ECONOMIC INTELLIGENCE REPORT
copper in the seven yearf the ussr
CIA/BR0
CENTRAL INTELLIGENCE AGENCY
OFFICE OF RESEARCH AND REPORTS
economic intelligence report
copper in the seven yearf the ussr
CIA/RR
central intelligence agency
OFFICE OF RESEARCH AND REPORTS
FOREWORD
This report analyses the current status of the copper industry of the USSR andontinuous time series of production cf refined copper in that country0 (the last year for which the USSRroduction figure)n estlmat;5 also is given, based on the percentage increase announced in the Seven Year.
The time series la based exclusively on Information extracted frosi Soviet newspapers, periodicals, and books. oviet source is given for each figure In the series, or the methodology for the figure lu explained in detail. Close attention to sources and methods has yielded estimates that arc believed toloseto the actual production of refined copper In the USSS.
Page
Summary and Conclusions
T. Production .
and
and
II. Construction and Investment
III.
TV.
V.
VT. Relationship Between Supply and Consumption
ApiKTidlx
Source References
Tables
Production of Refined Copper In the USSR,
,5 Plan
and Concentrating, Smelting, and Rpfining
Plants and Production in the Copper Industry
of the USSR,
i- Expansion of the Copperf3 During
the Seven Year Plan,
h. Estimated Supply srxl Consumption Balance of Copper lr.
tile5
COPPER IK THi) SEVEN ;EAP PIAKTHE 'JSSU
Susrary 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 Waroderate Increase In productionopper has taken place, and there hasapid growth of the Soviet oconomy accompanied by an even faster rate of growth in the consumption of copper. Consequently, the gap between domesticand consumption of copper has not been closed, und the USSR has hud to augment its domestic production by importing copper from the Free World and, since World War II, by withdrawing supplies fromstocks accumulated during the war.
In the Seven Yearhe USSR again hasubstantial increase in production of refined copper. The goal5 isercent above the estimated production8 of aboutmetricrons. Production ofasons. Achievement of the goal5 win 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 rDr 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 ofpercent Increaseoubtful 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 pursuingrogram cf substitution. Aiacng toe measures being stressed at the present time is the substitution of aluminum for copperariety of applications.ore than 1tons of aluminum ore planned to be consumed by the wire and cable Industry, thus saving, among other things, an average of about
Tonnages are given in aetric tons throughout this report.
ons 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 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 countryhole or in any of its regions In that year an official report stated that tbe total production of copperons, of0 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 firmfigures9 Although annual percentage increases have been published for most postwar years, such data must be appliedonnage figurease toroduction figure interms. Uncertainty about the magnitude of this base, usually taken to be productionas given riseumber ofboth here and abroad, orf copper In the USSR in the period since World War II.
The conjecture on this subject came to an end whenof information concerning achiever.eats during thepublished, as follows: roductioncopper in Kazakh SSR5 wasercent greaterazakh SSR5 produced kU percent of the totalof copper in the USSR,he total product lot: of copperUSSR5 Increasedercent above the level statements can be related to tlie announced increase inof copper in Kazakh SSR0 above the level0 andV . y : i ici; of pr iuc-
i'-Cii figures bused wholly on information released by Soviet authori-
The USSR is estimated to have increased its production ofcopper2 times during the pastears, 0 tons3 to aboutons For comparison, production of refined copper in the IS hat- about doublec during the
period, having increased frooons totons. Estimates of the Soviet production of refined coppernd the plan5 are preftented in
Table 1
Estimated Production of Refined Copper in the.5 Plan
Thousand Metric Tons
9
lan
Amount
/
m/
l
r/
r/
/
(For aerially nuobered source references, see the Appendix.')
ercent more copper van smelted than8novn, and production7 was derived.
tl0nC0PPer9han in Jj37Pr^)uctlon0 wasercent greater than in
f. Figures for production of copper ir. the USSRi.iLon the basis of Information ab->ut production in Kazakhits relation to production inR. Production of copperduring thehs
the corresponding period in ioi-:, =above the ccrrespood-inS period, and lo per cert above the corresponding On the basis ofnts, the following index of production of copper in Kazakh 3s3 haJ been derived:
Text continued on p. 6.
