The Boy Grew Older

Suckled by mighty Grand Coulee and Bonneville dams is one of the lustiest of West Coast war babies--its brand-new aluminum industry. Thriving on cheap power, five huge reduction plants have burgeoned in less than four years, now turn out 30% of U.S. pig aluminum. But many a West Coast industrialist is worried over the baby's future. Reason: its mother, mammoth Alcoa, may strangle it.

Of the five plants, Alcoa owns one, operates two others for Defense Plant Corp. And it supplies alumina (the oxide from which aluminum is made) from its Mobile plant to the two others, operated by Reynolds Metals Co. and by Olin Corp., a subsidiary of Western Cartridge. Come peace and an end to WPB's control of alumina, Alcoa might decide to pull out of the two DPC plants and cut off alumina. This could kill the new industry.

Infant No. 2. Last week, WPB acted to forestall this possibility. It approved construction of a $4,000,000 alumina refinery plant at Salem, Ore., by another infant, Columbia Metals Corp. The new member of the family is fathered by such West Coast bigwigs as Boeing President Philip Johnson, President Eric Johnston of the U.S. Chamber of Commerce, Weyerhauser Timber Company's Norton Clapp. The plant, to be built with DPC cash, will produce alumina from the West Coast's vast beds of clay. It will be the first plant in the U.S. to use this process.

The move is more than an attempt to outguess Alcoa postwar strategy. The U.S. now has so much aluminum that WPB's C. E. Wilson recently said "it is running out of our ears". But the fact is that the U.S. will exhaust its high and medium-grade bauxite deposits (chiefly in Arkansas) in three years. It must then perfect a commercial process for utilizing low-grade bauxite (Alcoa claims to be trying out such a process now) or rely completely on bauxite imports, mainly from British and Dutch Guiana. This would mean that the U.S. might become a have-not nation in the No. 1 raw material of the light-metal age. The last alternative is to resort to producing alumina from clay or other non-bauxites.*

Growing Pains. If the war lasted beyond 1946, Columbia Metals would be a solid asset to the U.S. But now it is no great threat against vast Alcoa. The new plant will not get into operation for a year, and then will turn out only a piddling 50 tons of alumina daily (the five West Coast plants use over 30 times that amount). Alumina from clay, in this small quantity, will cost from $75 to $80 per ton compared to Alcoa's present West Coast price of about $60. But Columbia Metals' smart president, James O. Gallagher, who spent months in Washington bulling his pet plant through WPB, is confident that production can be expanded and costs cut.

Full Manhood. If that happens, Alcoa will not be caught napping. It has been considering a deal to buy San Francisco's Pope & Talbot Inc., the West Coast's third biggest lumber and shipping concern, operator of Alcoa's Pacific fleet of nine ships. Through such a deal, Alcoa would acquire: 1) enough ships to water-haul alumina from its Mobile, Ala. plant to the West Coast, thereby saving enough on rail costs to cut prices; 2) huge clay deposits near Castle Rock, Wash., where it could set up its own alumina-from-clay plant.

Columbia Metals is well aware of these possibilities. But if its Salem plant clicks, Columbia's backers will be in a position to try to buy the DPC plants Alcoa now runs, as well as the West Coast's only aluminum rolling mill near Spokane (also Alcoa-run). Even if Alcoa hangs on to what it now has, the always optimistic West Coast industrialists figure they will still win. They see the Coast a long step ahead of the rest of the U.S., with its own regionally integrated aluminum industry, complete from clay to pots & pans and planes.

*Kalunite, Inc., affiliate of Olin Corp., is almost ready to begin production of alumina from alunite ore in its new $4,500,000 DPC plant near Salt Lake City. While high-grade U.S. alunite deposits total only 12,000,000 tons, Kalunite, Inc. hopes to apply its process to clays and bottom-grade bauxite.

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