COPPER IN THE SEVEN YEAR PLAN (1959-65) OF THE USSR

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79R01141A001700050001-6
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 28
• Document Creation Date: December 27, 2016
• Document Release Date: March 19, 2013
• Sequence Number: 1
• Publication Date: July 1, 1960
• Content Type: REPORT

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ECONOMIC INTELLIGENCE REPORT
COPPER IN THE SEVEN YEAR PLAN (1959-65)
OF THE USSR
CIA/RR ER 60-19
July 1960
CENTRAL INTELLIGENCE AGENCY
OFFICE OF RESEARCH AND REPORTS
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NOTICE
This report brs been loanc.s.d to the recipient tor
the Central Ltelbgerice .A.:ency. When it has
served its purpo:Te it should be destroyed or
returned to the:
CIA Librarian
Central Intelligence Agency
Washington 25, D. C.
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ECONOMIC INTELLIGENCE REPORT
COPPER IN THE SEVEN YEAR PLAN (1959-65)
OF THE USSR
CIA/RR ER 60-19 '
CENTRAL INTELLIGENCE AGENCY
OFFICE OF RESEARCH AND REPORTS
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FOREWORD
This report analyzes the current status of the copper industry
of the USSR and presents a continuous time series of production of
refined copper in that country from 1938 (the last year for which
the USSR announced a production figure) through 1959. An estimate
for 1965 also is given, based on the percentage increase announced
in the Seven Year Plan (1959-65).
The time series is based exclusively on information extracted
from Soviet newspapers, periodicals, and books. A Soviet source
Is given for each figure in the series, or the methodology for the
figure is explained in detail. Close attention to sources and
methods has yielded estimates that are believed to be a close ap-
proximation to the actual production of refined copper in the USSR.
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CONTENTS
Summary and Conclusions
I. Production
Pae
1
2
A. Quantity 2
B. Reserves 6
C. Mining and Concentrating 7
D. Smelting and Refining 9
II. Construction and Investment
III. Consumption
IV. Substitution
V. Trade
9
15
16
16
A. Imports 16
B. Exports 17
VI. Relationship Between Supply and Consumption
Source References
Appendix
Tables
1. Estimated Production of Refined Copper in the USSR,
1913, 1937-59, and 1965 Plan
18
3
2. Mining and Concentrating, Smelting, and Refining
Plants and Production in the Copper Industry
of the USSR, 1958 10
3. Expansion of the Copper Industry of the USSR During
the Seven Year Plan, 1959-65 13
4. Estimated Supply and Consumption Balance of Copper in
the USSR, 1954-59 and 1965 Plan 18
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Illustrations
Following Page
Figure 1. The Copper Industry of the USSR, 1959
(ap) . . . . . . ........... 10
Figure 2. Estimated Supply and Consumption Balance
of Copper in the USSR, 1954-59 and 1965
Plan (Chart) 18
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COPPER IN THE SEVEN YEAR PLAN (1959-65)
OF THE USSR
Summary and Conclusions
Although the USSR has the largest reserves of copper in the world,
it has been dependent on imported supplies of that metal for many
years. Increases in production of copper have been scheduled in each
of the six Five Year Plans, but actual production, although steadily
rising, has consistently fallen short of goals. Particularly during
the period since World War II, a moderate increase in production of
copper has taken place, and there has been a rapid growth of the
Soviet economy accompanied by an even faster rate of growth in the
consumption of copper. Consequently, the gap between domestic produc-
tion and consumption of copper has not been closed, and the USSR has
had to augment its domestic production by importing copper from the
Free World and, since World War II, by withdrawing supplies from cop-
per stocks accumulated during the war.
In the Seven Year Plan (1959-65) the USSR again has scheduled a
substantial increase in production of refined copper. The goal for
1965 is 90 percent above the estimated production in 1958 of about
406,000 metric tons,* or about 772,000 tons. Production of copper
in 1959 was approximately 416,000 tons. Achievement of the goal for
1965 will depend in large part on whether or not the program for the
construction of additional capacity, particularly ore-concentrating
facilities, is completed on schedule. As far as can be determined,
the planned investment in the copper industry appears to be adequate
to construct the facilities necessary for meeting the planned increase.
In view of the Soviet record of failing to complete the construction
programs in the copper industry and also in view of recent complaints
of delays in construction that have been made in the Soviet press and
in radiobroadcasts, attainment of the 90-percent increase by 1965 ap-
pears doubtful at this time.
Along with the efforts to increase production of copper, the USSR
is attempting to slow down the rate of growth of consumption of copper
by pursuing vigorously a program of substitution. Among the measures
being stressed at the present time is the substitution of aluminum for
copper in a variety of applications. During 1959-65, more than 1 m-13-
lion tons of aluminum are planned to be consumed by the wire and cable
industry, thus saving, among other things, an average of about
* Tonnages are given in metric tons throughout this report.
