would not come within this bill, because a project is authorized in its broad aspects and this committee merely appropriates money for a given fiscal year.

Senator HAYDEN. Thank you.

BUREAU OF MINES

LEADVILLE DRAINAGE TUNNEL, LEADVILLE, COLO.

AMOUNT REQUESTED

Senator JOHNSON. Mr. Chairman, the purpose of the requested increase of $500,000 in the bill is to continue driving the tunnel at Leadville, Colo., until useful drainage is accomplished.

[Referring to map.] This Leadville mineralized area is divided into four major basins called hydrostatic basins. Senator Millikin, correct me if I make a misstatement on this as I go along.

They are pretty much filled with water because they are crisscrossed by numerous dikes which do not permit drainage. That mineralized area, as you see, is divided into four compartments or rooms, and they are flooded. Here you see the altitude of the tunnel, and this the depth of the Hayden shaft; there are deep shafts all over this area.

Senator HAYDEN. What the tunnel does, you start it at the lower elevation and go under a mountain?

Senator JOHNSON. That is right, to tap these four basins.

Senator HAYDEN. The original concept, as I remember, was quite an extensive tunnel.

Senator JOHNSON. 17,500 feet long.

Senator HAYDEN. That was projected during the war when the minerals that are in the area were very badly needed.

Senator JOHNSON. We were in dire need of zinc and lead, and there still is a very vital shortage of lead.

TUNNELING DIFFICULTIES EXPERIENCED

Now this tunnel goes in 6,600 feet, and then it stops right here when we ran out of money. We had an appropriation of $1,400,000 which was supposed to build the whole thing, but they ran into some very bad ground, very wet ground, and they had the usual troubles when they built the tunnel so they got in only 6,600 feet.

DISTANCE TO FIRST MINERAL BASIN

Senator HAYDEN. How far would they have to go to get to the first basin?

Senator JOHNSON. They are in the water basin now, but they will get into a mineralized area in this neighborhood, near the Hayden shaft. That, I think, is something like 3,300 feet, but it is estimated that it would cost $500,000 to complete the tunnel to the Hayden shaft, which will drain the first mineralized area.

TUNNEL NOW USELESS

Senator HAYDEN. As it is now, the tunnel is perfectly useless as far as it has gone?

Senator MILLIKIN. Completely useless.

Senator HAYDEN. To make it of value, it would be necessary to drain out the area.

Senator MILLIKIN. For $500,000 we can unwater one of these great basins up there, and that will take us to the so-called Hayden shaft. As it stands now, as you pointed out, this tunnel is worthless to us. It will unwater a vast tonnage of lead, zinc, and manganese.

While the pressure may be somewhat off on that, we may get into other emergencies, and I think it is foolish not to have these reserves against a possible day when we may have grave need for them.

REPAYMENT FOR TUNNEL

Senator JOHNSON. The plan is that the costs of this tunnel shall be repaid. The Bureau has worked out an arrangement for repayment with the persons who own the claims, the mineral claims. There are hundreds of mineral claims in this area, and the Bureau of Mines has worked out an agreement with 90 percent of them that they pay 3-percent royalties on all of the metal taken out of that area; and, in addition, the tunnel is to be used as a common carrier to transport ore and waste materials at a charge of 20 cents a ton. It is estimated that these revenues will more than pay the complete costs of the tunnel.

Senator HAYDEN. It is not getting into an unknown area.

Senator MILLIKIN. All of the mineral deposits in this area are well known. It was mined with very deep shafts. The price of metal dropped so low that they had to shut down and they could not keep up with the water and the pumps in those days were not equal to the job.

May I make a suggestion, Senator Johnson?

Senator JOHNSON. Yes, indeed.

Senator MILLIKIN. The question was asked: Why do these people not do it themselves? In other hearings we have introduced here maps showing that you would have to take a microscope to decide where one claim ends and the other begins. I think it would take 20 years to fix ownership responsibility on a problem of that magnitude.

We have a peculiarity in the ownership of mining claims which makes it most difficult to fix responsibility for contributions. Senator Johnson and I lived and slept with this thing trying to decide how it could be done.

QUESTION OF ROYALTY ON TONNAGE

Senator HAYDEN. If you simply fix a royalty on every ton of ore that comes out, somebody will have to pay.

Senator MILLIKIN. Somebody will have to pay if they use that tunnel. I have no doubt that they will use it and it is the only feasible way to bail out this lost investment that we have in there. Senator JOHNSON. It amounts to $1,400,000.

Senator MILLIKIN. $1,400,000 and the Bureau of Mines has done a lot of investigating on this.

Now I believe that they are in firm ground and that this estimate will hold up.

Senator JOHNSON. It is in granite now.

