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SUP'S' rOCKPILE DISPOSAL BILLS

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GOVERNMEN1

StorageKSU LIBRARIES 

HEARING

BEFORE A.

SUBCOMMITTEE OF THE

COMMITTEE ON ARMED SERVICES

UNITED STATES SENATE

EIGHTY-NINTH CONGRESS

SECOND SESSION

ru ON

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H.R. 13371, PHLOGOPITE MICA

0 H.R. 13373, MUSCOVITE MICA

H.R. 13578, RHODIUM 

'43

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H.R. 13579, THORIUM 1-1

rg H.R. 13580, AMOSITE ASBESTOS

H.R. 13663, RUTHENIUM

H.R. 13774, VANADIUM

H.R. 13365, METALLURGICAL GRADE CHROMITE

H.R. 13367, ACID GRADE FLUORSPAR

H.R. 13368, BISMUTH

MAY 4, 1966

Printed for the use of the Committee on Armed Services

U.S. GOVERNMENT PRINTING OFFICE

62-669 WASHINGTON : 1966
COMMITTEE ON ARMED SERVICES

RICHARD B. RUSSELL, Georgia, Chairman

JOHN STENNIS, Mississippi

STUART SYMINGTON, Missouri

HENRY M. JACKSON, Washington

SAM J. ERVIN, JR., North Carolina

HOWARD W. CANNON, Nevada

ROBERT C. BYRD, West Virginia

STEPHEN M. YOUNG, Ohio

DANIEL K. INOUYE, Hawaii

THOMAS J. McINTYRE, New Hampshire

DANIEL B. BREWSTER, Maryland

HARRY F. BYRD, In., Virginia

WILLIAM H. DARDEN, Chief of Staff

CHARLES B. KIRBOW, Chief Clerk

LEVERETT SALTONSTALL, Massachus, tt,

MARGARET CHASE SMITH, Maine

STROM THURMOND, South Carolina

JACK MILLER, Iowa

JOHN G. TOWER, Texas

SUBCOMMITTEE ON THE NATIONAL STOCKPILE AND NAVAL PETitOLEUM RESE V 6

STUART SYMINGTON, Missouri, Chairman

HOWARD W. CANNON, Nevada JACK MILLER, Iowa

STEPHEN M. YOUNG, Ohio JOHN G. TOWER, Texas

DANIEL K. INOUYE, Hawaii

GORDON A. NEASE, Professional Staff

TI
CONTENTS

Statements: Page

H R. 13365 2

Joe E. Moody, Deputy Administrator, General Services Administration 

H.R. 13367 

Joe E. Moody, Deputy Administrator, General Services Administration 

H.R. 13368 

Joe E. Moody, Deputy Administrator, General Services Administration 

H.R. 13371 

Joe E. Moody, Deputy Administrator, General Services Administration 

Mica Industry Association 

James Romeo, Assistant Commissioner, Defense Materials

Service, GSA 

H.R. 13373 

Joe E. Moody, Deputy Administrator, General Services Administration 

Mica Industry Association 

James Romeo, Assistant Commissioner, Defense Materials

Service, GSA 

H.R. 13578 

Joe E. Moody, Deputy Administrator,

tration 

H.R. 13579 

Joe E. Moody, Deputy Administrator,

tration 

H.R. 13580 

Joe E. Moody, Deputy Administrator,

tration 

H.R. 13663 

Joe E. Moody, Deputy Administrator,

tration 

H.R. 13774 

Joe E. Moody, Deputy Administrator,

tration 

General Services AdminisGeneral Services AdminisGeneral Services AdminisGeneral Services AdminisGeneral Services Adminis3

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STOCKPILE DISPOSAL BILLS

WEDNESDAY, MAY 4, 1966

U.S. SENATE,

SUBCOMMITTEE ON THE NATIONAL STOCKPILE

AND NAVAL PETROLEUM RESERVES OF THE

COMMITTEE ON ARMED SERVICES,

Washington, D.C.

The National Stockpile Subcommittee (composed of Senators

Symington (chairman), Cannon, Young of Ohio, Inouye, Miller, and

'Tower), appointed to hold such meetings and briefings as are necessary

to maintain familiarity with the operation of the program for the

stockpiling of strategic and critical materials necessary for the common

defense, met in open session, pursuant to notice, in room 212, Old

'Senate Office Building, at 10:30 a.m.

Present: Senator Symington.

Also present: Gordon A. Nease, professional staff member; Charles

B. Kirbow, chief clerk; and Herbert S. Atkinson, assistant chief clerk.

Senator SYMINGTON. The meeting will come to order. Because

the Preparedness Subcommittee is meeting this morning and because

of the funeral of our late beloved colleague, Senator McNamara,

subcommittee members may not be able to attend this meeting.

However, we have the proxies of all the members of the subcommittee.

We have before us this morning for consideration 10 stockpile bills

involving different commodities. All of them relate to the disposal

of surplus strategic and critical materials from the national stockpile

and the supplemental stockpile. All are administration proposals and

have been passed by the House of Representatives, although two of

them have been amended. These bills are as follows:

H.R. 13365, metallurgical grade chromite.

H.R. 13367, acid grade fluorspar.

H.R. 13368, bismuth.

