The Iron We Need

by CLARENCE B. RANDALL

1

THE American people have suddenly become iron ore concious. Until it became an atom war, this last one was a steel war, and everyone knew it. Tanks, battleships, landing craft, poured out all over the world from American factories and shipyards that were fed by the steel plants. Our public not only learned to talk about steel in terms of ingot production, but they came to understand that back of it all lay the great iron ore deposits of the Lake Superior district. The Mesabi range and the “Soo ‘ Locks became commonplaces in the speech and minds of our people. Whether they lived in Maine or California, they had a mental picture of what it was like to watch an electric shovel loading red iron ore into railroad cars or to see enormous freighters plowing the Great Lakes to put this war-winning red earth on the docks of the steel plants of the nation.

Great struggles are exhausting, and as the war came to its end our people began to think in terms of our national exhaustion. They knew that the resources of Europe were depleted and that great inroads had been made into the resources of our own rich country. Consequently, their minds were receptive when the suggestion appeared that our iron ore was exhausted. What began as a whisper is rising to a shout. The current vogue is to say that the iron ore is running out. There are even those who for reasons of self-interest have quietly amplified the whisper. Finally comes the suggestion that the steel plants in the Middle West have a limited life and must in the planned future move to the seacoast or perish for lack of raw material.

All of this seems strangely inconsistent with the fact that the steel companies which have plants in Pennsylvania, Ohio, Michigan, Illinois, and Indiana are currently spending and planning to spend hundreds of millions of dollars to increase their capacity and improve their facilities. One wonders what kind of management those companies have, to be so unaware of their impending doom.

One of the most objective statements of the new cult is a striking article by Marvin Barloon, called “Steel: the Great Retreat” (Harpers, August, 1947). The author writes as follows: —

The steel industry faces a momentous change which will have a profound effect upon the future of the United States, and may in time touch the lives and fortunes of every one of us. Costly new processes are going to have to be added to steel-making, and much of the industry is going to have to move to other parts of the country. These changes . . . are not the result of the inventions of engineers or the discoveries of prospectors. The simple fact is that the iron ore is running out.

Those are fighting words in my segment of the steel industry.

Move the steel industry out of Chicago? Not on your life! When Father Dearborn looks down a hundred years from now, he will still see smoke coming out of those open-hearth stacks at Gary and Indiana Harbor, and Lake Superior iron ore will still be feeding the blast furnaces there.

Pause for a moment to reflect upon the past one hundred years of iron ore production from Wisconsin, Minnesota, and Michigan. How did we come by these mines, without which we could not have achieved the world’s highest standard of living or won either of two world wars?

Benjamin Franklin really began it. That amazing man who did so many things so well was the fin-erunner to whom we owe the fact that those vast deposits are under the flag of the United States instead of that of the Dominion of Canada. It was he who sketched our northern boundary so that it would arc around that lonely wooded island called Isle Royale, anchored out in the blue waters of Lake Superior.

The territory thus added to the United States paid off first when, fifty years later, Douglass Houghton discovered commercial copper on the Keweenaw Peninsula.

But great as those copper deposits were, they were merely a down payment on the vast wealth that has flowed from that stroke of Franklin’s pen. The northern boundary line which he drew gave the United States its steel industry.

Iron ore today is mined in six areas on the American side of Lake Superior. They are called ranges. They feed a large share of the hungry blast furnaces in tills country, and all six he north of the line as Franklin might well have drawn it. Our shrewd minister plenipotentiary gave our nation two gifts of great value: one is a magnificent National Park, and the other is 90 million tons of iron ore per year.

There was a time interval, of course, before the iron ore was found. It wasn t until a September day in 1844 that a peculiar wobble in the surveyor’s compass of William Burt pointed the way to the discovery of the first iron ore deposit in the Lake Superior district at Negaunee, Michigan. Man of science that he was, William Burt received not one penny of profit for that breath-taking discovery. But the men of commerce moved in quickly to take the risks and provide the capital. Many lost heavily, but a few won and a new industry was born.

