3,600 employees in Butte, Mont.; today, that figure has been nearly cut in half. With other reductions at Anaconda and Great Falls, the job loss at our Montana operations since 1974 exceeds 2,200 employees curtailed.

While that figure may seem small on a national scale, it has a severe impact in Montana and in the communities of Butte, Anaconda, and even Great Falls, Mont., it becomes critical.

However, despite these reductions and all other efforts to reduce expenses, our operation costs exceed the price of copper and our Montana properties are operating at a direct financial loss.

I believe this points out a significant threat to our national interest. If foreign producers continue their operations at current levels without regard for high inventories and the need to adjust to market realities, the prospects are poor for price improvement, and more and more producers in the United States will be required to curtail operations or close completely. This lost capacity would be replaced by foreign imports.

It should be stressed that mining capacity cannot be easily turned on and off to meet market fluctuations. In some cases, an abandoned mine can never be opened, such as an underground property when the workings are allowed to flood.

As for starting up new mines, where the deposit is thoroughly evaluated and investment capital is available, it would take about 5 years to bring an underground mine on stream. It takes about 3 years to bring in an open pit mine on stream, although the time could vary depending on stripping requirements and other conditions. To expand production at an operating mine requires a certain leadtime for delivery of heavy equipment. If other producers are expanding and placing orders on the same manufacturing facility, the leadtime becomes even longer.

In all cases, we have the added problem of manpower. It can be difficult to rebuild a skilled labor force, particularly at some of the remote locations where mines operate. This is particularly true if skilled underground workers are required.

In view of these problems, the United States should not be allowed to become dependent on foreign nations for our supply of copper, a metal that is critical to our defense and national needs. There is a definite need for a strategic stockpile of copper. I would like to point out that a goal of 1,299,000 tons of copper has been approved by the administration for the national stockpile. As of now, there are only about 20,000 tons in the stockpile.

I strongly support S. 2167 sponsored by Senator Domenici as a logical first step in a copper stockpile program. It has several benefits, including the fact that the purchase of copper would be financed by the sale of tin. I urge the approval of this bill and such further legislation as may be required to authorize additional purchases and build the level of the copper stockpile to its approved goal.

That completes my testimony, Senator.

Senator HART. Thank you very much, Mr. Powell. We appreciate your time and your trouble in appearing before this committee and certainly take your testimony under serious advisement.

One question is the lingering one with regard to all the testimony affecting this problem and that is your judgment as to the effect that

a purchase of the size contemplated in this legislation would have on the overall health of the industry.

Mr. POWELL. My position and our company position, of course, is the same as that of the American Mining Congress stated by Simon Strauss. There is one facet that has not come forward and that is a general number. An average employee produces about 30 tons of copper year so when you consider that against a 250,000 ton stockpile it is a significant effect; it is equivalent to about 8,000 employees for 1 year.

Senator HART. That is a figure I don't think anyone else has raised and I think it is very helpful.

Thank you very much. I will look forward to seeing you out in Colorado.

Mr. POWELL. Thank you.

Senator HART. I want to welcome my colleague, Senator DeConcini, from Arizona and my good friend and colleague, Congressman Udall, also from Arizona-two of the finest public servants I know of both in terms of their interest in the public interest and their service for their constituents and their leadership on the specific question of the health and future of the copper industry in this country.

Gentlemen, you are welcome to the subcommittee. The floor is yours for any statement that you care to make.

STATEMENT OF THE HON. DENNIS DeCONCINI, A U.S. SENATOR FROM THE STATE OF ARIZONA

Senator DECONCINI. Gary, I will submit a statement because of your time. I will be editing it slightly and I will leave it here.

I would like to thank you very much at this time for holding these hearings timely.

Congressman Udall will have a few remarks, I know. We are introducing somewhat similar legislation today that approaches it a little bit different. The bill we have introduced I don't think it will find any great conflict in what the testimony is today-it authorizes the sale of 45,000 tons of tin and the purchase of 225,000 tons of copper. It is in the Nation's best interest, it is not-and I hope not considered any kind of just a way to help out the copper industry.

The administration is supportive of our legislation and you will hear testimony today, I am advised, in support of it for the national interest. Needless to say for Arizona and other copper producing States than Arizona, we have some 8,000 unemploved. It will be significant psychologically and also in the area of taking some of the overhang in excess of 1 million tons off the market so I greatly appreciate your commitment last year on the floor to hold these hearings and following through with the great amount of time and effort and interest that you have devoted to this matter. I know you have plenty of other things to take up, too, but this is so vital to the West and our industries that we appreciate the tremendous days that you are putting in on this.