H.R. 13371, phlogopite mica.

H.R. 13373, muscovite mica.

H.R. 13578, rhodium.

H.R. 13579, thorium.

H.R. 13580, am.osite asbestos.

H.R. 13663, ruthenium.

H.R. 13774, vanadium.

Inasmuch as all these materials are in surplus, I do not believe that

there would be any objection to the approval of the legislation which

has been passed in the House, and which will be taken up in the full

,committee tomorrow. Industry is anxious to get some of these

materials at the earliest possible time. I would like to recognize the

urgent request with respect to vanadium made to me by Mr. William

White, of the United States Steel Corp., and by others. Senator

1
2 STOCKPILE DISPOSAL BILLS

Cannon stated that he would be glad to report these bills to the full

committee tomorrow inasmuch as I will be out of the city on a

longstanding engagement.

The subcommittee is unaware of any opposition to eight of these

measures as they passed the House. However, the Mica Industry

Association has registered objection to the two bills relating to mica.

This objection will be called to the attention of the subcommittee in

the proper order. There is before you a brief résumé of each bill,

which I believe may be helpful to you in following these various bills.

We are privileged to welcome to the committee Mr. Joe E. Moody,

the Acting Administrator of the General Services Administration.

Is Mr. Lawrence from the office of Emergency Planning with you?

I understood he was coming. Mr. Moody is, in addition to being a

very able public servant, one of my constituents, and I am always

very glad to see him.

H.R. 13365

Senator SYMINGTON. The first bill is H.R. 13365. This bill would

authorize the disposal of approximately 885,000 short dry tons of

metallurgical grade chromite ore from the national stockpile.

(The bill referred to follows:)

[H.R. 13365, 89th Cong., 2d sess.]

AN ACT To authorize the disposal of metallurgical grade chromite from the national stockpile and the

supplemental stockpile

Be it enacted by the Senate and House of Representatives of the United States of

America in Congress assembled, That the Administrator of General Services is

hereby authorized to dispose of, by negotiation or otherwise, approximately

eight hundred eighty-five thousand short dry tons of metallurgical grade chromite

ore now held in the national stockpile established pursuant to the Strategic and

Critical Materials Stock Piling Act (50 U.S.C. 98-98h) and the supplemental

stockpile established pursuant to section 104 (b) of the Agricultural Trade Development and Assistance Act of 1954, as amended (7 U.S.C. 1704(b)). Such

disposition may be made without regard to the provisions of section 3 of the

Strategic and Critical Materials Stock Piling Act: Provided, That the time and

method of disposition shall be fixed with due regard to the protection of the

United States against avoidable loss and the protection of producers, processors,

and consumers against avoidable disruption of their usual markets.

Senator SYMINGTON. At present the total inventory of this metal

is 6,244,712 short dry tons, with a stockpile objective of 2,970,000

short dry tons, for a total excess of 3,274,712. The administration's

proposal would have permitted the disposal of 2,300,000 short dry

tons of this metal, of which only 885,000 short dry tons are in ore

form. The House amended the bill to permit disposal of only that

in ore form, since it was believed unwise to authorize the disposal

of ferro-chromite, which comprised the balance of the original proposal, as such a release would be completely disruptive to the market.

No objection to this has been received from the interested Government agencies.

The average acquisition cost of chromite ores and concentrates

was $50.55 per ton and the current market value is about $30 per ton.

You may proceed, Mr. Moody.
STOCKPILE DISPOSAL BILLS 3

STATEMENT OF JOE E. MOODY, DEPUTY ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION; ACCOMPANIED BY JAMES

ROMEO AND GEORGE CASTO, ASSISTANT COMMISSIONERS,

DEFENSE MATERIALS SERVICE

Mr. MOODY. Mr. Chairman, my name is Joe E. Moody, I am the

Deputy Administrator of GSA, and I appear here today on behalf

of our Administrator, Mr. Lawson B. Knott, Jr., who would have

testified at today's hearings personally had it not been for the fact

that he is hospitalized and unable to do so. I want to thank you for

the opportunity to appear before your subcommittee for the purpose

of expressing the views of GSA on 10 bills dealing with the disposal

of excess materials from the stockpile. I am accompanied by Mr.

James Romeo and Mr. George Casto, who are also substituting for

Mr. John Harlan, the Commissioner of our Defense Materials Service.

Mr. Harlan is the GSA official primarily responsible for, and most

knowledgeable about, our stockpile program but is unable to accompany me this morning because he had a prior commitment to testify

before Subcommittee No. 1 of the House Armed Services Committee

on seven bills which would authorize disposal of seven additional excess

stockpile materials. Mr. Romeo and Mr. Casto, are Assistant Commissioners of Defense Materials Service and have been closely associated with the stockpile program for many years, and I am sure they

will be able to supply any detailed or technical information, concerning

the materials covered by the pending bills, which I may be unable to

supply.

Turning specifically to the bills, Mr. Chairman, GSA favors enactment of all the proposals as they appear before you. We have developed orderly disposal programs for each of the excess materials.

We have carefully examined all pertinent factors and have consulted

with the several Government agencies concerned. In turn, those

agencies have consulted with affected governments and industry to

the extent they considered necessary. In addition, GSA has held

meetings with industry where necessary, and has worked out the

specific sales techniques to be employed with respect to each one of

these materials.

