A Corporate History of the Nevada Consolidated Copper Properties

by Keith Albrandt

From its inception, the Nevada Northern Railway was a subsidiary of Nevada Consolidated Copper (Nevada Con). It was built to haul ore from the mines to the mill, and subsequently transport blister copper from the smelter to the transcontinental rail link with the Southern Pacific Railroad.

The germination of Nevada Con as well as its subsequent history lies in a series of connections: the opportunity to generate business and revenue as seen by Mark Requa, President of the Eureka and Palisade Railroad in neighboring Eureka County, Nevada; the vision of Daniel C. Jackling realizing the potential of mechanized, large scale, open-pit copper mining operations to reap enormous profits from low-grade, disseminated deposits; and the financial interests that can be traced to the Guggenheims, the Copper Kings of the early twentieth century.

Nevada

In 1902, Mark Requa, president of the Eureka and Palisade Railroad made a trip to the Robinson mining district in neighboring White Pine County.¹ The Ruth and Kearsage claims, optioned by Edwin Gray and David P. Bartley after their arrival in the Ely area in September 1900,² were the objects of his visit. Realizing the potential of the rich copper deposits both for their intrinsic value and as a source of haulage revenue for his railroad, he optioned the claims from Gray and Bartley for $150,000.³

Another property in the Robinson district actively being worked during this period was Copper Flat;⁴ perhaps the best prospect in the district. It included the Eureka mine and the Calumet group of six claims amongst others. Joseph Bray supervised the operation as agent for Mulford Martin of New York City. In November 1902, they obtained 560 acres at the Georgetown Ranch, including certain water rights of Murry Creek, as the proposed site for a smelter. In December 1902, these properties were organized as the New York and Nevada Copper Company.

The third property active in the district at this time was the Pilot Knob or West End camp developed by Samuel F. Paul.⁵ Senator William Clark of Montana Copper and Joseph Giroux held options and by May 1901 had increased their holdings to nearly 1000 acres.

William A. Clark made his millions from the copper mines in Butte, Montana. He was one of the early investors in the West End properties of the Robinson mining district, including the claims that would subsequently be organized as the Giroux Consolidated Mines Company and later as Consolidated Coppermines.

Together with his brother, J. Ross Clark, he promoted, financed and built the San Pedro, Los Angeles and Salt Lake Railroad (later purchased by the Union Pacific Railroad as their Salt Lake Route) and the Las Vegas and Tonopah Railroad. He is largely responsible for the early development of Las Vegas, Clark County, Nevada.

He moved to New York City in 1907, essentially quitting the West. He died there in 1925 at the age of eighty-six.

Senator William A. Clark

Photo courtesy of the Union Pacific Railroad;
used with permission.

Requa organized the White Pine Copper Company on 15 February 1903, capitalized at $500,000.⁶ It consisted of fifteen claims of the Ruth Group, including the original Gray and Bartley claims as well as others added by Requa during the period from 1902 to 1903. James Phillips, Jr. (New York City financier) was President, Requa, Vice President and General Manager, S.D. Olney, Secretary-Treasurer, and Edwin Gray, Superintendent.

Requa and the White Pine Copper Company commissioned a survey for an ore-hauling railroad in October 1904.⁷ They also built and operated an experimental mill (subsequently dismantled) during the fourth quarter of that year that demonstrated that the low-grade porphyry could be worked economically.⁸ But by far the biggest development of that year actually began in late 1903 when the property of the New York and Nevada Copper Company was attached by local storekeeper William B. Graham and by Requa's own Eureka and Palisade Railroad for failure to meet its debts. Boston bankers S.D. Loring and Sons invested and reorganized it as the Boston and Nevada Copper Company in 1904.⁹

Requa and James Phillips met with S.D. Loring and Sons and arranged to merge their White Pine Copper Company with the Boston and Nevada Copper properties. The Nevada Consolidated Copper Company was incorporated on 17 November 1904 with 1 million shares at a par value of $5.00.¹⁰ Nevada Con had vast ore reserves but little working capital.

"Porphyry Copper" is commonly used to describe large, low-grade (<2%) disseminated copper deposits. In the continental USA, these deposits are found in Utah, Nevada, Arizona, and New Mexico.

Separation of the copper minerals from the waste material is known as "concentrating".

"Smelting" is the subsequent step of extracting the copper from the minerals.

