major proportions of

production in North America, Japan, and Western

Europe.

United States

The United States is a major producer of lead,

ranking second in mining and first in both primary

and secondary refining. Recycled lead accounts for

about two-thirds of total domestic refined production. U.S. trade in concentrates is relatively small.

Concentrate imports have declined about 70 percent

since the 1960s, when the United States had a large

custom smelting/refining industry. Processing is

now closely tied to the level of regional mine

production. For refined lead, the United States

imports about 12 percent of its needs. During

$’I.n this repo~ little distinction is made between the smelting and refining seetors of the lead industry. SmeM.ng and refining are often, though not

always, carried out at the same facilities.
44 ● Nonferrous Metals: Industry Structure

Table 4-l—Profile of U.S. Primary Lead Production Industry, 1980 and 1990

1980 1990

Major mines:

Lead mines:

West Fork, MO . . . . . . . . . . . . . .

Sweetwater (Milliken), MO . . . . .

Magmont, MO . . . . . . . . . . . . . . .

Buick, MO . . . . . . . . . . . . . . . . . .

Fletcher, MO . . . . . . . . . . . . . . . .

Viburnum #29, MO . . . . . . . . . . .

Casteel (Viburnum #35), MO...

Viburnum #28, MO . . . . . . . . . . .

Brushy Creek, MO . . . . . . . . . . .

Indian Creek, MO . . . . . . . . . . . .

Mixed lead-zinc mines:

Leadville, CO . . . . . . . . . . . . . . .

Bunker Hill, ID. . . . . . . . . . . . . . .

Red Dog, AK . . . . . . . . . . . . . . . .

Butte Hill, MT. . . . . . . . . . . . . . . .

Star-Morning Unit, ID . . . . . . . . .

Precious metals mines:

Greens Creek, AK . . . . . . . . . . .

Lucky Friday, ID . . . . . . . . . . . . .

Montana Tunnels, MT.. . . . . . . .

Sunnvside, CO . . . . . . . . . . . . . .

—

Ozark Leada

Cominco-Dresser b

Amax-Homestake c

St. Joe

St. Joe —

St. Joe

St. Joe

St. Joe

Asarco-Newmon e

Bunker Hillf

—

—

Bunker Hill-Heclaf’

h

Hecla

—

Standard Metals

Asarco

Asarco

Cominco-Dresser b

Doe Rund

Doe Rund

Doe Rund

Doe Rund

Doe Rund

—

—

Asarco-Newmone

Bunker Hill Mining

Cominco-NANAg

New Butte Mining

Star-Phoenix Mining

Greens Creeki

Hecla

Montana Tunnelsj

Opened 1985

Closed 1983; sold to Asarco 1986; reopened 1987

Amax share sold to Homestake 1986; Note 1

Notes 2&1

Notes 2&1

Opened 1984; owned by Fluor (St. Joe); Note 1

Notes 2&1

Closed 1984; Notes 2&1

Closed 1982; Notes 2&1

Closed 1981; Note 3; reopened 1988

Opened 1990

Closed since early -1970s; reopened 1990

Closed 1982; Star-Phoenix signed 10 year leasepurchase agreement 1989; reopened 1990

Opened 1989; Note 4

. . Washington Miningk

Opened 1987; Note 5

Sold to Echo Bay 1985; Note 6

Smelters:

Glover, MO . . . . . . . . . . . . . . . . . Asarco Asarco

East Helena, MT . . . . . . . . . . . . . Asarco Asarco

El Paso, TX. . . . . . . . . . . . . . . . . Asarco — Closed 1985

Kellogg, ID . . . . . . . . . . . . . . . . . Bunker Hillf

. Closed 1981 (indefinite), 1985 (permanent)

Herculaneum, MO . . . . . . . . . . . . St. Joe Doe Rund Notes 2&1

Boss, MO . . . . . . . . . . . . . . . . . . . Amax-Homestakec Doe Rund Amax share sold to Homestake 1986; Notes 1&7

Refineries:

Glover, MO . . . . . . . . . . . . . . . . . Asarco Asarco

Omaha, NB . . . . . . . . . . . . . . . . . Asarco Asarco

Kellogg, ID . . . . . . . . . . . . . . . . . Bunker Hillf — Closed 1981

Herculaneum, MO . . . . . . . . . . . . St. Joe Doe Rund Notes 2&1

Boss, MO ., . . . . . . . . . . . . . . . . . Amax-Homestakec

Doe Rund Amax share sold to Homestake 1986; Note 1&7

NOTES: I Lead assets of Fluor (St. Joe) and Homestake merged to form Doe Run

~zark Lead was a subsidiary of Kennecott, a subsidiary of Standard Oil 1986. Doe Run was owned 57.5% by Fluor and 42.5% by Homestake

(SOHIO), a majority-owned subsidiary of British Petroleum. 1986-90. Fluor became sole owner by purchasing Homestake’s share

bcominm and Dresser Industries each own 50?’. of the Magmont mine. 1990.

Cominco is the operator. 2St. Joe acquired by Fluor 1981.

cAm~ and Homestake each owned 50 percent of the Buick mine and the 3Bunker Hill, ID mine was sold to Bunker Hill Ltd. partnership 1982. Bunker

Boss smelter/refinery. Hill Mining created in public spinoff 1988.

dDoe Run is a subsidiary of Fluor. 4fiplomtion and development led by Noranda 1981-86, British petroleum

eAsarco and Newmont each own 50 percent of the LQadVille mine. Asarco 1986-1 989; Hecla b~ame a minority partner 1987; RTZ became majority

is the operator. holder 1989.

fBunker Hiil was a subsidiary of Gulf Resources and Chemical tirp. 5owned by U.S. Minerals Exploration (USMX); explored by placer

gCominco-Alaska developed and operates the Red Dog mine. NANAowns Development 1981-82, Centennial Minerals 1983-85; Centennial Minerthe mineral rights.

hThe Star Morning unit was owned 70% by Bunker Hill and 30% by Hecla.

als acquired by Pegasus Gold 1985; USMX share sold to Pegasus Gold

1987.

It was operated by Hecla. 6Echo Bay and Alta Gold (owned by Silver King and pacific silver) formed

iGreens creek mine is a joint venture of RTZ, Hecla, EXalaS Resources the Alta Bay Venture in June 1988. Alta Bay is 60% owned by Alta Gold

,Corp. (a subsidiary of Mitsubishi), and CSX Oil & Gas Corp.

JMontana Tunnels is a subsidiary of Pegasus GoId.

and 40’Yo owned by Echo Bay. Echo Bay contributed the Sunnyside, CO

ksunnyside Mine is a joint venture of Alta Gold (owned by Silver King and

mine and other properties to the venture. Washington Mining (which owns

the property) became a 35% partner in November 1988 and the mine

Pacific Silver), Washington Mining, and Echo Bay. Washington Mining is operator in January 1989. Alta Bay owns the remaining 65%.

the operator. 7Boss, MO faciltiy operating at about oneauarter Of itS Capacity 1990.

Secondary lead recovery unit to be added in late-1990.

SOURCE: Office of Technology Assessment, 1990. Compiled from Minerals Yearbook (various issues), U.S. Bureau of Mines (Washington, DC).
Chapter &Lead Industry ● 4 5

Figure 4-4--NSW Lead Production, Country Profile, 1988

Mine Production

2.3 million tonnes

United

United St

Primary Production

2.3 million tonnes

Canada 16% Mexico 7%

Secondary Production

2.1 million tonnes

United States

4%

2 2 %

South Korea 2%

Spain 3%

Brazil 3%

y 5%

5%

UK 8% Australia 7% W. Germany 8% Japan 6%

NOTE: Seeondary production is refined metal reeovered from old and new scrap.

SOURCE: iUe&r/Statistib.s 1978-1988, Metallgesellschaft Aktiengesellschaft.

11 Lead is also produced as a

1985-88, the largest suppliers were Canada (63 nized excavation.

percent of imports) and Mexico (22 percent).10 byproduct or co-product at mines in Alaska, ColoAll U.S. lead mines are located in southeastern rado, Idaho, and Montana. Domestic processing

Missouri’s Viburnum Trend, which was discovered facilities are located in Missouri, Montana, and

and developed in the late- 1960s. These facilities are Nebraska.

considered low-cost and competitive in the world

market. Their ores are easy to process, because they Two firms, Doe Run and Asarco, dominate the

are relatively homogeneous (containing few byprod- domestic lead industry (see figure 4-5). Together

ucts) and mineralogically simple. Furthermore, the they account for three-quarters of domestic mine

deposits are large and amenable to highly mecha- production and all primary refined production.

lou.s. Department of tie hterior, Bureau of Mines, Mineral Commodity Summaries, 1990 ed. (Ww~gto~ DC: 1990).

I Iu.s. Conwess, Congression~Rese~ch Service, The Competitiveness ofAmem”can Mining andProcessing, report prepared for the House Committee

on Energy and Commeree, Subcommittee on Oversight and Investigations, Committee Print 99-FF (Washington, DC: U.S. Government Printing OffIce,

July 1986).
46 ● Nonferrous Metals: Industry Structure

Doe Run 56%

Figure 4-5--U.S. Lead Industry, Company Profile, 1988

Mine Production Refinery Production

394,000 tonnes 392,000 tonnes

Other 7%

Montana Tunnels 2%

Magmont 18%

Doe Run 54%

Asarco 46%

SOURCES: Minerals Yearbook (various issues), U.S. Bureau of Mines; Non-Ferrous Metid Data 1988, American Bureau of Metal Statistics Inc.; company

annual reports.

Doe Run

Doe Run is the largest U.S. lead producer. It

accounted for 56 percent of domestic mine production and 54 percent of primary refinery capacity in

1988. It operates six mines, four mills, and two

smelter/refineries in the Viburnum lead belt.12 Doe

Run’s Buick mine is the largest lead mine in the

country. The company was established in 1986 when

Fluor combined its St. Joe operations with those of

Homestake.

13 In May 1990, Fluor bought out

Homestake’s 42.5 percent share in Doe Run. Fluor

has reportedly been trying to sell its share in Doe

Run and sole ownership is expected to make the sale

easier. 14 Lead accounts for nearly all of Doe Run’s

sales, but only a small part of those of Fluor.15 Fluor

is primarily an engineering, construction, and technical services company. It also has coal interests.

Asarco

Asarco’s domestic lead operations include two

lead mines in Missouri, two smelters (East Helena,

Montana and Glover, Missouri), and two refineries

(Omaha, Nebraska and Glover, Missouri). The

company also operates the Leadville, Colorado

zinc-lead-gold-silver mine which it owns jointly

with Newmont. These facilities accounted for 18

percent of domestic mine production and 46 percent

of refining capacity in 1988.16

Asarco is a multinational diversified minerals

producer whose primary businesses are copper,

silver, gold, lead, zinc, and other nonferrous metals.

Lead accounted for 6 percent of the company’s sales

in 1988. 17 Originally a smelting and refining company, Asarco has been trying for several years to

build up its own sources of concentrates. In 1988,60

percent of the lead concentrates required by the

company smelters were supplied by its own mines.

This compares with 3 percent in 1985.18

Cominco

Cominco is a major Canadian minerals company

that is among the world’s largest lead and zinc

producers. It is developing the Red Dog mine in

~z~e BOSS smelter is currently being outtltted to process scrap lead.

13~e St. J~ Opmtiom fi~l~ded five ties,~mi~s, and tie Her.u~ne~ smelter/refinery. Homestake contributed the Buick tie and mill and

the Boss smelter/refmery.

14James H. Jo~y, “MineralIndustry Surveys,” Zinc lndusrr-y Monthly (Washington, DC: IJ.S. Department of the Interior, Burt3dU of Mines, March

1990).

15~ lggg, Doe Rlm ac~o~ted for 2.4 p~cent of Fluor’s revenum. Fluor bud Repofi 1988.

IG~s fiye ~cludes the entire production of the hadville mine.

ITNot ~~lutig Asarco’s nonco~oli&ted subsi~es(~~ Metia, ~d SPCC).

lgAsarco Annual Report, 1988.
Chapter 4-Lead Industry ● 47

Alaska, which is scheduled to begin production in

1990. 19 This mine has estimated ore reserves of 77

million tomes grading 17.1 percent zinc, 5 percent

lead, and 80 grams/tonne silver. At its planned

annual production of 70,000 tonnes of lead in

concentrates, Red Dog will be the country’s third or

fourth largest lead mine. It will increase U.S. lead

mine production by 16 percent over 1989 levels. The

mine will ship half of its concentrates to Cominco’s

Trail zinc-lead smelter in British Columbia and the

rest to coastal smelters in the Far East and Europe .20

Cominco also owns half of the Magmont leadzinc mine in Missouri. Magmont, which accounted

for 18 percent of U.S. mine production in 1988, is

currently the second largest lead mine in the country.

Dresser, a machinery manufacturer, is the other

owner of Magmont.

Other Companies

The other major firms in the U.S. lead industry are

mining companies. Bunker Hill Mining, StarPhoenix Mining, and New Butte Mining operate

lead-zinc mines. Hecla, Montana Tunnels (a subsidiary of Pegasus Gold), Greens Creek (a joint venture

of RTZ, Hecla, Exalas Resources, and CSX Oil &

Gas), and Washington Mining (in partnership with

Alta Gold and Echo Bay) produce lead from

precious metals mines.

U.S. Interests in Other Countries

The U.S.-based companies that currently have

foreign lead-zinc holdings are Asarco, Phelps

Dodge, and Cerro Copper, Asarco has ties to MINI,

a large Australia-based producer of nonferrous

metals and coal,21 MIM has lead facilities in

Australia (Mt. Isa mine) and the United Kingdom

(the Britannia refinery) as well as equity interests in

Cominco. Asarco also owns 34 percent of Medimsa

which runs silver-lead-copper-zinc mines, mills, and

smelters in Mexico. Phelps Dodge is primarily a

copper company, but owns 45 percent of Black

Mountain, a major lead-silver-zinc-copper mine in

South Africa. Cerro Copper owns 34 percent of the

Buenaventura zinc-lead mines in Peru. Two other

U.S. firms have recently sold their foreign lead and

zinc holdings. Amax sold its share of Fresnillo in

Mexico. USX sold its share of the exhausted Prieska

mine in South Africa.

Canada

Canada is the largest NSW zinc producing country and third ranking lead producer.22 It is also a

major exporter of lead and zinc. During 1985-88,

about 40 percent of its concentrate output was

exported, primarily to Japan, Belgium, and West

Germany. Of its refined metal output, Canada

exports about half of its lead and three-quarters of its

zinc. The United States is the major destination for

both refined products.

Production in Canada is dominated by Cominco,

Noranda, and their subsidiaries. These two companies are especially strong in the processing sector.

They control all of Canada’s lead processing capacity and about 70 percent of its zinc processing

capacity. In the lead mining sector, they, along with

the Faro joint venture, are the major producers. The

zinc mining industry is somewhat more broad based,

with Falconbridge, Hudson Bay, Nanisivik, and

Westmin having some presence.

Cominco (partially owned by Teck, MIM, and

MG) is a major nonferrous metals producer. It has

major zinc-lead mines in western (Sullivan, British

Columbia) and northern (Polaris, Northwest Territories) Canada, and interests in mines in the United

States (Magmont and Red Dog), Australia (Aberfoyle), and Spain (Exminesa). The company is

especially adept at Arctic mining.

Cominco has a major lead smelter and zinc

electrolytic refinery at Trail, BC and an interest in

the Mitsubishi-Cominco lead smelter/refinery in

Japan. The Trail plant processes the concentrates

from Sullivan and other Canadian mines. The

company sells, buys, and toll refines large amounts

of concentrates.

Cominco claims to account for about 10 percent

of NSW mine production of lead and zinc .23

—— . .

lgcofico-~~kais developing the mine and will operate it when it is commissioned. NANA (an Alaskan Native corporation) o-the fieral rights

to the property.

~s~te of AIaska, Division of Geological and Geophysical Surveys, Alaska’s Mineral Industry, Special Report 43, 1988.

21&Mco Ow 19 percent of ~~ and MM Oms 25 perCerlt of As~o. me relationship is one of passive ownership and entails 1itt]e operatiomd

control.

~C~da produces n~ly all of its lead and about half of its zinc from mixed ores.

nComiUco Annual Report, 1988.
48 ● Nonferrous Metals: Industry Structure

Three-quarters of the company’s sales are from the

metals business, including copper, lead, zinc, silver,

gold, molybdenum, cadmium, bismuth, iridium, and

fabricated metals. The company also has a substantial fertilizer business.

