Sunday, March 1, 2015


From the The Guardian (1-14-15)
"Amid a wider commodities sell-off the metal was down more than 8% at one point at $5,353.25 a tonne [2204.6 pounds] – a level last seen during the depths of the financial crisis in July 2009."

That's $2.42 a pound. 

With the current drop in prices of metals and energy products, we thought it would be interesting to look at another depression in copper prices in the 1920s.  

After World War I, the copper industry went into a depression because of oversupply from American and foreign mines.  Prices were around 12 to 15 cents per pound, dropping at one time to 8 cents.  Using 13 cents a pound in 1920, the price equivalent in 2013 terms is $1.45 a pound.  

This was an era in which America was building its electrical infrastructure with companies such as General Electric producing generating equipment for industry and cities.  Electric appliances were coming on to the market--refrigerators, toasters, vacuum cleaners--for the growing consumer market.  Automobiles required copper for electrical equipment and radiators as Henry Ford and his rapidly growing competitor, General Motors, built millions of cars each year.

Quincy Smelter was one of those producers of copper.  There was a massive expansion of smelter capacity starting in 1918-19 and completion in 1920-21 with anticipation of a growing market, not a depression. 

The Keweenaw was at a disadvantage with higher production costs than western mines where extraction was less expensive due to surface stripping of the landscape versus underground mining.  

Copper in the Keweenaw which the mining industry called the Lake District could fetch a premium because small amounts of silver in the copper ore  were thought to improve conductivity.  The amount of silver varied from 28 to 66 oz per ton.  The smelter itself differentiated between the different ores and slag materials, saying they would run charges (ore put in furnaces for melting) with or without silver.  It depended for what purpose the end product was to be used by a customer. In the 1920s the chemistry of smelting was only vaguely understood and much of the practice of smelting was based upon experience and some science.  

Even though the Keweenaw copper mining companies closed in 1968, the boom and bust cycle of the mining industry continues.  After this recession, we may see another cycle of copper mining in the Keweenaw.