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60,000 tons of copper per year. Although there is little doubt that
the USSR will both increase the level of production of copper and
stretch to the maximum the current supplies of copper by stringent
conservation measures and substitution wherever practicable, the gap
between production and consumption probably will not be closed by
1965. Therefore, the USSR is expected to continue to import copper
from the Free World during the period of the Seven Year Plan.
I. Production
A. Quantity
The USSR has not announced the quantity of copper produced in
the country as a whole or in any of its regions since 1938. In that
year an official report stated that the total production of copper was
103,200 tons, of which 83,700 tons were from ore. Presumably the
balance was obtained from processing copper scrap. Other statements
in the prewar Soviet press make it possible to establish firm produc-
tion figures for 1939 and 1940. Although annual percentage increases
have been published for most postwar years, such data must be applied
to a tonnage figure as a base to obtain a production figure in abso-
lute terms. Uncertainty about the magnitude of this base, usually
taken to be production in 1945, has given rise to a number of esti-
mates, both here and abroad, of production of copper in the USSR in
the period since World War II.
The conjecture on this subject came to an end when three
pieces of information concerning achievements during the Fifth Five
Year Plan (1951-55) were published, as follows: (1) production of
blister copper in Kazakh SSR in 1955 was 79 percent greater than in
1950, (2) Kazakh SSR in 1955 produced 44 percent of the total produc-
tion of copper in the USSR, and (3) the total production of copper in
the USSR in 1955 increased 53 percent above the level in 1950. These
three statements can be related to the announced increase in produc-
tion of copper in Kazakh SSR in 1950 above the level in 1940 and to
other data previously published to yield a complete series of produc-
tion figures based wholly on information released by Soviet authori-
ties themselves.
The USSR is estimated to have increased its production of re-
fined copper about 12-1/2 times during the past 46 years, from
31,000 tons in 1913 to about 416,000 tons in 1959. For comparison,
production of refined copper in the US has about doubled during the
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same period, having increased from about 600,000 tons to about 1.2 mil-
lion tons. Estimates of the Soviet production of refined copper for
1913 and 1937-59 and the plan for 1965 are presented in Table 1.*
Table 1
Estimated Production of Refined Copper in the USSR
1913, 1937-59, and 1965 Plan
Thousand Metric Tons
Year
Amount Year
Amount
1913
31.0 2/
1948
186.8 .,j/
1949
224.2 h/
1937
97.6 12/
1950
246.6 1/
1938
103.2 2/
1951
281.1 1/
1939
142.5 2/
1952
323.3
1940
161.0 2/
1953
320.8 2/
1941
186.8 1/
1954
336.8 1,/
1942
164.0 I/
1955
377.3 s/
1943
141.3 1/
1956
386.7 I/
1944
147.5 1/
1957
396.4 El
1945
134.7 E/
1958
406.3 11
1946
142.8 12/
1959
416.5 E/
1947
155.7 1/
1965 Plan
772.0 2/
a. 1/. (For serially numbered source references, see the Appendix.)
b. In 1938, 5.7 percent more copper was smelted than in 1937. 2/
Production in 1938 is known, and production in 1937 was derived.
c.
d. Production of copper in 1939 was 46 percent greater than in
1937. 1-.
e. Production of copper in 1940 was 65 percent greater than in
1937.
f. Figures for production of copper in the USSR during 1941-44 were
derived on the basis of information about production in Kazakh SSR
and its relation to production in the USSR. Production of copper in
Kazakh SSR during the first 7 months of 1944 was 69.4 percent above
the corresponding period in 1940, 26.3 percent above the correspond-
ing period in 1941, and 18 ipercent above the corresponding period in
1943. J On the basis of these statements, the following index of
production of copper in Kazakh SSR has been derived:
* Text continued on p. 6.
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Table 1
Estimated Production of Refined Copper in the USSR
1913, 1937-59, and 1965 Plan
(Continued)
Year
Index
(1940 = 100)
1941
134.1
1943
143.6
1944
169.4
This index applies only to the first 7 months of each year. New
capacity was being installed at the Balkhash plant in 1940, and thus
an unusually large proportion of production in Kazakh SSR took place
during the latter months of that year. The rate of production dur-
ing the last 5 months of 1940 is estimated to have been the same as
during the first 7 months of 1941 -- that is, about 34 percent greater
than during the first 7 months of 1940. The average monthly production
of copper in Kazakh SSR in 1940, therefore, was derived as follows:
x = the average monthly rate of production during
the first 7 months of 1940
1.34x = the average monthly rate of production during
the last 5 months of 1940
7x + 5 (1.3)-1-x) = 35,490 metric tons (the amount of copper
smelted in Kazakh SSR
in 19)4-0 was seven
times as great as that
in 1913. 1/)
7x + 6.7x = 35,490 metric tons
x = 2,591 metric tons, the average monthly production during
the first 7 months of 1940
1.34 times 2,591 = 3,472 metric tons, the average monthly
production during the last 5 months of
1940
Production in Kazakh SSR in 1941 is therefore estimated to have been
about 41,664 metric tons (the uverage monthly production of 3,472
metric tons during the first 5 months of 1940 times 12). Kazakh
SSR produced 22.3 percent of the total produced in the USSR in
1941, ?../ which is therefore estimated to have been 186,800 metric
tons. The figure for production in 1942 is interpolated. Production
In Kazakh SSR in 1943 is estimated to have been about 44,648 metric
tons (the average monthly production of 2,591 metric tons during the
first 7 months of 1940 times 12 times 1.436). Kazakh SSR produced
31.6 percent of the total produced in the USSR in 1943, 9/ which is
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Table 1
Estimated Production of Refined Copper in the USSR
1913, 1937-59, and 1965 Plan
(Continued)
therefore estimated to have been 141,300 metric tons. Production in
Kazakh SSR in 1944 is estimated to have been about 52,670 metric tons
(the average monthly production of 2,591 metric tons during the first
7 months of 1940 tithes 12 times 1.694). Kazakh SSR produced 35.7
percent of the total produced in the USSR in 1944, 12/ which is
therefore estimated to have been 147,500 metric tons.
