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5. The medal committee may invite nominations from the membership of the Institute, such nominations to be accompanied by an argument in favor of the award and details sufficient for a proper citation to be drawn. This medal has been awarded as follows: 1927—David William Brunton. 1929—John Hays Hammond. 1928—Herbert Hoover. 1930-Daniel C. Jackling. Miscellaneous Prizes Many of the Local Sections have established or administer prizes for the best paper presented within the year by any junior member. Annual Lectures Howe Memorial Lecture The Howe Memorial Lecture, in memory of Henry Marion Howe, Past President of the Institute, was authorized in April, 1923, as an annual address to be delivered by invitation under the auspices of the Institute by an individual of recognized and outstanding attainment in the science and practice of iron and steel metallurgy or metallography, chosen by the Board of Directors upon recommendation of the Iron and Steel Division. The following were the Howe lectures and lecturers for the years indicated: 1924 What is Steel? By Albert Sauveur. 1925 Austenite and Austenitic Steels. By John A. Mathews. 1926 Twenty-Eve Years of Metallography. By William Campbell. 1927 Alloy Steels. By Bradley Stoughton. 1928 Significance of the Simple Steel Analysis. By Harry D. Hibbard. 1929 Studies of Hadfield's Manganese Steel with the High-power Microscope. By John Howe Hall. 1930 The Future of the American Iron and Steel Industry. By Zay Jeffries. Institute of Metals Lecture An annual lectureship was established in 1921 by the Institute of Metals and it has come to be one of the important functions of the Annual Meeting. A number of distinguished men from this country and abroad have served in this lectureship. The roll is quoted below: 1922 Colloid Chemistry and Metallurgy. By Wider D. Bancroft. 1923 Solid Solution. By Walter Rosenhain. 1924 The Trend in the Science of Metals. By Zay Jeffries. 1925 Action of Hot Wall: a Factor of Fundamental Influence on the Rapid Corrosion of Water Tubes and Related to the Segregation in Hot Metals. By Carl Benedicks. 1926 The Relation between Metallurgy and Atomic Structure. By Paul D. Foote. 1927 Growth of Metallic Crystals. By Cecil H. Desch. 1928 Twining in Metals. By C. H. Mathewson. 1929 The Passivity of Metals, and Its Relation to Problems of Corrosion. By Ulick R. Evans. 1930 Hard Metal Carbides and Cemented Tungsten Carbide. By 8. L. Hopt.

Jan 1, 1930

The Institute conducts jointly with the American Society of Civil Engineers, American Society of Mechanical Engineers and American Institute of Electrical Engineers, certain activities as listed below, and is joint owner with them of certain properties. United Engineering Trustees, Inc. When Mr. Carnegie made his gift which made possible a home for the engineering societies, a separate corporation was organized to act as a holding company and to manage the common property. This was long known as the United Engineering Society but the name has now been changed to one which more nearly reflects the real function of the corporation. It holds title to the Engineering Societies Building and to various funds placed in its charge and is managed by a Board of Trustees of which three are chosen by each of the four societies, American Institute of Mining and Metallurgical Engineers, American Society of Mechanical Engineers, American Institute of Electrical Engineers and American Society of Civil Engineers, which own equal and undivided interests in the property. The land and building cost two million dollars. The interest of each of the Founders societies, aside from especial trust funds, is now valued at $493,352. The A. I. M. E. trustees are Arthur S. Dwight, J. V. N. Derr and George D. Barron. The President of the Board is Francis Lee Stuart and the Secretary, Alfred D. Flinn.

Jan 1, 1923

By Robert E. Goodwin

As man's need for minerals continues to grow and as the known mineral deposits become depleted, it may be expected that these increased demands will result in greater exploration for additional deposits and at continually increasing depths below the earth's surface. As labor and material costs continue to rise, the need for more economic material handling will be emphasized. The quest for heavier payloads, safely moved at faster speeds from deeper mines, will be vigorously pursued. Strenuous efforts are, therefore, being made in the wire rope industry to develop ropes with greater strength-to-weight ratios than presently available while maintaining the dependability and long life being received from the conventional rope manufactured today. For many years, high quality rope wire has been manufactured from rods of selected steel compositions. Carefully-controlled wire drawing combined with proper heat treatment has resulted in high quality wire and wire rope throughout this period. Refinements in the rod produced from specially-selected high carbon steels combined with the latest improvements in wire drawing and heat treatments have made it possible to manufacture higher strength rope wire of uniform composition and structure that is suitable for use in Special High Strength wire rope.