2

SINCE those days when a wobbly compass became the old Jackson Mine, about 2.5 billion tons of iron ore have come down the lakes from the states of Michigan, Wisconsin, and Minnesota for the manufacture of everything from plows to Pullmans, battleships to bobby pins. First it was hauled round the rapids of the St. Mary’s River by Sheldon McKnight and his old gray horse; then, after the canal was opened in 1855, it flowed faster under the white sails of schooners that were unloaded by Irishmen with shovels and wheelbarrows; and today it comes down, 18,000 tons at a time, in great ships like the B. F. Fairless.

But where do we stand today? Is Mr. Barloon right, and is the curtain ringing down on the last act of this industrial drama? Or am I right in believing that iron ore will go on flowing through the “Soo” Locks for another hundred years? It is one man’s opinion against another’s. The answer is not to be found in books, but the stakes are large and snap judgments given wide circulation could do a great deal of harm.

The first thing to do, obviously, is to estimate the visible inventory. How much ore is thought to exist in the states of Minnesota, Wisconsin, and Michigan which has a quality like that now being used, and which needs no improvement in technology to be made available? No one could document such an estimate accurately. Iron ore does not lie in flat beds as docs bituminous coal, which can usually be measured in acres and often in square miles. Instead, it rolls and bellies out unpredictably, and in Michigan sometimes goes to great depths. No man has access to all the facts, but so far as there is general consensus, it would be safe to assume that 2 billion tons of ore can still be produced from our American Great Lakes deposits.

Now what is 2 billion tons in terms of years of supply? The complex series of variables that enter the problem at this point make objective judgment very difficult indeed. Ninety-two million tons were shipped in 1942. This was the all-time high, and if every year were to be like that we should arrive at a total life of only twenty-two years. This simple calculation is the basis of the panic talk. But see how quickly the equation changes with a glance at the record. Never before this war had we shipped anything like 90 million tons. Only three times in the previous twenty years did shipments touch even 60 million tons. Five times they were under 25 million.

It is a curious human weakness that in forecasting the future we are apt to assume that the present status is typical. In depressions we cannot believe that the turn for the better will ever come, and in boom times we are sure that we have arrived at a new plateau. So those who cry panic in iron ore assume that the present amazing demand for steel will continue unabated indefinitely. Yet, obviously, if Lake Superior ore shipments should average 50 million per year instead of 90, the present reserves of the quality to which we are accustomed will give a life of forty years instead of twenty-two. In the day-to-day job of running a steel company that difference is fundamental. Few officers charged with providing raw material would care to commit the capital of their companies to investments that would not be recovered in forty years, and in iron ore a thirty-year reserve is considered conservative.

Furthermore, because the Lake Superior district has been so widely publicized, it is not commonly understood that important deposits of iron ore exist in many other districts in the United States, and that the exploitation of such ores is being vigorously pushed. This significant trend will serve to extend the life of the Lake Superior deposits. The steel demand of the nation is a single entity, and the iron ore resources of all of the states therefore form a common pool.

In the year 1947, for example, while 78 million tons of ore were being mined in Minnesota, Michigan, and Wisconsin, 15.7 million tons were being mined from deposits located in other states of the Union. This breaks down into 8.2 million for the South, which includes Alabama, Georgia, Missouri, and Texas; 3.8 million tons for the East, which includes New York, Pennsylvania, and New Jersey; and 3.7 million for the West, which includes Wyoming, Utah, and California. In terms of percentages of total U.S. production, these other ores represented 16.8 per cent, whereas in 1942 they were hut 12.9 per cent.

The South, of course, has for a long time had an important segment of the steel industry in the Birmingham district. The question of ore supply there is not one of quantity but merely one of beneficiation. The reserves are large, but the percentage of silica is high and must be reduced by known methods of treatment.

The development of a steel industry in Texas, on the contrary, is quite new. The first blast furnace, located at Houston, came in in 1944, and the second, located at Daingerfield, in 1947. The ore supply for these plants comes from limonite deposits in the northeastern part of the state. Large tonnages arc available, scattered over extensive areas, all at or near the surface. In addition to the limonite, there are carbonate ores containing satisfactory percentages of iron, and an effort is now being made to mix the two. Here, again, some beneficiation is required, but the processes are known and the question is solely one of economics. When tonnages of high-grade ore are required for mixing, they are imported from Mexico.