g. Derived from production in 1946, which was 6 percent greater
than in 1945. 11/
h. Derived from production in 1947, which was 9 percent greater
than in 1946. 12/
i. Derived from production in 1948, which was 20 percent greater
than in 1947. 13/
j. Derived from production in 1949, which was 20 percent greater
than in 1948.111/
k. Derived from production in 1950, which was 10 percent greater
than in 1949. 12/
1. Derived from production in 1955, which was 53 percent greater
than in 1950. 1.Y Another source reported that production in 1950
was 82 percent greater than in 1945, 11/ or 245,200 metric tons in
1950, which is close to the figure given in the table.
m. Production of copper in 1951 was 14 percent greater than int
1950. 1L3/
n. Production of copper in 1952 was 15 percent greater than in
1951. 12/
o. Derived from production in 1954, which was 5 percent greater
than in 1953. 22/
p. Derived from production in 1955, which was 12 percent greater
than in 1954. 21/
q. Estimated from production in Kazakh SSR and the percentage of the
total production in the USSR accounted for by Kazakh SSR. In 1955,
Kazakh SSR produced 44 percent of the copper produced in the USSR. 22/
Production by Kazakh SSR in that year is estimated to have been about
166,000 metric tons. This figure was derived by linking production
in Kazakh SSR in 1940 to that in 1913, production in 1950 to that
in 1940, and production in 1955 to that in 1950. Production in 1940
was seven times that in 1913, 231 or 35,490 metric tons. The planned
production of copper in Kazakh SSR in 1950 was to be 260 percent of
production in 1940, 211/ or 92,274 metric tons. The Fourth Five Year
Plan (1946-50) for production of copper in Kazakh SSR was fulfilled
by 100.5 percent. 22/ In 1955, production of blister copper in
Kazakh SSR was 79 percent greater than in 1950. 2g
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Table 1
Estimated Production of Refined Copper in the USSR
1913, 1937-59, and 1965 Plan
(Continued)
r. The USSR has not published figures for annual percentage in-
creases in production of copper since 1955. There probably was some
increase in production during 1956-59 but less than both the planned
increases and the increases in previous years. The smallest annual
increase known to have been announced by the USSR during the period
under consideration is 5 percent. If the USSR had increased produc-
tion in any of the years 1956-59 by as much as 5 percent, an an-
nouncement probably would have been made to this effect. On the
assumption that some increase in production was achieved and that it
was less than 5 percent, a figure of 2.5 percent was selected as the
annual increase for the 4 years 1956-59.
s. Production of copper planned for 1965 is 90 percent greater than
in 1958. 21/
The USSR also has announced that production of refined copper
in 1965 is to be 90 percent greater than in 1958. Thus the goal for
production of refined copper is estimated to be 772,000 tons, or an
average annual increase of 9.6 percent above the level in 1958. This
large increase may indicate the failure of the Soviet copper industry
to increase production in the first 3 years of the original Sixth Five
Year Plan (1956-60) by anything like the amounts called for in that
plan. Whereas production was scheduled to grow by 9.6 percent an-
nually during 1956-60, it is estimated to have grown only by about
2.5 percent annually in the first 4 years of the Sixth Five Year Plan.
The major reason for the failure to meet the goals for production of
copper in the early years of this plan as well as the goal of the
Fifth Five Year Plan (1951-55) is believed to have been the unful-
filled construction goals for various enterprises of the copper indus-
try, particularly in the mining and concentrating sectors.
B. Reserves
The USSR has stated that it leads the world in reserves of
copper. 2119/ This allegation, which implies nothing about the quality
of the reserves, may be true -- no other country is known to have re-
serves that are larger than those claimed by the USSR. The copper
content of the Soviet copper reserves at the beginning of 1959 is
estimated to have been about 35.2 million tons. This quantity repre-
sents an increase of about 80 percent above the level of 19.5 million
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tons of reserves in 1939, the last year for which the USSR reported
a tonnage figure for reserves. During the Seven Year Plan (1959-65)
the USSR hopes to increase the surveyed reserves of copper by 35 to
40 percent. 22/ If this goal is achieved, reserves of copper in 1965
should amount to between 44 million and 45 million tons -- that is,
48 million to 49 million tons minus the amount of ore mined during
the Seven Year Plan.