"Refining" is the final purification of the metal.¹¹

Utah

Colonel Enos A. Wall recognized the potential of extensive, if disseminated, copper deposits during his trip to Bingham Canyon, Utah in July 1887 and subsequently filed mining claims in the region.^{12, 13} In 1898, Captain Joseph R. DeLamar took 25% interest in the Bingham claims for $50,000 with options on a second quarter interest for $250,000 and a third quarter interest for an additional $1.25 million.¹⁴

Two young mining engineers on DeLamar's staff, Daniel Cowan Jackling and Robert C. Gemmell, were sent to examine the properties at Bingham. Jackling realized that vast deposits of <1% copper could be profitably mined by large scale surface methods^15,16 using steam shovels. The Jackling-Gemmell report of 18 September 1898 proposed massive open pit mining methods , as a means to tear down the mountain cheaply enough to make a profit.¹⁷

DeLamar was unable or unwilling to develop his Bingham interests by Jackling's revolutionary approach (all copper mining had been previously accomplished by underground methods)¹⁸ and refused to build a small-scale mill to test Jackling's recommendations.¹⁹ DeLamar was not alone in failing to fully appreciate Jackling's innovative ideas: Benjamin Guggenheim turned down an interest in Bingham in 1900 because the 2% copper content was less than that in the tailings of their Butte, Montana mines.²⁰ But Jackling's more efficient mining method and the rising price of copper due to increased demand would demonstrate this shortsightedness.

Several years after his 1898 report on Bingham, Jackling was working at the Cripple Creek, Colorado mines of Spencer Penrose and Charles W. MacNeil. Never wavering in his belief, but without capital, Jackling interested them in the possibilities of mass excavations in the canyon. They obtained a 55% interest in the Bingham properties from Colonel Enos Wall for $385,000 and DeLamar's 25% interest for an additional $125,000,²¹ leaving Colonel Wall with a 20% minority interest. Thus, Utah Copper Company (UC) was formed on 04 June 1903, capitalized with 450,000 shares at a $10.00 par value.^22,23 Charles MacNeill was president, Colonel Enos Wall vice-president, and Jackling was the general manager.²⁴

A 300-ton mill was constructed at Copperton, a few miles from the mine at the mouth of the canyon.²⁵ This is where Jackling devised a method of concentrating porphyry ore that led to a revolution in the copper industry and his recognition as the father of porphyry copper ore. By 1905, they had completed enough development work to confirm the original estimates of Jackling and General Superintendent Bob Gemmell.²⁶ But similar to the circumstances of Nevada Con during the same year, they had vast ore deposits but little capital.

Daniel Cowan Jackling

Photo courtesy of the School of Mines & Metallurgy, University of Missouri-Rolla; used with permission.

Guggenheim Capital

On 08 April 1901, M. Guggenheim Sons gained control of the American Smelting and Refining Company²⁷ (A.S.& R.), formed only two short years prior by the merger of 16 smelters, 18 refineries and a number of mines and mining claims²⁸ (but none of them Guggenheim properties). Daniel Guggenheim was appointed Chairman of the Board, Isaac Guggenheim as Treasurer, and Isaac, Solomon, Murry, and Simon Guggenheim to both the Board of Directors and the Executive Committee.²⁹

A.S.& R. expanded their scope from lead smelting and refining into the smelting and refining of copper and non-ferrous metal mining in general, upon Daniel Guggenheim's ascension to the presidency in 1905.³⁰ This expansion required additional capital. The agent to float the securities necessary to raise the millions of dollars required was the American Securities Exploration Company, formed in 1905 and soon thereafter renamed the American Smelters Securities Company.³¹ The officers, directors, and operations of the Securities Company were substantially the same as A.S.& R., except proper accounting practices were made between the two.³²

Along with the Guggenheim Exploration Company (Guggenex) that had been formed in June 1899,³³ both the Securities Company and A.S.& R. played important roles in the development of Utah Copper.

