Political and commercial geology and the world's mineral resources

by Unknown

COMMERCIAL CONTROL

United States.

—The widely scattered monazite deposits of the United States are of importance only during a period of abnormally high prices or during the restriction of imports from Brazil and India. The known reserves are small and the deposits will probably never be an important factor in the world monazite market. As far as the writer knows, all of the American deposits are controlled by American capital.

The manufacture of thorium nitrate in this country is closely controlled by two large companies, the Welsbach Co. and the Lindsay Light Co.; they own the only two commercial plants of any size in the United States.

All of the manufacturers of mantles in the United States, with one exception, must obtain their thorium nitrate from one of these two companies. As these companies supply practically all the thorium nitrate requirements of England and France, they control the thorium industry. The only other manufacturer of thorium nitrate in this country is the Block Co., of Chicago, which uses about 15 tons of monazite a year, making sufficient thorium nitrate for its own production of mantles. The Welsbach Co. uses about 1,200 tons of monazite annually and the Lindsay Light Co. about half that amount. The Welsbach Co. has contracts for the delivery of monazite, up to its requirements, from Brazil; the Lindsay Light Co. has obtained all of its monazite from India.

Most of the processes used, including those used by the Welsbach Co. and the Lindsay Light Co., are secret. As thorium can be extracted from monazite in more ways than one, a secret process does not necessarily mean commercial control unless such a process is in every way efficient and the company owning it is willing to get into a commercial war.

Brazil.

—As the Brazilian deposits have for so many years been the chief source of the supply of monazite, the history of their commercial control is practically a history of the commercial control of the monazite industry. About 27 years ago, John Gordon, an American now residing in New York, found monazite on the coast of Brazil. He brought large quantities to Hamburg, Germany, and was able to obtain a monoply of the monazite sand.

At that time the manufacture of thorium nitrate, the principal product of the monazite sand, was confined in Europe to a few large chemical firms in Germany and the Welsbach Co. in Vienna. They not only supplied the European market with thorium nitrate, but also sent large quantities to the United States. The American Welsbach Co. early manufactured thorium nitrates from sands mined in the Carolinas, a protective duty of 6 per cent. making this possible.

In 1902 Mr. Gordon agreed to supply the four large German manufacturers and the Austrian manufacturers with monazite at a price of $150 a ton and a profit on the manufactured nitrates. A close combination thus formed, known as the German Thorium Convention, prevented other thorium manufacturers from acquiring any of the mineral mined by Mr. Gordon, and raised the price of thorium nitrate 100 per cent.

For a considerable period Mr. Gordon exported the sand from the coast lands of Bahia, near Prado, Brazil, without interference. Finally the Brazilian government became acquainted with the value of the resources and decided that no private individual or state government had the right to mine, sell, lease, or remove any monazite on so-called state lands without the consent of the federal authorities. In 1908 the government advertised that coast lands in the State of Espirito Santo would be leased to the highest bidder for the exploitation of the sands. A contract was thus obtained for the firm of A. C. de Freitas & Co., of Hamburg, Germany. By the contract the firm agreed to pay to the Brazilian government a rental equal to 50 per cent. of the selling price of the monazite sands and to export at least 1,200 tons annually.

To avoid trouble the German Thorium Convention arranged later that half of its supply should be furnished by Mr. Gordon and half by the de Freitas company. A new convention was formed by the four German chemical manufacturers with Mr. Gordon and the de Freitas company, preventing firms in other countries that had started to manufacture thorium nitrate from getting raw material. Consequently great efforts were made to find and develop new deposits of monazite. The high price for thorium nitrate made possible the mining of monazite in the Carolinas and its export to Germany, especially to one German manufacturer who was not in the German Thorium Convention.

Ultimately there was an overproduction of thorium and in 1906 the price dropped 50 per cent. Monazite mining declined in all localities where the cost of mining was high, and production in the Carolinas and the interior of Brazil practically stopped.

During the four or five years antedating the war the German Incandescent Gas Light Co., of Berlin, succeeded in controlling the largest manufacturers of thorium nitrate in Europe, except those in France. It controlled both the English and Australian companies and became the active competitor of the so-called Thorium Convention, which at that time had lost much of its power. Mr. Gordon still has extensive interests in Brazil, but he does not have a monoply. The exportation rights from Brazil are in the hands of Luis de Rezende & Co. (Rio de Janiero), Mr. Gordon, and others. Luis de Rezende & Co. is mainly a French concern, but has Brazilian and Portuguese stockholders. The company controls the French company, Société Minière, associated with the Welsbach Co.

As noted above, one French company has exploited monazite deposits in the territory immediately behind the government lands in the State of Rio de Janeiro. Another French company has worked the black sands along the Parahyba River, near Sapucaica, which contain traces of monazite.

India.

—Before the war, the German manufacturers of thorium nitrate exercised as close control over the monazite deposits of Travancore, India, as over those of Brazil. Only a limited quantity of the sand was sold to gas-mantle manufacturers and other consumers in the United Kingdom, and then at a price nine times the price paid by the German consumers. Such a monoply of the supplies of raw material made the German monoply of the thorium nitrate industry almost complete.

According to S. J. Johnstone, in an address at the annual meeting of the Society of Chemical Industry in July, 1916, the Germans obtained practical control of the Travancore monazite deposits in the following manner: A lease for working these deposits was granted some years ago by the Travancore Durbar, with the approval of the Government of India, to the London Cosmopolitan Tin Mining Co., which contracted to sell the whole of its output to a German firm. Soon after the outbreak of war it was found that the whole of the preference shares and 11,000 of the ordinary shares of the Travancore Minerals Co. were held in trust for the Auer company, of Berlin.

The India Office decided that in the future all directors of the company working the concession must be British-born and that the company, must be ready at all times to sell monazite sand direct, and at a fair price, to British firms. German contracts were canceled. A second company, Thorium, Ltd., obtained a 20-year lease to work 150 acres in Travancore for monazite sand, and is exporting the sand and manufacturing thorium nitrate from it at works in England. A great deal of Travancore monazite has been imported by American companies.