Approximately 90 percent of the copper reserves of the USSR
at the end of 1958 were located in four general areas in 1958, as
shown in the following tabulation:
Area
Percent
Armenian SSR
10
Urals
15
Kazakh SSR
50
Uzbek SSR
15
Other
10
Total
100
Most of the copper deposits are in complex rock formations,
which have been subjected to considerable alteration and deformation.
The ores generally are polymetallic and include a variety of copper-
bearing minerals. Many of the deposits of copper in the USSR are of
relatively low grade and contain large quantities of oxide ores, which
require different processes and equipment from those required by sul-
fide ores. The USSR has been processing both types of ore with the
same techniques, with the result that recovery of copper from oxide
ores has been low.
C. Mining and Concentrating
Little quantitative information has been released by the USSR
in the last 20 years regarding production of copper ores and concen-
trates. Considerable data of a qualitative nature have been published,
however, particularly about ores and processes in the Urals and the
Armenian SSR. These data indicate that the mining and concentrating
processes are lagging behind the smelting and refining processes and
that the metal content of the ores has been declining.
Kazakh SSR leads all other areas in the USSR in production
of copper ore, followed by the Urals, Noril'sk, and the Armenian SSR.
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Soviet production of copper ore in 1958 was distributed among these
areas approximately as follows:
Percent of Total Production
Area in the USSR
Kazakh SSR
55
Urals
20
Noril'sk
20
Armenian SSR
5
Total
100
The mining and concentrating operations in Kazakh SSR are
carried on in the Dzhezkazgan-Karsakpay area, the Balkhash-
Kounradskiy area, and the Altay area of East Kazakhstan. The largest
copper mine and concentrating plant in the USSR is in the Balkhash-
Kounradskiy area. During the Seven Year Plan, large new mines and
concentrating plants are to be constructed at Bozshakul', Chetyr-
Kul'sk, Nikolayevsk, and Dzhezkazgan.
In the Urals, where copper has been mined for many centuries,
tlie principal mines are at Krasnouralisk, Kirovgrad, Degtyarka,
Karabash, Sibay, and Blyava. Each of the mines has its own concen-
trating plant except Degtyarka, which ships its ore a few miles
northward to a concentrating plant at Revda. Mining and concentrating
at Volkov, Uchaly, and Gaysk are to begin during the Seven Year Plan.
One of the largest mining-metallurgical combines in the USSR
is at Norillsk in Krasnoyarskiy Kray. The Noril'sk ore is different
from the other copper ores in the USSR in that it resembles the nickel-
copper ore of the Sudbury district in Ontario, Canada. During the
Seven Year Plan, production at Norillsk is to double.
In the Armenian SSR, copper ore is mined and concentrated at
four localities -- Akhtala-Shamlug, Dastakert, Kadzharan, and Kafan.
At present, each of these operations is relatively small in scale.
During the Seven Year Plan a large porphyry copper deposit at Agarak
is to be developed for open-cut exploitation, and a concentrating
plant of commensurate size is to be constructed in the vicinity.
In Uzbek SSR, copper ore is to be mined and concentrated for
the first time during the Seven Year Plan. The oxidized ores from
the Kal'makir mine are to be processed at a new concentrating plant
near the mine.
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For a listing of the principal copper mines in the USSR, see
Table 2,* and for an indication of the location of these mines, see
the map, Figure 1.**
D. Smelting and Refining
Copper smelting is concentrated in two areas of the USSR, the
Urals and Kazakh SSR, where approximately three-fourths of the total
production of the country is smelted. Lesser amounts of blister cop-
per are produced in Norillsk, Moscow, and the Armenian SSR and on the
Kola Peninsula.
Five or six copper smelters are in the Urals. They are
situated at Krasnoural'sk, Kirovgrad, Revda, Karabash, and Mednogorsk,
and there may be one at either Sibay or Baymek. Although none of
these smelters is particularly large, collectively they make the
Urals the second largest producing area in the country. The copper
smelters in Kazakh SSR are located at Balkhash, Karsakpay, and
Glubokoye, with the one at Balkhash being the largest in the country.
Other copper smelters are at Alaverdi, Moscow, Norilisk, and
Monchegorsk.
