Copper Quarrel

Rich & powerful in their far-flung mineral empire, the Brothers Guggenheim must have been glad to see last week behind them. Threatened in Chile by political agitation against their nitrate interests, in Manhattan, on their copper front, they faced the Belgian Congo's prolific Katanga. Nor were they alone in their fears of potent Union Miniere du Haut Katanga. Represented by Belgian Minister of State Emile Francqui and his cohorts, MM. Fernand Pisart & Camille Gutt, Katanga was forcing a hard bargain on a conference of the world's copper producers. Further curtailment of output to cut down the mounting supplies of copper on hand was the conference's purpose. Through the guarded doors no statements came from the conferences but rumors told of their maneuvers. Every producer was agreed on a 50% cut in production, except Katanga.

Since 1925 North & South American copper producers have watched the African mines with misgivings tinged with respect. From an output of only 90,000 tons in 1925 Africa rose to 160,000 tons in 1930. Katanga, controlled by the Belgian Government, backed by British capital, operating under strictest of colonial regimes, rapidly rose to lead the Africans. U. S. producers have to dig deep when they prospect new veins but Katanga's ore lies so close to the surface they do their prospecting by airplane. Labor costs are on a like scale. A Bantu boy working hard in Katanga's opencut mines gets about $5 a month. Production costs come to about 4-c-per Ib. African mines can deliver copper in England or the U. S. for about 7-c---the present world price, ruinous to most other producers.

Last week's conference was not the first in which other coppermen have felt the power and threat of Katanga. A year ago in Manhattan the copper world agreed to reduce output 33% of capacity. At that time Katanga was supposedly operating at about 12,500 tons a month. Amazed were U. S. producers some weeks later when the agreement went into effect, to hear from Katanga that it was curtailing on the basis of about 16,600 tons monthly. In fact, announced the Belgians, their output had actually run as high as 20,000 tons! Other coppermen shook their heads, said harsh things about Katanga's stepping up production just before curtailment.

Unrestricted by last year's agreement (effective only Dec. 1), the main copper districts of the world produced as follows in 1930: (Short Tons) United States 820,000

Mexico 58,535

Canada 113,004

Chile & Peru 280,554

Africa 160,000

Total 1,432,093

Instead of improving the copper market has grown steadily worse. Month after month the stores of copper above ground have mounted to a new record high. In its present state the world finds it can use just about 85,000 tons of copper a month, 1,020.000 tons a year. It was simple to figure out that if everyone cut his present production 50% the cooperating producers would have their output down to 55,000 tons a month. To this must be added about 30,000 tons a month from noncooperating mines mostly in Japan, Germany & Russia, the total bringing output into line with world consumption. U. S. producers wanted the reduction and remembering Katanga's sudden step-up last year hinted broadly it should accept it willingly. Instead Katanga was said to have countered with a proposal for 25% reduction in shipments only and creation surplus.

Conferences last week were on what the copper industry calls an "informal basis," the customary dodge to get around the Sherman Act. But not only were conferences informal, they were just about over. Emile Francqui, chief of the Katangans, departed for home. A. Chester Beatty, chairman of Rhodesia's important Roan Antelope Copper Mines, Ltd., said he was sailing Friday night; MM. Pisart & Gutt took passage on the Saturday sailing of the Ile de France. The conference looked like a failure. Then someone made a mysterious move and the foreigners stayed.

Opinion was that if no agreement was reached, another way would be found to tame Katanga. Failing output reduction, U. S. and English coppermen might get their countries to enact copper tariffs. England is Katanga's best customer.

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