COM'
J une 21, 19'19
Seantora :Edv1n e . Johntlozl.
United St tea SenL.te
lf;J.ah1ncton, D. e.
~ne
D. J:1111kin
Jbo. Y. A. Sitton and the IndeyeDdent T&rulditii:I-UraniUI:I Prodnoera'
Auocit.tion b:ln rece1Ted the proposed toll arranc-t of Y.r. Jeaae
Johnaon of the Baw ¥4Lteriala Div1a1on of tho Atogic ~ Co~ae1on,
wherq \he Cozr1u1on offered to receive the ore of tho Incltpendent
Produeere, p~q for the urenlua onl7, eD4 return 80 per cent of the ~
adiUIII contained to the producer upon ~t of 60 cents per pound of
vano.di1J11 oxic!.e to the A. J:. C. to cover their proceslin.; charc:e. '1'he
~1 producers had ~abel an equitable J;rice of J2 cenh per poand,
vhich woe baaed on the ect-...U. co1t of the orerat1on.
In CILH the seller el.cted to take thia offer he vould pe;r 60
cente for 80 per cent of t.h" VP.nad1w:a 1n hia orec azul. the difference between th1e charge and thfi!"Z"'!&ent aa.lea price of '9Un8dium (96.4 ce h)
would JDeen tl)at he lu:d ::3' . : centa d1f erence to ~ h1lll for hie m~
and :profit, Bovever, u thie "'-0 . 4 cents covere onl7
per cent of the
vanad1UIIl 1n hie ore, thie YO ld be thA B<"'Uivalent to JS. ~ X 80 per ced,
o'bv1oual7 the a;;;1e or leea the.:.. the Jl ce!!h nov 'beillo'l paid th&t there
woul d be no obJect 1n the treneact1on.
eo
If the producer abo ~ elect t;.1a ~emont, he vould rece1Te about
J0. 72 centa for hie vanadiUI:I. If he conUD118a a a he doee nov , he
rece1vea Jl cents.
On June 9 a m.. t~ v::c held 1n Gr,:.nd Junction with l':r. O.Or.;e
. Gallf'4}!er (A·I1atant to J:r. Johnson) and Mr. P . c. x-bT. with m,yaelf end
Xr. Sitton r4Mreeent1Jtt; the -11 Itinere. At thia -tint:, I called
.:r. Galla(;ber' e attention to the obviou.e uru:airneua of the o ffer 1n
viev ofl
J'irat.
The entln::te of the Jlrlce ot JO to JS c8tlte of
T rocea 1ng b7 the At oaic Jlnerg- eoa11aa1on J:rlcineera.
Secon4. A contr ct for toll proeeecing c ade between United
Sta tea Tan::d!UI:I Co:rporr.tion aDd Metals Eeaone COIIpBZIT
1n 1944, for vh1ch the cbarC• for a1ctler proc01~ing
- • )2. 4 cenh.
~
The coat of r roce11ing a\ the Rifie Plant 1n 1947 of
70, 000 t one of )2. 04 cente which covered rknt
deprecuUon.
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1
Senator• ldw1.n
June 21, 1949
f ... 2
c.
Johnaon • !u.cene D. Millikin
Jr. c.uamer 1 • attention wu called t.o the tact. that this offer
vould leave the emall producer 1e.. well ott than before beeauM be
would bave tba arld1t1onal. proble11 or ae!J..int hie product. ana the
.t.toaic f.nerg c-iaaioD wuld olrrloual:f baY& a profit or about 28 cet~ta
per po\111& ot ':fJs•
Mr. Gallacher e:.at.ed that the ~ Y~teriala DiYiaion felt ttat •u
there 11&11 a Jli"'fit in pl'Ocesain& thb ore, it should so the Gon~.·
-
At th1.e tiM, the RAW Jf&teriala Dinaion of tha ttoldc Energ
Co.aieaion 1a FChaaiDC -41u. produced. b7 tte Vai\ac!i\111 CorJOration
or ..._rica and United State• Vanad1ua "orporat1on, t r - oree purche.eed
under 1. !. C. echedulee, tor app~tel:r 98. 4 c:enta per pounci under
an a&;re mt that, i t tile nnad1ua c:owpentee C&Dnot ..u tbia vanad1-,
the " · r;. c. will take 1t orr their band• at thia IU&Z'IIllteed rrice .