Noranda, active primarily in eastern Canada, is

focused more on zinc than lead. Its Brunswick

operations produce zinc-lead ore and its Ontario/

Quebec mines produce zinc-copper ore. Noranda is

a diversified natural resources company with interests in nonferrous minerals and forest, energy, and

manufactured products. The nonferrous segment

produces zinc and lead, but also large quantities of

gold, silver, and copper.

24 Noranda’s lead business

is run through its partial ownership of Brunswick

which has a mine and a smelter in New Brunswick.

The zinc business is comprised of mines in Ontario

and Quebec (run by Brunswick and Noranda itself)

and a zinc refinery at Valleyfield, Quebec (run by the

Canadian Electrolytic Zinc subsidiary).

The Faro joint venture operates a large zinc-leadsilver mine in the Yukon. The mine reopened 1986

and is currently owned by Curragh Resources and

Boliden. Fare’s concentrates are sent to the Far East

and Europe for processing.

Falconbridge, best known as the world’s second

largest nickel producer, mines copper-zinc ores at its

Kidd Creek facilities in Timmins, Ontario. About

half of the concentrates are processed onsite and the

other half are shipped elsewhere. In late 1989,

Falconbridge was bought by Noranda and Trelleborg of Sweden.25

Other Canadian zinc facilities are Hudson Bay’s

Flin Flon mine and smelter in Manitoba; Westmin’s

Myra Falls mine in British Columbia; and the

Nanisivik mine in the Northwest Territories. Hudson

Bay is owned by Inspiration Resources, which in

turn is controlled by Anglo American of South

Africa. Westmin and Noranda are both partially

owned by Brascan.

Australia

Australia is a major lead and zinc producer whose

industries have grown significantly in the last 10 to

15 years. It exports about 90 percent of its lead and

zinc output. During 1985-88, Australia exported 23

percent of its lead as concentrates (mostly to Japan

and Belgium), 44 percent as bullion (to the United

Kingdom), and 34 percent as refined lead. About 70

percent of the zinc exports during this period were in

the form of concentrates (mostly to Japan, Europe,

and South Korea), with the remainder being shipped

as slab zinc. There has been a great amount of

exploration and development in Australia in recent

years, much of it has focused on zinc.

Australia’s major lead and zinc companies are

Pasminco and MIM. Pasminco was created by the

merger of the lead and zinc operations of CRA

(partially owned by RTZ) and New Broken Hill

Holdings (NBHH) in July 1988. CRA and NBHH

each own 40 percent of the company, the remainder

is publicly held. Pasminco accounts for an estimated

45 percent of Australia’s lead mine production and

about half of its zinc mine production. It also

operates all of the countrys lead and zinc processing

capacity, except for one lead bullion smelter (MIM).

In terms of refried metal, Pasminco accounts for an

estimated 10 percent of NSW zinc production and 7

percent of lead output.26

Pasminco’s lead-zinc mines are centered in the

Broken Hill area of New South Wales. The mines

have rich ores, but are considered high cost operations. The company processes concentrates from all

over Australia at its Port Pirie (South Australia),

Risdon (Tasmania), and Cockle Creek (New South

Wales) smelters. It also operates the country’s only

lead refining facility (Port Pirie). Pasminco’s interests outside of Australia include the AM&S leadzinc smelter at Avonmouth in the United Kingdom

and partial ownership of the Budelco zinc smelter in

the Netherlands.

MINI owns the silver-zinc-lead complex at Mt.

Isa/Hilton (Queensland) which accounts for about

35 and 30 percent of Australia’s production of lead

and zinc respectively. Some of the lead is shipped

out as concentrates. Most, however, is smelted into

bullion onsite and then shipped to the company’s

Britannia refinery in the United Kingdom or to

Japan. All of the zinc is sold as concentrates. MIM’s

lead and zinc interests outside of Australia include

the Britannia lead refinery, partial ownership of

~Noranda>~ alum~um smel~g facilitks are included in its manufacting sector.

~Trel]eborg a]so Oms 50 percent of Boliden, a Sweden-based nonferrous metals producer.

zGIan Hammond, “CRA—The Australian Connection,” Engineering and Mining Journal, vol. 190, No. 8, August 1989.
Chapter 4-Lead Industry ● 49

Ruhr Zink (a West German zinc refining firm) and

ties to Asarco, Cominco, Teck, and Metallgesellschaft.

Australia’s other producers operate zinc-lead

mines. Aberfoyle (partially owned by Cominco) has

mines at Hellyer and Que River in Tasmania. A

project that quadrupled Hellyer’s capacity was

completed in March 1989. Nicron runs the Woodcutters mine in the Northern Territory. The Cadjebut

mine (owned by BHP and Billiton) in West Kimerly, West Australia began production in 1987. The

Lady Loretta and Thalanga mines (owned by Pancontinental and Outokumpu) in Queensland are

expected to be brought on-stream in 1990.

Mexico

Mexico is a medium-sized lead and zinc producer.

Most of its output comes from mines where silver is

the primary interest. The country exports about 60

percent of its lead and about two-thirds of its zinc.

The lead is shipped mostly as refined metal. The zinc

is exported as both concentrates and slab zinc.

Mexican mine production is dominated by Medimsa, Penoles, Real des Angeles, and Frisco. These

four companies account for about 80 percent of the

country’s lead mine output and 90 percent of its zinc

mine output.27 Penoles and Medimsa operate nearly

all of Mexico’s lead and zinc processing capacity.

Medimsa (owned by IMM and Asarco) is the

largest lead and zinc producer in Mexico. It operates

seven silver-zinc-lead mines, a lead smelter at

Avalos Chihuahua and smelter/refinery at Monterey, and a zinc refinery at San Luis Potosi.

Medimsa processes all of its output of lead concentrates, but sells or has tolled about half of its zinc

concentrates.

Penoles operates a number of smaller mines

(either directly or through its partially owned

Fresnillo subsidiary) and a large smelter/refinery at

Torreon, Coahuila. The processing facility produces

more lead and zinc than do the company’s mines. Of

the refined metal produced, roughly 60 percent of

the lead and 35 percent of the zinc is based on

purchased or tolled concentrates.

Frisco operates two smaller silver-zinc-lead

mines and has an interest in the Real des Angeles

lead-zinc mine. The Real des Angeles silver-lead

concentrates are processed at the Penoles smelter.

Peru

Peru has a medium-sized mining industry and a

small processing sector. Most of the lead and zinc

comes from multimetallic ores that are mined

principally for their silver. Peru exports about

two-thirds of its lead and zinc concentrates.

Centromin (owned by the Peruvian government)

accounts for about 30 percent of the country’s lead

mine production and about 40 percent of its zinc

mine production. The company has five silver-zinclead mines. It also has a processing plant (La Oroya)

that encompasses a lead smelter/refinery and an

electrolytic zinc refinery. All of Centromin’s lead

concentrates and a quarter of its zinc concentrates

are processed at La Oroya.

The remainder of Peru’s lead and zinc mine

production is from smaller local independent producers such as San Ignacio Morococha (the largest

private zinc mine), Milpo (the largest private lead

mine), and Atacocha. There are also some smaller

mining companies held by foreign interests, including Nor Peru (partially owned by Asarco), Huaron

(partially owned by Metaleurop), Santander (owned

by Docarb), and Buenaventura (partially owned by

Cerro Copper, Centromin, and the World Bank).

Peru also has two additional processing facilities.

Mineroperu (owned by the government) runs a zinc

refinery at Cajamarquilla. Fundeconsa operates a

small lead refinery at Sayan.

Mineral production in Peru has been plagued by

political strife, labor strikes, and natural disasters.

These perennial problems deter foreign investment

in Peru’s industry. Little growth is expected in

Peruvian production for some time.

Japan

Japan has some mine production, but is primarily

a processing country. It is the NSW’s second largest

producer of both refined lead and refined zinc. Japan

imports about three-quarters of its zinc concentrates

and 90 percent of its lead concentrates. Australia,

Canada, and Peru are the largest suppliers. Japan is

roughly self-sufficient for refined lead and a net

270r1ando Martino, “The Mineral Industry of Mexico, ” Minerals Yearbook, vol. III, 1986 ed. (Washington, DC: U.S. Department of the Interior,

Bureau of Mines, 1988).
50 ● Nonferrous Metals: Industry Structure

importer of refined zinc. The principal zinc suppliers

are North and South Korea.

Four companies (Dowa, Mitsui, Nippon Mining,

and Mitsubishi) have both mines and processing

facilities in Japan. Four others (Akita Zinc, Toho

Zinc, Hachinoe, and Sumitomo) have only smelter/

refineries. The principal owners of Akita Zinc and

Hachinoe are Dowa and Mitsui, respectively. All of

these companies, except for Dowa in the lead sector,

must purchase or toll concentrates to maintain their

economic processing levels. Mitsubishi and Cominco are involved in a joint venture to process the

latter’s Canadian lead concentrates.

Spain

Spain is Europe’s largest zinc miner and second

largest lead miner. The mines, located in the

southwestern part of the country, contain complex

ores that are relatively difficult to process. The major

lead and zinc mining companies are Exminesa,

Boliden, Asturiana de Zinc, and Almagrera. Spain’s

smelting/refining companies are Metaleurop, Asturiana de Zinc, and Espanola de Zinc. Metaleurop,

which owns the largest lead smelter, produces over

three-quarters of the country’s refined lead. Asturiana de Zinc, the largest zinc smelter, accounts for

roughly 80 percent of Spain’s refined zinc output.

Sweden

Sweden exports about one-quarter of its lead

concentrates and all of its zinc concentrates (primarily to Finland, Norway, and France). The industry is

dominated by Boliden, which accounts for roughly

60 percent of the country’s lead and zinc mine

production and all of its refined lead production. The

company smelts its lead concentrates at Ronskar and

ships the zinc concentrates to its partially owned

Norzink subsidiary in Norway. Boliden’s other

foreign holdings include the Black Angel mine in

Greenland and a small interest in the Faro mine in

Canada.

Most of the rest of Sweden’s mine output is

produced by Vieille Montagne (part of Acec-Union

Miniere). This company’s lead concentrates are sent

to Boliden’s Ronskar plant; the zinc concentrates are

sent to its own facilities in France.

Ireland

Ireland is a small zinc mine producer. It has one

mine and no smelting/refining capacity. Tara

(owned by Outokumpu and the Irish government)

runs the Navan zinc-lead-silver mine. It is Europe’s

largest zinc mine. The concentrates are all sent to

other European countries for processing.

Yugoslavia

Yugoslavia has five lead-zinc producers, all of

which are government-owned. RMHK Trepca is the

largest. The ores are multimetallic and have a higher

proportion of lead than is found in most places

except the United States. Almost all of the concentrates are processed domestically.

West Germany

Germany is Europe’s largest primary lead and

zinc smelter/refiner. It is also a major secondary lead

producer. It imports over 80 percent of its lead

concentrates and bullion. Metallgesellschaft (MG)

and Metaleurop dominate production in Germany.

MG runs the country’s only lead and zinc mines, and

operates several smelters, through its Berzelius

Metallhutten subsidiary. It also has interests in the

Norddeutsche Affinerie (owned by MG, MIM, and

Degussa) lead plant, and the Ruhr Zink (owned by

MG and MIM) zinc plant. Metaleurop was created in

1988 by the merger of Preussag (Germany) and

Penarroya (France). It is now Europe’s largest lead

producer and second largest zinc producer (after

Vieille Montagne). In Germany, Metaleurop has

lead and zinc processing facilities at Nordenham.

The company has additional plants in Spain and

France.

France

France has three lead and zinc processing facilities, for which it imports most of the required

concentrates. The largest concentrate suppliers are

Canada, Sweden, Peru (zinc), and South Africa

(lead). Metaleurop accounts for all of France’s

refined lead production and about one-third of its

zinc production. The company has a large complex

at Noyelles-Godault, Pasde Calais. The facility is

somewhat rat-e in that it produces nearly twice as

much lead as zinc. The other two-thirds of the

countrys refined zinc production comes from

Vieille Montagne’s plants at Auby.

United Kingdom

The United Kingdom has one primary lead

refinery, the Northfleet plant run by MIM’s Britannia subsidiary. This facility refines lead bullion from
Chapter 4-Lead Industry ● 51

the MIM Mt. Isa complex in Australia. Pasminco has

a lead and zinc smelter at Avonmouth. Its lead

bullion is exported to refineries in Italy, Germany,

and Belgium.

Belgium

Belgium imports all of the concentrates needed by

its lead and zinc processing industry. The largest

suppliers are Peru, Australia, and Greece for lead

concentrates, and Canada, France, and Mexico for

zinc concentrates. Belgium’s capacity is essentially

all controlled by Acec-Union Miniere through two

of its subsidiaries, MHO and Vieille Montagne.

MHO runs all the country’s lead capacity and

roughly 45 percent of its zinc capacity. The company’s lead (and copper) facilities are at Hoboken

and its zinc operations are at Overpelt. Vieille

Montagne’s Balen plant accounts for the rest of

Belgium’s zinc production.

The Netherlands

The Netherlands’ only primary zinc plant is

Europe’s largest. It is run by Budelco (owned by

Billiton and Pasminco) and processes concentrates

from Canada, Australia, and Ireland.

Italy

Italy is a medium-sized zinc producer. Its industry

is dominated by Metaleurop’s Pertusola subsidiary

and Nuova Samim (partially government-owned).

Pertusola accounts for about 55 percent of the

country’s zinc production. Nuova Samim accounts

for the remainder of the zinc and a small amount of

lead production. The zinc concentrates come from

Canada, Ireland, and Peru.

Finland

Finland has one producer, Outokumpu. It mines

mostly zinc, but also a little lead. The concentrates,

along with those from the Tara subsidiary in Ireland,

are processed at the company’s Kokkola smelter/

refinery.

Norway

Norway’s only producer, Norzink (owned by

Boliden and RTZ), refines zinc at Eitrheim. The

principal sources of its feed materials are Boliden’s

Swedish mines and smelters.28

Other Countries

Other large producers around the world include:

Black Mountain and ZC South Africa in South

Africa; Touissit, Djebel Aouam, and Zellidja in

Morocco: CMM and Paraibuna in Brazil; Korea

Zinc and Young Peon in South Korea; Padaeng in

Thailand; and Gecamines in Zaire. Several of these

are affiliated with companies discussed earlier:

Black Mountain (Phelps Dodge) and Touissit and

Djebel Aouam (Acec-Union Miniere).

Recent Producer Mergers and Alliances

In the late 1980s, the world lead and zinc

industries went through a period of consolidation.

Doe Run (United States) brought together the lead

operations of Fluor and Homestake. Pasminco

(Australia) was formed from CRA and NBHH.

Metaleurop (France) was created through the merger

of Penarroya and the lead and zinc operations of

Preussag. Somewhat older are Acec-Union Miniere

and the MG-MIM-Teck-Cominco-Asarco group.

Acec-Union Miniere (Belgium) consists of Vieille

Montagne, MHO, Asturienne, and Jersey Miniere.

Interlocking ownership joins MG (West Germany),

MINI (Australia), Teck (Canada), Cominco (Canada), and Asarco (United States). (See figure 4-6.)

The group controls an estimated one-quarter of

NSW primary refined lead production and 20

percent of primary slab zinc output. It has even

greater shares in the mining sector.29

Xwcbd H. Stigleto% ‘‘The Mineral Industry of Norway, ” A4ineraZs Yearbook, vol. III, 1985 ed. (Washington DC: U.S. Department of the Interior,

Bureau of Mines, 1987).

~pa~o de S4, “Structural Ctinges and Price Formation in the Minerals and Metals kdusv,” Resources Policy, vol. 14, No. 4, December 1988,

pp. 25’7-273.
52 ● Nonferrous Metals: Industry Structure

Figure 4-6-Cross-Share Participation between Metallgesellschaft-MIM-Teck-Cominco-Asarco, 1990

I

I

J 100’

L J

SOURCE: Pauio de 3, “Structural Changes and Price Formation in the Minerals and Metals Industry,” Resources Po/icy, VOI.1 4, no. 4, December 1988, pp.

257-273; updated by the Office of Technology Assessment, 1990.
Chapter 5

Zinc Industry

INTRODUCTION

Zinc has been used in brass and bronze since

ancient times. The metal was produced in its

elemental form much later. In the 20th century, the

invention of froth flotation spurred zinc production

and the development of galvanizing increased its

use.

Uses

Zinc is the third most used nonferrous metal, after

aluminum and copper. Most primary zinc is recovered as slab. The largest use of slab zinc is for

galvanizing (and electrogalvanizing), an application

which accounted for 51 percent of U.S. consumption

in 1988. Other uses include zinc-based die-cast

alloys (23 percent), brass alloys (13 percent), chemicals, and dusts. The galvanized products are used in

the steel, automobile, and construction industries.