Senator MILLIKIN. You could almost make a textbook case of all of the unforeseen things that happened to them before.

Senator JOHNSON. They are in what you call pre-Cambrian granite now. The Bureau of Mines estimates that there are 3,000,000 tons of lead and zinc ore that is rather high grade, it runs 15 percent metal and in addition to that there is almost unlimited amounts of manganese, two different kinds of manganese, including oxide manganese, the most valuable kind.

They estimate that this tunnel will make available 100,000,000 tons of oxide manganese and then there is something like 400,000,000 tons of carbonated manganese.

So, it is a heavily mineralized area. You can see on the map that there are shafts all over, so it is not guesswork and they know that the ore is there and the Bureau of Mines has made a most conservative estimate according to the mining engineers and experts of Colorado. They say an estimate of 3,000,000 tons of lead and zinc ore is very conservative.

Senator HAYDEN. The manganese, we are now depending on Russia for our source of supply.

Senator MILLIKIN. That is right.

Senator JOHNSON. Some of these deposits of manganese run as high as 40 percent.

Senator HAYDEN. I note by the House hearings, pages 298 and 299, the testimony by Dr. Boyd of the Bureau of Mines where he placed a letter from the president of the administrative council, highly recommending that.

Senator MILLIKIN. They are very much in favor of it.

Senator Johnson has made it very clear, Senator Hayden, that this is probably the largest-known reserve of lead and zinc and associated minerals that can be gotten at with anything approaching the modest costs that are involved here.

The manganese certainly is a feature. We would have been infinitely better off in the last war had we had these reserves available for mining, and we would be infinitely better off if we should have another war to have them available.

The interests of the United States, as I suggest, are that we want to liquidate a bad investment, and we are also building up a reserve that is mighty useful for stock piling, especially if we get into another

war.

Might I make another point?
Senator JOHNSON. Yes.

METAL PER TON OF ORE

Senator MILLIKIN. I think Dr. Boyd has made it very clear that you get more metal per ton of ore out of the expenditure of money here than you do any place in the United States. You get 15 percent metal content here whereas the other exploration moneys that the Federal Government is spending run about 31⁄2 percent.

Senator JOHNSON. I think the Bureau of Mines estimated, either the Bureau of Mines or competent mining engineers, estimated that the tunnel to drain that area would cost 3 mills per pound of metal recovered. That is three-tenths of 1 cent per each pound of metal recovered.

Senator HAYDEN. I have no doubt that it would be perfectly feasible for the operators to pay the royalty.

Senator JOHNSON. I think there is no doubt about it.

Senator Millikin and I would like to submit for the record the statement by Mr. John Hamm, president of the Colorado Mining Association and Charles E. Beatty, president, Lake County Mining Association with respect to that. May we have it in the record? Senator HAYDEN. That will be included in the record.

(The statement is as follows:)

MEMORANDUM IN RE CONTINUATION OF LEADVILLE DRAINAGE TUNNEL, LEADVILLE, COLO.

The continuation of the uncompleted and presently useless Leadville, Colo., drainage tunnel, driven by the Government during the war to make available certain critical and strategic materials, is necessary to:

1. Complete the first phase of the original project.

2. Salvage a Government investment of $1,400,000.

3. Drain the first hydrostatic basin of the four, for which it was designed.

4. Make significant quantities of lead, zinc, and manganese available for present use and as a mineral reserve for stock-piling purposes.

5. Prevent deterioration of present tunnel.

The tunnel was authorized in 1943 by Public Law 133 of the Seventy-eighth Congress. There was $1,400,000 appropriated and expended on the project. The purpose of the tunnel was to dewater large bodies of lead, zinc, and manganese known to exist in four underground hydrostatic basins in the Leadville mining district.

The original plans contemplated 17,500 feet of tunnel and laterals-6,600 feet have been driven. Unusual difficulties were encountered. The tunnel was entering the mineralized area at the time work was stopped in 1945 because the appropriated funds were exhausted. Drainage has not been affected in any of the four basins. Continuance of the present tunnel for 2,500 to 3,500 feet to the vicinity of the Hayden shaft is required to dewater the first basin planned to be drained. The estimated cost of this continuation is $500,000. That amount was, and is now, requested for use "to continue driving the tunnel until useful drainage is accomplished." The funds would be expended in accordance with the provisions of the regular Interior Department appropriation bill and the original act authorizing the tunnel.

The project has been heretofore approved by the Congress. It was endorsed by the War Production Board. The National Minerals Advisory Council recently endorsed a continuance of the present project. The Department of Interior and Bureau of Mines recently requested $500,000 for use during the coming year for its continuation. The Senate and House of the State of Colorado by concurrent resolution have endorsed it. The Colorado Mining Association and various other public bodies are supporting the requested appropriation.