Two blast furnaces are operating at St. Louis, which are supplied with iron ore from Iron Mountain and other places in the southeastern part of Missouri.

In the West, Colorado Fuel and Iron Company has had at Pueblo an important steel plant for a long time, supplied from a large iron ore deposit at Sunrise, Wyoming. More recently, pig iron capacity amounting to over 2 million tons has been added to the West in the states of Utah and California, and there appears to be no question that the ore deposits tributary to those plants can continue to supply them for a very long time to come. A railroad is being built to the Eagle Mountain iron ore district in Riverside County, California, which will be exploited to support the plant at Fontana.

Wherever these developments are going on, the capital investment is large, and the owners would not be spending such substantial sums of money if they did not believe their ore reserves were altogether adequate.

In the East, important production is now being obtained from the magnetite ores of the Adirondacks. Deposits are being worked which have been known since the Revolutionary War. This tonnage moves principally to Ohio and Pennsylvania, and there is used to supply plants which heretofore have been dependent exclusively upon Lake Superior ores. In those mines processes have been developed which will go far to solve the problems of beneficiation of low-grade ores in the Lake Superior district. Pennsylvania has had its Cornwall Aline for over one hundred and fifty years. And even New Jersey brought in new iron ore production at the Ringwood Aline in July, 1947.

In addition to these other domestic sources of supply, the imports of iron ore in 1947 reached a new hign of 4 million tons. Of these, 1.5 million came Irom Canada, 1,3 million from Chile, .9 million from Sweden, and the balance from Cuba, Brazil, South Africa, Mexico, and other sources. New iron ore enterprises in foreign countries, backed by American capital, are in the making, which in all probability will raise this figure of imports still higher. Both of these trends will continue.

During the war the Lake Superior ores had to carry a load not normally theirs, but if all of these other sources of iron ore increase, the demands made upon Minnesota, Wisconsin, and Michigan should decrease, even if peak steel production goes on.

3

THERE are two additional factors that make me believe that the total tonnage will be much greater than 2 billion tons, and the total life much longer. The first is intensive exploration within the known areas. Most mining men spend their careers trying not to find ore. Under the prevailing tax laws ore goes on the tax roll as soon as found, and if too large a deposit is developed it can be rich in mineral quality but ruinous in current cost because of the continuing tax burden. Many open-pit mines on the Mesabi range pay out more money in taxes per ton than the total labor and supply cost of putting the ore on cars. So the ideal program of a shrewd operator has been to keep enough ore in sight so that his directors will feel comfortable, and not enough to cause him to lose his job. He keeps a mental book on where he wall next explore, and hopes he will be right when the time comes!

As a result of this process of retarded exploration, a comparison of estimates made from time to time during the past thirty or forty years will show that lor each three tons removed, two tons have been added by later development. I should not dare to hope that this ratio will be maintained, but I do feel very confident that the 2 billion tons will be greatly increased by this process. The state of Michigan has taken positive action to encourage and reward discovery. Hereafter new deposits found by diamond drilling may be held tax-free for ten years.

Our high phosphorus ores in particular have great possibilities for added tonnage. These presently undesirable ores are found near Iron River and Crystal Falls, Michigan, Crosby and Ironton, Minnesota, and Florence and Mayville, Wisconsin. They are marginal today although rich in iron, because the phosphorus gives undesirable qualities to the steel. There is no secret, however, about the know-how of removing the phosphorus from the metal, and it will be done as soon as the approaching scarcity of other ore makes the moderate added cost competitive.

And the second factor that may greatly increase the 2 billion tons and extend the life of the Lake Superior district is Canada. Across our northern boundary lies a rich empire with a dollar-hungry economy. What more natural and proper development could there be than for the balance of trade between our two nations to be restored by the shipment of iron ore from Canada to American steel plants? That our Canadian friends have iron ore and lots of it is a conviction growing in their minds as well as ours. Heretofore their prospectors have looked chiefly for the precious metals, but they are becoming iron conscious, and 1 shall be greatly surprised if new and important iron ore discoveries are not made in the next ten years.