Tabic 1
Estimated Production of Refined Copper in the,5 Plan (Continued)
Index
* ICO)
This index applies only to theonths of each year. New capacity was being Installed at the Balkhash plantnd thus an unusually large proportion of production in Kazakh SSR took place during the latter months of that year. The rate of productiontheonths0 is estimated to have been the sane as during theonthsthat is, aboutercent greater than during theonths. The average monthly production of copper In Kazakh SSRherefore, was derived as follows:
he average monthly rate of production during
theonthshe average monthly rate of production during
theonths0 metric tons (the amount of copper
smelted in Kazakh SSR0 was seven times as great as that
0 metric tons
etric tons, the average monthly production during
theonthsetric tons, the average monthly production during theonthsO
Production in Kazakh SSRI is therefore estimated to have been: metric tons (tne average monthly productionetric tons during theonths0. Kazakh SSR2 percent of the total produced in the USSR,hicr. is therefore estimatedaveetric tons. Ihe figure for productions interpolated. Production in Kazakh SSfts estimated to have beer, aboutk8 metric tons (the average monthly production- metric tons during theonths0 Uses Kazakhroducedpercent of the total produced la the USSR/ which is
Table 1
therefore estimated to haveetric tons. Production in Kazakh SSRk is estimated to have been0 metric tons
(the average monthly productionetric tons during theonths0 times Kazakh SSR7 percent of the total produced in the USSR inhich is therefore estimated to haveetric tons.
from productionhich
from productionhich
from productionhich was
j. Derived from production inwhich wasercent greater thanU/
k. Derived from productionhich wasercent greater than
1. Derived from productionhich wasercent greater than Another source reported that productionO wasercent greater thanrmetric tonshich is close to the figure given in the table, m. Production of copper1 was Ik percent greater than in
n. Production of copper2 wasercent greater than in
0- Derived from productionhichercent greater than
p. Derived from productionhich wasercent greater than
c. Estimated from production in Kazakh SSR and the percentage ofproduction in the USSR accounted for by Kazakh SSR. IniiSR producedereen; o' tho copper produced In theby Kazakh SS3 in that year is estimated to have beenocu.t:
in Kazakh SSR0 to thatroduction0 to thatnd production5 to thai Productiono was seven times that0 metric tons. The plannedf copper ir. Kazakh SSPoercent of production ink metric tons. The Fourth Five Yearor production or copper in Kazakh SSR was fulfilled roduction of blister copper in
Estimated Production of Refined Copper In the.5 Plan (Continued)
Table 1
Estimated Production of Refined Copper in the,5 Plan (Continued)
r. The USSR has not published figures for annual percentagein production of copper There probably was some Increase in productionut less than both the planned increases and the increases in previous yoars. The smallest annual increase known to have been announced by the USSR during the period under considerationercent- If the USSR had increasedin any of they as muchercent, anprobably would have been (Lade to this effect. On the assumption that some increase ln production was achieved and that it was lessigureercent was selected as the annual increuse for.
s. Production of copper planned5 isercent greater than
ihe USSR also has announced that production of refined copper5 is to beercent greater than Thus the goal for production of refined copper is estimated toons, or an average annual increaseercent above the level Thij large increase may indicate the failure of the Soviet copper industry to increase production in theears; of the original Sixth Fiv Yeary anything like the amounts; called for in that plan, whereas production was scheduled to growJ, it is estimated to have grown only byercent annually in the first I* years of the Sixth Five Year Plan The major reason for the failure to meet the goals for production ofhe early years of this p; an hb well as the goal of e 6 v heconstruction goals lor various enterprises of the copper induf, try, particularly in the mining and concentrating sectors.
h. Kcserves
The USSR has stated that it leads the world in reserves of This allegation, which implies nothing about the quality of the reserves, may be true no ether country is known to havethat ore larger than those claimed by the USSR. The copper content or the Soviet copper reserves at the beginning9 is estimated to have beenillion tons. This quantityan increase of aboutercent above the level5 million
tons of reserveshe last year for which the USSRtonnage figure for reserves. During the Seven Year PlanUSSR hopes to increase the surveyed reserves of copper bypercent, go/ If this goal is achieved, reserves of copper inamount to between hh million and I* millionhatmillion to kg million tons minus the amount of ore minedSeven Year
Approximatelyercent of the copper reserves of the USSR at the end8 were located in four general areass shown in the following tabulation:
Armenian
Kazakh
Uzbek
Most of the copper deposits are in complex rock formations, which have been subjected to considerable alteration and deformation. The ores generally are polymetalllc andariety of copper-bearinB minerals. Many of the deposits ofhe USSRelatively low grade and contain large quantities of oxide ores, which require different processes and equipment from those required byores. The USSR has been processing both types of ore with the same techniques, with the result that recovery of copper from oxide ores lias been low.