Jan 1, 1970

By AIME AIME

Do you Possess, or Can you Obtain; and Will you Give, or Sell, to the Institute Library Early Volumes of the following Proceedings and Journals? American Chemical Society. American Foundrymen's Association. Australian Mining Standard. Chemical Society of London. Deutsche Chemische Gesellschaft. The Foundry. New Zealand Mines Record. Queensland Government Mining Journal. La Revue Universelle des Mines.

Jan 9, 1907

By Louis C. Just, Grahan A. Mathieson

Low cost, greater operating flexibility, and relatively simple operation are just three of the reasons for using minicomputers in the mining industry. No less than a dozen US manufacturers have sold the new generation of minicomputers to mining operations in the US and the world. Many manufacturers produce several models of minicomputers, each with excellent calculating capabilities. Prices for these "mini-giants" range from about $10,000 for a basic system to over $300,000 for a very powerful, sophisticated system with numerous peripheral devices. While the acceptance of minicomputers by the mining sector has lagged behind their penetration into other businesses, mines with minicomputer capability-especially remote mine sites-have found applications in practically all areas of operations including standard payroll processing, mineral deposit modeling and planning, surveying/mapping, production reporting, and daily production scheduling. In fact, the only limit to the further application of minicomputers in mining is the user's imagination. There are some obstacles to the accelerated use of minicomputers in the mining sector: the limited amount of software available, limited information on site-specific uses, and limited interest in the mining market by manufacturers. The latter is especially significant in light of the fact that many manufacturers queried in a recent telephone survey did not compile statistics on locations of their units in mining. The general consensus is that mining sales represent less than 1% of the total market. Many manufacturers do believe that market dynamics will increase their future research and development for the mining industry. The minicomputer was introduced in 1968, when Digital Equipment Corp. of Maynard, MA, developed a small computing device-the PDP-8 minicomputer. It is important to note that since then, it has become increasingly difficult to precisely define a minicomputer (see box, page 1582). The mini has evolved to surpass the capabilities of many of the large computers (mainframes) of 1968, and some models rival the mainframes of today.

Jan 11, 1981

By Paul Levin

A coal preparation plant built with conventional materials only might be able to do an efficient job of preparing coal, but its maintenance costs would be high and emergency shutdowns frequent. To remedy this situation special materials are being used, either in original plant construction or for replacement of conventional materials. The special materials vary from high-strength and abrasion-resisting steels and stainless steel alloys to ceramics. They include hard surfacing welding rods, rubber refractories and some of the newer plastics, the merits of which are cited by the author. A coal preparation plant, limited strictly to the use of conventional materials-for example, mild steel, cast iron and ordinary rubber-could, no doubt, do an efficient job of preparing coal, but the high cost of maintenance and increasingly frequent emergency outages would soon force the operator to seek relief by introducing special materials such as alloyed steels, oil-resistant rubbers and hard-surfacing welding rods.

Jan 6, 1964

By Paul M. Tyler

HISTORICAL concepts of the economics of the glass-sand industry are changing rapidly. The greatly expanded demand for glass containers combined with higher freight rates on raw materials and manufactured products have induced a migration of glass factories toward densely populated centers and the creation of new standards of place value for sub- standard sand deposits. This migration has been facilitated by the construction of pipelines to bring cheaper natural gas and liquid fuel to large cities and may be further speeded by the adoption of modern mineral dressing methods to permit economical utilization of local raw materials. Our national resources of naturally high-grade 1 silica sand are abundant, but most of the best de- posits are situated so far from large centers of population that it now costs $3.00 to $5.00 a ton to carry the sand from the mine to the optimum site for a 1 factory making beverage bottles, scientific and electrical glassware, and miscellaneous blown and pressed ware for local markets. It follows that on the basis of freight savings alone it may be economical to use material from inferior deposits closer to the factory even though the f.o.b. cost of mining and treatment may be much high

Jan 1, 1950

By G. W. Jr. Jarman

THE purpose of this paper is to present briefly a description of some of the special methods of separation or concentration, either singly or in combination with others, and to give certain operating data and examples. Explanation of the usual methods of large-production mill treatment, such as flotation or wet tabling, or of chemically treating industrial minerals, is not included in the scope of this paper, although one of these methods might be, in certain instances, augmented by one or more of the special methods that will be enumerated herein. Description of these special methods will be centered on magnetic separators, electro-static separators and air flotation or air tables.