Already significant beginnings have been made. There is the rich Steep Rock Mine northwest of Port Arthur, developed by a Canadian syndicate with the assistance of Cyrus Eaton of Cleveland; there is the Michipicoten area north of the Canadian Sault, which is fast becoming an important producer under the gifted leadership of Sir James Dunn; there is the old and still tremendous Wabana deposit in Newfoundland; and then there is the breathtaking new discovery, situated partly in Quebec and partly in Labrador, which is being explored jointly by the Hollinger interests of Canada and the Hanna interests of this country. It lies in that no man’s land where the exact boundary awaits survey to determine the “height of land, but already this new deposit is known to have high quality and apparently tremendous tonnage.

Port Arthur and Michipicoten ship on the Great Lakes interchangeably with Duluth and Marquette, while Wabana ships by sea, and the new QuebecLabrador area would go to sea not far from the St. Lawrence. Should necessity arise, it seems clear to me that ocean-borne ores would come to Chicago by new St. Lawrence channels long before Chicago steel plants would move to Boston. Other Canadian finds are already in the whispering stage, and it would be a very foolhardy geologist indeed who would dare assert that there would be no more.

To this point, all that I have endeavored to establish is that the number of years that will elapse before we have exhausted the type of ores which the steel industry in the Middle West is now using will be much greater than the alarmists would have the public believe. Make any allowance you wish, however, for error in this reasoning and there still is no cause for apprehension. Remember that the changeover to low-grade ores will be gradual. There will be no interruption. The public will not even be aware of the substitution. When the rich ores are all actually exhausted, the plants in Pittsburgh, Cleveland, Youngstown, Detroit, and Chicago will go right on making steel. It will be business as usual because the second-rate ores of the Lake Superior district can and will do the full job.

In fact, for ail practical present purposes it can be said that the low-grade ores are capable of doing the full job indefinitely, since the reserve tonnage of those deposits is so astronomical that their life is beyond estimating.

Feature writers like to use phrases that sound impressively technical, and in discussing these ores the word taconite has lately come into wide vogue. Personally, I find it confusing. It means different things to different people, and even for the same person it changes meaning as the context changes. The truth is that the mother rock from which the iron ores were formed is a very ordinary thing around Lake Superior. It is widely disseminated and covers thousands of square miles in the vicinity of the iron ranges. Taconite in Minnesota and jasper in Michigan are, of course, chemically different but the significant fact is not so much their difference as their alikeness. Along with other forms of low-grade ore in the area, they bear around 35 per cent of iron as compared with about 50 per cent for the high-grade ore we now ship. Nature found ways to remove the impurities from this country rock and bring particles of iron together in one place to form ore. Man can do the same thing. Engineers call the process beneficiation and the product concentrate.

4

THE industry is turning first to the iron-bearing rocks in which the minute particles of iron are magnetic. One well-informed expert has estimated that the concentrates from this group alone would add 5 billion tons to the reserves of the district, or fifty-five years of life at the full rate of the 1942 peak. The economics of the method by which this beneficiation is to be accomplished are still marginal, but the physical process is fully understood and proven in basic principles. It involves mining the rock by familiar open-pit practices, grinding it to a fine powder, selecting the iron particles by the application of magnetism, and then making artificial pellets from the iron in a size to suit blast furnace requirements. All of this is at the pilot plant stage right now. Commercial installations will, of course, bring improvements and economies, but no well-informed person in the industry has the slightest doubt as to the ultimate feasibility of the process.

Nature has been so generous in handing the American people the vast rich deposits of the Mesabi range that mining men haven’t had to apply their ingenuity to these problems earlier. As a matter of fact, they wouldn’t be attacking them for a great many years to come if it were not for two factors. The first is the uneven distribution of ownership in the 2 billion tons of natural ore. Sonie steel companies have less than others, and this puts competitive pressure behind the inquiries into beneficiation.

The second factor of acceleration is the impact of wartime wage increases on the production of underground ore. It takes five times as much labor to mine a ton of underground ore as one that comes from an open pit. Hence a horizontal wage increase is five times as costly. If this process goes on, beneficiated ores could very soon become cheaper than underground ores of much higher quality.