H.R. 13365, as amended, would authorize disposal of 885,000

short dry tons of metallurgical grade chromite ore. The bill as

introduced covered 2.3 million short dry tons, consisting of 885,000

tons of chromite ore and 1,415,000 tons of ferro-chromium.

Metallurgical grade chromite ore is an important raw material to

our steel industry. The ore is converted to ferro-chromium and

chromium metal used to produce alloy steels.

During hearings before Subcommittee No. 1 of the House Armed

Services Committee, industry representatives, while not objecting to

disposal of chromite ore testified that there was no need in the

present market for ferro-Chromium. In recognition of this situation

our disposal plan did not contemplate sale of ferro-chromium at the

present time. We planned to confine initial disposals to ore but we

believed that authority to sell the full 2.3 million tons would have

enabled us to formulate a plan to sell ferro-chromium at such future

date as market conditions permitted. However, enactment of H.R.

13365 as passed by the House will enable initiation of an orderly

chromite-disposal program.

(In executive session, May 5, 1966, the full committee voted to

report H.R. 13365 without amendment, as covered by S. Rept. 1143.)
4 STOCKPILE DISPOSAL BILLS

H.R. 13367

Senator SYMINGTON. This measure as it passed the House would

authorize the disposal of approximately 32,000 short dry tons of acid

grade fluorspar in lump form.

(The bill referred to follows:)

[H.R. 13367, 89th Cong., 2d sess.]

AN ACT To authorize the disposal of acid grade fluorspar from the national stockpile

Be it enacted by the Senate and House of Representatives of the United States of

America in Congress assembled, That the Administrator of General Services is

hereby authorized to dispose of, by negotiation or otherwise, approximately

thirty-two thousand short dry tons of acid grade fluorspar in lump form now

held in the national stockpile established pursuant to the Strategic and Critical

Materials Stock Piling Act (50 U.S.C. 98-98h). Such disposition may be made

without regard to the provisions of section 3 of the Strategic and Critical Materials

Stock Piling Act: Provided, That the time and method of disposition shall be

fixed with due regard to the protection of the United States against avoidable

loss and the protection of producers, processors, and consumers against avoidable

disruption of their usual markets.

Senator SYMINGTON. The original proposal as submitted to the

Congress would have permitted the disposal of 236,773 short dry tons

of acid grade fluorspar. In amending the bill, the House report

states:

During the hearings, the subcommittee became convinced that the domestic

fluorspar industry was suffering a severe economic strain. Mere authorization

for disposal would tend to further depress the domestic industry. There was

industry consensus, however, that the release of acid grade fluorspar in lump

form would satisfy the current shortage of this type of fluorspar in the domestic

market and would not upset the domestic fluorspar industry.

The subcommittee has received no objections to the House-passed

bill.

The total inventory of acid grade fluorspar held by GSA now stands

at 1,144,090 short dry tons. The present stockpile objective is

540,000 short dry tons and, in addition, 350,000 short dry tons have

been credited to the metallurgical grade fluorspar objective. The

excess of 254,000 short dry tons consists of 17,317 short dry tons in

the DPA inventory and 236,773 short dry tons covered by the original

proposal. Most of the material in the stockpile is a concentrate

which has been finely ground. The average acquisition cost of the

stockpile inventories of acid grade fluorspar was $46.69 a short dry

ton. The current market price is about $45 a short dry ton.

Mr. MOODY. H.R. 13367 would authorize disposal of approximately 32,000 short dry tons of acid grade fluorspar in lumpy form.

Acid grade fluorspar is primarily used to make hydrofluoric acid,

which, in turn, is used principally in the production of aviation gasoline

and synthetic cryolite, which I understand is used in the production

of aluminum.

The situation with respect to this bill, Mr. Chairman, is similar to

chromite. GSA originally proposed disposal of 236,773 short dry

tons of acid grade fluorspar.

During hearings the House subcommittee heard the domestic mining

industry oppose the original bill on the grounds that the industry has

considerable idle capacity; that it is only now beginning to regain some

of the losses in revenues it had experienced in recent years; that competition from imported material was becoming more and more severe;
STOCKPILE DISPOSAL BILLS 5

and that disposals from the stockpile might have serious consequences

upon an industry which is by and large situated in Appalachia.

• GSA proposed to carry out its fluorspar disposal program with careful regard for possible adverse impact on the industry. We planned

to confine initial disposals to the lumpy form of excess acid grade

fluorspar which would not be competitive with normal markets. Use

of this type of fluorspar is confined to metallurgical users the steel

industry—which actually is in need of this material. The bill as

passed by the House would limit our authority to the sale of approximately 32,000 tons representing our total holdings of lumpy type

excess fluorspar. Here, again, from a practical standpoint, enactment

of H.R. 13367 will enable us to begin current disposal of the lumpy

acid grade fluorspar for which there is an unfilled demand.

(In executive session on May 5, 1966, the full committee voted to

report H.R. 13367, without amendment, as covered by S. Rept. 1144.)

H.R. 13368

Senator SYMINGTON. The next bill is H.R. 13368.

(The bill referred to follows:)

[H.R. 13368, 89th Cong., 2d sess.]