0- Mining and Concentrating
Little quantitative information has been released by the USSR in the lastears regarding production of copper ores and Considerable dataualitative nature have been cublished however, particularly about ores and processes in the Urals and the
.latu tnd
processes are lagging behind the smelting and refining processes and Vint tne metal content of the ores has been declining.
Kazakh SSR leads all other areas in the uSSR ir, production Of copper ore, followed by the Urals, Horil'A, and the Armenian SSR.
Soviet production of copper ore6 was distributed among these ureas approximately as follows:
Percent oi Totalthe USSR
Kazakh
Armenian
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 JSSH is in the Balkhash-Kounradskiy area. During the Seven Year Plan, large new mines and concentrating plants are to be constructed athetyr-Kul'sk, Hikolayevsk, and Dzhezkazgan.
In the Urals, where Copper has been mined for many centuries, the principal mines are at Krasnoural1sk, Kirovgrad, Degtyarka, Karabaflh, Sibay, and Blyava. Each of the mines has its ownplant except Itegtyarka, which ships itsew miles northwardoncentratingt Revdg.. Mining and concentrating at Volkov, Uchaly, and Saysk are to begin during the Seven Year Plan.
One of the largest mining-metal iurgical combines in thes at Koril'Sk in Krasnoyarskly Kray. The Ncril'sk ore is different from the other Copper ores in the USSR in that it resembles the nlckel-copper ore of the Sudbury district in Ontario, Canada. During the Seven Year Plan, production at Noril'sk is to double.
In the Armenian SSR, copper ore is mined and concentrated at four localitiesKhtala-Shaaiiug, Dastakert, Kadzharan, and Kaian. At present, each of these operations is relatively small in scale. During the Seven Yeararge porphyry copper deposit at Aserak is to be developedn-cut exploitation,oncentrating 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 Flan. The oxidized ores fro& the Kal'makir mine are to be processedew concentrating plant near the mine.
isting of the principal copper mines in the USSR, secnd for an indication of the location of these mines, see the map.*
and Refining
smelting is concentrated in two areas of the USSR, the Urals and Kazakh SSR, where approximately three-fourths of the total production of the countrymelted. Lesser amounts of blisterarc produced in Noril'sk, Moscow, and the Armenian SSR and on the Kola Peninsula.
Five or six copper smelters are in the Urals. They are situated at Krasnoural1sk, Kirovgrad, Revda, Karabash, and Mednogorsk, and there may be one at either Sibay or ifayraak. 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, Noril'sk, and Monchegorsk.
By far the largest percentage of production of refined copper in the USSR came from the Urals 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 Verkhnyriyn Pyshma in Sverdlovstkoya Oblast. Tlie- second largest in tbe country is the Balkhash refinery in Kazakh SS-i. Other refineries are at Alaverdi in the Armenian SSR, Kyshtya in -he Urals, Noril'sk in Krasnoyarskiy Kray, and Moscow- he USSR plans torefining capacity, probably by aboutercent. Capacity at Alaverdi is to be Increased to five times the present size, capacity at both Balkhash and Noril'sk may be increased,ew smelterefinery are scheduled to be built at Almalyk in Uzbek SSR.
isting of the copper smelters and refineries of the USSR, seend for an indication of the location of these facilities, see the map."
.T. Construction and Investment
*ollows on Following
An increase in production of copper in the USER by theercent called for in the Seven Year Plan willubstantial expanslor
i m
! 3 1 3 Hi
i ft! lili Hi 11
I 5 ;
of capacity in ail sectors of the copper industry. Perhaps the greatest expansion will occur in the raining and concentratingwhich has been lagging behind the metallurgical sector for several years. Refining capacity, however, may have to be expanded by only aboutercent, inasmuch as existing refineries probably couldons in addition annually.
* Ruble values in this report are expressed in current rubles. The official rate of exchangeubles to USoes not necessarily reflect the dollar value. An approximate ratio for investment in the copper industry follows.
The figureillion rubles is based on an increase induring the Seven Year Plan ofons of refined copper andapital investment figure reported by the USSR0 rubles per ton of new The figureillion rubles is believed to include not only investment in refiningbut 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 thanould the figure0 rubles apply to refining capacity alone. atio appears to be unlikely in view of the ruble-dollar ratio of less thanor investment In capital construction for the USSRhole.
** Information about investment In capacity for refining copper In the USSR is not available, arid even for Free World countries such information is very Sparse. In theC's the Mufhodesiaillion pounds sterling3 million) in the construction of an electrolytic refineryapacity0 tons, orer ton of refined capacity.oefinery to producetons of refined copper would require, at0 per ton,illion.uble-dollar ratio of 1tohis investment would amount to about 3k5 million rubles.