Utah Copper was in desperate need of capital to underwrite their huge excavations. Jackling, through John C. Montgomery, requested that the Guggenheims investigate the prospects of Bingham. The report by John Hays Hammond, Guggenex Chief Supervisor, and understudies Alfred Chester Beatty and Seeley W. Mudd was highly favorable and stated that the operations envisioned by Jackling for the lean 2% porphyry deposits would yield millions just as Jackling had predicted.³⁴ Consequently, in 1905,³⁵ an arrangement was made between Utah Copper and the Guggenheim interests. Guggenex would underwrite $3 million in bonds,³⁶ including a 25% interest in UC for $1.5 million, retirement of $750,000 in UC notes, and an additional $750,000 for construction of the Magna concentrating mill. American Smelters Securities purchased a substantial amount of UC stock.³⁷ In return, the management of UC would come under Guggenex control, with John Hays Hammond as managing director, and a twenty-year contract was negotiated for the smelting of all UC ore at A.S.& R.'s Garfield smelter being built on the shore of the Great Salt Lake.³⁸

The arrangement between the Guggenheims and Utah Copper established M. Guggenheim Sons as Copper Kings. They already controlled Mexico's copper production and were behind the organization of Stephen Birch's Kennecott Mines Company in Alaska to tap the "Bonanza" lode.³⁹ Although the Guggenheims held only a minority interest in UC, by virtue of the smelting contract they were in control.⁴⁰

Guggenheims in Nevada

The developments in Utah signaled that financial backing by the Guggenheim interests would be possible for other porphyry deposits. And in the same year that the deal between UC and the Guggenheim interests was struck, the Guggenheims were already busy at work in Nevada.

In 1905, the New York banking firm of Hayden, Stone and Company, encouraged by Guggenex,⁴² committed to fund Requa's Nevada Con contingent upon an engineering report. Requa then organized the Nevada Northern Railway on 29 May 1905 and initiated construction plans.⁴³ The railway was incorporated under the laws of Maine for $2,000,000 with shares at $100 par value.⁴⁴ Upon a favorable report for development of Nevada Con's properties from mining engineer J. Parke Channing, Hayden, Stone and Company agreed to finance the building of the railway and reduction plant. On 29 August 1905, the Utah Construction Company was awarded the contract to build the railway.⁴⁵

William Boyce Thompson

Photo courtesy of the Boyce Thompson Institute for Plant Research; used with permission

Although "the exact part played by the Guggenheims in the early organizational activity of the Nevada Consolidated Copper Company is difficult to determine",⁴⁹ it is interesting to ask when they first became interested in the Nevada copper properties.

• In 1903, Requa obtained technical and financial help from two San Francisco mining men, Fred W. Bradley and John H. McKenzie. This gave stature to the new company in the eyes of Guggenex and they began to take a slight interest in the property.⁵⁰
• Guggenex commissioned a report on the Robinson district by Harold A. Titcomb in early 1904.⁵¹
• The close relationship between the Guggenheims and Hayden, Stone and Company was well known and must have been apparent to Requa when arranging financing in 1905.⁵²

The Guggenheims immediately moved to merge the two companies,⁵³ but Requa and the original promoters of Nevada Con successfully opposed it. However, it was made clear that any decision regarding construction of a smelter would necessarily involve both companies. A dispute soon evolved over the proposed site of the reduction plant. Nevada Con wanted it located at their Georgetown Ranch site with a water supply from Murry Creek whereas George Gunn of Cumberland-Ely argued vehemently for their McGill Ranch location and associated water rights to Duck Creek. Guggenex engineer Henry Krumb was sent to investigate the Cumberland-Ely properties in May 1906. The conclusion of his report dated 01 June 1906 states in part:

S.W. Eccles, president of Cumberland-Ely, settled the disagreement in the late summer of 1906 in favor of the McGill location.⁵⁵ Requa had essentially lost control.

At a joint meeting of Nevada Con and Cumberland-Ely officials in New York City in October 1906, it was decided to form the Steptoe Valley Smelting and Mining Company (SVSMCo) to construct and operate the reduction works.⁵⁶ SVSMCo was organized in November 1906 and controlled equally through stock ownership by both companies. However, the Guggenheims insisted that Cumberland-Ely be allowed to purchase one-half interest in the Nevada Northern Railway.

Shortly thereafter, on 01 December 1906, both Requa and Gunn, general managers of Nevada Con and Cumberland-Ely, respectively, "retired" and were replaced by Guggenheim engineer Pope Yeatman as managing director of both copper companies as well as SVSMCo.⁵⁷

Panoramic View of Smelter at McGill circa 1909

Left to right: Smelter in background; mill in background and further to its right is the wooden railroad trestle approach; labor housing development in foreground at right.

Library of Congress, Prints and Photographs Division, Panoramic photographs. DIGITAL ID: (intermediary roll film) pan 6a13962; REPRODUCTION NUMBER: LC-USZ62-123515 DLC.

