Anaconda Copper
The Anaconda Company, also known historically as the Anaconda Gold and Silver Mining Company, Anaconda Mining Company, Anaconda Copper Mining Company, Amalgamated Copper Company, and Anaconda Copper Company, was an American mining company headquartered in Butte, Montana. It was one of the largest trusts of the early 20th century and one of the largest mining companies in the world for much of the 20th century.
Marcus Daly bought the original silver mine, named the Anaconda, in 1880. Daly partnered with George Hearst, James Ben Ali Haggin and Lloyd Tevis in 1881 to develop it, and the company expanded dramatically in 1882 with the discovery of huge copper deposits. In 1883, Daly began building a smelter and the town of Anaconda to process copper mined in Butte. In 1899, with Hearst and Tevis deceased, Haggin retired and Daly restructured the enterprise into the Amalgamated Copper Company, bringing in H H Rogers and William Rockefeller.
By 1910, Amalgamated had expanded its operations and bought the assets of all other copper companies operating in Butte. In 1922, Anaconda bought mining operations in Mexico and Chile; the latter hosted the largest mine in the world and for a time yielded two-thirds of the company's profits. The company added aluminum reduction to its portfolio in 1955. In the 1950s, the company switched over from underground to open-pit mining. In 1960 its operations employed 37,000 employees in North America and Chile.
Anaconda Copper was purchased by the Atlantic Richfield Company on January 12, 1977. ARCO halted production at the Anaconda smelter in 1980, and mining ceased completely in 1982 when the deep pumps draining the Berkeley Pit and the underground mines were shut off, allowing the Pit and mines to fill. The company presently only exists as a major environmental liability for BP, who bought out ARCO in 2000. Its former operations are now the largest Superfund site in the country; CERCLA liability passed to BP upon its acquisition of ARCO.
History of Anaconda Copper
Beginnings
, a self-taught miner, engineer and geologist, bought a small silver mine called Anaconda in 1880. At the time, Daly was working for the Walker brothers, mining investors and bankers from Salt Lake City, Utah. He was a mining superintendent of the Alice, a silver mine in Walkerville, a suburb of Butte. While working in the Alice, he noticed significant quantities of high grade copper ore. Daly scouted the Anaconda and several other mines in the area and recommended the mine to the Walker brothers, who sent a professional geologist to inspect the Anaconda. The Walkers were not interested in the mine, and Daly sold his interest in the Alice to purchase it himself.Placer gold and silver lode mining had taken place at Butte, placer mining at Helena, Bannock and Virginia City, Montana Territory, respectively, and Butte was nearing the end of its silver lode mining phase. Lacking capital to develop the mine, Daly sought financing from San Francisco mining magnate George Hearst and his partners, James Ben Ali Haggin and Lloyd Tevis, of Hearst, Haggin, Tevis and Co. and the Anaconda Company was born in 1881 with Daly as a 25% partner in the enterprise. Daly had recommended Hearst purchase the Ontario Mine, a silver mine in Park City, Utah, which consequently made Hearst many millions.
Huge deposits of copper were soon developed and Daly became a copper magnate. When surrounding silver mines "played out" and closed, Daly bought up the neighboring mines, forming a mining company. In 1883, Daly built a smelter at Anaconda, Montana, building a company town to support the workers, and connected his smelter to Butte by his Butte, Anaconda and Pacific Railway.
Butte became one of the most prosperous cities in the country, often called "the Richest Hill on Earth." From 1892 through 1903, the Anaconda mine itself was the largest copper-producing mine in the world. It produced more than $300 billion worth of metal in its lifetime.
Rothschilds
In 1889 the Rothschilds tried to gain control of the world copper market. In 1892 the French Rothschilds began negotiations to buy the Anaconda mine. In mid-October 1895 the Rothschilds, French and British, bought out the stock in Anaconda held by Hearst's widow, Phoebe Apperson Hearst, for $7.5 million. By the late 1890s the Rothschilds probably had control over the sale of about forty percent of the world's copper production.Rockefellers
The Rothschilds' role in Anaconda was brief. In 1899, Daly teamed up with two directors of Standard Oil to create the Amalgamated Copper Mining Company which grew to become one of the largest trusts of the early 20th century. The leading roles were played by Henry Huttleston Rogers and William Rockefeller. They were aided by company promoter Thomas W. Lawson. Although Rogers and William Rockefeller were Standard Oil directors, the company of Standard Oil did not have a stake in this business, nor did its founder and head, John D. Rockefeller, who disliked such stock promotions.By 1899 Amalgamated Copper acquired majority stock in the Anaconda Copper Company, and the Rothschilds appear to have had no further role in the company. By his death in 1900, Marcus Daly had just become president of the holding company valued at $75 million.