The Soviet investment coefficientCOO rubles per ton of new capacity nay be comparedree Worid figure ofer ton of new plants, including all sectors from mining throughthue indicating the above ruble-dollar ratio. Tac Free World figure0 was derived by adding dataarge new Latin American copper-producing facility ztiat /footnote continued en
Capital investment for the expansion program of theliole in the Seven Year Plan Is estimated to amount toillionarge share of thisercent, probably will be used for the construction of new plants and the remainder to modernize existing plants. Of the total investment,illion rubles may be expended to achieve an increaseons in new capacity for refining copper.""
Includes mining, concentrating, and smelting to data about the fairly new copper refinery built ln Rhodesia. Approximatelymillion ore being Invested in the Toquepcla properties of the Southern Peru Copper Company toine, concentrating plant, smelter, roads, and ancillary facilities to produce annuallyons of high-grade blister Thus the investment coefficient is abouter ton. It might be noted that at San Manuel In the US the cost was about Slid millionlant to produce0 tons of blister copper per The Investment coefficient for this plant, therefore. Is? per ton. Adding thecoefficient of the Mufulira refinery to the coefficient of the average of Toquepela and Son Manuelree World Investment coefficient of0ubLe-dollar ratio ofo 1.
* Hew capacityonser too times5 billion rubles. The figure ofper ton is based onillion for the Haydcr.) tons per day) anday-per-year operation.
A rough check on the investment in nining andillion rubles could be of the right order of The ruble Investment would bo equal to7 million, on the assumptionuble-dollar ratio ofo 1. On the assumption that0 million of the San Manuel investment is for nining and concentrating, the investment of;on would provideimes the capacity of San Manuel, orillion tons of oreons of concentrate per year. Tne assumption is based on iae subtraction from tbe total San Manuel in.'estoent of >U& million of or. amount equal to the investment coeff.cient7 per ton of smelter capacityas at the Hoyden smeltertimes the San Manuel smelter capacity0 tons. For the USSR toOC tons of refined copperroduction of ore must increase aboutillion tona.
ollows on
Facilities for emeltlng maylightly larger amount than the amount for refining capacity. On tbe assumption tbnt siDeltlngamountingi0O0 tons muat be constructed, the Investment would be5 billion rubles.* The remainder ofillion rubles to be Invested in the copper Industrythatillion rubles maydirected to the mining and concentratinguch of this Investment may be required for facilities to process oxide ores by technologies different from those for sulfide ores.* gives some indication of the emphasis on tbe development of the Dining and concentrating sectors of the Soviet copperas opposed to the smelting and refining sectors and also of the regional location of the principal new facilities of the copper
The USSR has not published figures for any recent year on thefor copper, the total amount of copper consumed in the country, or the amount consumed by any major consuming industry. In theof 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. Tho relationship is believed to be causal: the specific properties of copper cake 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, vere used to evaluate the significance of thebetween production of crude steel' and consumption of refined copper. Data for four highly industrialized countries (Canada, Japan, the UK, and the US) were analyzed, and In evrry case theignificant relationship existed between these two factors. esult of the findings for the other industrial countries, it was concluded thatarge Industrial country such as the USSR, production of crude steel could be usedasis for estimatingof copper.
Accurate data on production of crude steel in the USSR oreblexceptears during World War II, when there are uncertainties aa to the dates that production ceased at some of the plants overrun by the Invading Germans. Also, firm data arc available on production,nd exports of copper* Although the changes In the level of stocks of copper are unknown, it is believed that the annual production plus Imports minus exports (which wereveraged for the, will cancel any changes in stocks that may have occurred and therefore willwithin reasonable limits the level of consumption of copper. Consumption of copperal estimated on the basis or the Increase in production of steel, using the average annualof steela base, oased or. the methodologyabove, consumption of copper in the "JSSS5 is estimated as follows:
._. Thousands
|
Production of crude steel is virtually equivalent to consumption of crude steel, Inasmuch as crude steel in unfabrlcated forms normally is not exported or imported in significant quantities.
IV. Substitution
During the Seven Year Plan the USSR probably will make greater efforts than heretofore to substitute other metals and nounctailic materials for copper in many applications. Khrushchev, in his speech to the Plenum of the Central Committee of the Communist Party intated 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.