By far the largest percentage of production of refined copper
in the USSR came from the Urals in 1958. This area accounted for
about one-half of the total production of refined copper in the country
and was followed by Kazakh SSR, which accounted for one-fourth. The
Urals area also has the largest refinery in the USSR, situated at
Verkhnyaya Pyshma in Sverdlovskaya Oblast. The second largest in the
country is the Balkhash refinery in Kazakh SSR. Other refineries are
at Alaverdi in the Armenian SSR, Kyshtym in the Urals, Norillsk in
Krasnoyarskiy Kray, and Moscow. During 1959-65 the USSR plans to ex-
pand refining capacity, probably by about 50 percent. Capacity at
Alaverdi is to be increased to five times the present size, capacity
at both Balkhash and Noril'sk may be increased, and a new smelter and
a refinery are scheduled to be built at Almalyk in Uzbek SSR.
For a listing of the copper smelters and refineries of the
USSR, see Table 2,* and for an indication of the location of these
facilities, see the map, Figure 1.**
II. Construction and Investment
An increase in production of copper in the USSR by the 90 percent
called for in the Seven Year Plan will require a substantial expansion
* Table 2 follows on p. 10.
** Following p. 10.
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Table 2
Mining and Concentrating, Smelting, and Refining Plants and Production
in the Copper Industry of the USSR
1958
Thousand Metric Tons
Mining and Concentrating
Smelting
Refining
Plant
Production
of Copper Ore
Plant
Production
of Blister Copper 2/
Plant
Production
of Refined Copper
Akhtala-Shamlug
Dastakert
2,000
Alaverdi
15.8
Alaverdi
15.8
Kadzharan
Kafan
Dzhezhakgan
Karsakpay
East Kazakhstan
26,000
Glubokoye
191.2
Balkhash L3,./
103.0
Kounrad
Balkhash
Blyava-Mednogorsk
Mednogorsk
KarabashKarabash
Monchegorsk
4,500
Monchegorsk
, 35.0
Kyshtym
31.0
Sibay
Baymak
Degtyarka
Kirovgrad
Kirovgrad
Krasnoural'sk
88.8
pyshma 22/
181.0
Krasnotur'insk
5,500
Revda
Krasnoural'sk
Tuim
Noxil'sk
10,000
Noril'sk
48.o
Norilsk
48.o
Moscow 2/
27.5
Moscow 2/
27.5:
Total
48,o0o
4o6.3
406.3
a. Given in terms of refined copper.
b. The excess of blister copper over refined copper in Kazakh SSR is sent to Pyshma for refining.
c. Production at this plant is based primarily on scrap metal.
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r-'
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MInchegorsk
KNT/ ) e-
,r??"
;7
Moscow4).
111x, Kirovgrad
Revda A\ Ntsz. Krasnourorsk
i Degtyarko
Korobash AytN\4140 Pyshmo
c") 410 I Aloverdi Blyava-
Mednogorsk
41,0 Kyshtym
olo-Shamlug
,---.... cc_ \sr .Sibay
Baymak
Akht-\\
A
I'
(
Dostakert .5t,
Kadzharan 7c53` Rohm (
.'A
ICS.:
Krosnotur'insk
28990 6.60
Dzhezkazgan
iGlubokoye
&Abash
East
Kozalcstan
tyt NoriPsk
THE COPPER INDUSTRY
OF THE USSR, 1959
R. Mining and concentrating
A Smelting
Refining
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of capacity in all sectors of the copper industry. Perhaps the
greatest expansion will occur in the mining and concentrating sec-
tor, which has been lagging behind the metallurgical sector for
several years. Refining capacity, however, may have to be expanded
by only about 50 percent, inasmuch as existing refineries probably
could produce 100,000 tons in addition annually.
Capital investment for the expansion program of the copper in-
dustry as a whole in the Seven Year Plan is estimated to amount to
about 9.5 billion rubles.* A large share of this investment, per-
haps 75 percent, probably will be used for the construction of new
plants and the remainder to modernize existing plants. Of the total
investment, nearly 350 million rubles may be expended to achieve an
increase of 265,000 tons in new capacity for refining copper.**
* Ruble values in this report are expressed in current rubles'. The
official rate of exchange of 4 rubles to US $1 does not necessarily
reflect the dollar value. An approximate ratio for investment in the
copper industry follows.
The figure of 9.5 billion rubles is based on an increase in pro-
duction during the Seven Year Plan of about 365,700 tons of refined'
copper and on a capital investment figure reported by the USSR of
26,000 rubles per ton of new plant. 3.2/ The figure of 9.5 billion
rubles is believed to include not only investment in refining facili-
ties but also investment in all stages of the industry preceding the
refining stage. Only if the ruble-dollar ratio between the USSR and
the Free World for investment in refining facilities were something
more than about 250 to 1 would the figure of 26,000 rubles apply to
refining capacity alone. Such a ratio appears to be unlikely in view
of the ruble-dollar ratio of less than 10 to 1 for investment in
capital construction for the USSR as a whole.
** Information about investment in capacity for refining copper in
the USSR is not available, and even for Free World countries such
information is very sparse. In the early 19501s the Mufulira enter-
prise in Rhodesia invested 1.192 million pounds sterling (US $3.3
million) in the construction of an electrolytic refinery with a
capacity of 36,600 tons, or about $91 per ton of refined capacity. 31/
To construct a refinery to produce 265,000 tons of refined copper
would require, at about $100 per ton, approximately $26.5 million.
