Red-Hot Copper

Copper has generally been a contentious metal, existing side by side with violent political upheavals, bitter labor strife and speculative price binges. It is the modern metal of communications, a major ingredient of the wires that serve the vast electrical-equipment industry, the huge utilities, and the radio and TV networks. Yet it has seldom caused more excitement than it did last week. A U.S. company, Texas Gulf Sulphur, announced the discovery of one of the biggest and richest copper lodes in history near Timmins, Ont., 350 miles north of Toronto. Test borings so far indicate a find at Timmins of 25 million tons of ore, rich not only in very high-grade copper but in sizable quantities of silver and zinc as well. At the first rumor of the discovery, Texas Gulf stock on the New York Stock Exchange began rising, rocketed 14 points in ten days of trading to 41 1/4 by week's end. Mining stocks on the Toronto exchange joined in with their biggest speculative orgy since the uranium boom of the '50s.

Even Curtis Publishing Co. had a timely bit of luck in the find. After the publishing house announced that it owns 40,000 acres of timberland next to the Timmins strike--and that it has an agreement with Texas Gulf to share in the profits of ore under its timber holdings--Curtis stock rose 2 5/8 points to 11, before trading was halted by the Big Board.

Strikes & Shortage. The latest copper find just added more excitement to the world copper situation, which is already cluttered and chaotic. Strikers last week slowed production in the rich copper mine area of the Congo, around which Moise Tshombe's shooting war revolved only last year. In Chile, where it often seems that copper labor would rather walk out than work, two crucial wage contracts run out this year; beyond that, Leftist Salvador Allende, who has made nationalization of U.S. copper mines his key plank, is making a strong bid for President in Chile's Sept. 4 election. The U.S., the world's largest producer, is also threatened with labor tie-ups as 50 major-industry wage contracts expire beginning June 30. Thus the areas where 50% of the free world's copper is mined face one kind of crisis or another. The specter of shortages of the essential metal has pushed copper dealers' prices up as much as 25% since January and driven many users to hasty stockpiling.

In any other industry except copper, the prospect of rising prices and sharpening demand would cause only happy visions of fatter profits. When copper prices spiraled once before in the mid-1950s, however, many users turned to such substitutes as aluminum and plastics. "At that point," says Dr. Charles H. Moore, executive vice president of the International Copper Research Association, "copper became a defensive industry." Companies had to fight to protect the markets they had left.

Not Enough to Pile. Coppermen claim that free world production, expected to hit 4,100,000 tons this year if all goes well, is adequate to meet consumption. But with so many copper crises threatening to erupt around the world, big copper users are convinced that the only prudent course is to lay in stocks in advance--and production cannot keep up with heavy stockpiling. Texas Gulf's find at Timmins should help in the long run, but it can provide no quick relief. It will be well over a year before the heavy mining equipment can be set up and put to work scooping through the earth's crust to remove the rich, brown ore.

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