Jan 1, 1938

By G. W. Jarman

THE purpose of this paper is to present briefly a description of some of the special methods of separation or concentration, either singly or in combination with others, and to give certain operating data and examples. Explanation of the usual methods of large-production mill treatment, such as flotation or wet tabling, or of chemically treating industrial minerals, is not included in the scope of this paper, although one of these methods might be, in certain instances, augmented by one or more of the special methods that will be enumerated herein. Description of these special methods will be centered on magnetic separators, electro- static separators and air flotation or air tables. MAGNETIC SEPERATORS In general, separating is achieved by exerting upon a particle some kind of force opposed to gravity, either directly or at an angle. For example, in the Wetherill or cross-belt type of magnetic separator some particles are lifted vertically from the others because they have been exposed to a force to which they respond more readily than particles of lesser magnetic susceptibility. Of course, there is a limitation to this vertical rise, for the particle must be of a high enough susceptibility to receive a magnetic force greater than the 980 dynes per gram of gravitational urge. To overcome this limitation, the induction type of magnetic separator was developed, so that it is only necessary to instill, say, 30 to 60 dynes per gram instead of the 980, to cause a deflection away from the vertical in falling, and that deflection can be used advantageously when falling by inserting a dividing knife-edge. The induction magnetic separator (Fig. 1) has become a fairly well known method of concentrating and purifying. For example, abrasive grain was among the materials that did not respond to the previously best known type of magnetic separator, such as the Wetherill type, and the development of the induction magnetic separator in the plant of a

Jan 1, 1938

By D. Beregekoff

In the routine examination of a wide variety of metal specimens it is sometimes necessary to have special methods of polishing in order to retain and reveal certain details in each specimen. Among such special cases is the retention of graphite in malleable and gray cast irons, the preservation of all types of nonmetallic inclusions in both hard and soft steels, obtaining a scratch-free surface with soft metals, and avoiding the usual relief effects with very hard specimens such as tool metals con-taining various carbide and nitride phases. It is the purpose of this paper to give an account of some of these special polishing methods in use at the Union Carbide and Carbon Research Laboratories. The polishing procedures outlined have been found to give uniform results. It is obvious that only general rules and the most important working details can be given here. Following these rules, the polisher can obtain satisfactory results if he possesses the necessary patience and has a sincere desire to give as nearly perfect a finish as possible to his work.

Jan 1, 1939

Coal is of tremendous importance for the Czechoslovak econ- omy. The current annual primary energy demand being about 109 million tons of standard fuel (1 ton of standard fuel - 7,000 coal = 29,308 GJ), coal satisfies almost two thirds of our fuel consumption. If compared with the distribution of resources in the world's fuel and energy pattern, the situation in Czechos- lovakia is significantly different, as shown in Fig. I. One of the causes behind the difference is that the Czechoslo- vak oil and natural gas reserves and, hence, their production are insignificant, so that it is necessary to import them. Brown coal will continue to play an important role as a prin- cipal domestic source of primary energy even in the future. While the share of nuclear power is increasing, brown coal represents strategic reserves in the fuel and energy balance.

Jan 1, 1989

By Oliver Smalley

EXCEPT for the work of Guillet, who conducted a systematic investigation on the zinc-replacing value of nickel in brass, and extended his investigation with a view to developing commercial high zinc content nickel brasses, the author does not know of any systematic research on the subject. The most promising commercial alloys and their physical properties obtained by Guillet are given below: Maximum Elonga- Reduction Copper Zinc Nickel Stress, tion, of Area, Brinell Tons Per Per Cent. Per Cent. Sq. In. 55.0 41.0 5.0 24.4 46.5 94 Sand cast. 22.6 27.0 90 Chill cast. 56.7 39.74 3.35 30.0 43.0 51.7 97 Casting annealed 2 hr. at 750° C. 33.9 33.0 50.7 144 Cold-drawn bar. 55.15 42.3 2.24 29.8 33.0 116 Casting annealed 2 hr. at 750° C. 32.3 29.0 151 Cold-drawn bar. These test results scarcely justify the use of such quantities of so expensive a metal, and could have been obtained from ordinary commercial brass. For purposes of comparison, the physical properties of ordinary brasses, ranging from 70 per cent. to 50.1 per cent. Cu in both the cast and normalized1 conditions are included in Table 1. These incidentally furnish a useful standard of the properties of castings and of rolled, extruded and forged brass when correctly annealed. A close study of some of the well-known special brasses containing nickel reveals a series of alloys which bewilder by their complexity, and one can only hazard a guess at the function and commercial value of each of the many elements used.