Mr-. Oall.a&lWr'. attention ""' called to the unfair!wss or the treat•nt of the ..U producers in co.pari11011 with thia preferred treat.ent
accorded the Yanadiua i.nduatry, 'Who, unde:- aecrat contract., are paranteed
a II&J'ket a.n.d a prot1t 011 pro04lae1Di tbe ore of the . . U producera . {!be
rrot1t 011 lftlich b u-at. equal to the entire price paid to t.'te & ....u
llliner. )
It ia -:r o~on Ulat i t 1e bopel..• to t17 to obteiD aliT relief Ulrollih
the lav l:ateriala Dinaion of tha AtOIIic !ner11:7 Co=iaaion, vho baYe 1111tted tbeuelvee to the polic7 or developin& the re&ion o~ throll&h t e
Yanad1'11111 OO"'p&"1.. . 'l'be next ertort, Mr. Sitton bellev.d, boul4 be ill
t.he direction or obt.d.nilla an indepenclent proeen111e ~lant tor the ..U
Jdnar output-& plant that WOuld do the job that the7 all expeotad the
Jfont1eallo Plant to do .
the real i ..ue here ill th1a region, and the iJipOi'tant one, 1e vbetber
the tuture .t.rican Suppl:f ot Uraniua ia t.o be obtained ae a b7 ('l'Oduct
of the l.hit.ed Y&nadiua ,arbta, (the publicl:f announced polie;r or Mr.
Guatat8011), or llhether uraniua ia to be deYelo~d and rrocsned u a rrinc1pal product• tree !roa reatridtive lildta or the ~reaent uneatiafactory
't'&n&diu. illdust.t7.
1'bose ot ua who han lines and ~Yeloped thia field tor lii&Il1 ,-.are
bali..... tl1e pr..ent polie7 or aubordill&ti.nc uran1ua production to a aiel!
'+'anacliua illdustrT, 1a reeult.j,nc in axeua1Ye eoata t.o the Gove~t, u
exceadYe lose or urania 111 yazwdiu. proceuing plant.a not equipped to
recein uran1ua efficientl7. We !eel tbat, 4u. to the inexperience of the
lav Material• d1rlaion 1.n tl1e coa l.e.. ;roblea or thia •'"'"' field, and
tb7 the axcluain acuptanc. or council or the vana.:J.ua eo~ on
•ttera o! 't'&n&diua prieea and. 1ale1, the Kaw Materials Jiviaion of the
Atollic !:nerg CO..S.aaion ( perbar• unwittincl;r} , haYe inher.tted, with the
Senators Edwin
June
c.
21, 1949
Page )
nnadiu::a CO"il""'es , the oCi- of restriCted denlop»nt of D&tur&l re-=-ces which is imolved 1L the ~ndi.ng a:)nOJ:Ol-7 s-.U.t b7 the Anti-Truat
Dbiaion of the \ie~nt or Juatic:t.
I tb no~ thinlc tll&t we will have a square deal for ell the ~.leers
of ora in t.llia reaion, or the full deYelo;-nt of t !:e resources of ~e Colorado region, UDtil this ,jlOliCT of the RaW Materials Div!.sion is revised.
I aa rrepar111g, for the rec::>rd , & detailed stud7 and anal.ysia of the
entire quution, and will .up;: l.J' :ro• with this data later.
Sincerel.J' Yours 1
Blair Burwell
Consulting
BB:ju
Minin~
and Metallurgical
Engineer