No substitute for galvanizing exists for protecting

large tonnage iron and steel products from corrosion.1 Secondary zinc, most of which comes from

new scrap, is used to produce brass and bronze (46

percent of 1988 domestic use), slab zinc (26

percent), chemicals (18 percent), and dusts (7

percent).

Production Methods and Technologies

Zinc is produced mostly from the sulfide ores:

sphalerite (ZnS) and marmatite ([Zn,Fe]S). These

ores, also known as zinc blende, are commonly

associated with galena, the principal lead ore. Over

80 percent of nonsocialist world (NSW) zinc mines

are underground operations. After mining, the ore is

crushed, ground and subjected to several froth

flotation steps to remove the lead, iron, and gangue

(waste rock). The resulting zinc concentrates typically contain 50 to 64 percent zinc. These beneficiation steps are performed at the minesite.3

At the smelter/refinery, zinc is produced by one of

several processes that smelt and refine the metal

simultaneously. Regardless of the process, the

concentrates are first roasted into zinc-oxide materials. In roasting, the concentrates are burned in the

presence of oxygen (usually from air) thus forming

crude zinc oxides and gaseous sulfur dioxide. Most

modern roasters are fluid-bed reactors.

The crude oxide is then smelted/refined by

electrolytic or pyrometallurgical methods. The electrolytic process is the most common method, accounting for about 80 percent of NSW smelting/

refining capacity. In the first step of this process, the

crude oxide feed is leached with sulfuric acid to

produce a zinc sulfate solution. This is then purified

and pumped into electrolytic cells. The cells use

lead-silver anodes and aluminum cathodes. Upon

application of the current, the zinc in the solution is

reduced and deposited on the cathode. The cathode

is stripped periodically and the zinc metal is cast into

ingots. Virtually all impurities remaining from the

preparation processes are eliminated. Electrolytic

zinc needs no further refining. Purity normally

exceeds 99.95 percent and can possibly be 99.995

percent or better.

In the pyrometallurgical production methods, the

crude zinc oxides from the roaster are first sintered

in a Dwight-Lloyd moving grate machine or a rotary

kiln to yield a homogeneous feed. The sinter is then

heated to above 1,832 ‘F (a temperature at which

zinc is vapor) in the presence of a reducing agent

(chiefly carbon monoxide) in one of four types of

furnaces.

4 This reduces and vaporizes, the zinc,

which is then collected in a condensation vessel.

IJames H. Jolly, “Zinc,” Minerals Yearbook, vol. I, 1988 wI. (Washington, DC U.S. Department of the Interior, Bureau of Mines, 1990).

WarlH.Cotterill,‘‘Zinc Metallurgy,” McGruw-HillEncyclopedia on Science and Technology (New York, NY: McGraw-Hill, 1987). James H. Jolly,

“Zinc,” Mineral Facts and Problems, 1985 ed. (Washington, DC: U.S. Department of the Interior, Bureau of Mines, 1985).

3zkc oxide ores, w~ch have declin~ in impomnce since the development of the froth flotation process, and other zinc bearing Seeondw ma@ri~S

are genemlly not concentrated at the minesite. They are pyroconcentrated at the smelter in a Waelz rotary kiln or by slag fuming.

d~e four pvometal[wgica] Zinc production technologies are: the horizontal (Belgian) retort, the vertical (New Jersey) retofl, the elecmotietic (St.

Joseph) retort, and the blast (Imperial Smelting) furnace. The Imperial Smelting Process (ISP), which is used primarily in Europe, Japan and Australia,

is the most common. It is basically a lead blast furnace with a zinc recovery system added. It can treat mixed zinc and lead concentrates, low-grade

concentrates, and oxide concentrates. The Belgian process, the oldest, is a batch method. The New Jersey and St. Joseph methods are continuous

processes. A fifth pyrometallurgical technology, the Soviet-developed Kivcet process, hm found limited use. It can process lead-zinc concentrates

directly, thus elimimting the need for sintering.

–53–
54 ● Nonferrous Metals: Industry Structure

Most of the impurities are eliminated to the furnace

residues. Zinc recovered by any of the pyrometallurgical methods is less than 99 percent pure. The

quality is adequate for hot-dip and continuous line

galvanizing, and for some brass uses. However, for

die casting, the zinc must be further refined.

Fractional distillation is the most common method

of upgrading the lower purity zinc.

THE 1980s

The U.S. zinc market started the 1980s on a mixed

note (see figures 5-1 and 5-2). Prices (averaging

$0.37/lb) in 1980 were slightly higher than those of

the late 1970s. In 1980, domestic mine production

(349,000 tonnes) was higher than it had been in the

two previous years, but below what it had been for

most of the 1970s. Slab zinc production (370,000

tonnes) was much lower in 1980 than it had been in

previous years.

The price of zinc, unlike those of the other metals

in this study, remained above its 1980 level for the

entire decade. The greatest increase came in the late

1980s, when zinc prices rose from $0.42/lb in 1987

to $0.83/lb in 1989. U.S. mine production fell during

1980-86. It rose in the later years, but ended the

decade down 20 percent. Primary refined production, which declined sharply in 1982, finished

the decade down 26 percent.

Secondary zinc increased its importance in the

market during the 1980s. In 1989, it accounted for 23

percent of slab zinc production in the United States.5

Most secondary material is recovered as products

other than slab zinc. The extensive use of zinc in

galvanizing and other dissipative uses limits the

potential for increased recycling. New scrap is

principally zinc alloy and brass from manufacturing

operations.

U.S. slab zinc consumption rose throughout most

of the 1980s. Its only large decline came during the

recession in 1982. Consumption in 1989 was 21

percent greater than that in 1980 (but only 8 percent

greater than the 1975-79 average). Most zinc used in

the United States is imported. In 1989, total U.S. slab

production (primary and scrap-based) amounted to

only 34 percent of domestic consumption.

Figure 5-l—Zinc Prices, 1975-89

Cents/pound

100

75-79 80 81 82 83 84 85 86 87 88 89

Year

- current $ i:: 1980$

NOTE: U.S. producers price- High Grade zinc delivered. Prices inconstant

1980 dollars were calculated using producer price index. Bars

labeled 75-79 represent averages for the period 1975-79.

SOURCE: U.S. Bureau of Mines.

In the nonsocialist world, zinc output and use rose

fairly steadily during the decade (see figure 5-3).

NSW production and consumption in 1988 were

both around 5.2 million tonnes, which represented a

17 percent increase over the 1980 levels.

The openings, closings, and ownership changes

that occurred in the U.S. primary zinc industry

during the 1980s are profiled in table 5-1. Two new

zinc mine (Pierrepont and Ward Mountain) and two

zinc-producing precious metals mines (Greens

Creek and Montana Tunnels) opened during the

decade. In addition, zinc is recovered from the West

Fork lead mine which opened in 1985. The Butte

Hill zinc-lead-silver mine, which had been closed

since the early 1970s, reopened in 1990. The Red

Dog zinc-lead mine is slated to begin full production

in 1990. Five zinc mines were permanently closed in

the 1980s. In the processing sector, three smelter/

refineries were closed permanently and no new ones

opened. During 1980-88, U.S. primary slab zinc

capacity declined 44 percent to 320,000 tonnes.

Acec-Union Miniere (based in Belgium) increased its position in the U.S. zinc industry in the

1980s. It acquired full control of Jersey Miniere in

1984 and purchased the USX zinc facilities in 1989.

Horsehead Industries entered the industry by purchasing zinc facilities from New Jersey Zinc and

Sncse fiwres represent the slab zinc recovered from both new and old scrap. Old scrap comes from discarded products, new scrap is waste fmm

fabricating and other manufacturing processes. In 1988,342,000 tonnes of secondary zinc were recoveredflom old scrap (97,000 tomes) and new scrap

(245,000 tonnes), and recover-edas slab zinc (89,000 tonnes) and other products (254,000 tonnes). James H. Jolly, “Zinc,” Minerals Yearbook, vol.

I, 1988 cd. (Washington, DC: U.S. Departmcn( of the Interior, Bureau of Mines, 1990).
Chapter 5-Zinc Industry ● 55

Figure 5-2--U.S. Slab Zinc Production and

Consumption, 1975-89

750 1

500

250

n“

75-79 80 81 82 83 84 85 86 87 88 89

‘fear

= Mine production _ Primary production

~ Secondary production —— Consumption

NOTE: Secondary production is refined metal recovered from old and new

scrap. Bars labeled 75-79 represent averages for the period

1975-79.

SOURCE: Meta/ Statistics, Metallgesellsehaft Aktiengesellschaft.

Fluor (St. Joe). It merged them into a venture called

the Zinc Corporation of America (ZCA). Other new

zinc mining companies include Doe Run, Montana

Tunnels, Greens Creek, Washington Mining, Bunker Hill Mining, Star-Phoenix Mining, New Butte

Mining, Alta Gold, and Cominco-NANA. Big River

is the only new zinc processor. It purchased the

Sauget, Illinois facility from Amax in 1988. Five

companies (New Jersey Zinc, USX, Bunker Hill,

Amax, and Standard Metals) left the U.S. industry

during the 1980s.

PRODUCER PROFILES, 1990

Most zinc is produced in industrialized countries

(see figure 5-4). Compared with copper, very little

zinc capacity is government-owned. Developed

countries account for about 70 percent of mine

capacity and even greater percentages of primary

smelter/refinery capacity. 6 Canada is the largest

producer in both the mining and processing sectors.

Australia is a large mine producer and a mediumsized processor. Peru and Mexico have large mine

production, but little processing capacity. Japan and

European countries are large refined zinc producers.

The United States has a medium-sized zinc industry.

Inmost parts of the world, zinc and lead are mined

and processed together. The situation is somewhat

Figure 5-3--NSW Slab Zinc Production and

Consumption, 1975-88

Million of tonnes

6 T—

3

i

2

1

1

“ 75-79 80 81 82 83 84 85 86 87 88

Year

= Mine production = Primary production

a Secondary production — Consumption

NOTE: Secondary production is refined metal recovered from old and new

scrap. Bars labeled 75-79 represent averages for the period

1975-79.

SOURCE: Meta/ Statistics, Metallgesellschaft Aktiengesellschaft.

different in the United States. The U.S. zinc and lead

industries are relatively separate, though there are

some domestic mines that produce both metals.

United States

The United States is a medium-sized zinc producer. It ranks sixth in the NSW in mine output and

eighth in primary metal production. The country was

a net importer of zinc concentrates during 1983-88,

but a net exporter in 1989. For refined (slab) zinc, the

United States is dependent on imports for about

two-thirds of its needs. The major suppliers during

1985-88 were Canada (accounting for 56 percent of

imports), Mexico, and Spain. Slab exports are small.

About half of U.S. zinc mine production comes

from Tennessee. The other major mining States are

Missouri, Colorado, Alaska, Idaho, Montana, New

York, and Nevada. Processing facilities are located

in Tennessee, Pennsylvania, Oklahoma, and Illinois.

Asarco

Asarco is the largest U.S. zinc mining company

(see figure 5-5). Most of its production is from its

four mines in eastern Tennessee, but some also

comes from its Missouri lead mines and its partially

owned Leadville, Colorado operation. These facilities accounted for 37 percent of U.S. zinc mine

bk~s rew~ li~e dist~ction is ~de beween the smelting and reftig sectors of the zinc industry. one or the other, but nOt both, Of the pmCessitlg

steps is usually sufilcient to produce marketable zinc.
56 ● Nonferrous Metals: Industry Structure

Table 5-l—Profile of U.S. Primary Zinc Production Industry, 1980 and 1990

1980 1990

Major mines:

Zinc mines:

Ward Mountain, NV . . . . . . . . . .

Young, TN . . . . . . . . . . . . . . . . . .

Immel, TN . . . . . . . . . . . . . . . . . .

New Market, TN . . . . . . . . . . . . .

Coy, TN . . . . . . . . . . . . . . . . . . . .

Beaver Creek, TN . . . . . . . . . . . .

Jefferson City, TN . . . . . . . . . . . .

Elmwood-Gordonsville, TN . . . .

Freidensville, PA . . . . . . . . . . . .

Austinville/lvanhoe, VA . . . . . . .

Idol, TN . . . . . . . . . . . . . . . . . . . .

Zinc Mine Works, TN . . . . . . . . .

Pierrepont, NY. . . . . . . . . . . . . . .

Balmat, NY . . . . . . . . . . . . . . . . .

Sterling, NJ . . . . . . . . . . . . . . . . .

Mixed lead-zinc mines:

Leadville, CO . . . . . . . . . . . . . . .

Bunker Hill, ID . . . . . . . . . . . . . . .

Red Dog, AK .,. , . . . . . . . . . . . .

Butte Hill, MT . . . . . . . . . . . . . . . .

Star-Morning Unit, ID . . . . . . . . .

Lead mines:

West Fork, MO . . . . . . . . . . . . . .

Magmont, MO . . . . . . . . . . . . . . .

Buick, MO . . . . . . . . . . . . . . . . . .

Precious metals mines:

Greens Creek, AK . . . . . . . . . . .

Lucky Friday, ID . . . . . . . . . . . . .

Montana Tunnels, MT. . . . . . . . .

Sunny side, CO . . . . . . . . . . . . . .

—

Asarco

Asarco

Asarco

Asarco

New Jersey Zinca

New Jersey Zinca

Jersey Minierea.

b

New Jersey Zinca

New Jersey Zinca

New Jersey Zinca

US Steel (USX) —

St. Joe

New Jersey Zinca

Asarco-Newmon e

Bunker Hillf

Bunker Hill-Heclaf,h

Cominco-Dresseri

Amax-Homestake j

Hecla

Standard Metals

Smelter/refineries:

Corpus Christi, TX . . . . . . . . . . . .

Sauget, IL . . . . . . . . . . . . . . . . . .

Kellogg, ID . . . . . . . . . . . . . . . . .

Clarksville, TN . . . . . . . . . . . . . . .

Monaca, PA . . . . . . . . . . . . . . . .

Bartlesville, OK . . . . . . . . . . . . . .

Palmerton, PA . . . . . . . . . . . . . .

Aita Gold

Asarco

Asarco

Asarco

Asarco

Asarco

—

Jersey Minierec

—

Union Zincc

ZCAd

ZCAd

Asarco-Newmone

Bunker Hill Mining

Cominco-NANAg

New Butte Mining

Star-Phoenix Mining

Asarco

Cominco-Dresser i

Doe Runk

Greens Creekl

Hecla

Montana Tunnelsm

Washington Miningn

Opened 1990

Sold to Inspiration 1983, Asarco 1988; merged with

Young, TN mine

Closed 1983; sold to inspiration 1983, Asarco 1988

Gordonsville opened 1982; Note 1

Closed 1983

Closed 1981

Closed 1981; sold to Inspiration 1983

Sold to Union Zinc 1989

Opened 1982; owned by Fluor (St. Joe); Notes 2&3

Notes 2&3

Closed 1985; Notes 4&3

Closed 1981; Note 5; reopened 1988

Opened 1990

Closed since early -1970s; reopened 1990

Closed 1982; Star-Phoenix signed 10 year leasepurchaser agreement 1989; reopened 1990

Opened 1985

Amax share sold to Homestake 1986; Note 6

Opened 1989; Note 7

Opened 1987; Note 8

Sold to Echo Bay 1985: Note 9

Asarco — Closed 1985 (indefinite), 1988 (permanent)

Amax Big River Sold to Big River 1988

Bunker Hillf — Closed 1981 (indefinite), 1985 (permanent)

Jersey Miniereaa,b Jersey Minierec Note1; Expanded 1988

St. Joe ZCAd Expanded 1981 -83; Notes 2&3

National Zinc ZCAd

Sold to Continental 1983, Fluor (St. Joe) 1984; Note 3

New Jersey Zinca ZCAd

Smelter closed 1980; Notes 4&3; plant makes zinc

oxides, dusts, and powders

~ew Jersey Zinc was a subsidiary of Gulf and Western Industries Inc. 3zinc Sets of Fluor (St. Joe) sold to Horsehead Industries and merged

b Jersey Miniere was a subsidiary of New Jersey Zinc and Union Miniere. with New Jersey Zinc Co. Inc. (NJZI) to form Zinc Corp. of America (ZCA)

cJersey Mjfliere is a Subsjtjiq of Union Zinc. Union Zinc is a subsidiary Of 1987.