Jan 10, 1925

INTERNATIONAL ENGINEERING CONGRESS This Congress will be held under the auspices of five National Engineering Societies, of whi h the Institute is one. The sessions will be held in 11 sections and the proceedings will be published in 10 volumes of 500 pages each, of which Volume 8 will contain the papers and proceedings on Mining Engineering and Metallurgy. The membership fee of $5 will entitle the holder to the volume of General Proceedings and Index, and, in addition thereto, any other single volume chosen. Other volumes may be subscribed for according to a sliding scale depending upon the number of volumes taken. The Institute will have a meeting in San Francisco during 1915, and it is desirable for our members to join the International Engineering Congress at in early date in order that their support of the enterprise may be given in its early stages, when it is most needed.

Jan 2, 1914

By M. J. Coolbaugh

Mining of potash more than 3000 ft beneath the water-bearing sediments in Saskatchewan presented the unique challenge of designing stable mine workings and assuring protection from overhead water in a material that was believed to flow plastically, but whose behavior as a plastic material was not sufficiently known. Under the stress conditions ordinarily encountered in mining most rocks behave as elastic materials; that is, they compress slightly under pressure, and rebound when the pressure is released. Salt and potash, however, are different. Even under the relatively low pressures encountered at shallow depths, these materials become slightly plastic and yield to stress by flowing.* The plastic properties become more pronounced at greater depth and pressure, and the question arises as to whether or not the plastic flow will be rapid enough and exert enough pressure to destroy underground structures or interrupt the mining process.

Jan 5, 1967

Sampling of CIL/CIP circuits is typically done by compositing samples of feed and tails over eight or 12 hour periods. As the residence time in the leaching tankage may be approximately 20 hours, the tails from any period being derived from material entering the circuit 20 hours earlier do not correspond to the head from the same sampling period. Moreover, mixing in the series of tanks in a circuit also modifies correspondence between input and output. A special purpose simulator has therefore been developed to allow for the mixing and delay in the tankage and permit estimation of the head assays corresponding to any tailings sample. Thus more accurate assessment of the day-to-day recoveries of gold and silver follows. The model, programmed in Excel, assumes that the tanks are perfect mixers. By inputting the sequential head grades and considering that no leaching has occurred, the head grade which corresponded to the tailings for each period could be estimated. Allowance is made for variations in feed rate over the sampling period by computing the average flow rate of slurry and thus the residence time of each increment of the tailings. This simple model and its application have been found to be subject to some limitations, which are discussed in the paper, resulting in some unresolved variability in results. However, for a typical circuit even the simple model was able to greatly improve consistency of recovery data with variations being approximately halved by eliminating much of the anomalous variation arising from the lack of correspondence between head and tail when changes in head grade are occurring. Therefore, this permits genuine variations in metallurgy to be identified with greater confidence and thus operational shortcomings can be identified and addressed more quickly.

Jan 1, 2006

By C. P. Blair

In discussing so-called "volume rates" for the movement of coal, I start from one basic premise: That it is the job of the railroads to devise rates which will move the traffic, while at the same time assuring a fair return on their investment. No matter how reasonable and nondiscriminatory freight rates may be, if they fail to attract and hold traffic to the rails, they are utterly useless - both to the carriers and the shipping public. And it will be my purpose here to show that under certain circumstances the use of volume rates by the railroads enables them. to hold traffic which would otherwise be lost, and to avoid needless dissipation of revenues, Properly employed, volume rates should benefit both the coal industry and the railroads, I do not, however, advocate the discarding of the carload as the basic rate-making unit. Far from it. Sound operating reasons dictate the making of rates based on car- loads, and the tradition of carload rates has a firm foundation in railroad operating costs, many of which vary directly with cars handled. In short, the carload was, Is and, in my opinion, will continue to be the basis for most rail rates on coal, as well as on other commodities. But change is an inevitable result of progress, and we should not be so bound by tradition that we are unwilling to try novel methods of ate making, should the circumstances require, The modern rate maker must, now and then, run the risk of being called an iconoclast if he is to keep up with the times. As T will point out, volume rates were for many years rejected by both the Interstate Commerce Commission and the railroads, But now both the Commission and the carriers have come to recognize that under proper circumstances and conditions volume rates are a powerful and effective tool.