AN ACT To authorize the disposal of bismuth from the national stockpile and the supplemental stockpile

Be it enacted by the Senate and House of Representatives of the United States of

America in Congress assembled, That the Administrator of General Services is

hereby authorized to dispose of, by negotiation or otherwise, approximately two

hundred and twelve thousand three hundred pounds of bismuth now held in the

national stockpile established pursuant to the Strategic and Critical Materials

Stock Piling Act (50 U.S.C. 98-98h) and the supplemental stockpile established

pursuant to section 104(b) of the Agricultural Trade Development and Assistance

Act of 1954, as amended (7 U.S.C. 1704(b)). Such disposition may be made

without regard to the provisions of section 3 of the Strategic and Critical Materials

Stock Piling Act: Provided, That the time and method of disposition shall be

fixed with due regard to the protection of the United States against avoidable

loss and the protection of producers, processors, and consumers against avoidable

disruption of their usual markets.

Senator SYMINGTON. The total inventory of bismuth held by

GSA in the national supplemental stockpile now stands at 3,812,315

pounds. The present stockpile objective is 3,600,000 pounds. The

excess of approximately 212,300 pounds is covered by H.R. 13368.

The average acquisition cost of the stockpile inventories of bismuth

was $2.134 per pound. The current market price is approximately

$4 per pound.

Mr. MOODY. H.R. 13368 covers approximately 212,300 pounds of

bismuth. Bismuth is a metal used primarily for low melting alloys

in a number of safety devices such as automatic sprinkler systems and.

firedoor releases. Another major use is as an ingredient in the manufacture of medicinal compounds.

The excess of 212,300 pounds is a relatively small quantity. The

Atomic Energy Commission needs all of this material and we plan to

limit its release to the AEC.

(In executive session on May 5, 1966, the full committee voted to

report H.R. 13368 without amendment, as covered by S. Rept. No.

1145.)

H.R. 13371—H.R. 13373

Senator SYMINGTON. It is believed desirable to handle these two

related bills simultaneously. H.R. 13371 would permit the disposal

62-668-66-----2
6 STOCKPILE DISPOSAL BILLS

of 3,765,000 pounds of phlogopite mica splittings and approximately

205,640 pounds of phlogopite block mica from the national stockpile

and the supplemental stockpile. H.R. 13373 would permit the disposal of 6,772,000 pounds of muscovite block mica, approximately

628,000 pounds of muscovite film mica, and approximately 22,666,000

pounds of muscovite mica splittings. All the materials described in

these two measures are in excess of the stockpile objectives.

(The bills referred to follow:)

[H.R. 13371, 89th Cong., 2d sess.]

AN ACT To authorize the disposal of phlogopite mica from the national stockpile and the supplemental

stockpile

Be it enacted by the Senate and House of Representatives of the United States of

America in Congress assembled, That the Administrator of General Services is

hereby authorized to dispose of, by negotiation or otherwise, approximately three

million seven hundred and sixty-five thousand pounds of phlogopite mica splittings

and approximately two hundred and five thousand six hundred and forty pounds

of phlogopite block mica now held in the national stockpile established pursuant

to the Strategic and Critical Materials Stock Piling Act (50 U.S.C. 98-98h) and

the supplemental stockpile established pursuant to section 104(b) of the Agricultural Trade Development and Assistance Act of 1954, as amended (7 U.S.C.

1704(b)). Such disposition may be made without regard to the provisions of

section 3 of the Strategic and Critical Materials Stock Piling Act: Provided, That

the time and method of disposition shall be fixed with due regard to the protection

of the United States against avoidable loss and the protection of producers,

processors, and consumers against avoidable disruption of their usual markets.

[H.R. 13373, 89th Cong., 2d sess.]

AN ACT To authorize the disposal of muscovite mica from the national stockpile and the supplemental

stockpile

Be it enacted by the Senate and House of Representatives of the United States of

America in Congress assembled, That the Administrator of General Services is

hereby authorized to dispose of, by negotiation or otherwise, approximately six

million seven hundred and seventy-two thousand pounds of muscovite block

mica, approximately five hundred and twenty-eight thousand pounds of muscovite

film mica, and approximately twenty-two million six hundred and sixty-six

thousand pounds of muscovite mica splittings now held in the national stockpile

established pursuant to the Strategic and Critical Materials Stock Piling Act

(50 U.S.C. 98-98h) and the supplemental stockpile established pursuant to section

104(b) of the Agricultural Trade Development and Assistance Act of 1954, as

amended (7 U.S.C. 1704(b)). Such disposition may be made without regard to

the provisions of section 3 of the Strategic and Critical Materials Stock Piling

Act: Provided, That the time and method of disposition shall be fixed with due

regard to the protection of the United States against avoidable loss and the

protection of producers, processors, and consumers against avoidable disruption

of their usual markets.

Senator SYMINGTON. The total inventory of phlogopite mica—

block and splittings—held by GSA is 5,288,239 pounds. The present

stockpile objective is 1,317,000 pounds. The excess of approximately 3,970,000 pounds is covered by H.R. 13371.