[The prepared statement of Senator DeConcini follows:]

PREPARED STATEMENT OF SEN. DENNIS DECONCINI

Mr. Chairman, on behalf of my distinguished colleagues, Senators Cannon, Domenici and Paul Hatfield, I am introducing legislation which both meets

our national security requirements and which provides desperately needed assistance to the American copper industry.

The legislation has the full endorsement and support of the Carter Administration. We worked closely with the Administration in developing the language to suit the priorities and procedures they are anxious to follow in matters affecting the treatment of copper and the strategic stockpile. We believe, and the Administration concurs, that this legislation is in the best interest of the

nation.

The thrust of the bill is to provide the Administrator of the General Services Administration with the authority to dispose of certain items in the national stockpile of which there is an excess over the established goals and to allow him to add materiel that is deemed necessary for national security reasons but which is currently not held. It should be noted that this approach was originally suggested by S. 2167, introduced during the first session by Senator Domenici.

Under our bill, the Administration is authorized to dispose of up to 45,000 long tons of tin for the purpose of obtaining copper. As the legislation is written, the Administrator is empowered either to sell or barter the tin. Since the legislation also contains safeguards against any potential disruption of the tin market, the Administrator will be able to choose, given market conditions, whether it is more advantageous to barter tin directly for copper or whether tin should be sold. In the latter case, we anticipate that the Administration will require authority from the Appropriations Committee to actually purchase the copper. Because of the flexibility built into the bill, the Administrator, in all likelihood, will combine both methods.

The legislation further empowers the Administrator of the General Services Administration to purchase copper in an amount not to exceed 225,000 tons. This figure represents the best thinking of the Administration at this point as to the real needs of the nation in an emergency. I do not believe that any of us wish to see the national stockpile subject to the sort of abuse and manipulation that has occurred in the past. To prevent that, it is better to be cautious. This Administration while anxious to assist Arizona and the other copper-producing states, has wisely chosen to purchase only the absolute minimum amount of copper necessary.

I believe, Mr. Chairman, that if enacted quickly this legislation will not only serve the needs of national security; it will measurably and significantly benefit the American copper industry. That industry has been beset by a series of difficulties that have left many mines closed and thousands of workers unemployed. In my own state, Mr. Chairman, approximately 8.000 persons have been laid off, some permanently. Some of the immediate hardship has been relieved by trade adjustment assistance, but that is not a solution, only a palliative.

Although there is a surplus of approximately one million tons on the world copper market, the long-term outlook for copper is good. Demand is growing following the recent worldwide recession. If the Administration is able to purchase the full amount of copper authorized in this legislation within a reasonable period of time. I believe that it will have a very significant impact on the price of copper. Among other possibilities, it will reverse the tendency. among buyers of copper to withhold purchase orders in the anticipation that the price will drop further. Clearly, with the United States Government as an active purchaser of copper, the present market psychology will change.

The President of the United States has, by endorsing this legislation, discharged his obligation to protect the national security while simultaneously demonstrating keen sensitivity to the unique problems facing the western states, I know I speak for my colleagues on both sides of the aisle in applauding this action.

Senator DECONCINI. Congressman Udall, would you care to submit a statement?

STATEMENT OF THE HON. MORRIS K. UDALL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ARIZONA

Representative UDALL. Yes, I have a statement and I will submit it. I just want to say a couple of things in addition. One thing is that

Senator DeConcini and I view these hearings as a major event. The copper industry is in the worst situation since the 1930's. This is not the total answer but it is part of an answer. I know your concern about developing a comprehensive stockpile program that really works in the national interest does not result in sort of ad hoc reactions to particular events and particular industries. It is important to the country that we get an overall program but you attend to the sick or those in danger of dying first and then worry about a national health plan after that.

I would hope that you would be able to assist us in focusing right now, this year on the problems and programs of the copper industry. The breakthrough that I think we have made with the bill that the Senator will introduce on this side and I will introduce with a large number of western Congressmen in the House this afternoon is that finally we have the administration support of something specific to aid the copper industry. I have always felt that we had to make this fight and that we could go on ahead with it and perhaps have a good chance of success. In the final analysis if the administration decides from the foreign policy consideration, economic and fiscal problems that they could not support a specific bill, we are going to have a rough road. The breakthrough today is that the administration from the President and Vice President on down have assured us that this bill we are introducing will have that support and the President will be pleased to sign it.

