Articles

ALUMINUM HITS THE ROAD AGAIN

Like a restless sourdough Canada’s vast aluminum industry is always on the hunt for new frontiers. When the frontier is tamed, civilization troops in and Alcan heads for the bush again, panning remote rivers for nuggets of cheap power. Its latest strike will bring the world’s biggest powerhouse to the B.C. wilds

FRED BODSWORTH December 15 1951
Articles

ALUMINUM HITS THE ROAD AGAIN

Like a restless sourdough Canada’s vast aluminum industry is always on the hunt for new frontiers. When the frontier is tamed, civilization troops in and Alcan heads for the bush again, panning remote rivers for nuggets of cheap power. Its latest strike will bring the world’s biggest powerhouse to the B.C. wilds

FRED BODSWORTH December 15 1951

ALUMINUM HITS THE ROAD AGAIN

Like a restless sourdough Canada’s vast aluminum industry is always on the hunt for new frontiers. When the frontier is tamed, civilization troops in and Alcan heads for the bush again, panning remote rivers for nuggets of cheap power. Its latest strike will bring the world’s biggest powerhouse to the B.C. wilds

FRED BODSWORTH

LAST SPRING a man stepped into the little hotel at Terrace, B.C., a quiet and remote lumbering town of twenty-five hundred people on the CNR eighty miles inland from Prince Rupert, and casually announced that he wanted to reserve a few rooms.

“Yes, sir. How many?” the hotel clerk asked. “Let’s say a dozen for the time being,” the man replied.

The clerk blinked. Jesting tourists rarely reached Terrace. “How long?” he asked. He could carry along a joke too.

“Four years,” said the traveller.

And it wasn’t a joke. It was Terrace’s introduction to a fabulous extravaganza of twentiethcentury engineering which, eight years and six hundred million dollars later, will have transformed a rugged uninhabited hinterland the size of Ireland, now occupied only by forest, mountain and grizzly bears, into an industrial colossus boasting the world’s biggest aluminum smelter, the world’s biggest single hydro-electric powerhouse, and a brand-new British Columbian city.

It’s the Nechako-Kitimat project of the Aluminum Company of Canada which ultimately will produce five hundred and fifty thousand tons of aluminum a year, and probably make Canada the world’s biggest producer of this featherweight metal (today’s leader: the U. S.). It’s the biggest thing that’s happened to B. C. since the first transcontinental railway punched a giddy right-of-way through the Rockies in 1885. Already Alcan is spending one million dollars a week along a twohundred-mile west-to-east construction front on seaports, airports, townsites, smelter, powerhouse, roads and dams, four hundred mountainous miles north of Vancouver.

Even for B. C., where the magnitude of the Rockies dwarfs everything else, Project Kitimat is a fantastic undertaking.

Nechako dam, biggest of its type in the British Commonwealth, will back up water for one hundred and fifty miles which normally drains into the upper Fraser at St. George and send it thundering down through two tunnels which will have to be bored for ten miles through the solid granite of the Coast Range’s Portal Mountain. The tunnels will have a drop—engineers call it “the head” of twenty-six hundred feet, sixteen times greater than Niagara. At the end of the tunnels Alcan’s Remano powerhouse will be in a massive man-made cavern

carved out a quarter of a mile inside the mountain. A fifth of a mile long and one hundred feet wide and high, this underground powerhouse will almost, be large enough for three buildings the size of Toronto’s Bank of Commerce to be placed end to end inside. Water will hit the bottom of the tunnels with a pressure of seventy-five tons per square foot, and the generator turbines, though they weigh hundreds of tons, will need this six-thousand-foot mountain peak sitting on top of them to keep them from being blasted off their bedplates.

Kitimat, site of the projected smelter and seaport, is today a settlement of five hundred and eighty Indians fifty miles north of Remano and fifty miles south of Prince Rupert. In a decade or two it will probably have a population of fifty thousand, the same as Victoria has now. The number of Alcan employees throughout Canada, now about sixteen thousand, will be doubled.

Remember the Name of Kitimat

The amount of power traveling along the fiftymile transmission line from the powerhouse to the Kitimat smelter will be so great that the daily loss consumed by wire resistance alone will be equal to all the power used daily by Edmonton, a ci ¿y of one hundred and fifty-eight thousand.