AceC-Union Miniere. 4~~ t. Hor~ehead lndustri~ investment group and operated Ss *W

dzim @p. of Ame~ (ZCA) is a subsidiary of Horsehead Industries. Jersey Zinc Co. Inc. (NJZI) 1981.

eAs~co ad Newmont ea~ own 50 percent of the Laadville mifle. Asarco 5Bunker Hill, [D mine was sold to Bunker Hill Ltd. pafinership 1982. Bunker

is the operator. Hill Mining created in public spinoff 1988.

fBunker Hill W= a subsidiary of Gulf Resources ad Chemical @rp. 6~d assets of F]uor (St. Joe) ad Homestake merged to form Doe Run

gCominco-Alaska developed and operates the Red Dog mine. NANA owns 1986. Doe Run was owned 57.5% by Fluor and 42.5% by Homestake

the mineral rights.

~he Star Morning Unit was owned 700/0 by Bunker Hill and 30% by Hecla.

1986-90. Fluor became sole owner by purchasing Homestake’s share

1990.

It was operated by Hecla. 7&@omtion and development led by Noranda 1981-86, British PetrOleum

icomin~ and Dresser Industries each own 50 percent of the Magmont 1986-1 989; Hecla became a minority partner 1987; RTZ became majority

mine. Cominca is the operator. holder 1988.

JAmax and Homestake each owned 50 percent of the Buick mine. bed by U.S. Minerals Exploration (USMX); explored by Placer kme Run is a subsidiary of FIuor- Development 1981-82, Centennial Minerals 1983-85; Centennial MinerIGreens Creek mine is a joint venture of RTZ, Hecla, Ekalas Resources

Corp. (a subsidiary of Mitsubishi), and CSX Oil & Gas Corp.

als acquired by Pegasus Gold 1985; USMX share sold to Pegasus Gokt

1987.

mMont$na Tunnels is a subsidiary of Pegasus Gold. 9Echo wy and Alta Gold (owned by Silver King and pacific silver) formed

nsunnysi~ Mine is a joint venture of Alta Gold (owned by Silver King and the Alta Bay Venture in June 1988. Alta Bay is 60% owned by Alta Gold

Pacific Silver), Washington Mining, and Echo Bay. Washington Mining is and 407. ownad by Echo Bay. Echo Bay contributed the Sunnyside, CO

the operator.

I New Jersey Zinc share of Jersey Miniere sold to Union Miniere 1984.

mine and other properties to the venture. Washington Mining (which owns

the propetiy) became a 35% partner in November 1988 and the mine

2St. Joe acquired by Fluor 1981. operator in January 1989. Alta Bay owns the remaining 650/..

SOURCE: Office of Twhnology Assessment, 1990. Compiled from Minera/s Yearbook (various issues), U.S. Bureau of Mines (Washington, DC).
Chapter 5--Zinc Industry ● 57

Figure 5-4--NSW Zinc Production, Country Profile, 1988

Mine Production

5.1 million tonnes

Primary Production

4.8 million tonnes

Japan 13%

Australia 15%

5%

Peru 10% Spain 5%

Secondary Production

0.4 million tonnes

ustralia 5%

NOTE: Secondary production is refined metal reeovered from old and new scrap.

SOURCE: Meta/ Statistics, Metallgesellschaft Aktiengesellschaft.

output in 1988.7 The company sells and/or tolls most

of its zinc concentrate production. Asarco no longer

has slab zinc processing capacity. It converted its

Corpus Christi, Texas refinery to a hazardous waste

processing facility in 1988. It does, however, operate

a zinc-oxide plant at Hillsboro, Illinois.

Jersey Miniere

Jersey Miniere is the second largest domestic zinc

producer. The company accounted for an estimated

20 percent of U.S. mine production and 29 percent

of refinery capacity in 1988. Jersey Miniere’s

United Stat

her 34

Australia 18

rmany

Japan 18%

%

9%

operation is fully integrated. It has a mine and a

smelter/refinery in central Tennessee. In addition, its

parent Union Zinc, purchased The Zinc Mine Works

in Jefferson City, Tennessee from USX in 1989.

With this additonal capacity, the company’s U.S.

mines can provide two-thirds of the concentrate feed

needed by its Clarksville refinery.8

Jersey Miniere is owned by Union Zinc, a

subsidiary of Belgium-based Acec-Union Miniere

(the nonferrous and nonmetallic minerals unit of

Societe Generale de Belgique). Acec-Union Miniere

7’I’MS fi~e includes entire production of the Leadville tie.

8u.s. Depmrnent of tie kterior, Bureau of Mines, Minerals and Materials (Washington, DC: Jme/Jtiy 19*9)-
58 ● Nonferrous Metals: Industry Structure

Figure 5-5—U.S. Zinc Industry, Company Profile, 1988

Mine Production Slab Capacity

256,000 tonnes 323,000 tonnes

Other 11%

,-----

Leadville 5

oe Run 9%

(est) 13%

ZCA 47%

River 24%

ey Miniere 29%

Jersey Miniere (est) 20%

NOTE: Mine production figures for Jersey Miniere and ZCA are OTA estimates. Jersey Miniere’s mine production indudes that of the USX mine purchased

in 19S9. About one-third of ZCA’S slab capacity is used to process secondary zinc.

SOURCES: fb4inera/s Yearbook (various issues), U.S. Bureau of Mines; Non-Ferrous Meta/ Data 1988, American Bureau of Metal Statistics Inc.; company

annual reports.

is one of the world’s largest zinc and lead producers.

Its other lead and zinc interests include Metallurgie

Hoboken-Overpelt (MHO), Vieille-Montagne, and

Asturienne. Acec-Union Miniere began reorganizing its operating units

Zinc Corporation of

in early 1990.

America

Zinc Corporation of America (ZCA) is also a fully

integrated producer. It accounted for an estimated 13

percent of the country’s mine production and almost

one-half of the refinery capacity in 1988. ZCA has

two mines in New York, a smelter/refinery in

Pennsylvania, and a refinery in Oklahoma. It also

processes steelmaking dusts into zinc at a plant in

Pennsylvania.

ZCA, a subsidiary of Horsehead Industries Inc.,

was formed in 1987. It represents the merger of

Horsehead’s St. Joe operation (acquired from Fluor

in 1987) and its New Jersey Zinc facilities (acquired

in 1981).

Doe Run

Doe Run, the largest U.S. lead company, produces

some byproduct zinc at its Buick mine. It accounted

for 9 percent of U.S. zinc mine output in 1988.

Montana Tunnels

Montana Tunnels, a subsidiary of Pegasus Gold,

opened its gold-silver-zinc-lead mine in 1987. The

Jefferson, Montana operation accounted for 7 percent of U.S. zinc mine production in 1988.

Cominco

Cominco is a major Canadian minerals company

that is among the world’s largest lead and zinc

producers. It is developing the Red Dog mine in

Alaska, which is scheduled to begin production in

1990.9 This mine has estimated ore reserves of 77

million tonnes grading 17.1 percent zinc, 5 percent

lead, and 80 grams/tonne silver. At its planned

annual production of 325,000 tomes of zinc in

concentrates, Red Dog will be the world’s largest

zinc mine. It will nearly double U.S. zinc mine

9Cominco-Alaska is developing the mine and will operate it when it is commis sioned. NANA (an Alaskan Native corporation) owns the mineral rights

to the property.
Chapter S-Zinc Industry ● 59

production over 1989 levels. The mine will ship half

of its concentrates to Cominco’s Trail zinc-lead

smelter in British Columbia and the rest to coastal

smelters in the Far East and Europe.10

Cominco also owns half of the Magmont leadzinc mine in Missouri. Magmont, which is currently

the second largest lead mine in the country, accounted for 3 percent of U.S. zinc mine production

in 1988. Dresser, a machinery manufacturer, is the

other owner of Magmont.

Big River

Big River bought the Sauget, Illinois smelter/

refinery from Amax Zinc in 1988. The plant

accounts for about a quarter of domestic zinc

processing capacity. The company has no mines.

Other Companies

The other major firms in the U.S. zinc industry are

mining companies. Alta Gold recently opened a zinc

mine in Nevada. Bunker Hill Mining, Star-Phoenix

Mining, and New Butte Mining operate lead-zinc

mines. Hecla, Greens Creek (a joint venture of RTZ,

Hecla, Exalas Resources, and CSX Oil & Gas), and

Washington Mining (in partnership with Alta Gold

and Echo Bay) produce zinc from precious metals

mines.

U.S. Interests in Other Countries

The U.S.-based companies that currently have

foreign lead-zinc holdings are: Asarco, Phelps

Dodge, and Cerro Copper. Asarco has ties to MIM,

a large Australia-based producer of nonferrous

metals and coal.ll MIM has lead facilities in

Australia (Mt. Isa mine) and the United Kingdom

(the Britannia refinery) as well as equity interests in

Cominco. Asarco also owns part of Medimsa which

runs silver-lead-copper-zinc mines, mills, and smelters in Mexico. Phelps Dodge is primarily a copper

company, but owns part of Black Mountain, a major

lead-silver-zinc-copper mine in South Africa. Cerro

Copper has interests in the Buenaventura zinc-lead

mines in Peru. Two other U.S. firms have recently

sold their foreign lead and zinc holdings. Amax sold

its share of Fresnillo in Mexico. USX sold its share

of the exhausted Prieska mine in South Africa.

Other Countries

Zinc and lead are often produced by the same set

of countries and companies. To avoid repetition, the

profiles of zinc and lead producers outside of the

United States are given in chapter 4 only.

losti@ of w~ Division of Geological and Geophysical Surveys, Alaska’s Mineral Industry, sPM Rx 43, 1988.

11-0-19-t of -~d MIM O-S 25 pereent of Ammo. The relationship is one of passive OwnershI “p and entails little operational

Lxmtrol.
Appendix A

Historical Rankings of Nonsocialist

Copper, Aluminum, Lead, and Zinc Producing Countries

-61–
Table A-2--Largest NSW Aluminum-Producing Countries, Mine and Meta Production (thousand metric tonnes gross weight):

Rank 1950 1970

Mine production:

1960 1980 1988

1

2

3

4

5

6

7

8

9

10

Suriname

Guyana

United States

France

Indonesia

Yugoslavia

Italy

Ghana

Greece

India

2,045 Jamaica

1,668 Suriname

1,356 Guyana

808 France

5,837

3,455

2,511

2,067

2,030

1,378

1,025

884

749

689

Jamaica

Australia

Suriname

Guyana

France

Guinea

Greece

United States

Yugoslavia

India

Australia

Guinea

Jamaica

Suriname

Brazil

Yugoslavia

Guyana

Greece

France

India

27,179

13,911

11,978

4,903

4,152

3,138

3,052

3,012

1,892

1,785

Australia

Guinea

Brazil

Jamaica

Suriname

India

Yugoslavia

Greece

Guyana

Sierra Leone

36,192

16,834

7,728

7,408

3,434

3,415

3,034

2,533

1,774

1,379

12,010

9,256

6,022

4,417

3,051

2,490

2,292

2,115

2,099

1,374

531 United States

206 Guinea

153 Yugoslavia

117 Greece

77 Malaysia

65 Dominican Rep

NSW 87,479

East 12,806

World 100,285

NSW

East

World

7,085 NSW

1,333 East

8,418 World

22,492

5,128

27,620

NSW

East

World

50,812

9,898

60,710

NSW

East

World

81,244

11,500

92.744

Metal production: (refined metal from primary sources)

1

2

3

4

5

6

7

8

9

10

United States

Canada

France

Norway

Italy

UK

W. Germany

Japan

Switzerland

Austria

652

360

61

45

37

30

28

25

19

18

United States

Canada

France

Norway

W. Germany

Japan

Italy

Austria

Cameroon

Switzerland

1,828

691

235

171

169

133

84

68

44

39

3,618

911

4,528

United States

Canada

Japan

Norway

France

W. Germany

Australia

India

Italy

Spain

3,607

963

728

522

381

309

206

161

147

120

United States

Japan

Canada

U. Germany

Norway

France

Spain

UK

Venezuela

Australia

4,654

1,092

1,068

731

662

432

387

374

328

304

United States

Canada

Australia

Brazil

Norway

W. Germany

Venezuela

India

France

UK

3,944

1,535

1,141

874

827

744

443

335

328

300

NSW (430)

East

World

1,288

219

1,507

NSW (856)

East

World

NSW (2,183)

East

World

8,056

2,246

10,302

NSW (3,868) 12,768

East 3,286

World 16,053

NSW [5,397) 13,852

East 3,628

World 17,480

NOTE: NSW secondary production from old and new scrap shown in parentheses.

SOURCE: Metal Statistics (various issues), Metal lgesellschaft Aktiengesel lschaft.
Appendix A--Historical Rankings of Nonsocialist Copper, Aluminum, Lead, and Zinc Producing Countries ● 63

N. I- )

m
Table A-4--Largest NSW Zinc-Producing Countries, Mine and Metal Production (thousand metric tonnes contained zinc).

Rank 1950

Mine production:

1960 1970 1980 1988

1

2

3

4

5

6

7

8

9

10

United States

Canada

Mexico

Australia

W, Germany

Peru

Italy

Zaire

Spain

Japan

Canada

Australia

Peru

Spain

Mexico

United States

Sweden

Ireland

Japan

Brazil

1,347

759

485

277

261

256

193

173

147

103

566

284

224

201

98

88

87

77

64

52

United States

Canada

Australia

Mexico

Peru

Japan

Italy

W. Germany

Zaire

Spain

395

369

323

271

157

157

130

115

109

86

Canada

Australia

United States

Peru

Japan

Mexico

W, Germany

Italy

Zaire

Yugoslavia

1,253

487

485

299

280

266

161

111

103

101

Canada

Australia

Peru

United States

Mexico

Japan

Ireland

Spain

Sweden

W. Germany

1,059

495

468

349

243

238

229

179

167

121

4,536

1,656

6,192

735

592

370

365

301

253

248

207

170

152

4,472

1,700

6,172

1,950 NSW

260 East

2,210 World

NSW 5,098

East 2,010

World 7,108

NSW

East

World

2,595 NSW

756 East

3,351 World

4,305

1,257

5,561

NSW

East

World

Metal production: (refined metal from primary sources and old and new scrap)

Canada

Japan

W. Germany

United States

Australia

Belgium

France

Spain

Italy

South Korea

703

678

352

330

303

298

274

245

242

223

United States

Canada

Belgium

W. Germany

Australia

UK

France

Mexico

Japan

Norway

826

185

174

136

84

71

68

49

49

43

United States

Belgium

Canada

W. Germany

Japan

France

Australia

Italy

UK

Zaire

787

248

237

192

187

149

119

85

76

53

United States

Japan

Canada

W. Germany

Australia

Belgium

France

UK

Italy

Spain

866

681

418

301

256

232

224

147

142

88

Japan

Canada

United States

W. Germany

Australia

France

Belgium

Italy

Netherlands

Spain

2

3

4

5

6

7

8

9

10

NSW (160)

East

World

1,810

250

2,060

NSW (149)

East

World

2,438

713

3,151

NSW (267)

East

World

3,955

1,263

5,218

NSU (349)

East

World

NSW (434)

East

World

5,223

2,048

7,271

NOTE: NSW secondary production from old and new scrap shown in parentheses.