At a ruble-dollar ratio of 13 to 1, this investment would amount to
about 345 million rubles.
The Soviet investment coefficient of 26,000 rubles per ton of
new capacity may be compared with a Free World figure of about $2,000
per ton of new plants, including all sectors from mining through re-
fining, thus indicating the above ruble-dollar ratio. The Free World
figure of $2,000 was derived by adding data about a large new Latin
American copper-producing facility that ffootnote continued on p. 1g7
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Facilities for smelting may receive a slightly larger amount than the
amount for refining capacity. On the assumption that smelting capac-
ity amounting to 365,000 tons must be constructed, the investment
would be about 1.65 billion rubles.* The remainder of the 9.5 billion
rubles to be invested in the copper industry -- that is, 7.5 billion
rubles -- may be directed to the mining and concentrating sectors.**
Much of this investment may be required for facilities to process
oxide ores by technologies different from those for sulfide ores.
Table 3*** gives some indication of the emphasis on the development
of the mining and concentrating sectors of the Soviet copper indus-
try as opposed to the smelting and refining sectors and also of the
regional location of the principal new facilities of the copper in-
dustry.
includes mining, concentrating, and smelting to data about the fairly
new copper refinery built in Rhodesia. Approximately $230 million
are being invested in the Toquepela properties of the Southern Peru
Copper Company to develop a mine, concentrating plant, smelter, roads,
and ancillary facilities to produce annually about 120,000 tons of
high-grade blister copper. 12/ Thus the investment coefficient is
about $1,917 per ton. It might be noted that at San Manuel in the
US the cost was about $118 million for a plant to produce about
63,500 tons of blister copper per year. 18( The investment coefficient
for this plant, therefore, is about $1,85 per ton. Adding the in-
vestment coefficient of the MufUlira refinery to the coefficient of
the average of Toquepela and San Manuel gives a Free World investment
coefficient of nearly $2,000 and a ruble-dollar ratio of 13 to 1.
* New capacity of 365,000 tons times $347 per ton times 13 gives
1.65 billion rubles. The figure of $347 per ton is based on an in-
vestment of $25 million for the Hayden smelter (240 tons per day)
and assumes a 300-day-per-year operation.
** A rough check on the investment in mining and concentrating in-
dicates that 7.5 billion rubles could be of the right order of magni-
tude. The ruble investment would be equal to about $577 million, on
the assumption of a ruble-dollar ratio of 13 to 1. On the assumption
that about $100 million of the San Manuel investment is for mining
and concentrating, the investment of $577 million would provide about
5.8 times the capacity of San Manuel, or 58 million tons of ore and
174,000 tons of concentrate per year. The assumption is based on the
subtraction from the total San Manuel investment of $118 million of
an amount equal to the investment coefficient of $347 per ton of
smelter capacity -- as at the Hayden smelter -- times the San Manuel
smelter capacity of 63,500 tons. For the USSR to produce 772,000
tons of refined copper in 1965, production of ore must increase about
50 million tons.
*** Table 3 follows on p. 13.
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Table 3
Expansion of the Copper Industry of the USSR During the Seven Year Plan
1959-65
Area and Location Mining and Concentrating Smelting Refining
Armenian SSR
Agarak Construction of combine to be
completed
Akhtala Concentrating plant to begin
operating
Alaverdi Probably will expand To increase capacity
capacity by 80,000 tons above
? present capacity of
20,000 tons
Dastakert Combine to be expanded
Kadzharan Capacity of concentrating
plant to be increased by
50 percent
Urals
Bashkir Second and third sections of
concentrating plant to be
completed
Gaysk Concentrating plant under
construction
Mednogorsk Combine to be reconstructed
Uchaly Combine to be expanded
Volkov Combine to be constructed
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Expansion
Table 3
of the Copper Industry of the USSR During the Seven Year Plan
1959-65
(Continued)
Area and Location
Kazakh SSR
Balkhash
Bozshakul'
Chetyr-Kul'sk
Dzhezkazgan
Nikolayevsk
Uzbek SSR
Almalyk
Kola Peninsula
Moscow
Krasnoyarskiy Kray
Noril'sk
Mining and Concentrating
Smelting
Refining
Capacity-of the entire plant to be increased by 50 percent
Mining-concentrating combine
to be completed
Combine to be constructed
Existing concentrating plant Smelter to be con-
to be reconstructed and a structed
new concentrating plant to
be built
Combine to be constructed
Combine for mining, concentrating, smelting, and refining to be constructed
None
None
None
None
Capacity of combine to be doubled; copper expansion unknown
None
None
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III. Consumption
The USSR has not published figures for any recent year on the de-
mand for copper, the total amount of copper consumed in the country,
or the amount consumed by any major consuming industry. In the ab-
sence of such figures, consumption has been estimated by an indirect
methodology derived from an observable direct relationship between
consumption of crude steel and consumption of refined copper. The
relationship is believed to be causal: the specific properties of
copper make it complementary to steel rather than competitive, as
copper is with aluminum. The estimates of consumption are based on
both observation and theory. Several statistical methods, including
correlation, were used to evaluate the significance of the relation-
ship between production of crude steel* and consumption of refined
copper. Data for four hie-11y industrialized countries (Canada, Japan,
the UK, and the US) were analyzed, and in every case the results in-
dicated that a significant relationship existed between these two
factors. As a result of the findings for the other industrial countries,
it was concluded that in a large industrial country such as the USSR,
production of crude steel could be used as a basis for estimating con-
sumption of copper.