Jan 1, 1959

By S. D. Bechtel

Bechtel Civil and Minerals, Inc., one of the Bechtel group of companies, is a large engineering and construction firm that services the mining industry, among others. The firm's head, S. D. Bechtel Jr., comments on how his E&C company is dealing with the recessionary economy. First, he offered a historical perspective. About a half century ago-in the middle of the Great Depression-W. A. Bechtel and several business partners drew up a fixed price bid to build the Hoover Dam. At that moment in history, the W. A. Bechtel Co. was a modest success, but the times were troubled and uncertain. Money was scarce and a lot of contractors across the country were one project ahead of bankruptcy. The bid for Hoover was a make-or-break proposition for Bechtel, and it turned out successfully. The Hoover Dam was a no-frills operation in an isolated and harsh environment. There was plenty of hard work, long hours, and not many amenities. Controlling costs was critical. Everyone knew what had to be done, and why and what the consequences were. Today's Challenge Bechtel is now a bigger, more complex organization whose management views the current economic recession as a challenge to be met in much the same way W. A. Bechtel met the challenge of the Hoover Dam: by pulling together with a sense of purpose and direction. In many respects, Bechtel's situation today has a number of parallels to that which faced my grandfather. The company is eminently successful, but times are tough and there are plenty of signs that they could get tougher. My grandfather bet on the Hoover Dam to insure the future health of his company and I think we can work together again in that same tradition, make some tough decisions together, and the company's future can be just as promising. The first and most important requirement is to make certain that everyone understands the situation. The Bechtel group of companies are in an excellent financial position now. Its workload hit an alltime high in 1982 and it is well positioned in its principal markets. But the next two years may be critical for the company. Traditionally, Bechtel's work load lags behind general developments in the economy. Although many of its clients continue to suffer serious business difficulties, Bechtel is only beginning to feel the impact. The worldwide market for basic metals remains soft; relatively low prices and abundant supplies of oil and gas have flattened the petroleum market and made once promising synfuels projects economically unattractive; utility clients are still caught in the vise between overregulation and escalating costs. And persistently high, long-term interest rates have made capital investments expensive and difficult to justify. The company maintained a healthy workload through 1982. In some areas it has had little new work and consequently has been forced to lay off some staff as projects have been canceled or concluded. In other areas new work has tided the company over and more people have been hired. But new work bookings have fallen off, creating some uncertainty for the near future. 1983 requirements are clear, although seemingly contradictory. Belt tightening and cost reduction are necessary for Bechtel to remain healthy and competitive, enabling it to handle a possible further downturn with a minimum of turmoil and dislocation. At the same time, we need to allocate resources and funds in areas that will keep us positioned for the turn-around marketplace.