The average acquisition cost of the phlogopite mica planned for

disposal was $1.36 per pound for the block and $1.06 per pound for

the splittings. The approximate current prices for the block range

from $0.50 per pound to $1.90 per pound, duty paid. There are no

published prices for splittings.

The total inventory of muscovite mica—block, film, and splittings—

held by GSA is 66,581,281 pounds. The present stockpile objective

is 30,200,000 pounds. The excess of 36,381,281 pounds consists of

29,966,000 covered by H.R. 13373 and the remaining excess is from

the Defense Production Act inventory.
STOCKPILE DISPOSAL BILLS 7

The approximate acquisition price per pound of muscovite block

mica in the national and supplemental stockpiles was $2.60; for film,

$5.60; for splittings, $1.04. The present market value per pound,

depending on quality and grade, range from $2 to $9 per block, $1

to $12 for film, and is $1.20 for splittings.

Mr. MooDY. H.R. 13371 would authorize disposal of approximately 3,971,000 pounds of phlogopite mica.

Phlogopite mica is used primarily as insulating material in soldering

irons and high temperature coils, transformers, and heater elements.

The excess quantity is rather large in terms of current consumption.

Under present market conditions, disposal will require many years.

Enactment of this bill will permit us to get underway at an early date

in liquidating this asset which is excess to stockpile objectives.

H.R. 13373 covers approximately 6,772,000 pounds of muscovite

block mica, approximately 528,000 pounds of muscovite mica film,

and approximately 22,666,000 pounds of muscovite mica splittings.

Muscovite mica covered by this bill is used primarily for electrical

insulation purposes. It is used in items such as electronic tubes, as

insulation in motors, and other electrical apparatus.

Disposal of this large quantity of excess muscovite mica would extend over a long term. We believe we should begin to liquidate the

Government's investment in this unneeded material in an orderly

manner as soon as possible.

Senator SYMINGTON. Subsequent to the passage of these bills by

the House, this subcommittee received a statement from the Mica

Industry Association opposing the passage of both bills, which will

be made a part of the record at this point.,

STATEMENT OF MICA INDUSTRY ASSOCIATION REGARDING PROPOSED MICA

STOCKPILE DISPOSAL

The Mica Industry Association, which handles the bulk of the mica imported

annually on a basis of either tonnage or dollars, wishes to make known its vigorous

opposition to the release of any mica from existing stockpile inventories currently

declared to be surplus. This position is dictated by three considerations:

(1) Concern with the strategic needs of industry (particularly electronic

and electrical) in face of developing demands from the Defense Establishment.

(2) Awareness of the economic impact of such disposal on two producing

nations (India and Brazil) whose continued economic well-being is currently

of essential importance to our Government.

(3) The threat to the economic existence of the small but highly essential

group of importers who are mica specialists, representing unique skills to

which the Government itself turned at the time of the Korean conflict in order

to acquire the original mica stockpile. Disposal at this time threatens to

destroy them.

These principal reasons can be elaborated on; however, we believe that a

concise statement of basic reasons will make the logic of the associations' position

apparent and will sustain its belief that S. 3025 should not be approved without

further comprehensive review. We would respectfully point out that the potential dollar reclamation at this time cannot possible justify the implications

to national defense and to international relations, nor the threat to the mica

importers' existence.

The administration's bill now proposed, as interpreted by Government officials,

implies a disposal plan for mica which would extend over a period of 20 years.

Based on amounts of mica mentioned in the legislation an approximate value

of $2,800,000 of mica per year will be released—a catastropic 46 percent by

value of the current average year's imports of mica.
STOCKPILE DISPOSAL BILLS

However, a very important aspect of any disposal plan for mica lies in the

intricate makeup of our stockpile of mica qualitatively, as related to the actual

present usuage by industry. Most of the stockpile has been acquired in higher

grades and 'qualities than those actually needed by civilian industry. It would

therefore, seem to those who know and understand the flow of mica supplies

that, if and when a release should occur, the possible purchases would be concentrated on qualities and grades in the stockpile which are suited more nearly

to industry's usual specifications. In such an event the leverage of these limited

sales would exert a disporportionate, adverse effect on the existing sources of

supply. This effect might be so serious as to jeopardize continued mining of

mica.

To cite just one illustration: if, as we were informed by Government sources,

the intended annual rate of release of block mica would be geared to 25 percent

of the total yearly intended release of 1,500,000 pounds, that would amount to

375,000 pounds which is approximately 15 percent of the statistical consumption

of block mica in the United States during 1964. If however, these 375,000

pounds will consist mostly of grades 6, 5, and 5 in A/B and heavy stained qualities,

it may well amount to anywhere from 50 to 70 percent of the current consumption

of these types.

• Should this be permitted to occur it would knock out of the market almost

immediately the Brazilian mica-producing industry, and deprive us of sorely

needed production facilities to feed our continuing requirements for the electronic

and related defense industries. Many of the producers of raw mica in Brazil

and India have been engaged for several years in a struggle for survival in what

appears to be a steadily dwindling market. In both countries, the mica producers

only now have begun to recover from the economic shook caused by a sudden

stoppage of U.S. stockpiling to which these producers had been geared at the

urgent insistence of the U.S. Government. In India alone, several hundred

thousand people at the lowest level of economic status, with incomes of less than

$100 per year, depend on mica for their livelihood. In Brazil a similar situation

exists, although the number of people involved is somevvhat less. s

We lath-to understand a policy which would cause a release of excess stockpile

mica to bring in $2 or $3 million a year and yet bring with it destruction of an

Industry in two friendly countries where we pour billions of dollars in economic

aid at the present time.