SOURCE: Metal Statistics (various issues), Metal lgesellschaft Aktiengesellschaft
Appendix B

Country and Company Producers

Table B-1--Major Copper Producing Companies by Country

Country

---------------

Australia

Belgium

Brazil

Canada

Chile

Finland

Germany, FR

Indonesia

Japan

Korea, Rep

Mexico

Peru

Phili

PNG

ppines

Portugal

South Africa

Spain

Sweden

UK

USA

Yugoslavia

Zaire

Zambia

Companies (m=mine, s=smelter, r=refinery)

------------------------------------------------- —---—--——------—--———---—-----------—---—- -

MIM (msr), Renison Goldfields (m), ER&S (sr), Olympic Dam JV (msr)

MHO (sr)

Caraiba Metais (sr), CVRD (m) pending

Inco (msr), Falconbridge (msr), Noranda (msr), Highland Valley (m), BHP-Utah (m), Afton JV

(m), Hudson Bay (s)

Codelco (msr), ENAMI (sr), Escondida (m) pending, Disputada (ins), Mantes Blancos (msr), Ojos

del Salado (m)

Outokumpu (msr)

Norddeutsche Affinerie (sr)

Freeport Indonesia (m)

Nippon Mining (sr), Onahama (sr), Sumitomo (sr), Mitsubishi (sr), Hibi Kyoda

(msr), Mitsui (r)

Korea Mining & Smelting (sr)

Mexicana de Cobre (ins), Cananea (ins), Medimsa (ins), Frisco (m), Cobre de Mex

SPCC (ins), Cuajone JV (m), Centromin (msr), Minero Peru (mr), Nor Peru (m)

Atlas (m), Maricalum (m), Marcopper (m), North Davao (m), Benguet (m), Lepanto

(sr)

Bougainvillea (m), Ok Tedi (m)

Somincor (m)

Palabora (msr), O’okiep (ins)

Rio Tinto Minera (sr)

Boliden (msr)

IMI Refiners (r), BICC (m)

(sr), Dowa

co (r)

m), PASAR

Phelps Dodge (msr), Chino JV (msr), Morenci JV (m), Cyprus (msr), Kennecott (msr), Magma

(msr), Asarco (msr), Butte JV (m), Copper Range (msr), Doe Run (m), Southwire (r), Cox Creek

(r), Anaconda E-R (r), Texas City (s) pending

RTB Bor (msr)

Gecamines (msr)

ZCCM (msr)

SOURCE: Office of Technology Assessment, 1990

-65-
66 ● Nonferrous Metals: Industry Structure

Table B-2--Major Aluminum Producing Companies by Country

Country

---------------

Argentina

Australia

Austria

Bahrain

Brazil

Canada

Egypt

France

Germany, FR

Ghana

Greece

Guinea

Guyana

India

Indonesia

Ireland

Italy

Jamaica

Japan

Malaysia

Mexico

Netherlands

New Zealand

Norway

Sierra Leone

South Africa

Companies (m=mine, r=refinery, s=smelter)

--------------—------—-—---—-—-—-—---—-—-—---—- --—-----—---—---—---------------—------------

Aluminios Argentines (s)

Alcoa of Australia (mrs), Comalco (ins), Queensland Alumina (r), Boyne (s), Gove Project

(mr), Tomago (s), Worsley (mr), Alcan Australia (s), Portland Smelter JV (s)

Austria Metall (s), Salzburger (s)

Alba (s)

MRN (m), Alcoa Aluminio (mrs), Alcan Aluminio (mrs), CBA (mrs), Alumar (rs), Albras (s),

Valesul (s), Alunorte (r) pending

Alcan (rs), Reynolds (s), Becancour (s), Alouette (s) pending

Egyptal (s)

Pechiney (mrs)

VAW (rs), Aluminum Oxide Stade (r), Alusuisse (rs), Hamburg Aluminum (s), Hoogovens (s)

Ghana Bauxite (m), Valco (s)

Parnasse [m), Elbaumin (m), Greek Helikon (m), Aluminium de Grece (mrs), Hellenic Alumina

(r) pending

CBG (m), OBK (m), Friguia (mr)

Guymine (m)

Bharat (mrs), Nalco (mrs), Indalco (mrs), Hindalco (mrs), Malco (rs)

Aneka Tambang (m), Inalum (s)

Aughinish (r)

Aluminia SpA (s)

Kaiser Jamaica (m), Jamaican (mr), Alpart (mr), Clarendon Alumina JV (mr)

Nippon Light Metal (rs), Sumitomo Aluminum (r), Showa Aluminum (r)

Johore Mining (m)

Alumsa (s)

Pechiney (s), Hoogovens (s)

New Zealand Al Smelters (s)

Hydro Aluminium (s), Mosal (s), Soral (s)

SIEROMCO (m)

Alusaf (s)
Appendix B--Country and Company Producers ● 67

Spain

Suriname

Sweden

Switzerland

Turkey

UAE

UK

USA

Venezuela

Yugoslavia

Aluminio Espanol (rs), Endasa (s)

Suralco (ins), Suralco-Billiion JV (mr )

Granges Aluminum (s)

Alusuisse (s)

Etibank (s)

Dubai Aluminum (s)

British Alcan (rs), Anglesey Aluminium (s)

Alcoa (rs), Reynolds (rs), Kaiser (rs), Ormet (rs), Clarendon (r), Alumax-[Eastalco,

Intalco, Mt. Holly JV] (s), Alcan (s), Noranda (s), Columbia Falls (s), Columbia Aluminum

(s), Southwire (s), Vanalco (s), Ravenswood (s), Northwest Aluminum/Martin Marietta (s)

Bauxiven (m), Interalumina (r), Venalum (s), Alcasa (s), [A]amsa (s), Aluyana (s), Alisa

(s), Alusur (s), Aluguay (s), Vexxal (s), Angostura (s)] pending

Energoinvest (mrs)

SOURCE: Office of Technology Assessment, 1990
Table B-3--Major Lead Producing Companies by Country

Country

---------------

Australia

Belgium

Canada

Finland

France

Germany, FR

Honduras

Ireland

Italy

Japan

Korea, Rep

Mexico

Morocco

Namibia

Peru

South Africa

Spain

Sweden

UK

USA

Yugoslavia

SOURCE: Office of

Companies (m=mine, s=smelter, r=refinery)

--------------------------------------------------------------------------------------------

Pasminco (msr), MIM (ins), Aberfoyle (m)

(m)

MHO (sr)

Cominco (msr), Faro Mine JV (m), Brunswi

Noranda (sr)

Outokumpu (m)

Metaleurop (msr)

Cadjebut JV (m), Lady Loretta (m), Woodcutters JV

ck (m), Westmin (m), Nanisivik (m), Polaris JV (m),

Berzelius (msr), Metaleurop (sr), Norddeutsche Affi

El Mochito (m)

Tara Mines (m)

Nuova Samim (msr)

Dowa (msr), Nippon Mining (msr), Mitsubishi (msr),

Toho Zinc (sr), Hachinohe (sr), Sumitomo (sr)

Korea Mining & Smelting (sr), Young Poong (m)

nerie (sr)

Mitsui (msr), Mitsubishi -Cominco (sr),

Medimsa (msr), Penoles (msr), Fresnillo (m), Frisco (m), Real des Angeles (m)

Touissit (m), Djebel Aouam (m), Zellidja (sr)

Tsumeb (msr)

Centromin (msr), Milpo (m), Atacocha (m), Raura (m), Buenaventura (m), Alianza (m), Mitsui

(m), Santo Toribio (m), Nor Peru (m), Huaron (m), Volcan (m), Fundeconsa (s)

Black Mountain (m), Billiton (m)

Metaleurop (sr), Exminesa (m), Boliden (m), Asturiana de Zinc (m), Almagrera (m), Espanola

del Zinc (sr)

Boliden (msr), Vieille-Montagne (m)

Pasminco (s), Britannia (r)

Doe Run (msr), Asarco (msr), Leadville JV (m), Magmont JV (m), Bunker Hill Mining (m),

Greens Creek JV (m), Hecla (m), Montana Tunnels (m), Sunnyside JV (m), New Butte Mining (m),

Star-Phoenix Mining (m), Red Dog JV (m) pending

RMHK Trepca (msr)

Technology Assessment, 1990
Appendix B--Country and Company Producers ● 69

Table B-4--Major Zinc Producing Companies by Country

Country

-------- —---—-.

Australia

Belgium

Brazil

Canada

Denmark

Finland

France

Germany, FR

Honduras

Ireland

Italy

Japan

Korea, Rep

Mexico

Namibia

Netherlands

Norway

Peru

South Africa

Spain

Sweden

Thailand

UK

USA

Yugoslavia

Zaire

SOURCE: Office of

Companies (m=mine, r=smelter/refinery)

-------------------------------------------------- --——--—--—--——--—---—------—---—--—---—--—

Pasminco (mr), MIM (m), Aberfoyle (m), Cadjebut JV (m), Lady Loretta (m), Woodcutters JV (m)

Vieille-Montagne (r), MHO (r)

CMM (mr), Paraibuna (r)

Brunswick (m), Falconbridge (mr), Cominco (mr), Faro Mine JV (m), Noranda (mr), Hudson Bay

(mr), Nanisivik (m), Westmin (m), Daniel’s Harbor JV (m), Polaris JV (m)

Boliden (m)

Outokumpu (mr)

Metaleurop (mr), Vieille-Montagne (r)

Metaleurop (r), Ruhr Zink (r), Berzelius (mr)

El Mochito (m)

Tara Mines (m)

Pertusola (r), Nuova Samim (mr)

Mitsui (mr), Dowa (m), Nippon Mining (mr), Mitsubishi (mr), Akita Zinc (r), Toho Zinc (r),

Hachinohe (r), Sumitomo (r)

Korea Zinc (r), Young Poong (mr)

Medimsa (mr), Penoles (mr), Fresnillo (m), Frisco (m), Real des Angeles (m)

Tsumeb (mr)

Budelco (r)

Folldal (m), Norzink (r)

Centromin (mr), San Ignacio Morococha (m), Milpo (m), Santander (m), Volcan (m), Raura (m),

Mitsui (m), Atacocha (m), Santo Toribio (m), Buenaventura (m), Alianza (m), Minero Peru (r),

Nor Peru (m), Huaron (m)

Black Mountain (m), Billiton (m), Zinc South Africa (r)

Exminesa (m), Asturiana de Zinc (mr), Boliden (m), Almagrera (m), Espanula del Zinc (r)

Boliden (m), Vieille-Montagne (m)

Padaeng (r)

Pasminco (r)

ZCA (mr), Jersey Miniere (mr), Asarco (m), Leadville JV (m), Doe Run (m), Magmont JV (m),

Bunker Hill Mining (m), Greens Creek JV (m), Montana Tunnels (m), Sunnyside JV (m), Big

River (r), New Butte Mining (m), Alta Gold (m), Hecla (m), Union Zinc (m), Star-Phoenix

Mining (m), Cyprus (m), Red Dog JV (m) pending

RHHK Trepca (mr)

Gecamines (mr)

Technology Assessment, 1990
Appendix C

Company Abbreviations

Appendix C Company Abbreviations

DIR = Direct investment by the company metal-country (sector)

metal Al=aluminum; Cu=copper; Pb=Lead; Zn=zinc

sector m=mine; s=smelter; r=refinery (in the case of zinc, r=smelter/refinery)

PAR = Parents of the company and their shares of its ownership

SUB = Subsidiaries or joint ventures of the company and its shares of their ownership

Ownership shares for parents, subsidiaries, and joint ventures are rounded

to whole percentage points. Absence of a percentage figure indicates full ownership.

Abbreviation Full Name

Headquarters Location Direct Investments and Affiliates (as of early 1990)

-------------— ---------- ------------------------------------- ----- ——----------------—-----——--—-------- ------

Aberfoyle Aberfoyle Ltd

AUSTRALIA DIR: Pb-Australia (m) Zn-Australia (m)

PAR: Cominco 46%

Acec-Union Miniere Acec-Union Miniere SA

BELGIUM PAR: Societe Generale de Belgique (Belgium) owned by Cie Fi

Suez (France)

SUB: Union Mines 93%, MHO 71%, Vieille-Montagne 96%, Asturi

Afton Mine Joint Venture

DIR: Cu-Canada (m)

PAR: Teck 73%, Metall Mining 27%

Akita Zinc Co Ltd

DIR: Zn-Japan (r)

Afton JV

CANADA

Akita Zinc

JAPAN

Alamsa

VENEZUELA

Alba

BAHRAIN

Albecour

CANADA

Albras

BRAZIL

Alcan

CANADA

Alcan Aluminio

BRAZIL

Alcan Australia

AUSTRALIA

Alcasa

VENEZUELA

nanciere de

enne 55%

PAR: Dowa 52%, Nippon Mining 14%, Sumitomo 14%, Mitsui 10%, Mitsubishi

5%, Toho Zinc 5%

Alamsa

DIR: Al-Venezuela (s) pending

PAR: Austria Metall 40%, CVG 30%, Pechiney 30%

Aluminum Bahrain

DIR: Al-Bahrain (s)

PAR: Kaiser 17%, Balco 73%

Albecour

PAR: Quebec Government

SUB: Alouette ?%, Becancour 25%

Aluminio Brasileiro SA

DIR: Al-Brazil (s)

PAR: CVRD 51%, NAAC 49%

Alcan Aluminum Ltd

DIR: Al-Canada (rs), USA (s)

SUB: Alcan Aluminio, British Alcan, Halco 27%, Indalco 40%, Jamaican

93%, MRN 24%, Queensland Alumina 21%, Endasa 24%, Alcan Australia 70%,

Aughinish 65%, Johore Mining 70%, Nippon Light Metal 50%, Alunorte 9%

Alcan Aluminio do Brazil SA

DIR: Al-Brazil (mrs)

PAR: Alcan

Alcan Australia

DIR: Al-Australia (s)

PAR: Alcan 70%

Aluminio del Caroni SA

DIR: Al-Venezuela (s)

PAR: CVG 72%, Reynolds 28%

–71–
72 ● Nonferrous Metals: Industry Structure

Aluminum Co of America

DIR: Al-USA (rs)

SUB: Alcoa of Australia 51%, Alcoa Aluminio 61%, Clarendon Alumina JV

50%, Halco 27%, Mosal 50%, Suralco, Alusur 40%, Alumsa 44%

Alcoa

USA

Alcoa Aluminio do Brazil SA

DIR: A1-Brazil (mrs)

PAR: Alcoa 61%

SUB: Alumar refinery 60% & smelter 72%

Alcoa Aluminio

BRAZIL

Alcoa of Australia Ltd

DIR: Al-Australia (mrs)

PAR: Alcoa 51%, Western Mining 44%

SUB: Portland Smelter JV 45%

Alcoa of Australia

AUSTRALIA

Cia Minera Alianza SA

DIR: Pb-Peru (m) Zn-Peru (m)

Alianza

PERU

Alisa

VENEZUELA

Alisa

DIR: Al-Venezuela (s) pending

PAR: CVG 20%

Almagrera

SPAIN

Minas de Almagrera

DIR: Pb-Spain (m) Zn-Spain (m)

Alouette

CANADA

Alouette

DIR: Al-Canada (s) pending

PAR: VAW ?%, Austria Metall ?%, Albecour ?%, Kobe Steel ?%, Hoogovens

?%, Marubeni ?%

Alumina Partners of Jamaica

DIR: Al-Jamaica (mr)

PAR; Kaiser 65%, Hydro Aluminum 35%

Alpart

JAMAICA

Alta Bay

USA

Alta Bay Venture

PAR: Alta Gold 60%, Echo Bay 40%

SUB: Sunnyside JV 65%

Alta Gold

USA

Alta Gold

DIR: Zn-USA (m)

PAR: Silver King 50%, Pacific Silver 50%

SUB: Alta Bay 60%

Aluguay

VENEZUELA

Aluguay

DIR: Al-Venezuela (s) pending

Alumar

BRAZIL

Aluminio do flaranhao SA

DIR: Al-Brazil (rs)

PAR: refinery - Alcoa Aluminio 60%, Billiton 40%; smelter - Alcoa

Aluminio 72%, Billiton 28%

Alumax

USA

Alumax Inc

PAR: Amax

SUB: Intalco 75%, Eastalco 75%, Mt Holly JV 73%, Becancour 25%

Aluminia SpA

ITALY

Aluminia Italia SpA

DIR: Al-Italy (s)

PAR: Alumix (EFIM-Ente Partecipazioni e Finanziamento Industria

Manifattureria)

SUB: Halco 6%, Sava

Aluminio Espanol

SPAIN

Aluminio Espanol SA

DIR: Al-Spain (rs)

PAR: Endasa 75%, Government (Instituto Nacional de Industria-INI) 19%

Aluminios Argentines

ARGENTINA

Aluminios Argentines SAIC

DIR: Al-Argentina (s)

PAR: Government 52%
Appendix C--Company Abbreviations ● 73

Aluminium de Grece

GREECE

Aluminium de Grece SA

DIR: Al-Greece (mrs)

PAR: Pechiney 60%

Aluminium Oxide Stade Gmbh

DIR: Al-FR Germany (r)

PAR: VAW 50%, Reynolds 50%

Aluminium Oxide Stade

FR GERMANY

Grupo Aluminio SA de CV

DIR: Al-Mexico (s)

PAR: Alcoa 44%

Alumsa

MEXICO

Alumina do Norte do Brazil SA

DIR: Al-Brazil (r) pending

PAR: CVRD 49%, MRN 26%, Alcan 9%, CBA 9%, NAAC 7%

Alunorte

BRAZIL

Alusaf Pty Ltd

DIR: Al-South Africa (s)

Alusaf

SOUTH AFRICA

Swiss Aluminum Ltd

DIR: Al-Switzerland (s), FR Germany (rs)

SUB: Gove Project 70%, Nabalco 50%, Salzburger, SIEROMCO, Soral 50%,

Bauxiven 4%. Interalumina 2%, Frialco 11%

Alusuisse

SWITZERLAND

Alusur

DIR: Al-Venezuela (s) pending

PAR: CVG 40%, Alcoa 40%, Sural 20%

Alusur

VENEZUELA

Aluyana

VENEZUELA

Aluyana

DIR: Al-Venezuela (s) pending

PAR: CVG ?%, Italimpianti ?%

Amax Inc

PAR: Chevron IB%

SUB: Alumax, Daniel’s Harbor JV 37%, Fresnillo 40%

Amax

USA

Amoco Minerals Co

PAR: Amoco Corp.