Jan 2, 1983

By Hans W. Schreiber

Most geologic and mining engineering consulting firms* began to experience the recession with declining billing levels, number of inquiries, and proposal requests in late 1981 or early 1982. As of today, most of them have been functioning at reduced income levels for nearly a year. And while many consulting firms have apparently reached a stabilized income level, they can see little prospect for attaining normal (pre-late 1981) billing levels and income for the remainder of 1983. A few firms have escaped being affected by the recession. Such com panies almost without exception are small (fewer than 20 personnel), offer a limited range in technical capabilities, and tend to be highly specialized in a particular niche. They include those specializing in the heap leaching of precious metals ores, in ground water testing programs, and in the derivation of computer-aided programs to monitor particular mineral processing functions. Those firms affected by the economic downturn have instituted a variety of policies and undertaken actions to cope with significantly reduced incomes to bring fixed costs in line with the depressed demand for services. These changes fall into the following broad categories: • management and management practices; • markets and market definition; • marketing and the pursuit of assignments; and • administration and personnel relationships. Not all of the perceived changes have necessarily been instituted by every consulting firm, and any one appears sporadically instituted. Management and Management Practices In favorable times the managers, and often the owners of the equity, of consulting firms tend to concentrate their attention on the part of the business they find most satisfying and enjoyable. For some, this means acting as project or assignment leaders, even undertaking a specific technical aspect of the job. For others, it means constant marketing with the associated heavy travel and entertainment schedules. In unfavorable conditions, such as the current recession, managers tend to spread themselves far more thinly, expending time and effort on all facets of the business including marketing, proposal preparation and cost estimating, budgeting, general administration, accounting and cash flow monitoring, project/assignment overview, and actual client work. The manager who in favorable times concentrated on client work is now less billable. The manager who concentrated on marketing is somewhat more billable. The manager now needs to pay attention to and expend equal effort on each facet of the business just to keep all the facets in relative balance. Falling behind schedule on a client job or carrying an unduly large percentage of accounts receivable exact a cost to the firm. Clearly the absolute cost to the firm is the same whether demand for service is good or slack. But in periods of slack demand the firm is frequently less able or even unable to bear such costs. Marketing and Market Definition Markets appear to have undergone some significant changes: • Federal and state governments have assumed a greater importance as providers of work vis-a-vis both industry and private groups. • Projects with increase-in-capacity aspects have given way to projects with maintenance or reduced operating cost aspects. • Projects searching for new deposits of minerals in generally new locations have given way to projects reviewing known mineral districts or known deposits. • Industrial mineral and mining companies have exhibited a great propensity to cut back the use of consultants and to undertake as much work as possible in-house. Further-more, a number of industrial mineral and mining companies have entered the competitive arena with consulting firms, submitting proposals (usually to the federal government) in an effort to keep their staffs intact and occupied. In response, consulting firms have reevaluated their capabilities by reviewing old work and reassessing personnel. The purpose is to broaden the services offered and the potential client base, thus redefining the available market. For example, a firm specializing in assessment of technical and cost parameters of a deposit would normally assist a prospective lender in judging the deposit's suitability for project financing. That same company could easily expand into the field of analyzing production costs for an individual operation -something that is needed in periods when lower prices reduce profit margins. Similarly, a firm that has confined such economic assistance to commercial banks could expand to provide its expertise to other lending and even equity buying in-stitutions such as insurance companies. Marketing and the Pursuit of Assignments With few exceptions, consulting firms have significantly increased their

Jan 2, 1983

By Simon D. Strauss

The recession that began in late 1980 has proved to be not only prolonged and severe, but in certain ways unique in its effect on the mineral industries among the periods of economic slowdown experienced in the Western world since the end of World War II. This time almost all minerals have been affected. In previous business turndowns, by contrast, some mineral sectors have with-stood economic adversity well. They experienced little or no adverse effect-thanks either to a strong secular expansion in the markets for their particular product or to specific factors that caused demand to be well maintained. For example, aluminum, molybdenum, and nickel are three metals that enjoyed extraordinary growth in applications during the years 1946-1973. These metals were little affected during the recessions that occurred in that era. Similarly, coal did not suffer a pronounced drop in sales in the 1974-75 turndown because, with the price of oil rising sharply, a switch away from oil and back to coal was clearly indicated for some energy-intensive applications. Oil itself was largely impervious to the ups and downs of the business cycle until very recently. And the precious metals, gold and silver, have often been regarded as benefiting from reduced economic activity because labor becomes more available, productivity rises, and operating costs diminish. In the current recession, however, no major mineral has escaped the broad trend. The secular growth factors that were previously so evident for aluminum, molybdenum, and nickel have disappeared, at least temporarily. The stable pricing behavior that previously characterized all three of these commodities has been replaced by extreme price weakness and apparent inability of the major producers to continue their roles as market leaders. Coal and oil both have suffered from a sharp drop in energy requirements. There are those who now anticipate a collapse of the market control over oil prices so clearly exercised by OPEC since 1973. If oil prices are no longer effectively controlled by the governments of the exporting countries, then coal prices are also certain to be affected. And the combination of high interest rates, tight money, and a change in public perceptions of precious metals put the skid under gold and silver quotations in 1981 and early 1982. Although inflation has been viewed as the scourge of most Western countries ever since the oil crises of 1973-74, prices-in constant dollars-of most minerals have not risen. On the contrary, with the exception of the precious metals and oil, for most minerals the prices that prevailed at the end of 1982 were close to the levels of the Great Depression of the 1930s in constant dollar terms. Table 1 compares prices for copper, lead, zinc, and aluminum at the end of 1982 with the average prices in 1934, stated in constant 1967 dollars. This emphasis on prices for mineral commodities reflects the fact that profits of mining enterprises vary directly with the level of prices. Manufacturing and retailing enterprises march to a different tune. They establish sales prices based on costs. Their profits tend to vary with volume. Commodities are for all practical purposes fungible, that is the advantages of known brands in marketing manufactured goods have little application in a commodity market. Thus the individual seller of minerals is unable to establish his sales prices. Except where a monopoly is present, he must sell at the going market. His option is to abstain from selling if he finds the price unremunerative. In past recessions, some mineral producers chose to do precisely that-either accumulating a substantial share of their output in inventory or, in prolonged downturns, abstaining from production. During the current recession, however, private-sector mining companies did not have the option of accumulating inventories to any great extent. Capital costs for new mineral projects or for expansion of existing facilities have escalated at an alarming rate since the early 1970s. Added to this has been the heavy cost of installing pollution control or safety equipment to comply with the regulations adopted in most industrialized countries (and particularly the United States) since 1968. The consequence has been that the financial position of most major mineral enterprises in mid-1980 was already strained. To finance increased inventories meant incurring additional funded debt at high interest costs, thus impairing the concern's credit rating. Management Choices Private-sector managements have had to face up to the alternative of either continuing to produce at an unchanged rate and marketing output at unremunerative prices or reducing output. The latter has meant either operating at a curtailed rate, with con-

