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The Siele property is six miles south of the Abbadia and is owned by a private cor- poration, Stablimento Minerario del Siele, which pays the government an annual con- cession rent of 10,000 lire plus a royalty of 2,000 lire per flask. Peak year of produc- tion for the Siele mine was 1940 when 41,479 flasks were mined compared with 37,777 flasks for the entire US for that year. Average grade of ore mined was 2.87 percent in 1940 and about two percent in 1944. Measured reserves were 225,000 flasks in 1946 while indicated and inferred were several times this figure. All of this is said to be in the Solforate del Siele mine and does not include other properties owned by the com- pany, some of which are now being developed. Siele, as well as Monte Amiata, is a mem- ber of the cartel but can withdraw at the end of the year by giving three months' notice. The Argus mine, near the Siele, is also owned by a private company, Societa Anonima Mineraria Argus of Milan. Maximum annual output has been about 7,000 flasks. The Argus mine is believed to be closed down at the present time because of the low price. Mining methods in Italy in prewar years were much different from those of Spain. Labor was relatively efficient and methods were economical in Italy. Because of greater efficiency and a high recovery, production costs of mercury in Italy were comparable to those in Spain although the Italian ore was lower grade. In fact, costs at Siele were less than half those of Almaden in 1937. When the war ended, costs (based on dollar equivalents at official exchange rates) in Italy rose near those of Spain due to relatively greater depreciation of the lire and to the government insisting that a full labor force be employed despite a reduced output. Costs could be reduced to $10 a flask at Siele by utilizing the present labor force to its best advantage and with improvements in stoping, placing fill, timbering, loading mine cars, ventilation and haulage. During 1946, Sr. Armenise, the president of Stablimento del Siele, approached a Canadian company, controlled by US capital, with a proposal to sell a stock interest in the Italian firm. A study of the mine was made by American engineers, who reported favorably, but the companies were unable to come to terms. When the war ended, stocks in Italy were very small, for the Germans shipped all stocks to Germany before their retreat. With an output of 50,822 flasks in 1946 and 53,984 flasks in 1947, large stocks are being built up since sales have been small. Italian producers were reported to have stocks totalling 90,000 flasks in July 1948 with at least 10,000 flasks held by speculators and consumers. Spain was offering US firms mer- cury at $54 a flask, f.o.b. Spanish ports, in April 1948, whereas Italian companies were getting $55 to $60 a flask, f.o.b. railhead in Italy. Siele has reduced its output to less than 1,000 flasks per month because of its large stocks; it could produce 4,000 flasks a month if markets were available, whereas Monte Amiata could produce 5,000 flasks a month. Average annual Italian consumption is about 5,800 flasks. The present retort capacity of all Italy is about 5,000 flasks a month, of which 3,200 are at the Amiata plant and 1,800 at Siele. Although Italy is supposed to receive 38.5 percent of the cartel's sales, exports from Italy in 1948 have been very much smaller than those of Spain. Italian exports of mercury have dropped monthly, stocks have increased, and the July production was 15 CONFIDENTIAL

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    "ocrText": "The Siele property is six miles south of the Abbadia and is owned by a private cor-\nporation, Stablimento Minerario del Siele, which pays the government an annual con-\ncession rent of 10,000 lire plus a royalty of 2,000 lire per flask. Peak year of produc-\ntion for the Siele mine was 1940 when 41,479 flasks were mined compared with 37,777\nflasks for the entire US for that year. Average grade of ore mined was 2.87 percent in\n1940 and about two percent in 1944. Measured reserves were 225,000 flasks in 1946\nwhile indicated and inferred were several times this figure. All of this is said to be in\nthe Solforate del Siele mine and does not include other properties owned by the com-\npany, some of which are now being developed. Siele, as well as Monte Amiata, is a mem-\nber of the cartel but can withdraw at the end of the year by giving three months' notice.\nThe Argus mine, near the Siele, is also owned by a private company, Societa\nAnonima Mineraria Argus of Milan. Maximum annual output has been about 7,000\nflasks. The Argus mine is believed to be closed down at the present time because of the\nlow price.\nMining methods in Italy in prewar years were much different from those of Spain.\nLabor was relatively efficient and methods were economical in Italy. Because of greater\nefficiency and a high recovery, production costs of mercury in Italy were comparable\nto those in Spain although the Italian ore was lower grade. In fact, costs at Siele were\nless than half those of Almaden in 1937. When the war ended, costs (based on dollar\nequivalents at official exchange rates) in Italy rose near those of Spain due to relatively\ngreater depreciation of the lire and to the government insisting that a full labor force\nbe employed despite a reduced output. Costs could be reduced to $10 a flask at Siele\nby utilizing the present labor force to its best advantage and with improvements in\nstoping, placing fill, timbering, loading mine cars, ventilation and haulage.\nDuring 1946, Sr. Armenise, the president of Stablimento del Siele, approached a\nCanadian company, controlled by US capital, with a proposal to sell a stock interest in\nthe Italian firm. A study of the mine was made by American engineers, who reported\nfavorably, but the companies were unable to come to terms.\nWhen the war ended, stocks in Italy were very small, for the Germans shipped\nall stocks to Germany before their retreat. With an output of 50,822 flasks in 1946 and\n53,984 flasks in 1947, large stocks are being built up since sales have been small. Italian\nproducers were reported to have stocks totalling 90,000 flasks in July 1948 with at least\n10,000 flasks held by speculators and consumers. Spain was offering US firms mer-\ncury at $54 a flask, f.o.b. Spanish ports, in April 1948, whereas Italian companies were\ngetting $55 to $60 a flask, f.o.b. railhead in Italy. Siele has reduced its output to less\nthan 1,000 flasks per month because of its large stocks; it could produce 4,000 flasks\na month if markets were available, whereas Monte Amiata could produce 5,000 flasks\na month. Average annual Italian consumption is about 5,800 flasks. The present\nretort capacity of all Italy is about 5,000 flasks a month, of which 3,200 are at the\nAmiata plant and 1,800 at Siele.\nAlthough Italy is supposed to receive 38.5 percent of the cartel's sales, exports from\nItaly in 1948 have been very much smaller than those of Spain. Italian exports of\nmercury have dropped monthly, stocks have increased, and the July production was\n15\nCONFIDENTIAL"
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