Even if this be less than sufficient reason to eliminate mica from the list of

materials which our Government intends to release from its stockpiles, we would

urge that the Congress be extremely cautious in taking a step which will have

highly deleterious effects on our own electronic and related national defense

industries. The proposed plan will disrupt so completely a delicately balanced

and long-nurtured network of supplies as to risk paralysis at the worst possible

moment. It also should be borne in mind that, in large measure, the mica in

the stockpile is not geared to the requirements and specifications of current

industry usage. This makes us even more dependent on traditional sources of

supply and their vast labor resources which prepare mica to the ever varying

industrial specifications, at wage rates that cannot be matched even if the hand

skills could.

Lastly, there is a group of mica importers which, for the past three decades, has

specialized in coordinating the complex network of world mica supplies for the

benefit of U.S. Government requirements, as well as for those of industry. All

of these importers are small business firms which depend on a normal flow of mica

trading for their subsistence. While this assuredly is not a major factor we feel

that some consideration should be given to the highly adverse effects that stockpile release will have on this small group of professional specialists who at best

participate in a $6 to $8 million total market for mica.

Summarized concisely, the proposal for mica stockpile disposal, in terms of a

projected 20-year marketing plan, shows that—

Muscovite block offering will be 40 percent of total annual usage based

on 1964 figures;

Muscovite splittings offered will equal 30 percent of total annual usage on

the same base; and

Muscovite film offerings will exceed the total 1964 usage. (See table I,

P. 9.)

When it is realized that the total mica market has an annual value of between

$fl and $7 million and that it now is shared by 15 to 20 importers, it readily can

be seen that they are in no position to compete with 'auctioned" material,

dumped on the open market. In effect, the Government is taking an action

which will insure at last one-half of these small specialists being forced out of

business.
STOCKPILE DISPOSAL BILLS 9

The Mica Industry Association can see no alternative position than definite

,opposition to mica stockpile disposal as undesirable, disruptive, and not in the

national interest, under existing international and domestic conditions.

TABLE 1.—Mica stockpile inventories, November 1965

[In thousands]

Muscovite block:

National stockpile 

Defense Production Act 

Supplemental stockpile 

Total 

Muscovite film:

National stockpile 

Defense Production Act 

Supplemental stockpile 

Total 

Muscovite splittings:

National stockpile 

Defense Production Act 

Supplemental stockpile 

Total 

Cost Pounds

U.S. yearly consumption

(in pounds)

1962 1963 1964

$27,112 11,401 

40,689 6,416 

6,728 1,960 

74, 529 19,777 2, 700 2, 194 2, 528

9, 05$ 1,719 

633 102 

1,063 116 

10, 754 1,937 84 68 78

40,598 40,040 

6, 226 4, 826 

46, 824 44, 866 6,382 6, 406 7,261

Source: Senate Committee Print 72.

Senator SYMINGTON. Is there anyone present this morning from

the mica industry who would like to be heard? Mr. Moody, do you

feel that not passing these two bills, where we have had industry

objection, would be detrimental to the national security and the

economy?

Mr. MOODY. I would ask Mr. Romeo to comment on the meetings

we have had with industry about these mica bills (H.R. 13371 and

H.R. 13373).

Mr. ROMEO. Mr. Chairman, we had a meeting on January 28 with

the mica industry. We outlined all of the excesses. There are some

158 different grades of mica. We told them of the existence of this

excess, bordering in the neighborhood of 35 to 40 million pounds; that

we understood it was an abnormally large quantity; and that we

would proceed very cautiously, because we knew that markets had

shrunk quite a bit in recent years. We proposed to start this program

with an offering of something on the order of 200,000 pounds, which

is about 5 or 6 percent of current consumption. We advised the

mica industry that we would try, in concert with them, to package the

material in the most attractive and noncompetitive grades.

We are told by the consumers that there are some grades that are

usable and are needed right now in the industry, and we are trying to

work out a program where we would emphasize the sale of those

grades.

Senator SYMINGTON. SO it would be your recommendation that we

pass these two bills today and let you work it out with industry, is

that correct?

Mr. ROMEO. Yes, sir.

Mr. MOODY. And we give you our assurances we will work it out

with them.
10 STOCKPILE DISPOSAL BILLS

Senator SYMINGTON. Fine. We will proceed to the next bill.

(In executive session on May 5, 1966, the full committee voted to

report H.R. 13371 without amendment, as covered by S. Rept.

No. 1146, and H.R. 13373, without amendment, as covered by

S. Rept. No. 1147.)

H.R. 13578

Senator SYMINGTON. This measure would dispose of the entire

stockpile of 618 troy ounces of rhodium, since there is no stockpile

objective.

(The bill referred to follows:)

[H.R. 13578, 89th Cong., 2d sess.]