So I congratulate you and I urge you onward and upward on these hearings. This is important to all of us in the West.

[The prepared statement of Representative Udall follows:]

PREPARED STATEMENT OF REPRESENTATIVE MORRIS K. UDALL

Mr. Chairman and Members of the Committee, I appreciate the opportunity to appear before this Committee this morning on a matter that is of utmost importance to Arizona as well as to many of the other western States.

I will not take up the valuable time of this Committee in outlining in any detail the depressed condition of the domestic copper industry. It is sufficient to say that due to uncontrolled imports and low prices the domestic copper industry has been very hard hit. Mines have closed, 10,000-12,000 workers were unemployed last summer and the price of copper has recently declined to about 60¢ per pound.

Today, I am introducing a bill which has the backing of the White House and which I sincerely hope will tend to stabilize the price of copper and bring some measure of relief to this industry.

This bill would authorize GSA to sell up to 45,000 tons of tin, excess to our needs and use a portion of the receipts from such sale for the purchase of up to 225,000 tons of copper.

The receipts from the first 5,000 tons of tin sold in 1978 and the first 10,000 tons of tin sold in 1979 would be covered in the Treasury. But the important point is that the receipts from the sale of 26,000 tons of tin would be used to purchase the 225,000 tons of copper. There is also provisions for the sale of 6,000,000 pounds of tungsten.

I think this is a good bill. It is not all that we in the copper states had hoped for. Frankly it is a compromise.

The other point I want to emphasize is that this bill is not to bail out the copper industry. Without doubt we hope it will help that industry. The goal of the copper stockpile is 1,299,000 tons. There is less than 20,000 tons now in that stockpile. This bill would authorize one purchase of 225,000, or a small first start to rebuilding the copper stockpile to its authorized goal.

Mr. Chairman, I thank you for your time and I hope you and your Committee will give favorable consideration to this proposal. As you know, Senator DeConcini is introducing an identical bill in the Senate today.

Senator HART. Thank you both. I think in this case we have a situation where we can have national health insurance and take care of the sick and wounded at the same time and we intend to do that with as much expedition as we can. That is the reason for these rather lengthy hearings the last 2 days and consideration of the range of stockpile legislation that we have.

My concern last year when this measure was brought to the attention of the Senate was that we should not piecemeal it, that we had to have comprehensive legislation in which this could be part and, second, that we had to have an administration position. I don't want to be critical of the administration but I think coming into office this is a matter that started out rather low on the totem poll in terms of attention. We did manage last year, I think, to focus the administration's attention on the overall problem and I think the culmination of that is in the appearance of administration witnesses yesterday as well as the apparent support which the administration has given to your bill here today. So with that kind of breakthrough I think we are prepared to go forward as quickly as possible.

I know our colleague on the House side, Congressman Bennett, has passed a bill. We want to get one out of here as soon as we can and hopefully look to this particular problem in the process, and then reconcile those two bills. We want to get some legislation out of the Congress as soon as possible.

I want to thank you both for appearing.

Senator DECONCINI. Thank you, Mr. Chairman. We appreciate it. Senator HART. I would like to now ask Mr. Lowell Hoffman representing the National Can Corp. to give us his statement for the subcommittee.

STATEMENT OF LOWELL M. HOFFMAN, VICE PRESIDENT,

NATIONAL CAN CORP.

Mr. HOFFMAN. Mr. Chairman, members of the committee, my name is Lowell M. Hoffman, and I am vice president of materials for National Can Corp., headquartered in Chicago, Ill. Today I am speaking on behalf of the Can Manufacturers Institute, whose members comprise approximately 90 percent of all metal can production in the United States. Sales of the can manufacturing industry exceed $7 billion annually and, through our purchases of tinplate for canmaking, account for in excess of 35 percent of annual tin usage in the United States.

In the interest of brevity, I shall deviate from my prepared remarks, but ask that they be submitted for the record.

The committee today is assembled to consider a most important. subject. I shall, therefore, succinctly outline my personal concerns and those of the industry which I represent.

First, I applaud you, Senator Hart, and others who join you in sponsoring S. 2575, which would seek to restructure the Strategic and Critical Materials Stockpiling Act, and to provide a new sense of management to this national resource.

I think management is a key word here. The act needs to allow flexibility and responsiveness to changing requirements, changing international situations, and changing strategic purposes.