Kennecott

In 1906, the same year the Guggenheims acquired control of Nevada Con from Mark Requa, the Morgan-Guggenheim Alaska Syndicate was formed to finance Stephen Birch's Kennecott Copper Company to mine the mountain of copper discovered in Alaska's Copper River district. At the completion of the Copper River and Northwestern Railway in 1911, the Syndicate had spent some $30 million in development with yet no return on their investment.⁶⁸ Little mining had actually taken place up until this time and there was only as estimated $6 million in ore in sight.⁶⁹ In 1914, even the new supervisor of the Bonanza mine thought that the operation could not repay the investment made by the Alaska Syndicate.⁷⁰ Morgan partner George W. Perkins reported that Kennecott could not pay the expense of the railroad built to access it.⁷¹

Circumstances began to change in the summer of 1914 with the discovery of a rich (70% copper) ore body on the Jumbo claim⁷² and the increasing price of copper as a result of the Kaiser's War.

It was perhaps to realize a combination of objectives that it was decided to take the Alaska mines public: speeding development by making millions of dollars available via new stocks and bonds; passing on Kennecott's liabilities to the public;⁷³ consolidating the Guggenheim copper interests; obtaining properties with long life ore reserves.⁷⁴ Kennecott Copper Corporation (KCC) was formed on 29 April 1915 with Birch as president.⁷⁵ It was the dismantling of Guggenex and its reconstruction⁷⁶ as the new Kennecott Copper Corporation.

Kennecott Copper Corporation absorbed the Morgan-Guggenheim Alaska Syndicate holdings in Kennecott.⁷⁷ On 31 December 1915,⁷⁸ KCC obtained 25% interest in Utah Copper from Guggenex for 607,000 KCC shares⁷⁹ (UC held 50% of Nevada Con at this time),⁸⁰ 96.5% ownership of Braden Copper Mines (Chile) from Guggenex for 770,000 KCC shares,⁸¹ and controlling interest in the Alaska Steamship Company and the Copper River and Northwestern Railway from the Alaska Syndicate for 200,000 KCC shares.⁸² Edmund A. and Harry F. Guggenheim were added as directors of KCC.

Profits were huge during the war years. Kennecott combined profits from 1916 and 1917 were in excess of $31.2 million,⁸³ essentially paying the entire cost of the Alaska mines, their development, and the Copper River and Northwestern Railway. The Guggenheim's increased their holding in UC by nearly 200,000 shares, giving Kennecott 600,000 shares, or three-eighths of UC total share capital.⁸⁴ Directors were exchanged between Utah Copper and Kennecott, with Edmond and Harry Guggenheim joining the UC board of directors.⁸⁵

On 01 March 1923, the Guggenheim Brothers sold controlling interest (2 million of 3.8 million shares) in Chile Copper to Anaconda for $70 million cash,⁸⁷ an amount equivalent to the purchasing power of ~$0.7 billion in the year 2000. They subsequently used a portion of these funds to acquire control of Utah Copper and during that year increased their total holdings in UC to 76%.⁸⁸ Jackling continued to run the Utah and Nevada operations and was named a director of KCC.⁸⁹ By 1925, Kennecott had obtained 95% interest in Utah Copper and essentially controlled Nevada Con by stock ownership through UC.⁹⁰

On 19 October 1925, a merger was announced between Nevada Con and Ray Consolidated Copper Company (RCC) of Arizona.⁹¹ Stockholder approval was obtained on 26 May 1926. Nevada Con acquired the physical assets of RCC for an exchange of Nevada Con stock. It also brought the Chino Copper properties in New Mexico that had previously been acquired by RCC. In the new organizational setup, parent company Nevada Con was divided into three divisions: Nevada Mines, Ray Mines, and Chino. However, Nevada Con officials had no control over either of the other two divisions. D.C. Jackling was the President and managing director of the parent company.

Kennecott acquired Nevada Con with a series of stock transactions that began on 05 May 1932 with the exchange of one-half share of KCC for one share of Nevada Con. By this means, KCC obtained 2,085,305 shares of Nevada Con.⁹² In early 1933, UC distributed its Nevada Con shares to its shareholders, and as KCC was the largest holder of UC, it gained 88% of Nevada Con. Accordingly, on 12 June 1933 KCC acquired all the assets of Nevada Con (including the mines at Ruth, Nevada, Ray, Arizona, and Santa Rita New Mexico) as well both the Nevada Northern Railway and Ray and Gila Valley Railroad.⁹³ The new wholly owned subsidiary was renamed the Nevada Consolidated Copper Corporation. Nine and one-half years later, on 31 December 1942, Nevada Con Corp was dissolved and became the Nevada Mines Division of Kennecott Copper Corporation within the new KCC Southwestern Division.⁹⁴