AN ACT To authorize the disposal of rhodium from the national stockpile

Be it enacted by the Senate and House of Representatives of the United States of

America in Congress assembled, That the Administrator of General Services is

hereby authorized to dispose of, by negotiation or otherwise, approximately six

hundred and eighteen troy ounces of rhodium (Rh content) now held in the national stockpile established pursuant to the Strategic and Critical Materials Stock

Piling Act (50 U.S.C. 98-98h). Such disposition may be made without regard to

the provisions of section 3 of the Strategic and Critical Materials Stock Piling

Act: Provided, That the time and method of disposition shall be fixed with due

regard to the protection of the United States against avoidable loss and the protection of producers, processors, and consumers against avoidable disruption of

their usual markets.

Senator SYMINGTON. Rhodium is a metal of the platinum group.

This quantity includes 173 ounces of rhodium in sponge form and

about 445 ounces of rhodium alloyed with platinum.

The approximate acquisition cost of the rhodium is about $126.54

per troy ounce. The current market price for rhodium in sponge

form is reported at $197—$200 per troy ounce. The platinum rhodium

alloy is in wire form and has no quoted market price.

Mr. MOODY. H.R. 13578 covers approximately 618 troy ounces of

rhodium. Rhodium is one of the metals included in the platinum

group. It is preferred over platinum in certain specialized uses. The

quantity is relatively small and we can work it into the market without

undue disruption.

(In executive session on May. 5, 1966, the full committee voted to

report H.R. 13578, without amendment, as covered by S. Rept. 1148.)

H.R. 13579

Senator SYMINGTON. This bill will permit the disposal of 3,500,000

pounds (thorium oxide content) thorium nitrate now held in the supplemental stockpile.

(The bill referred to follows:)

[H.R. 13579, 89th Cong., 2d sess.]

AN ACT To authorize the disposal of thorium from the supplemental stockpile

Be it enacted by the Senate and House of Representatives of the United States of

America in Congress assembled, That the Administrator of General Services is

hereby authorized to dispose of, by negotiation or otherwise, approximately three

million five hundred thousand pounds (thorium oxide content) of thorium nitrate

now held in the supplemental stockpile established pursuant to section 104(b) of

the Agricultural Trade Development and Assistance Act of 1954, as amended (7

U.S C. 1704(b)). Such disposition may be made without regard to the provisions

of section 3 of the Strategic and Critical Materials Stock Piling Act (50 U.S.C.
STOCKPILE DISPOSAL BILLS 11

98b): Provided, That the time and method of disposition shall be fixed with due

regard to the protection of the United States against avoidable loss and the

protection of producers, processors, and consumers against avoidable disruption

of their usual markets.

Senator SYMINGTON. The total inventory of thorium nitrate (oxide

content) held by GSA is 3,965,461 pounds. The present stockpile

objective is 500,000 pounds. The excess of approximately 3.5 million

pounds is covered by H.R. 13579.

The average acquisition cost of the thorium inventory was $2.08

per pound of thorium nitrate. The current market price is about

$1.86 per pound of thorium nitrate.

Mr. MOODY. H.R. 13579 would authorize disposal of approximately

3,500,000 pounds of thorium nitrate (thorium oxide content).

Thorium has limited commercial application in gas mantles, luminous paints and flashlight powders.

Major U. consumption, however, is in certain nuclear energy

applications. AEC is the major user of thorium at the present time.

During an industry meeting on March 24, the domestic mining

industry strongly advised against dispogal at this time, indicating that

the material is in substantial oversupply commercially. Although it

is true that commercial markets for thorium are presently very thin,

the AEC is a substantial user of thorium, and we believe that we

should be authorized to fulfill these needs to the extent possible from

the stockpile excesses.

(In executive session on May 5, 1966, the full committee voted to

report H.R. 13579, without amendment, as covered by S. Rept. 1149.)

H.R. 13580

Senator SYMINGTON. This measure provides for the disposal of

excess amosite asbestos from the national stockpile and the supplemental stockpile.

(The bill referred to follows:)

[H.R. 13580, 89th Cong., 2d sess.]

AN ACT To authorize the disposal of amosite asbestos from the national stockpile and the supplemental

stockpile

Be it enacted by the Senate and House of Representatives of the United States of

America in Congress assembled, That the Administrator of General Services is

hereby authorized to dispose of, by negotiation or otherwise, approximately

fifteen thousand one hundred and seventy short tons of amosite asbestos now held

in the national stockpile established pursuant to the Strategic and Critical Materials Stock Piling Act (50 U.S.C. 98-98h) and the supplemental stockpile established pursuant to section 104(b) of the Agricultural Trade Development and

Assistance Act of 1954, as amended (7 U.S.C. 1704(b)). Such disposition may

be made without regard to the provisions of section 3 of the Strategic and Critical

Materials Stock Piling Act: Provided, That the time and method of disposition

shall be fixed with due regard to the protection of the United States against

avoidable loss and the protection of producers, processors, and consumers against

avoidable disruption of their usual markets.

Senator SYMINGTON. The total inventory of amosite asbestos held

by GSA now stands at 55,170 short tons. The present stockpile objective is 40,000 short tons. The excess of 15,170 short tons is covered

by H.R. 13580. The average acquisition cost of the amosite asbestos

was $245 per short ton. The current market price is about $241

per short ton.
12 STOCKPILE DISPOSAL BILLS

Mr. MOODY. H.R. 13580 covers approximately 15,170 short tons

of amosite asbestos. Amosite asbestos consists mainly of long

resilient fibers and is used in manufacturing woven insulated felts

and heating insulation, such as pipe covering. We have worked out

an orderly program for the disposal of the excess.