Accurate data on production of crude steel in the USSR are avail-
able for 1929-58 except for 2 or 3 years during World War II, when
there are uncertainties as to the dates that production ceased at
some of the plants overrun by the invading Germans. Also, firm data
are available on production, imports, and exports of copper during
1929-33. Although the changes in the level of stocks of copper are
unknown, it is believed that the annual production plus imports minus
exports (Which were zero), averaged for the years 1929-33, will cancel
any changes in stocks that may have occurred and therefore will indi-
cate within reasohable limits the level of consumption of copper.
Consumption of copper during 1934-55 was estimated on the basis of
the increase in production of steel, using the average annual produc-
tion of steel in 1929-33 as a base. Based on the methodology de-
scribed above, ?consumption of copper in the USSR for 1954-59 and 1965
is estimated as follows:
Thousand Metric Tons
Year
Consumption Year
Consumption
1954
409
1958
577
1955
447
1959
629
1956
11-8o
1957
?503
1965
929
Production of crude steel is virtually equivalent to consumption of
crude steel, inasmuch as crude steel in unfabricated forms normally is
not exported or imported in significant quantities.
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IV. Substitution
During the Seven Year Plan the USSR probably will make greater
efforts than heretofore to substitute other metals and nonmetallic
materials for copper in many applications. Khrushchev, in his speech
to the Plenum of the Central Committee of the Communist Party in June
1959, stated that the government spends considerable gold to purchase
badly needed copper. He went on to say that some of this copper is
wasted on production of nonessential items and that aluminum and
plastics ought to be used for many of these items. 12/
The finding of substitutes for copper is being taken seriously,
as indicated by the fact that during 1959-65 more than 1 million
tons of aluminum are planned to be used in the electrical networks
of the country, partly as a substitute for copper as a conductor and
partly as a substitute for lead as a sheathing material. Some indi-
cation of the importance of this substitution may be inferred from
a Soviet statement that the utilization of aluminum and plastics in
production of cable will save up to 10 billion rubles and will con-
serve more than 400,000 tons of lead and more than 400,0oo tons of
copper during the Seven Year Plan. .ag Furthermore, the USSR appears
willing to expend the effort necessary to obtain this aluminum.
Whereas production of copper during 1959-65 is to be increased by
90 percent, production of aluminum is to be increased by 180 to 200
percent. 3.2/ Moreover, the investment in the aluminum industry is
estimated to be about 20 billion rubles,* or about twice that in the
copper industry. The reason for the relatively greater emphasis
being given to the aluminum industry seems to be the lower costs of
production for aluminum than for copper.
V. Trade
A. Imports
During the 6-year period 1954-59 the USSR was unable to ob-
tain additional copper from the rest of the Soviet Bloc and imported
nearly 550,000 tons of unwrought copper and copper wire from the Free
World. These imports represented nearly 20 percent of its new supply
(production plus imports) of copper in the period. Imports increased
rather sharply in 1958 and constituted more than one-fourth of the
* This estimate is based on a Soviet figure of 20,000 rubles per
ton for the creation of new capacity in the aluminum industry 28./
and an estimated increase in capacity of about 1 million tons re-
quired to meet the goal for production.
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new supply of copper in that year. Imports of copper by the USSR
during 1954-59 were as follows*:
Thousand Metric Tons
Year
Imports Year
Imports
1954
75
1957
85
1955
50
1958
150
1956
6o
1959
125**
The form of the copper imported by the USSR has varied to
a large extent with the export controls placed on the shipment of
copper to the USSR from countries belonging to the Coordinating Com-
mittee (COCOM). Before August 1954, most of the Soviet imports of
copper were in the form of unwrought copper. Following the removal
from the embargo list by COCOM of wire 6 millimeters and less in
diameter, the USSR imported most of its copper in the form of such
wire. In August 1958, COCOM removed the export controls on all forms
of copper. Subsequently the USSR imported more copper in unwrought
forms in the last 4 months of 1958 than the total of such imports in
all of the preceding 3 years. At the same time the USSR continued to
import bare copper wire at about the same rate as in the first 8 months
of the year. Available evidence indicates that Soviet purchases of
copper from the Free World in 1959 may have been slightly less than in
the preceding year and that the shift to purchases of unwrought forms
of the metal continued.