The finding of substitutes for copper Is being taken seriously, as indicated by the fact thatoreillion tons cf aluminum urc planned to be used. In the electrical networks of the country, partlyubstitute for copperonductor and partlyubstitute for leadheathing material. Someof the importance of this substitution may be inferredoviet statement that the utilisation of aluminum and plastics in production of cable will save up toillion rubles and willmore than koO.COC tons of lead and more thanons of copper during the Seven Year Furthermore, the USSR appears willing to expend the effort necessary to obtain this aluminum. Whereas production of coppers to be increased byercent, production of aluminum is to be increased Moreover, the Investment In the aluminum industry is estimated to be aboutillionr about twice that in the copper industry. The rcaaon for the relatively greater emphasis being giver, to the aluminum industry seems to bo the lower costs of production for aluminum than for copper.
V. Trade
k. Imtprta
* This estimate is basedoviet figure0 rubles per ton for the creation of new capacity Ir. the aluminum industryna an estimated increase Inillion tonsto meet the fioal for pr&iuctic::.
Duringear periodthe USSR was unanle toadditional copper from the rest cf toe Soviet Bloc and importedons of ur.wrought capper and copper wire from the Free World. These imports represented0 percent of its new supply (productlom plus inperta; of copper in the period. Imports increased rather sharplyQ and constitute; nore than one-fourth of the
new supply of copper in that year. Imports of copper by the USSR9 "ere as follows":
Thousand Metric Tons
Year
6
0
9
The form of the copper imported by the USSR has variedarge extent with the export controls placed on the shipment of copper to the USSR from countries belonging to the Coordinating(COCOM). Beforeost of the Soviet imports of copper were in the form of unwrought copper. Following the removal from the embargo list by COCOM ofillimeters and less in diameter, the USSR imported most of Its copper in the form of such wire. InOCOM removed the export controls on all forms of copper. Subsequently tbe USSR imported more copper in unwrought forms in theonths8 than the total of such importsll of theears. At the same time the USSR continued to import bare copper wire at about the same rate as in theonths of the year. Available evidence indicates that Soviet purchases of copper from the Free World9 may have been slightly less than In the preceding year and that the shift to purchases of unwrought force of the metal continued.
3. Exports
* These figures areur.er.ju^ statistics of Free Worldcountries. The USSR has not reported imports of copper in its official handbooks on foreign trade. *" Preliminary estimate.
he USSR exportedens ofalmost all of which way 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-Uiirds of the total in the Uyear 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 copperequal to that received frco the USSR. As far as theseare concerned, the supply position of the USSR is not affected, inasmuch as the USSR is, In effect,ervice and "value added by manufacture."
VI. Relationship Uetween Supply and Consumption
Estimated consumption of copper ln the USSR has exceededproduction for many years. Estimates5 are given in Tablend in the accompanying chart.ogether with an indication of the gap between production and consumption. Part of the deficit has been set by imports, primarily from the Free World. The remainder probably was met by withdrawals from stocks, which were exceedingly largeesult of large imports of copper and brass during World War II from the IIS and the UK. Although there is no positive information that stocks of copper have been reduced by the quantities estimated in Tablehe abundant evidencehortage of copper has existed in the USSR, at least in recentuggests that the direction of the stock changes Is at least correct.
Table 4
Estimated Supply and Consumption Balance of Copper in the5 Plan
Thousand Metric Tons
changes
Plan
APPENDIX
Cosplan. Sotsiullstlcbeskoye fltroltel'gtvo SSSR,
USSR, Gosplan. SotBlallstlchcakoyc stroltel1ctvo SSSR,
. Industriya,ay ko, p. 3-
Pravda,eb kl.
Katakhatanskaya pravda,ug hh.
Planovoy jjhosynystvo.
USSR, Gcologicacstiy Koaitet. Oodovoy o'ozor slr.ernl 'aykn
resursov,azakhstanskayaug kk.
SOURCE REFERENCES
8.
9- Ibid.
Ibid.
Pravda, 8 Jan ko.
13* Current Digest of tbe Sovietk. 3
- 3-
Pravda,
37- Llteynoye prolr.vodstvo,. 5.
Pravda,
j
Trud,
Current Digest of the Soviet Press, lk Kaiakhstanskaya pravda,
Planovoye khotyaystvo,
USSR, Geologlcheskiy. Kazakhstanskuya pravda,
6
8 Pravda, lk
26. Prl.-oda.. 6.
29- Ct Brit, BBC. Summary or World Broadcasts, pt I,,
M.I. Plastichesrtlyearodnom Kiiozyuyutve
(Plastics In the National ,
of Metals,-
. The Porphyry
33- Engineering and Hlniiig Journal,.
Original document.
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