SUB: Ok Tedi 30%

Amoco

USA

Australian Mutual Provident Society

SUB: Gove 30%. Comalco 12%

AMP

AUSTRALIA

Anaconda E-R

USA

Anaconda Environ-Refining

DIR: CU-USA (r)

Aneka Tambang

INOONESIA

PT Aneka Tambang

DIR: Al-Indonesia (m)

PAR: Government

Anglesey Aluminum

UK

Anglesey Aluminium Ltd

OIR: Al-UK (S)

PAR: RTZ 51%, Kaiser 49%

Anglo American Gold

SOUTH AFRICA

Anglo American Gold Investment Co Ltd

PAR: Anglo American S Africa 49%

SUB: GFSA 11%

Anglo American S Africa

SOUTH AFRICA

Anglo American Corp of South Africa Ltd

PAR: De Beers 38%

SUB: Oe Beers 34%, Minorco 40%, Hantos Blancos 79%, GFSA 9%, Anglo

American Gold 49%, Palabora ?%

Angostura

DIR: Al-Venezuela (s) pending

Angostura

VENEZUELA

Asarco Inc

DIR: CU-USA (msr) Pb-USA (msr) Zn-USA (m)

PAR: MIM 25%

SUB: SPCC 52%, M1fl 19%, Medimsa 34%, Leadville JV 50%, Butte JV 50%, Nor

Peru 80%

Asarco

USA
74 ● Nonferrous Metals: Industry Structure

Asturiana de Zinc Asturiana de Zinc SA

SPAIN

Asturienne

BELGIUM

Atacocha

PERU

Atlas

PHILIPPINES

Aughinish

IRELAND

Austria Metall

AUSTRIA

Balco

BAHRAIN

Bauxiven

VENEZUELA

Becancour

CANADA

Benguet

PHILIPPINES

Berzelius

FR GERMANY

Bharat

INDIA

BHP

AUSTRALIA

BHP-Utah

USA

BICC

UK

Big River

USA

Billiton

NETHERLANDS

DIR: Pb-Spain (m) Zn-Spain (mr)

SUB: Exminesa 30%

CieRoyale Asturienne des Mines SA

PAR: Acec-Union Miniere 55%

SUB: Touissit 50%, Pancontinental 10%, Djebel Aouam 67%

Cia Minera Atacocha SA

DIR: Pb-Peru (m) Zn-Peru (m)

SUB: Huaron 5%

Atlas

DIR: Cu-Philippines (m)

SUB: PASAR ?%

Aughinish Alumina Ltd

DIR: Al-Ireland (r)

PAR: Alcan 65%, Billiton 35%

Austria Metall AG

DIR: Al-Austria (s)

PAR: Government

SUB: Alouette ?%, Alamsa 40%

Bahrain Saudi Aluminum Marketing Co

PAR: Bahrain Government 74%, Saudi Basic Industries Corp (SABIC) 26%

SUB: Alba 73%

Bauxita de Venezolana CA

DIR: Al-Venezuela (m)

PAR: CVG 96%, Alusuisse 4%

Aluminum Becancour Inc

DIR: Al-Canada (s)

PAR: Pechiney 25%, Reynolds

Benguet

DIR: Cu-Philippines (m)

Berzelius Metallhutten Gmbh

DIR:

PAR:

Bharat

DIR:

PAR:

Broken

SUB:

Pb-FR Germany (msr)

MG

Aluminium Co Ltd

Al-India (mrs)

Government

25%, Alumax 25%, Albecour 25%

Zn-FR Germany (mr)

Hill Proprietary Co Ltd

BHP-Utah. Ok Tedi 30%, Cadjebut JV 58%, Escondida 58%

BHP-Utah International Inc

DIR: Cu-Canada (m)

PAR: BHP

B. I.C.C. Metals Ltd

DIR: CU-UK (m)

Big River Minerals Co

DIR: Zn-USA (r)

Billiton International Metals

DIR: Pb-South Africa (m) Zn-South Africa (m)

PAR: Shell

SUB: Halco 6%, MRN 10%, Valesul 45%, Worsley 38%, Cadjebut JV 42%,

Budelco 50%, Aughinish 35%, Cuajone JV 9%, Alumar ref 40% & smelt 28%,

Suralco-Billiton JV mine 76% & ref 45%
Appendix C-Company Abbreviations ● 75

Black Mountain Mineral Development Co Pty Ltd

DIR: Pb-South Africa (m) Zn-South Africa (m)

PAR: GFSA 55%, Phelps Dodge 45%

Black Mountain

SOUTH AFRICA

Boliden

SWEDEN

Boliden AB

DIR: Cu-Sweden (msr) Pb-Sweden (msr), Spain (m) Zn-Sweden (m],

Spain (m), Denmark (m)

PAR: Trelleborg 68%

SUB: Norzink 50%, Faro Mine JV 8%

Bougainvillea Copper Ltd

DIR: CU-PNG (m)

PAR: CRA 54%, Government 20%

Bougainvillea

PAPUA NEW GUINEA

Boyne Smelters Ltd

DIR: Al-Australia (s)

PAR: Comalco 30%, Kaiser 20%, Japanese Consortium 50%

Boyne

AUSTRALIA

BP Minerals International Ltd

PAR: British Petroleum Co Plc

SUB: Olympic Dam JV 49%

BP

UK

Brascade Resources

CANAOA

Brascade Resources

PAR: Brascan JO%

SUB: Noranda 46%, Westmin 62%

Brascan

CANADA

Brascan Ltd

SUB: Brascade Resources 70%

Britannia Refined Metals Ltd

DIR: Pb-UK (r)

PAR: MIM

Britannia

UK

British Alcan

UK

British Alcan Aluminum Ltd

DIR: Al-UK (rS)

PAR: Alcan

SUB: Frialco 11%, Ghana Bauxite 45%

BRPM

MOROCCO

Bureau de Recherches et de Participations Hinieres

PAR: Government

SUB: Djebel Aouam 33%

Brunswick Mining and Smelting Corp Ltd

DIR: Pb-Canada (m) Zn-Canada (m)

PAR: Noranda 64%

Brunswick

CANADA

Budelco

NETHERLANDS

Budelco BV

DIR: Zn-Netherlands (r)

PAR: Billiton 50%, Pasminco 50%

Buenaventura

PERU

Cia de t4inas Buenaventura SA

OIR: Pb-Peru (m) Zn-Peru (m)

PAR: Cerro Copper 34%, World Bank 5%, Centromin 18%

Bunker Hill Mining

CANADA

Bunker Hill Mining

DIR: Pb-USA (m) Zn-USA (m)

Butte JV

USA

Butte Mine Joint Venture

DIR: CU-USA (m)

PAR: Montana Resources 50%, Asarco 50%

C. Itoh

JAPAN

C. Itoh & Co Ltd

SUB: Kobe Alumina ?%, PASAR 6%

Cadjebut JV

AUSTRALIA

Cadjebut Mine Joint Venture

DIR: Pb-Austral ia (m) Zn-Australia (m)

PAR: 13HP 58%, Billiton 42%
76 ● Nonferrous Metals: Industry Structure

Cia Minera de Cananea SA

DIR: Cu-lexico (ins)

PAR: Government 90%

SU8: Cobre de Mexico ?%

Cananea

MEXICO

Clarendon Alumina Production Ltd

PAR: Jamaica Bauxite Mining

SU8: Clarendon Alumina JV 50%

CAP

JAMAICA

Caraiba Metais SA - Ind e Com

DIR: Cu-Brazil (sr)

PAR: Government 98%

Caraiba Metais

BRAZIL

Cia Brasileira de Aluminio

DIR: Al-Brazil (mrs)

PAR: Votorantim 80%, Government 20%

SUB: MRN 10%, Alunorte 9%

CBA

BRAZIL

Compagnie des Bauxites de Guinea

DIR: Al-Guinea (m)

PAR: Halco 51%, Government 49%

CBG

GUINEA

Empresa tiinera del Centro del Peru SA

DIR: Cu-Peru (msr) Pb-Peru (msr) Zn-Peru (mr)

PAR: Government

SUB: Buenaventura 18%

Centromin

PERU

Cerro Copper Products Co

PAR: Marmon

SUB: SPCC 21%, Buenaventura 34%

Cerro Copper

USA

Chevron Corp

SUB: Amax 18%

Chevron

USA

Chino JV

USA

Chino Joint Venture

DIR: CU-USA (msr)

PAR: Phelps Dodge 67%, Mitsubishi 33%

Clarendon Alumina JV

JAMAICA

Clarendon Alumina Joint Venture

DIR: Al-Jamaica (mr)

PAR: Alcoa 50%. CAP 50%

Clarendon Ltd

SWITZERLAND

Clarendon Ltd

DIR: Al-USA (r), tolling contracts with Drmet and Northwest Aluminum

PAR: t4arc Rich and Co (Switzerland)

SUB: Mt Holly JV 27%

CM

BRAZIL

Cia Hineira de Metais

DIR: Zn-Brazil (mr)

PAR: Votarantim

Cobre de Mexico

MEXICO

Cobre de Mexico

DIR: Cu-Mexico (r)

PAR: Government (Nacional Financier) ?%, Cananea ?%, various copper

fabricators ?%

Corpacion Nacional del Cobre de Chile

DIR: Cu-Chile (msr)

PAR: Government

Codelco

CHILE

Columbia Aluminum

USA

Columbia Aluminum Corp

DIR: Al-USA (S)

PAR: employees 30%

Columbia Falls

USA

Columbia Falls Aluminum Co

DIR: Al-USA (S)

PAR: Montana Aluminum Investors
Appendix C-Company Abbreviations ● 77

Comalco (hmalco Ltd

AUSTRALIA DIR: Al-Australia (ins)

PAR: CRA 67%, AMP 12%

SUB: Boyne 30%, Halco 8%, Queensland Alumlna 30%, New Zealand Al

Smelters 79%

Cominco Cominco Ltd

CANADA DIR: Pb-Canada (msr) Zn-Canada (mr)

PAR: Nunachiaq 40%, Mitsui 3%

SUB: Aberfoyle 46%, Exminesa 48%, Mitsubishi-Cominco 45%, Highland

Valley 50%, Magmont JV 50%, Red Dog JV (development and operations), Pine

Point 51%. Polaris JV 55%

Cons Gold Fields

UK

Consolidated Gold Fields plc

PAR: Hanson PLC

SUB: Newmont 49%, Renison Goldfields 46%

Copper Range Co

DIR: CU-USA (msr)

PAR: Metall Mining

Copper Range

USA

Cox Creek Refining

DIR: CU-USA (r)

PAR: Mitsubishi 20%, Southwire 20%, Halstead Industries 20%

Cox Creek

USA

CRA Ltd

PAR: RTZ 49%

SUB: Comalco 67%, Bougainvillea 54%, Pasminco 40%

CRA

AUSTRALIA

CSR Ltd

SUB: Gove 70%

CSR

AUSTRALIA

Cuajone Mine Joint Venture

DIR: Cu-Peru (m)

PAR: SPCC 91%, Billiton 9%

Cuajone JV

PERU

Curragh Resources Corp

PAR: Frame Mining Corp (Clifford Frame) 98%

SUB: Faro Mine JV 92%

Curragh

CANADA

Corp Venezolana de Guayana

PAR: Government

SUB: Alcasa 72%, Interalumina 98%, Venalum 80%, Bauxiven 96%, Alamsa

30%, Alisa 20%, Alusur 40%, Aluyana ?%

CVG

VENEZUELA

Cia Vale do Rio Doce

DIR: Cu-Brazil (m) pending

PAR: Government 56%

SUB: Albras 51%, Alunorte 49%, PIRN 46%, Valesul 55%

CVRD

BRAZIL

Cyprus Minerals Co

DIR: CU-USA (msr) Zn-USA (m)

Cyprus

USA

Daniel’s Harbor Mine Joint Venture

DIR: Zn-Canada (m)

PAR: Teck 63%, Amax 37%

Daniel’s Harbor J V

CANADA

De Beers Consolidated Mines

PAR: Anglo American S Africa 34%

SUB: Anglo American S Africa 38%, Plinorco 21%, Palabora ?%

De Beers

SOUTH AFRICA

Degussa AG

SUB: Norddeutsche Affinerie 30%, Ok Tedi 9%

Degussa

FR GERMANY

Cia Minera Disputada de las Condes SA

DIR: Cu-Chile (ins)

PAR: Exxon Coal and Minerals

Disputada

CHILE

Djebel Aouam

MOROCCO

Ste Miniere du Djebel Aouam

DIR: Pb-Horocco (m)

PAR: BRPM 33%, Asturienne 67%
78 ● Nonferrous Metals: Industry Structure

Doe Run

USA

Dowa

JAPAN

Dubai Aluminum

UNITED ARAB EMIRATES

Eastal co

USA

Echo Bay

USA

Egyptal

EGYPT

El Mochito

HONDURAS

E 1 baumi n

GREECE

E 1 kern

NORWAY

ENAH I

CHILE

Endasa

SPAIN

Energoinvest

YUGOSLAVIA

ER&S

AUSTRALIA

Escondida

CHILE

Espanola del Zinc

SPAIN

Etibank

TURKEY

Exalas Resources

USA

Doe Run Co

DIR: CU-USA (m) Pb-USA (msr) Zn-USA (m)

PAR: Fluor

Dowa Mining Co Ltd

DIR: Cu-Japan (msr)

SUB: Akita Zinc 52%,

Dubai Aluminum Co Ltd

DIR: A1-UAE (S)

PAR: Government 80%,

Eastalco Aluminum Co

DIR: Al-USA (S)

Pb-Japan (msr) Zn-Japan (m)

Hachinohe 20%, Onahama 30%

Southwire 8%, Nissho Iwai 8%

PAR: Alumax 75%, Mitsui 11%, Toyo Sash 7%, Yoshida Kogya KK 7%

Echo Bay

SUB: Alta Bay 40%

Aluminum Co of Egypt

DIR: Al-Egypt (S)

PAR: Government

El Mochito mine

DIR: Pb-Honduras (m) Zn-Honduras (m)

PAR: Metall Mining

Eleusis Bauxite Mines Mining Industrial & Shipping Inc

DIR: Al-Greece (m)

PAR: Government

Elkem AIS Norway

PAR: Kvaerner Industries A/S

SUB: Mosal 50%

Empresa Nacional de Mineria

DIR: Cu-Chile (sr)

PAR: Government

Empresea Nacional del Aluminio SA

DIR: Al-Spain (s)

PAR: Government (Instituto Nacional de Industria-INI) 73%, Alcan 24%

SUB: Aluminio Espanol 75%

Energoinvest

DIR: Al-Yugoslavia (mrs)

PAR: Government

Electrolytic Refining & Smelting Co of Australia Ltd

DIR: Cu-Austral ia (sr)

PAR: Pasminco 60%, Japanese consortium (led by Furukawa) 40%

Minera Escondida Ltd

DIR: Cu-Chile (m) pending

PAR: BHP 58%, RTZ 30%, Japan Escondida 10%, World Bank 3%

Espanola del Zinc SA

DIR: Pb-Spain (sr) Zn-Spain (r)

PAR: hletal Quimica del Nervion 31%

Etibank

DIR: Al-Turkey (s)

PAR: Government

Exalas Resources

PAR: t4itsubishi

SUB: Greens Creek JV 13%
Appendix C-Company Abbreviations . 79

Exminesa

SPAIN

Exxon Coal and Minerals

USA

Falconbridge

CANADA

Faro Mine JV

CANADA

F1uor

USA

Fol1dal

NORWAY

Freeport Indonesia

USA

Freeport McMoRan

USA

Fresnillo

MEXICO

Frialco

CAYMAN ISLANDS

Friguia

GUINEA

Frisco

MEXICO

Fundeconsa

PERU

Furukawa

JAPAN

Gecamines

ZAIRE

GFSA

SOUTH AFRICA

Ghana Bauxite

GHANA

Gove

AUSTRALIA

Gove Project

AUSTRALIA

Exploration Minera International Espana SA

DIR: Pb-Spain (m) Zn-Spain (m)

PAR: Cominco 48%, Asturiana de Zinc 30%

Exxon Coal and Minerals Co

PAR: Exxon Corp

SUB: Disputada

Falconbridge Ltd

DIR: Cu-Canada (msr) Zn-Canada (mr)

PAR: Noranda 50%, Trelleborg 50%

Faro Mine Joint Venture

DIR: Pb-Canada (m) Zn-Canada (m)

PAR: Curragh 92%, Boliden 8%

Fluor Corp

SUB: Doe Run

Folldal Verk A/S

DIR: Zn-Norway (m)

Freeport Indonesia Inc

DIR: Cu-Indonesia (m)