Where the iron particles are not magnetic, the know-how of beneficiation is less advanced at the moment but the quest is on. The principal group of ores is that where the iron is present in the form of hematite. There the tonnage is many times greater than that of the magnetite —certainly enough for another hundred years of 1942 shipments. Flotation of the particles on soapy froth such as is practiced in the copper industry has been tried but the technical difficulties have not yet been mastered. One sure way would be to take advantage of the fact that the application of heat to hematite will cause it to become magnetic, but adding this initial step would cause these ores to be non-competitive in cost with those that are magnetic to begin with. Here again no informed person doubts that the answer will be found. It is certainly closer than the application of nuclear energy to industry, or production of gasoline from coal, both of which the public takes for granted as being just around the scientific corner.

The author of “Steel: the Great Retreat” is frightened at the capital cost involved in the beneficiation plants which large-scale handling of low-grade ore would require. How strange that sounds when one remembers the talk of the thirties that we had reached a mature economy in which there would no longer be an outlet for the savings of the nation.

Remember we have between twenty-five and fifty years in which to do the job. The capital required for such plants will be but a down payment on what I suspect must be made available if our nation is to go to nuclear energy as a source of industrial power, and that is a challenge which all of us would take up joyfully. I should guess also that it would be less than what will bo spent on the technological revolution going on right now in coal, where company vies with company in building beneficiation plants to remove the impurities machine mining brings in.

And Mr. Barloon worries also about the cost per ton of the final concentrate produced by beneficiation from these second-string ores. The cost will, of course, be higher. Mining three tons to get one is expensive, but there will be many offsets. The first will be taxes.

The second will, oddly enough, be quality. If new plants ship a concentrate averaging 65 per cent iron, they will pay the same freight per ton, both rail and vessel, as a mine shipping natural ore that is but 50 per cent iron; and that will be an important competitive advantage.

And the third will be improved production at the blast furnaces because the physical structure of the concentrates will be better than that of natural ores. Ore when simply lifted from its place and put on cars is like any other pile of dirt. It has particles of assorted sizes, from fine grains to large chunks. Blast furnace men don t like that. They want openings in their burdens through which hot gases may rise upward for the reduction of the ore. They would call ideal a burden in which every particle is just like every other particle and of an agreed size. It is precisely that identical and ideal size which the new beneficiation plants will be able to accomplish, and the resulting improvement will justify a higher cost.

Nowhere in all this is there cause for alarm. It is merely the familiar pattern of gradual change in the industrial scene with problems yielding to technological progress in normal sequence.

Even the defense problem that might be caused by an alleged shortage of Lake Superior ore seems to me greatly overrated. Apart from the fact that the next war may not be a steel war, this fact seems clear: in this gradual change-over process there will always bo enough Lake Superior ore available to supply to their full capacity the steel plants normally dependent on those sources. Stockpiling need be considered, therefore, only for the seacoast plants that use foreign ores.

And it is fantastic to suggest that the changing iron ore situation would cause Middle Western steel plants to be abandoned and replaced by new ones in the East, but solely to round out the argument, I add a comment or two on that point. The first is that steel plants should be built at market. That is where the customer is and the plant that is closest, serves him best. I don’t quite see how Illinois and Indiana could be served with steel from New Jersey when it now would take a train fifty-four miles long to carry the steel that my company produces in a single month. Multiply that by the vastly greater tonnage of all the steel mills in the Middle West, and the staggering burden that it would place upon the railways becomes apparent.

Then, there is the question of scrap, the indispensable raw material of the open hearth. Scrap is produced at every factory that uses steel, and unless we are going to move all our Illinois and Indiana factories back East, the scrap will be here and not there. By the time we haul the scrap to New Jersey and the steel back, the added cost will look like the national debt when compared to the moderate and gradual increase in raw material cost that will follow a change-over from natural to beneficiated iron ore.

So let’s relax and not worry about iron ore. The American people scare easily. And they are jumpy right now for many good reasons. Let’s not add to the national headache by putting up danger signals about a problem that isn’t bothering the steel industry at all. I here will be Lake Superior iron ore for a long, long time.