Lawson later had a falling out with Rogers and Rockefeller, and wrote of the experience in a book Frenzied Finance. Colored by Lawson's bitterness, the book offered insight into aspects of high finance.
Amalgamated competes in copper
At the beginning of the 1900s, due to electrification, copper was very profitable, and copper mining expanded rapidly. Between 1899 and 1915, Anaconda, controlled by Standard Oil insiders, stayed under the name of Amalgamated Copper Company.Amalgamated was in conflict with powerful copper king F. Augustus Heinze, who also owned mines in Butte; in 1902 he consolidated these as the United Copper Company. Neither organization was able to monopolize copper extraction in Montana. In addition, although Butte was the most prolific copper-mining district in the world, Amalgamated could not control production from other copper producing districts, such as those in Michigan, Utah, Arizona, or countries outside the United States.
Marcus Daly died in 1900. His widow began a close friendship with a shrewd, intelligent businessman, John D. Ryan, who assumed the presidency of Daly's bank and management of his widow's fortune. The leaders of Amalgamated turned to Ryan, famous for his negotiation skills, for help in creating a monopoly at Butte.
Control of the areas producing mines was a key to high income. Ryan convinced Heinze to walk away with abundant compensation, allowing Amalgamated to take over Heinze's properties as well as the properties of William A. Clark. Amalgamated gained almost complete control of Butte's copper as they merged with these companies. The reorganized company was again named Anaconda. Ryan made its president and rewarded with a significant package of Amalgamated shares.
The "right hand" of John Ryan was Cornelius Kelley, a young attorney, who soon was given the position of vice-president.
Henry Rogers died suddenly in 1909 of a stroke, but William Rockefeller brought in his son Percy Rockefeller to help with leadership.
In 1912 and 13, the Pujo Committee investigated William Rockefeller and others for allegedly earning $30 million in profit through cornering of the copper market and "synchronizing with artificially enforced activity" in Amalgamated Copper stock in the New York Stock Exchange.
The golden twenties
During the 1920s, metal prices went up and mining activity increased. Those were really the golden years for Anaconda. The company was managed by the Ryan-Kelley team and was growing fast, expanding into the exploitation of new base metal resources: manganese and zinc. In 1922 the company acquired mining operations in Chile and Mexico.The mining operation in Chile, was acquired from the Guggenheims in 1923. It cost Anaconda $77 million and was the largest copper mine in the world. It produced copper yielding two-thirds to three-fourths of the Anaconda Company's profits.
The same year ACM purchased American Brass Company, the nation's largest brass fabricator and a major consumer of copper and zinc. In 1926 Anaconda acquired the Giesche company, a large mining and industrial firm, operating in the Upper Silesia region of Poland. This nation had gained independence after World War I.
At that time Anaconda was the fourth-largest company in the world. These heady times, however, were short-lived.
Great speculation
In 1928, Ryan and Rockefeller aggressively speculated on Anaconda shares by manipulating the supply of copper, causing shares to go up at first; at which point they sold, which caused stocks to fall; then buying them back. Known today as a "pump and dump", at the time the actions were not illegal and took place frequently. Anaconda was producing copper at such a rate they had tremendous stockpiles. To control prices, the company only sold the requested supply. Under the pressure of a "joint account" set up by Ryan and Rockefeller of nearly a million and a half shares of Anaconda Copper Company, prices fluctuated from $40 in December 1928, to $128 in March 1929. Selling large volumes of shares rather quickly causes the bottom to fall out of the market; investors lose confidence and dump their shares, causing a domino effect. Small investors would purchase blocks of shares on credit, and when they could not sell at or above the given price, had to sell the shares at a loss when the banks called on their loans for the purchase of said shares.Smaller investors were completely wiped out. The results are still considered one of the greatest fleecings in Wall Street history. The United States Senate held hearings on the stock manipulations, concluding that those operations cost the public at the very least, $150 million. A 1933 Senate banking committee called these operations the greatest frauds in American banking history, a leading cause of the 1929 stock market crash and 1930s depression.