Jan 3, 1983

By Graham J. Morgan

The following material is excerpted from a presentation Mr. Morgan gave recently to representatives of the financial community. Introduction 1982 was a period of challenge for United States Gypsum Company because of reduced market opportunity. Housing starts for the first 10 months averaged a seasonally adjusted annual rate of 1 million units, 9% below the comparable 1981 period when housing starts were the lowest in 35 years. Industry gypsum board shipments declined 9% from the already low levels of the same period in 1981. US Gypsum met the challenge with stringent cost reduction programs and aggressive action in the marketplace. In late 1981, anticipating market deterioration, the company's management adopted strategies to focus on two shortterm objectives: • Adjust operations to perform profitably in view of limited opportunities through more efficient operations and asset management. • Continue to strengthen U.S.G.'s resources and ability to take advantage of important market opportunities as the economy improves through selective expansion of production capacity in key growth markets. Concentration on these two objectives resulted in a nine month performance in 1982 that, while certainly not satisfactory by company standards, compared very favorably with that of principal competitors in terms of net earnings, margin on sales, and return on average stockholders' equity. To counteract limited market opportunities, U.S.G. focused on productivity improvement, cost reduction, expense control, and maximization of market penetration. Energy Use Improving performance encompassed all segments of operations. For example, efficient use of energy was a significant factor despite lower operating rates at most plants. Overall, in the third quarter of 1982 versus 1972, the company used 27% less energy per unit of production, a savings of $15 million in that quarter alone. These continuing improvements helped to partially offset constantly rising energy costs. A number of operations achieved superior results in the first nine months of the year compared with the same period in 1981. For example, gypsum board plants in Jacksonville, FL, and Sweetwater, TX, recorded 8% and 7% reductions, respectively, in energy use per unit of production. Paper mills in Oakfield, NY, Galena Park, TX, and Kansas City, MO, each reduced energy use more than 12%, while the Greenville, MS, ceiling products facility achieved a 16%o reduction. Safety Safety is another important element that received increased attention. U.S.G.'s safety performance over the past five years has consistently improved. In 1981 it was five times better than that of the gypsum industry; nearly 10 times better than all industry as measured by the National Safety Council; and almost 20 times better than all US manufacturing as recorded by the Bureau of Labor Statistics. In addition to human concerns, this excellent record results in significant dollar savings that directly affect company results. In 1981, U.S.G.'s pre-tax savings in claims, premiums, and related expenses were about $20 million compared to the industries in which it competes. For the first half of 1982 performance improved further, with a cumulative lost workday incidence rate per 200,000 man-hours worked of only 0.27, an all-time record. Expense Control Careful control of inventories and receivables also received special attention. As of Sept. 30, 1982, inventories were 29%, or $44 million, below the level of Sept. 30,

Jan 2, 1983