KCC acquired UC on 10 November 1936 and the new subsidiary was organized as the new Utah Copper Company.⁹⁵ On 01 January 1947, it became the Utah Copper Division of Kennecott Copper Corporation.⁹⁶ In 1949, there occurred an additional internal reorganization whereby the Utah and Southwestern divisions of KCC were combined into the newly established Western Mining Division.⁹⁷

End of Nevada mining operations

• Railroad Survey initiated in October 1904 by Mark Requa.
• Incorporated as the Nevada Northern Railway on 29 May 1905.¹⁰⁹
• Construction contract awarded to Utah Construction Company on 29 August 1905.
• Work began at Cobre (Omar) on 9 September 1905.
• Reached Currie Ranch in late May 1906.
• Reached Cherry Creek in July 1906.
• Reached Ely on 29 September 1906.
• Hiline branch to the reduction works completed 15 March 1908.
• Ore line to Copper Flat completed 01 April 1908; to Veteran a few weeks later.
• First trainload of ore arrived at concentrator on 15 April 1908.
• First shipment of blister copper made on 07 August 1908.

In 1983, KMC became Kennecott, an operating company of SOHIO.¹¹⁰ SOHIO itself was acquired by British Petroleum (BP) in 1987, with Kennecott becoming part of BP Minerals America. In June 1989 BP worldwide mineral interest were sold to Rio Tinto Zinc (RTZ) and BP Minerals Kennecott Utah Copper became Kennecott Corporation in July of that year.¹¹¹ It is currently known as Kennecott Utah Copper, a wholly owned subsidiary of RTZ.

Kennecott sold its mining rights in the Robinson district in 1990 to a joint venture between Alta Gold and Magma Copper Company. Magma became sole owner of the properties in 1991 and planned to mine the proven and probable copper ore reserves and ship the concentrate to their San Manuel, Arizona smelter and refinery. Mine development began in July 1995.

Magma was acquired by multinational Broken Hill Proprietary Company, Limited (BHP) in January 1996. Organized as BHP Copper North America, Robinson Operations, it shipped the first concentrate to its San Manuel facilities in February 1996. The operation lasted slightly more than three years, when falling copper prices forced BHP to close the Robinson project on 25 June 1999 and put the facilities on "care and maintenance" status. The BHP Nevada Railroad transported the last copper concentrate shipment from the Riepetown mill on 09 July 1999.¹¹²

In March 2001, BHP announced a proposed merger with Britain's Billiton Plc to form the world's second largest metals company.¹¹³ The merger forming BHP Billiton was consummated on 29 June 2001.¹¹⁴ Their Nevada properties remain closed.

Appendix
Nevada Consolidated Copper Management -- The first 50 years

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Davis, John H. 1988. The Guggenheims, 1848-1988: an American epic. New York: Shapolsky Publishers, Inc.

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Elliott, Russell R. 1966. Nevada's Twentieth-Century Mining Boom: Tonopah, Goldfield, Ely. Reno, NV: University of Nevada Press.

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Parsons, A(rthur) B(arrette). 1933. The Porphyry Coppers. New York: The American Institute of Mining and Metallurgical Engineers.

Sadler, Richard W. 1994. "Daniel Cowan Jackling" in Utah History Encyclopedia, ed. Allan Kent Powell. University of Utah Press. [Internet, WWW]. ADDRESS: http://www.media.utah.edu/UHE/j/
JACKLING%2CDANIEL.html. [Accessed: 24 April 2001].

Shaputis, June. 1999. "Mining In White Pine County, Nevada." [Internet, WWW]. ADDRESS: http://members.nbci.com/jshaputis/Mining/mining.htm. [Accessed: 25 April 2001].

Sims, Don. January 1980. "Nevada's Only Shortline Terminal." Railroad Modeler 10 (1), 50-57.

Strack, Don. 2001. To Move a Mountain: Railroads and Mining in Bingham Canyon, Utah. [Internet, WWW]. ADDRESS: http://www.xmission.com/~dstrack/utahrails/bingham/bingham.pdf. [Accessed: 24 April 2001].

Tower, Elizabeth A. 1996. Icebound Empire. Anchorage: Publication Consultants.

Last modified 13 March, 2003 -/-