PAR: Freeport-McMoRan 85%, Government

Freeport-McMoRan Inc

SUB: Freeport Indonesia 85%

Cia Fresnillo SA de CV

DIR: Pb-Mexico (m) Zn-Mexico (m)

PAR: Penoles 60%, Max 40%

Frialco SA

9%, Norddeutsche Affinerie 4%

PAR: Noranda 38%, Pechiney 36%, Alusuisse 11%, British Alcan 11%, VAW 5%

SUB: Friguia 51%

Societe d'Economie Mixte Frigu

DIR: Al-Guinea (mr)

PAR: Frialco 51%, Government

Empresas Frisco SA de CV

DIR: Cu-Mexico (m) Pb-Mex

SU8: Real des Angeles 33%

Fundicion de Concentrados SA

DIR: Pb-Peru (s)

Furukawa Co Ltd

SUB: Hibi Kyodo 16%, Onahama

a

49%

co (m) Zn-Mexico (m)

8%, ER&S ?%

La Generale des Carrieres et des Hines du Zaire

DIR: Cu-Zaire (msr) Zn-Zaire (mr)

PAR: Government

Gold Fields of South Africa Ltd

PAR: Anglo American Gold 11%, Anglo American S Africa 9%

SUB: O’okiep 81%, Black Mountain 55%, Zinc South Africa 65%, Tsumeb 76%

Ghana Bauxite Co Ltd

DIR: Al-Ghana (m)

PAR: Government 55%, British Alcan 45%

Gove Aluminium Ltd

PAR: CSR 70%, AMP 30%

SUB: Gove Project 30%, Nabalco 50%, Tomago 35%

Gove Project

DIR: Al-Australia (mr)

PAR: Alusuisse 70%, Gove 30%, managed by Nabalco
80 ● Nonferrous Metals: Industry Structure

Granges Aluminum

DIR: Al-Sweden (s)

PAR: Granges AB

Granges Aluminum

SWEDEN

Greek Helikon

GREECE

Greek Helikon Bauxites GL Barlos SA

DIR: Al-Greece (m)

Greens Creek Mine Joint Venture

DIR: Pb-USA (m) Zn-USA (m)

PAR: RTZ 53%, Hecla 28%, Exalas Resources 13%, CSX Oil & Gas 6%

Greens Creek JV

USA

Guyana Mining Enterprise Ltd

DIR: Al-Guyana (m)

PAR: Government (Bauxite Industry Development Co-Bidco)

Guymine

GUYANA

Hachinohe Smelting Co Ltd

DIR: Pb-Japan (sr) Zn-Japan (r)

PAR: Mitsui 50%, Dowa 20%, Nippon Mining 10%, Mitsubishi 10%, Toho Zinc

5%, Nisso Smelting 5%

Hachinohe

JAPAN

Halco

USA

Halco (Mining) Inc

PAR: Alcan 27%, Alcoa 27%, Pechiney 10%, VAU 10%, Comalco 8%, Aluminia

SpA 6%, Reynolds 6%, Billiton 6%

SUB: CBG 51%

Hamburger Aluminiumwerke GmbH

DIR: A1-FR Germany (s)

PAR: Reynolds 33%, VAW 33%, City of Hamburg 33%

Hamburg Aluminum

FR GERMANY

Hecla

USA

Hecla Mining Co

DIR: Pb-USA (m) Zn-USA (m)

SUB: Greens Creek JV 28%

He?lenic Alumina

GREECE

Hellenic Alumina (ELVA)

DIR: Al-Greece (r) pending

Hibi Kyodo Smelting Co Ltd

DIR: Cu-Japan (sr)

PAR: Mitsui 64%, Nittetsu 20%, Furukawa 16%

Hibl Kyodo

JAPAN

Highland Valley Copper

DIR: Cu-Canada (m)

PAR: Cominco 50%, Rio Algom 34%, Teck 14%, Highmont 3%

Highland Valley

CANADA

Highmont Mining Co

SUB: Highland Valley 3%

Highmont

CANADA

Hindalco

INDIA

Hindustan Aluminium Corp

DIR: Al-India (mrs)

Koninklijke Nederlandsche Hoogovens en Staalfabrieken NV

DIR: A1-FR Germany (s), Netherlands (s)

SUB: Alouette ?%

Hoogovens

NETHERLANDS

Horsehead

USA

Horsehead Industries

SUB: ZCA

Huaron

PERU

Cia Minera Huaron SA

DIR: Pb-Peru (m) Zn-Peru (m)

PAR: Metaleurop 17%, Atacocha 5%

Hudson Bay

CANADA

Hudson Bay Mining and Smelting Co Ltd

DIR: Cu-Canada (s) Zn-Canada (mr)

PAR: Inspiration Resources

Hydro Aluminum

NORWAY

Hydro Aluminium A/S

DIR: Al-Norway (s)

PAR: Norsk Hydro

SUB: Alpart 35%
Appendix Company Abbreviations ● 8 1

Imetal

FRANCE

IMI Refiners

UK

IMM

MEXICO

Inalum

INDONESIA

Inco

CANADA

Indalco

INDIA

Inspiration Resources

USA

Intal co

USA

Interalumina

VENEZUELA

Jamaica Baux

JAMAICA

Jamalcan

JAMAICA

te M ning

Japan Escondida

CHILE

Jersey Miniere

USA

Johore Mining

MALAYSIA

Kaiser

USA

Kaiser Jamaica

JAMAICA

Kennecott

USA

Kobe Alumina

AUSTRALIA

Imetal SA

SUB: Metaleurop 15%

IMI Refiners Ltd

DIR: CU-UK (r)

Grupo Industrial Minera Mexico SA de CV

SUB: Medimsa 66%

PT Indonesia Ashahan Aluminum

DIR: Al-Indonesia (s)

PAR: Nippon Asahan Aluminium Co Ltd (Japanese Consortium) 59%,

Government 41%

Inco Ltd

OIR: Cu-Canada (msr)

Indian Aluminium Co Ltd

DIR: Al-India (mrs)

PAR: Alcan 40%

Inspiration Resources Corp

PAR: Minorco 57% equity & 43% voting

SUB: Hudson Bay

Intalco Aluminum Co

OIR: Al-USA (S)

PAR: Alumax 75%, Mitsui 11%, Toyo Sash 7%, Yoshida Kogya KK 7%

Interamericana de Alumina

OIR: Al-Venezuela (r)

PAR: CVG 98%, Alusuisse 2%

Jamaica Bauxite Mining Ltd

PAR: Government

SUB: CAP, Kaiser Jamaica 51%, Jamaican 7%

Alcan Jamaica Co

DIR: Al-Jamaica (mr)

PAR: Alcan 93%, Jamaica Bauxite Mining 7%

Japan Escondida Corp

PAR: Mitsubishi 60%, Nippon Mining 20%

SUB: Escondida 10%

Jersey Miniere Zinc Co

DIR: Zn-USA (mr)

PAR: Union Zinc

Johore Mining and Stevedoring Co Sdn Bhd

DIR: Al-Malaysia (m)

PAR: Alcan 70%

Kaiser Aluminum & Chemical Corp

DIR: Al-USA (rs)

PAR: Maxxam

SUB: Alpart 65%, Anglesey Aluminum 49%, Boyne 20%, Kaiser Jamaica 49%,

Queensland Alumina 28%, Alba 17%, Valco 90%

Kaiser Jamaica Bauxite Co

DIR: Al-Jamaica (m)

PAR: Jamaica Bauxite Mining 51%, Kaiser 49%

Kennecott Corp

OIR: CU-USA (msr)

PAR: RTZ

Kobe Alumina Associates (Australia) Pty Ltd

PAR: C. Itoh ?%, Nissho Iwai 35%

SUB: Worsley 10%
82 ● Nonferrous Metals: Industry Structure

Kobe Steel

JAPAN

Korea Mining & Smelting

REP KOREA

Korea Zinc

REP KOREA

Lady Loretta

AUSTRALIA

Leadville JV

USA

Lepanto

PHILIPPINES

Magma

USA

Magmont JV

USA

Malco

India

Mantes Blancos

CHILE

Harcopper

PHILIPP

Maricalum

NES

PHILIPPINES

Marmon

USA

Martin Marietta

USA

Marubeni

JAPAN

Maxxam

USA

Medimsa

MEXICO

Metaleurop

FRANCE

Metall Mining

CANADA

Metallgesellschaft

Kobe Steel Ltd

SUB: Alouette ?%

Korea Mining & Smelting Co Ltd

DIR: Cu-Rep. Korea (sr) Pb-Rep Korea (sr)

Korea Zinc Co

DIR: Zn-Rep Korea (r)

Lady Loretta Co Pty Ltd

DIR: Pb-Australia (m) Zn-Australia (m)

PAR: Pancontinental 51%, Outokumpu 49%

Leadville Mine Joint Venture (Black Cloud)

DIR: Pb-USA (m) Zn-USA (m)

PAR: Asarco 50%, Newnont 50%

Lepanto Consolidated Mining Co

DIR: Cu-Philippines (m )

Magma Copper Co

DIR: CU-USA (msr)

Magmont Uine Joint Venture

DIR: Pb-USA (m) Zn-USA (m)

PAR: Cominco (Cominco American) 50%, Oresser Industries 50%

Madras Aluminum Co Ltd

DIR: Al-India (rs)

Empresa Minera de Mantes Blancos SA

DIR: Cu-Chile (msr)

PAR: Anglo American S Africa 79%

Marcopper Mining Corp

DIR: Cu-Philippines (m)

PAR: Placer Dome 40%

Maricalum Mining Corp

DIR: Cu-Philippines (m)

The Marmon Group, Inc

SUB: Cerro Copper, Raura 60%

Martin Marietta Corp

SUB: leasing The Dalles, OR aluminum smelter to Northwest Aluminum

Marubeni Corp

SUB: Alouette ?%, PASAR 16%

Maxxam Group Inc

SUB: Kaiser

Mexico Desarrollo Industrial Minero

DIR: Cu-Mexico (ins) Pb-Mexico (msr) Zn-Mex

PAR: It4M 66%, Asarco 34%

SUB: Mexicana de Cobre 91%

Metaleurop

DIR: Pb-France (msr), FR Germany (sr), Spain (sr

Germany (r)

PAR: Preussag 51%, Imetal 15%

SUB: Huaron 17%, Pertusola 51%

Metall Mining Corp.

PAR: PIG 63%

co (mr)

Zn-France (mr , FR

SUB: Copper Range, Nunachiaq 25%, Teck 10%, Ok Tedi 9%, Afton JV 27%,

MIH 4%, El Mochito

see klG
Appendix Company Abbreviations ● 83

Mexicana de Cobre

MEXICO

Mexicana de Cobre SA

DIR: Cu-Mexico (ins)

PAR: Medimsa 91%, National Mine and Metallurgical Workers Union 9%

Metallgesellschaft AG

PAR: Allgemeine Verwaltungsges fur Industriebeteiligungen GmbH 25%,

Kuwait Government 10%, Kuwait Petroleum Co 10%, MIM 3%

SUB: Metall Mining 63%, Norddeutsche Affinerie 35%, Ruhr Zinc 50%,

Berzelius

MG

FR GERMANY

Metallurg.ie Hoboken-Overpelt

DIR: Cu-Belgium (sr) Pb-Belgium (sr) Zn-Belgium (r)

PAR: Acec-Union Miniere 71%, Pancontinental 4%

SUB: Union Mines 6X

MHO

BELGIUM

Cia Minera Milpo SA

DIR: Pb-Peru (m) Zn-Peru (m)

Milpo

PERU

HIM Holdings Ltd

OIR: Cu-Australia (msr) Pb-Australia (ins) Zn-Australia (m)

PAR: Asarco 19%, Preussag 4%, Netall Mining 4%

SUB: Asarco 25%, Nunachiaq 25%, Norddeutsche Affinerie 35%, Ruhr Zinc

50%, Teck 5%, MG 3%, Brittania

HIM

AUSTRALIA

Minero Peru

PERU

Empresa Minera del Peru SA

DIR: Cu-Peru (mr) Zn-Peru (r)

PAR: Government

Minerals and Resources Corp Ltd

PAR: Anglo American S Africa 40%, De Beers 21%

SUB: Inspiration Resources 5?% equity & 43% voting

Minorco

LUXEMBOURG

Mitsubishi Metal Corp

OIR: Cu-Japan (sr) Pb-Japan (msr) Zn-Japan (mr)

SUB: Chino JV 33%, Mitsubishi-Cominco 55%, Akita Zinc 5%, Onahama 49%,

Hachinohe 10%, Exalas Resources, Texas City 51%, Cox Creek 20%, Japan

Escondida 80%

Mitsubishi

JAPAN

Mitsubishi Cominco Smelting

OIR: Pb-Japan (sr)

PAR: Mitsubishi 55%, Cominco 45%

Mitsubishi -Cominco

JAPAN

Mitsui Mining and Smelting Co Ltd

OIR: Cu-Japan (r) Pb-Japan (msr), Peru (m) Zn-Japan (mr), Peru (m)

SUB: Cominco 3%, Akita Zinc 10%, Hachinohe 50%, Hibi Kyodo 64%, Intalco

11%, Eastalco 11%

t4itsui

JAPAN

Montana Resources

USA

Montana Resources Inc

SUB: Butte JV 50%

Montana Tunnels

OIR: Pb-USA (m) Zn-USA (m)

PAR: Pegasus Gold

Montana Tunnels

USA

Morenci JV

USA

Morenci Mine Joint Venture

DIR: CU-USA (m)

PAR: Phelps Oodge 85%, Sumitomo 15%

Mosal

NORWAY

Mosal Alumirtium SA

DIR: Al-Norway (s)

PAR: Elkem 50%, Alcoa 50%

MRN

BRAZIL

Mineracao Rio do Norte SA

OIR: Al-Brazil (m)

PAR: CVRO 46%, Alcan 24%, CBA 10%, Billiton 10%, Reynolds 5%, Norsk

Hydro 5%

SUB: Alunorte 26X
84 . Nonferrous Metals: Industry Structure

Mt HoIly JV

USA

NAAC

BRAZIL

Nabal co

AUSTRALIA

Nal co

INDIA

NANA

USA

Nani si v i k

CANADA

NBHH

AUSTRALIA

New Butte Mining

USA

New Zealand Al Smelters

NEW ZEALAND

Newmont

USA

Nicron

AUSTRALIA

Nippon Light Metal

JAPAN

Nippon Mining

JAPAN

Nippon Steel

JAPAN

Nissho Iwai

JAPAN

Nlttetsu

JAPAN

Nor Peru

PERU

Noranda

CANADA

Norddeutsche Affinerie

FR GERMANY

Mt Holly Smelter Joint Venture

DIR: Al-USA (S)

PAR: Alumax 73%, Clarendon Ltd 27%

Nippon Amazon Aluminum Co Ltd

PAR: Japanese Consortium

SUB: Albras 49%, Alunorte 7%

Nabalco Pty Ltd

PAR: Alusuisse 50%, Gove 50%

SUB: manages the Gove Project

National Aluminium Co Ltd

DIR: Al-India (mrs)

PAR: Government

NANA Development Corp (an Alaskan Native corp)

SUB: Red Dog JV (owns mineral rights)

Nanisivik Mines Ltd

DIR: Pb-Canada (m) Zn-Canada (m)

PAR: Mineral Resources International Ltd 82%

North Broken Hill Holdings Ltd

SUB: Pasminco 40%

New Butte Mining

DIR: Pb-USA (m) Zn-USA (m)

New Zealand Aluminium Smelters Ltd

DIR: Al-New Zealand (s)

PAR: thnalco 79%

Newnont Mining Corp

N

N

N

PAR:

SU8:

cron

SUB:

ppon

DIR:

PAR:

ppon

DiR:

SUB:

Nippon

SUB:

Nissho

SUB:

Cons Gold Fields 49%

SPCC 11%, Leadville JV 50%

Resources Ltd

Woodcutters JV 77%

Light Metal Co Ltd

Al-Japan (rs)

Alcan 50%

Mining

Cu-Japan (sr) Pb-Japan (msr) Zn-Japan (mr)

Akita Zinc 14%, Hachinohe 10%, Japan Escondida 20%

Steel

Nittetsu 28%

Iwai Corp

Kobe Alumina 35%, Dubai Aluminum 8%

Nittetsu Mining Co Ltd

PAR: Nippon Steel 28%

SUB: Hibi Kyodo 20%

Corp Minera Nor Peru

DIR: Cu-Peru (m) Pb-Peru (m) Zn-Peru (m)

PAR: Asarco 80%

Noranda Inc

DIR: Al-USA (S) Cu-Canada (msr) Pb-Canada (sr) Zn-Canada (mr)