B. Exports
During 1955-58 the USSR exported about 225,000 tons of cop-
per, almost all of which was sent to other countries of the Soviet
Bloc. Czechoslovakia and East Germany have been the two principal
countries receiving the Soviet copper, accounting for nearly two-
thirds of the total in the 4-year period. Both of these countries
as well as most of the others in the Soviet Bloc exported to the
USSR finished goods probably containing an amount of copper approxi-
mately equal to that received from the USSR. As far as these transac-
tions are concerned, the supply position of the USSR is not affected,
inasmuch as the USSR is, in effect, importing a service and "value
added by manufacture."
* These figures are based on numerous statistics of Free World ex-
porting countries. The USSR has not reported imports of copper in
its official handbooks on foreign trade.
** Preliminary estimate.
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VI. Relationship Between Supply and Consumption
Estimated consumption of copper in the USSR has exceeded esti-
mated production for many years. Estimqtes for 1954-59 and 1965 are
given in Table 4 and in the accompanying chart, Figure 2,* together
with an indication of the gap between production and consumption.
Part of the deficit has been met by imports, primarily from the Free
World. The remainder probably was met by withdrawals from stocks,
which were exceedingly large as a result of large imports of copper
and brass during World War II from the US and the UK. Although there
is no positive information that stocks of copper have been reduced by
the quantities estimated in Table 4, the abundant evidence that a
shortage of copper has existed in the USSR, at least in recent years,
suggests that the direction of the stock changes is at least correct.
Table 4
Estimated Supply and Consumption Balance
of Copper in the USSR
1954-59 and 1965 Plan
Thousand Metric Tons
1954
1955
1956
1957
1958
1959
1965 Plan
Consumption
409
447
480
503
577
629
929
Production
337
377
387
396
406
416
772
Difference
72
70
93
107
171
213
157
Imports
75
50
60
85
150
125
N.A.
Stock changes
+3
-20
-33
-22
-21
-88
N.A.
* Following p. 18.
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Figure 2
Estimated Supply and Consumption Balance of Copper in the USSR
/954-59 and /965 Plan
Stock change*
Imports
Consumption
Production
412
Thousand Metric Tons
480
447 ?33
?20
503
I ?22
577
629
?88
929
1954
28991 6-60
1955
1956
1957
1958
*A plus figure indicates an addition to stocks, a minus
figure indicates a withdrawal from stocks.
1959
1965
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APPENDIX
SOURCE REFERENCES
1. USSR, Gosplan. Sotsialisticheskoye stroitel'stvo SSSR,
Moscow, 1936, p. 19.
2. Izvestiya, 8 Feb 39.
3. USSR, Gosplan. Sotsia1isticheskoye stroitel'stvo SSSR,
1933-38, Moscow, 1939, P. 62.
4. Industriya, 23 May 40, p. 3.
5. Pravda, 21 Feb 41.
6. Kazakhstanskaya pravda, 15 Aug 44.
7. Planovoye khozyaystvo, Mar 52, p. 47.
USSR, Geologicheskiy Komitet. Godovoy obzor mineral'nykh
resursov, Leningrad, 1926, p. 586.
8. Kazakhstanskaya pravda, 16 Aug 44.
9. Ibid.
10. Ibid.
11. Pravda, 21 Jan 47.
12. Ibid., 18 Jan 48.
13. Current Digest of the Soviet Press, 2 Feb 49, p. 38.
14. Ibid., 13 Mar 50, P. 16.
15. Ibid., 3 Mar 1, p. 3.
16. Pravda, 26 Feb 56.
17. Liteynoye proizvodstvo, Oct 57, p. 5.
18. Pravda, 29 Jan 52.
19. Ibid., 23 Jan 53.
20. Trud, 21 Jan 55.
21. Current Digest of the Soviet Press, 14 Mar 56, p. 23.
22. Kazakhstanskaya pravda, 18 Dec 55.
23. Planovoye khozyaystvo, Mar 52, p. 47.
USSR, Geologicheskiy Komitet (7, above).
24. Kazakhstanskaya pravda, 28 Jan 49.
25. Ibid., 16 Dec 51.
26. Ibid., 18 Dec 55.
27. Pravda, 14 Nov 58.
28. Priroda, Nov 58, p. 6.
29. Gt Brit, BBC. Summary of World Broadcasts, pt I, "USSR,"
no 990, 12 Dec 58, p. 60.
30. Garbar, M.I. Plasticheskiye massy v narodnom khozyaystve
(Plastics in the National Economy), Moscow, 1958, p. 13.
31. Journal of Metals, Feb 56, p. 234.
32. Parsons, A.B. The Porphyry Coppers in 1956, New York, 1957,
P. 26.
33. Engineering and Mining Journal, Apr 56, p. 75-76.
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34. Journal of Metals, Jun 59, p. 376-377.
35. Bakinskiy rabochiy, 3 Jul 59, p. 2.
36. Planovoye khozyaystvo, Jan 59, p. 19.
37. Pravda, 14 Nov 58.
38. Garbar, a. cit. (30, above).
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