Ch. 3— Minerals Supply, Demand, and Future Trends • 87 



plants have been built close to sources of chromite 

 ores in distant countries, such as the Republic of 

 South Africa, Zimbabwe, Greece, the Philippines, 

 Turkey, India, and Albania. This trend in the 

 movement of ferrochromium supply is expected to 

 continue. Decline of U.S. ferroalloy production ca- 

 pacity in relation to demand will likely make the 

 United States nearly totally dependent on foreign 

 processing capacity in the future. 



Domestic demand for ferroalloys is related to steel 

 production. Domestic steel capacity fell by almost 

 50 million tons (30 percent) between 1977 and 1987. 

 Iron castings capacity also has shrunk considera- 

 bly in recent years. In 1986, the United States im- 

 ported about 21 percent of its iron and steel. The 

 decline in domestic steel production has also re- 

 duced the domestic demand for ferroalloys. With 

 the decreases in both U.S. ferroalloy production 

 and iron and steel production, demand for chro- 

 mium and manganese ores for domestic produc- 

 tion of ferroalloys is likely to continue to decline 

 proportionately . 



Figure 3-4.— U.S. Ferrochromium and 

 Chromite Ore Imports 



J I L_l L 



73 74 75 76 77 78 79 80 81 82 83 84 85 



Year 

 The United States is now importing significantly more chro- 

 mium in the form of ferrochromium and as stainless steel 

 than as chromite ore. This trend of increasing ferrochromi- 

 um imports is threatening the existence of the domestic fer- 

 rochromium industry, and some analysts predict the 

 extinction of the U.S. industry in the near future. 



SOURCE: Office of Technology Assessment, 1987. 



NATIONAL DEFENSE STOCKPILE 



In 1939, Congress authorized stockpiling of crit- 

 ical materials for national security. World War II 

 precluded the accumulation of stocks, and it was 

 not until the Korean War that materials stockpil- 

 ing began in earnest. Since that time, U.S. stock- 

 pile policy has been erratic and subject to periodic, 

 lively debate. Past presidents have supported stock- 

 piling critical materials for times of emergency, but 

 some have favored disposal of some of the stock- 

 piled items for fiscal or budgetary reasons. The 

 question of how much of each commodity should 

 be retained in the stockpile remains a body debated 

 issue. 



Stockpile goals are currently based on the mate- 

 rials needed for critical uses for a 3-year period that 

 are vulnerable to supply interruption. Some ob- 

 servers conclude that an increase in one unit of do- 

 mestic production capacity from domestic reserves 

 could offset three units of stockpiled materials. This 

 view argues in favor of promoting domestic pro- 

 duction of stockpiled materials where feasible so as 

 to reduce the need for emergency stockpiling. Sev- 



eral seabed minerals, including cobalt, manganese, 

 and chromium could be considered as candidates 

 for special treatment if government policies were 

 to shift away from emergency stockpiling toward 

 economic support of marginal resource develop- 

 ment for strategic and critical purposes. To be con- 

 sidered a secure source of supply, however, ma- 

 rine mineral operations offshore would have to be 

 protected from saboteurs or hostile forces. 



The stockpiling program was overhauled in 1979 

 to create a National Defense Stockpile with a Trans- 

 action Fund that dedicates revenue received by the 

 Federal Government from the sale of stockpile ex- 

 cesses to the purchase of materials short of stock- 

 pile goals." In 1986, the stockpile inventory was 

 valued at approximately $10 billion. If the stock- 

 pile met current goals, it would have a value of 

 about $16.6 billion.'* A number of materials de- 



"Strategic and Critical Materials Stock Piling Act of 1979, Public 

 Law 96-41, 50 U.S.C. 98 et seq. 



"Federal Emergency Management Agency, Stockpile Report to the 

 Congress: October 1985-March 1986, FEMA 36, 1986, p. 61. 