PAR: Brascade Resources 46%

SUB: Falconbridge 50%, Brunswick 64%, Frialco 38%

Norddeutsche Affinerie AG

DIR: CU-FR Germany (sr) Pb-FR Germany (sr)

PAR: MG 35%, MIM 35%, Degussa 30%

SUB: Freeport Indonesia 4%
Appendix Company Abbreviations ● 8 5

Norsk Hydro

NORWAY

North Davao

PHILIPPINES

Northwest Aluminum

USA

Norzink

NORWAY

Nunachi aq

CANADA

Nuova Samim

ITALY

O’okiep

SOUTH AFR

OBK

GUINEA

CA

Ojos del Salado

CHILE

Ok Tedi

PAPUA NEW GUINEA

Olympic Dam JV

AUSTRALIA

Onahama

JAPAN

Ormet

USA

Outokumpu

FINLANO

Padaeng

THAILAND

Palabora

SOUTH AFRICA

Pancontinental

AUSTRALIA

Norsk Hydro

PAR: Government 51%

SUB: Hydro Aluminum, MRN 5%, Soral 50%

North Davao Mining Corp

DIR: Cu-Philippines (m)

Northwest Aluminum Corp

DIR: Al-USA (S)

PAR: leasing The Dalles, OR aluminum smelter from Martin Marietta

Norzink AS

DIR: Zn-Norway (r)

PAR: Boliden 50%, RTZ 50%

Nunachiaq Inc

PAR: Teck 50%, Metall Mining 25%, MIM 25%

SUB: Cominco 40%

Sta Azionaria Minero Metallurgic SPA

DIR: Pb-Italy (msr) Zn-Italy (mr)

PAR: Government (Ente Nazionae Idrocarburi-ENI) 51%, Snare 49%

O’okiep Copper Co Ltd

DIR: Cu-South Africa (ins)

PAR: GFSA 81%

Offices de Bauxites de Kindia

DIR: Al-Guinea (m)

PAR: Government

Compania Minera Ojos del Salado SA

DIR: Cu-Chile (m)

PAR: Phelps Dodge

Ok Tedi Miriing Ltd

DIR: CU-PNG (m)

PAR: BHP 30%, Amoco 30%, Government 15%, and through Star Mountains

Holdings (Metall Mining 9%, Degussa 9%, Deutsche Ges fur Wirtschaftliche

Zusamnenabeit 8%)

Olympic Dam Mine Joint Venture

DIR: Cu-Australia (msr)

PAR: Western Mining 51%, BP 49%

Onahama Smelting & Refining Co Ltd

DIR: Cu-Japan (sr)

PAR: Mitsubishi 49%, Oowa 30%, Furukawa 8%

Ormet Corp

DIR: Al-USA (rs)

PAR: Ohio River Associates Inc

Outokumpu Oy

DIR: Cu-Finland (msr) Pb-Finland (m) Zn-F~nland (mr)

PAR: Government (direct) 61%, Government (Kansanelakelaitos pension

plan) 14%

SUB: Tara Mines 75%, Lady Loretta 49%

Padaeng Industry Co Ltd

DIR: Zn-Thailand (r)

Palabora Mining Co Ltd

DIR: Cu-South Africa (msr)

PAR: RTZ 39%, Anglo American S Africa ?%, Oe Beers ?%

Pancontinental Mining Ltd

PAR: Asturienne 10%, MHO 4%

SUB: Lady Loretta 51%
&j ● Nonferrous Metals: Industry Structure

Paraibuna

BRAZIL

Parnasse

GREECE

PASAR

PHILIPPINES

Pasminco

AUSTRALIA

Pechiney

FRANCE

Pegasus Gold

USA

Penarroya

FRANCE

Penol es

MEXICO

Pertusol a

ITALY

Phelps Oodge

USA

Pine Point

CANAOA

Placer Dome

CANAOA

Polaris JV

CANAOA

Portland Smelter JV

AUSTRALIA

Preussag

FR GERMANY

Queensland Alumina

AUSTRALIA

Raura

PERU

Cia Paraibuna de Metais

DIR: Zn-Brazil (r)

PAR: Financiamentos e Participacoes (FIBASE) ?%

Bauxites Parnasse Mining Co

DIR: Al-Greece (m)

PAR: Eliopoulos-Kyriacopoulos Group

Philippine Associated Smelting and Refining Corp

DIR: Cu-Philippines (sr)

PAR: Government (National Development Corp) 40%, Marubeni 16%, Sumitomo

10%, C. Itoh 6%, Philippine copper producers (led by Atlas) 23%, World Bank

5%

Pasminco Ltd

DIR: Pb-Australia (msr), UK (s) Zn-Australia (mr), UK (r)

PAR: CRA 40%, NBHH 40%

SUB: Budelco 50%, ER&S 60%

Pechiney

DIR: Al-France (mrs), Netherlands (s)

SUB: Aluminum Greece 60%, Becancour 25%, Halco 10%, Queensland Alumina

20%, Tomago 35%, Alamsa 30%, Frialco 36%

Pegasus Gold Inc

SUB: Montana Tunnels

Ste Miniere et Metallurgique de Penarroya SA

SUB: merged with the lead and zinc assets of Preussag and renamed

Metaleurop in 1988

Industrial Penoles SA de CV

DIR: Pb-Mexico (msr) Zn-Mexico (mr)

SUB: Fresnillo 60%

Pertusola Sud SA

DIR: Zn-Italy (r)

PAR: Metaleurop 51%

Phelps Dodge Corp

DIR: CU-USA (msr)

SUB: Morenci JV 85%, Chino JV 67%, SPCC 16%, Black Mountain 45%, Ojos

del Salado

Pine Point Mines

PAR: Cominco 51%

SUB: Polaris JV 45%

Placer Dome Inc

SUB: Marcopper 40%, Real de Angeles 33%

Polaris Mine JV

DIR: Pb-Canada (m) Zn-Canada (m)

PAR: Cominco 55%, Pine Point 45%

Portland Smelter Joint Venture

OIR: Al-Australia (s)

PAR: Alcoa of Australia 45%, State of Victoria Government 35%, First

National Resource Trust 10%, China International Trust & Investment 10%

Preussag AG

SUB: Metaleurop 51%, MIM 4%

Queensland Alumina Ltd

DIR: Al-Australia (r)

PAR: Comalco 30%, Kaiser 28%, Alcan 21%, Pechiney 20%

Cia Minera Raura SA

DIR: Pb-Peru (m) Zn-Peru (m)

PAR: Marmon 60%
Appendix Company Abbreviations 87

Ravenswood Aluminum Corp

DIR: Al-USA (s)

PAR: Stanwich Partners

RavensWood

USA

Minera Real des Angeles

DIR: Pb-Hexico (m) Zn+lexico (m)

P A R: Friisco 33%, Placer Dome 33%, Government (Comision de Fomento

Real des Angeles

MEXICO

Hinero) 33%

Red Oog Mine Joint Venture

OIR: Pb-USA (m) pending Zn-USA (m) pending

PAR: Cominco (Cominco Alaska) (development and operations). NANA (owns

Red Dog JV

USA

mineral rights)

Renison Goldfields Consolidated Ltd

DIR: Cu-Australia (m)

PAR: Cons Gold Fields 46%

Renison Goldfields

AUSTRALIA

Revnolds Metals C O Reynolds

USA

..-, -

DIR: Al-USA (rs), Canada (s)

SUB: Alcasa 28%, Aluminum Oxide Stade 50%, Becancour

5%, Valesul 1%, Worsley 50%, Valco 10%, Hamburg

25%, Halco 6%, MRN

Aluminum 33%

Rio Algom Ltd

PAR: RTZ 53%

SUE: Highland Valley 34%

Rio Algom

CANAOA

Rio Tinto Minera Rio Tinto Minera SA

SPAIN OIR: Cu-Spain (sr)

PAR: RTZ 49%, Union Explosives 49%, Inversions Mobiliarias SA 2%

RMHK Trepca

DIR: Pb-Yugoslavia (msr) Zn-Yugoslavia (mr) RMHK Trepca

YUGOSLAVIA

PAR: 6okernment

Rudarsko-TopiOnicarski -8asen Bor

OIR: Cu-Yugoslavia (msr)

PAR: Government

RTB Bor

YUGOSLAVIA

RTZ Corp Plc

SUB: Kennecott, Anglesey Alumina 51%, CRA 49%,

39%. Rio Algom 53%, Rio Tinto Hinera 49%,

Creek JV 53%, Tsumeb 14%

RTZ

UK

Escondida 30%, Palabora

Norzink 50%, Somincor 49%, Greens

Ruhr Zink Gmbh

DIR: Zn-FR Germany (r)

PAR: MG 50%, HIM 50%

Ruhr Zink

FR GERHANY

Salzburger Aluminum GmbH

OIR: Al-Austria (s)

PAR: Alusuisse

Salzburger

AUSTRIA

Cia Minera San Ignacio de Morococha SA

DIR: Zn-Peru (m)

San Ignacio Morococha

PERU

Cia Minerales Santander lnc

OIR: Zn-Peru (m)

PAR: OocarbSA

Santander

PERU

Cia Hinera Santo Toribio SA

OIR: Pb-Peru (III) Zn-Peru (m)

Santo Toribio

PERU

Royal Outch/Shell Group

SU8: 8illiton

shell

NETHERLANDS

Shoua Aluminum Industries KK

OIR: Al-Japan (r)

PAR: ShowaOenkaKK

ShouaAluminum

JAPAN
/)8 ● Nonferrous Metals: Industry Structure

SIEROMCO

SIERRA LEONE

Semincor

PORTUGAL

Soral

NORWAY

Southwire

USA

SPCC

USA

Star-Phoenix Mining

USA

Sumitomo

JAPAN

Sumitomo Aluminum

JAPAN

Sunnyside JV

USA

Sural

VENEZUELA

Suralco

SURINAME

Suralco-Billiton J V

SURINAME

Tara Hines

IRELANO

Teck

CANAOA

Texas City

USA

Toho Zinc

JAPAN

Tomago

AUSTRALIA

Sierra Leone Ore & Metals Co

DIR: Al-Sierra Leone (m)

PAR: Alusuisse

Sociedade Mineira de Neves Corvo SARL

OIR: Cu-Portugal (m)

PAR: RTZ 49%

SorNorge Aluminium A/S

OIR: Al-Norway (s)

PAR: Norsk Hydro 50%, Alusuisse 50%

Southwire Co

OIR: Al-USA (S) CU-USA (r)

SUB: Oubai Aluminum 8%, Cox Creek 20%

Southern Peru Copper Corp

OIR: Cu-Peru (ins)

PAR: Asarco 52%, Cerro Copper 21%, Phelps Oodge 16%, Newmont 11%

SUB: Cuajone JV 91%

Star-Phoenix Mining

DIR: Pb-USA (m) Zn-USA (m)

Sumitomo Metal Mining Co Ltd

OIR: Cu-Japan (sr) Pb-Japan (sr) Zn-Japan (r)

SUB: Morenci JV 15%, PASAR 10%, Akita Zinc 14%

Sumitomo Aluminum Smelting Co Ltd

OIR: Al-Japan (r)

Sunnyside Mine Joint Venture

OIR: Pb-USA (m) Zn-USA (m)

PAR: Alta Bay 65%, Washington Mining 35%

Suramericana de Aleaciones Laminados

SUB: Alusur 20%

Suriname Aluminum Co

OIR: Al-Suriname (ins)

PAR: Alcoa

SUB: Suralco-Billiton JV mine 24% & refinery 55%

Suralco-Billiton Joint Venture

DIR: Al-Suriname (mr)

PAR: Onverdacht mine - Billiton 76%, Suralco 24%; Paranam refinery -

Bill iton 45%, Suralco 55%

Tara Mines Ltd

OIR: Pb-Ireland (m) Zn-Ireland (m)

PAR: Outukumpu 75%, Government 25%

Teck Corp

PAR: Metall Mining 10%, MIM 5%

SUB: Nunachiaq 50%, Highland Valley 14%, Afton JV 73%. Oaniel’s Harbor

JV 63%

Texas City Copper

OIR: CU-USA (s) pending

PAR: Mitsubishi 51%, 4 other Japanese companies

Toho Zinc Co Ltd

OIR: Pb-Japan (sr) Zn-Japan (r)

SUB: Akita Zinc 5%, Hachinohe 5%

Tomago Aluminium Co Pty Ltd

OIR: A1-Australla (s)

PAR: Gove 35%, Pechiney 35%, VAW 12% “
Appendix C-Company Abbreviations ● 89

Touissit

MOROCCO

Trel1eborg

SWEDEN

‘i

Tsumeb

NAMIBIA

Union Explosives

SPAIN

Union Mines

USA

Union Zinc

USA

Valco

GHANA

Valesul

BRAZIL

Vana1co

USA

VAW

FR GERMANY

Venal urn

VENEZUELA

Vexxal

VENEZUELA

Vieille-Montagne

BELGIUM

Volcan

PERU

Votarantim

BRAZIL

Washington Mining

USA

Western Mining

AUSTRALIA

Westmin

CANADA

Cie Miniere de Touissit

DIR: Pb-Morocco (m)

PAR: Asturienne 50%, Government 20%, Matran 15%

SUB: Zellidja ?%

Trelleborg AB

PAR: Edward & Peter Bronfman (Canada)

SUB: Boliden 68%, Falconbridge 50%

Tsumeb Corp Ltd

DIR: Pb-Namibia (msr) Zn-Namibia (mr)

PAR: GFSA 76%, RTZ 14%

Union Explosives Rio Tinto SA

SUB: Rio Tinto Minera 49%

Union Mines Inc.

PAR: Acec-Union Miniere 93%, MHO 6%

SUB: Union Zinc

Union Zinc Inc.

DIR: Zn-USA (m)

PAR: Union Mines

SUB: Jersey Miniere

Volta Aluminum Co Ltd

DIR: Al-Ghana (s)

PAR: Kaiser 90%, Ri

Valesul Aluminio SA

DIR: Al-Brazil (s)

PAR: CVRD 55%, Bil”

Vanalco Inc

DIR: Al-USA (S)

PAR: Bay Resources

ynolds 10%

iton 45%, Reynolds 1%

Corp

Vereingte Aluminium-Werke AG

DIR: A1-FR Germany (rs)

PAR: VIAG Aktiengesellschaft Bonn-Berlin (Government-Kreditanstalt fur

Wiederaufbau) 60%

SUB: Aluminum Oxide Stade 50%, Halco 10%, Tomago 12%, Alouette ?%,

Frialco 5%, Hamburg Aluminum 33%

Industria Venezolana de Aluminio

OIR: Al-Venezuela (s)

PAR: CVG 80%, Japanese Consortium 20%

Vexxal

DIR: Al-Venezuela (s) pending

Ste des Mines et Fonderies de Zinc de la Vieille-Montagne SA

OIR: Pb-Sweden (m) Zn-8elgium (r), Sweden (m), France (r)

PAR: Acec-Union Miniere 96%

Volcan Compania Minera SA

OIR: Pb-Peru (m) Zn-Peru (m)

SA Industrial Votarantim

SUB: CMM, CBA 80%

Washington Mining

SUB: Sunnyside JV 35%

Western Mining Corp Holdings Ltd

SUB: Alcoa of Australia 44%, Olympic Oam JV 51%

Westmin Resources Ltd

DIR: Pb-Canada (m) Zn-Canada (m)

PAR: Brascade Resources 62%
90 ● Nonferrous Metals: Industry Structure

Woodcutters JV Woodcutters Mine Joint Venture

Australia Dill: Pb-Austral ia (m) Zn-Australia (m)

PAR: Nicron 77%, Lachlan Resources NL 13%, Petrocarb Exploration NL 11%

World Bank International Finance Corp

USA SUB: Buenaventura 5%, Escondida 3%, PASAR 5%

Worsley Worsley Alumina Pty Ltd

AUSTRALIA DIR: Al-Australia (mr)

PAR: Reynolds 50%, Billiton 38%, Kobe Alumina 10%

Young Poong Young Poong Mining Co Ltd

REP KOREA DIR: Pb-Rep Korea (m) Zn

ZCA Zinc Corp of America

USA DIR: Zn-USA (mr)

PAR: Horsehead

ZCCM Zambia Consolidated Copper M

ZAMBIA DIR: Cu-Zambia (msr)

PAR: Government

Zellidja Societe des Mines de Zellidja

MOROCCO DIR: Pb-Morocco (sr)

PAR: Touissit ?%

Zinc South Africa Zinc Corp of South Africa

SOUTH AFRICA DIR: Zn-South Africa (r)

PAR: GFSA 65%

SOURCE: Office of Technology Assessment, 1990

-Rep Korea (mr)

nes Ltd