The Bureau of Mines, upon the request of the House Appropriations Subcommittee, submitted the following information:

"The Leadville district has produced about $650,000,000 worth of metals, chiefly lead, zine, silver, and smaller values in manganese, copper, and gold. Its production record is the largest of all the mining districts of Colorado and is among the largest in the country. It is conservatively estimated that 3,000,000 tons of zinc-lead ore would be made available for mining by unwatering the district through this drainage tunnel. The ore that would be thus unwatered would be considerably higher grade than what is currently being mined throughout the country. It would contain more than 15 percent metal, whereas the average lead-zinc ore now being mined contains only about 3 percent metal. In addition to the zinc-lead ore, at least 1,000,000 tons of ferruginous manganese ore would be made available for mining.

"The complexity of numerous property ownerships in the district has deterred private capital from undertaking this tunnel enterprise and has prevented the reopening of individual mines now flooded and inactive. The tunnel is designed to serve as a public utility in that it would afford permanent drainage of the area. It will stimulate active domestic mining and increase taxable property values and income taxes as well as make available badly needed metals.

"Agreements were negotiated with 90 percent of the property owners during the previous Bureau of Mines activity on this project whereby royalties in the amount of 3 percent would be paid to the Government on any resultant mineral productior. Additional revenues would be expected in the form of tolls charged for haulage of ore and waste rock through the tunnel."

"Even without considering the repayment features of the Leadville tunnel project, it is one of the most promising zinc-lead development proposals that have come to the attention of the Bureau of Mines in its investigations of strategic mineral deposits."

"While the average of the zinc and lead ore developed by the Bureau of Mines in its strategic minerals program is less than 6 percent combined metal, the material at Leadville contains more than 15 percent. Consequently, once the tunnel is unwatered, the ore that will be made available at Leadville will be of more immediate use than most of the ores now being developed."

The Director of the Bureau of Mines testified, upon cross-examination by the House Subcommittee on Appropriatious, that, "The Leadville tunnel in our mind, sir, is the one big possibility of quickly getting reserves of lead and zinc, principally zinc, and manganese opened up in this country."

Reference is made to the following exhibits attached hereto:

1. Draft of two proposed alternate amendments to the pending Interior appropriation bill to effect the desired purposes. 2. Source material and bibliography. Respectfully,

LEADVILLE, COLO., May 4, 1949.

JOHN HAMM,

President, Colorado Mining Association.
CHARLES E. BEATTY,

President, Lake County Mining Association.

EXHIBIT I. PROPOSED ALTERNATE AMENDMENTS TO PROVIDE $500,000 FOR CONTINUATION OF LEADVILLE, COLO., DRAINAGE TUNNEL

1. (a) Proposed amendment: Amend H. R. Eighty-first Congress, first session, a bill making appropriations for the Department of the Interior for the fiscal year ending June 30, 1950, and for other purposes, and "Title I, Bureau of Mines, investigation and development of domestic mineral deposits, except fuels," thereof, by adding at the end of said paragraph after the words "Federal, State, or private" on page 61 of the House full committee print, thereof, the following:

"To enable the Bureau of Mines to extend and operate the present Leadville, Colo., drainage tunnel for the purpose herein authorized or by Public Law 133 of the Seventy-eighth Congress; $500,000."

EXHIBIT II. SOURCE MATERIAL AND BIBLIOGRAPHY

(a) Hearings before the subcommittee of the Committee on Appropriations, House of Representatives, Eighty-first Congress, first session, on the Interior Department appropriaton bill for 1950, part I. (Pp. 296-297, 298-303.)

(b) Report by Bureau of Mines on Leadville, Colo., drainage tunnel with maps and photographs. (Draft for printing in 1949. Available at Bureau of Mines, Washington, D. C.)

(c) Justification for requested appropriation of $500,000 for continuation of Leadville, Colo., drainage tunnel, prepared by Bureau of Mines and approved by Department of the Interior. (Available at Bureau of Mines and Department of the Interior, Washington, D. C.)

(d) State of Colorado House Joint Memorial No. 7.

(e) Endorsement of National Minerals Advisory Council dated October 4, 1948. (See hearings, etc., on Interior Department appropriation bill for 1950, pt. I, p. 299.)

(f) Map of part of the Leadville mining district showing shaft objectives in the four water basins which would be tapped by the Leadville drainage tunnel, project No. 15-164, Lake County, Colo. (P. 1.)

(g) View of portal and surface plant from a high point across the valley. Line indicates course of the tunnel. Photograph by Bureau of Mines. To be included in report of project referred to as item II (b) hereof.