(In executive session on May 5, 1966, the full committee voted to

report H.R. 13580, without amendment, as covered by S. Rept. 1150.)

H.R. 13663

Senator SYMINGTON. This bill relates to the disposal of the entire

supply held in the supplemental stockpile of approximately 15,000

troy ounces of ruthenium, one of the platinum group of metals. The

stockpile objective for this metal was removed from the list on May

13, 1957.

(The bill referred to follows:)

[H.R. 13663, 89th Cong., 2d sessi

AN ACT To authorize the disposal of ruthenium from the supplemental stockpile

Be it enacted by the Senate and House of Representatives of the United States of

America in Congress assembled, That the Administrator of General Services is

hereby authorized to dispose of, by negotiation or otherwise, approximately fifteen

thousand troy ounces of ruthenium now held in the supplemental stockpile

established pursuant to section 104(b) of the Agricultural Trade Development

and Assistance Act of 1954, as amended (7 U.S.C. 1704(b)). Such disposition

may be made without regard to the provisions of section 3 of the Strategic and

Critical Materials Stock Piling Act (50 U.S.C. 98b): Provided, That the time and

method of disposition shall be fixed with due regard to the protection of the

United States against avoidable loss and the protection of producers, processors,

and consumers against avoidable disruption of their usual markets.

Senator SYMINGTON. U.S. production of ruthenium is limited.

The primary sources of the material are the Republic of South Africa,

Canada, and Russia.

The approximate acquisition cost of the ruthenium in the inventory

was about $37.30 per troy ounce. The present market value is $55

to $60 per troy ounce.

Mr. MOODY. H.R. 13663 approximately 15,000 troy ounces of

ruthenium. This is another metal in the platinum group. It is used

primarily as an alloying agent, and is added to platinum and palladium to produce a hard corrosion-resistant metal. We anticipate a

disposal program for this material extending over a number of years

and are confident that it can be carried out in an orderly manner

which properly protects the interests of the Government and industry.

(In executive session on May 5, 1966, the full committee voted to

report H.R. 13663, without amendment, as covered by S. Rept. 1151.)

H.R. 13774

Senator SYMINGTON. This proposal will authorize the disposal of

approximately 6,450 short tons of vanadium (V content) from the

national stockpile.
STOCKPILE DISPOSAL BILLS 13

(The bill referred to follows:)

[H.R. 13774, 89th Cong., 2d sess.]

AN ACT To authorize the disposal of vanadium from the national stockpile

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Administrator of General Services is hereby authorized to dispose of, by negotiation or otherwise, approximately six thousand four hundred and fifty short tons of vanadium (V content) now held in the national stockpile established pursuant to the Strategic and Critical Materials Stock Piling Act (50 U.S.C. 98-98h). Such disposition may be made without regard to the provisions of section 3 of the Strategic and Critical Materials Stock Piling Act: Provided, That the time and method of disposition shall be fixed with due regard to the protection of the United States against avoidable loss and the protection of producers, processors, and consumers against avoidable disruption of their usual markets.

Senator SYMINGTON. The total inventory of vanadium (V content)

held by GSA is 7,865 short tons. The present stockpile objective is

1,400 short tons. The excess of approximately 6,450 short tons is covered by H.R. 13774.

The vanadium for disposal is stockpile quality material in the form

of vanadium pentoxide. The approximate acquisition cost of the vanadium pentoxide inventory was $1.18 per pound. The average price received for similar vanadium pentoxide sold by GSA in February

of this year was approximately $1.22 per pound.

Mr. MOODY. H.R. 13774, approximately 6,450 short tons of con- tained vanadium. Vanadium is used primarily as an alloying agent in the manufacture of steel. The stockpile material is in pentoxide

form. The principal use for this material is in the production of ferrovanadium., which in turn is used primarily in the manufacture of high-strength structural steels and tool steels.

Mr. Chairman, this material is in very short supply. We have

many letters from the steel industry stating that the shortage is becoming critical.

We plan to release the material at a rate designed to minimize

adverse impact upon the producing industry, while at the same time assuring distribution to domestic consumers urgently needing the material.

We strongly urge early enactment of all of the pending bills.

(In executive session on May 5, 1966, the full committee voted to

report H.R. 13774, without amendment, as covered by S. Rept. 1152.)

Senator SYMINGTON. Is there anybody here who opposes in any shape or form the passage of the bills for metallurgical grade chromite, fluorspar, bismuth, phlogopite mica, muscovite mica, rhodium, thorium, amosite asbestos, ruthenium, or vanadium?

I will vote the proxies of all the members of the subcommittee, and also vote myself in favor of reporting these bills favorably to the full committee.

Thank you, gentlemen. Based on your testimony I will cast the proxies of my colleagues for the mica bills, H.R. 13371 and H.R. 13373, also, and vote for them myself.

Thank you, gentlemen. If there is no further business we will consider the hearing adjourned subject to the call of the Chair.

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