Yet the story of Project Kitimat, for all its record-shattering greatness, is merely the newest chapter in a bigger and untold story—the saga of aluminum’s history-making, sixty-five year retreat to ever more and more distant frontiers. It’s a twentieth-century industrial romance which parallels in many respects the story of another great Canadian colonizer—the Hudson’s Bay Company. Aluminum production, like the fur trade which went before it, needs a frontier to live. And, like the fur trade, aluminum opens up a remote area, pushes back its frontier, and in doing so it attracts competition for the area’s electrical power and destroys the very conditions it needs for its own economic survival.

Four times now that branch of the aluminum trail which has led finally to B. C.’s isolated Kitimat has pioneered new frontiers, has seen them develop into prosperous industrial areas, and itself has been crowded out to a newer frontier by the prosperity its own pioneering created.

It’s a stirring story. And, in the history of Canada’s development, it’s a highly significant one.

Most frontier-breaking industries move on and leave a wasteland of stumps and shack towns behind but, when aluminum moves on in its relentless frontier quest, it leaves prospering, selfsupporting industrial communities behind it. Remember those B. C. names of Kitimat, Kemano and Nechako. They will be big names in the future geography of Canada. And now let’s follow the long aluminum retreat out of which Canada’s newest city of Kitimat is emerging.

Canada’s position in the world’s aluminum industry is a strange and anomalous one. The principal raw materials which go into the production of aluminum are: 1, Bauxite, a reddish claylike ore

which contains twenty-five percent aluminum; 2, Cryolite, a white icelike mineral required in large quantities as a flux in smelting the processed bauxite; 3, Petroleum coke, a byproduct of oil refining. Canada today produces more aluminum than any country except the U. S. Its Alcan, which incidentally is the only firm producing primary aluminum in Canada, is the world’s biggest single aluminum company. Canadian aluminum is produced more cheaply than any other. Until Kitimat hits its peak about 1960 Alcan’s plant at Arvida on the Saguenay River in Quebec is the world’s biggest, most economically efficient and most modern aluminum smelter in the world.

Yet, in spite of this leading aluminum role, Canada doesn’t possess in commercial amounts a single teaspoonful of those three essential raw materials. Alcan imports them all—bauxite from British Guiana, cryolite from Greenland and petroleum coke from the U. S.

How does Canada, with none of the basic essentials, produce the world’s cheapest aluminum? The answer to this is also the answer to aluminum’s historic retreat into the hinterlands of Canada’s ever-receding frontiers. More important in the aluminum smelting process than any of the raw mateiials, more important even than the aluminum ore itself, is electricity. In fact, such tremendous amounts of electrical energy go into every pound of aluminum that Alcan officials frequently refer to their aluminum ingots as “packaged electricity.”

The bauxite first has to go through a complex chemical refining process which reduces two tons of the original ore into one ton of a white powder known as alumina. This is actually aluminum oxide, consisting of fifty percent aluminum metal. The final smelting

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Aluminum Hits the Road Again

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of aluminum is accomplished by electrolysis in large steel vats known in the industry as “pots” or the “potline.” Each pot is lined with a hard carbon paste produced from the petroleum coke, then partially filled with pulverized cryolite. A carbon electrode is lowered into the cryolite and an electric current two hundred thousand times more powerful than that flowing through an ordinary twenty-five watt bulb passes from the electrode, through the cryolite to the pot’s carbon lining. The cryolite melts and into this red-hot molten bath the aluminum - bearing alumina is added. The electric current separates the alumina’s oxygen and aluminum. Pure molten aluminum settles to the bottom of the pot and is drained off'. All that has to be done is to continue adding cryolite and alumina. As long as there is sufficient electric power to keep the metallurgical brew boiling the pots never cease their work. And there’s the rub. They consume an astronomical amount of electricity.

There’s such a volume of electricity sizzling down Arvida’s potlines that even the air for yards around is saturated with it. The potmen cannot carry watches, for the electrically charged air magnetizes a watch in a short time and makes it do everything except run backwards. The electrical energy used in producing one ton of aluminum would supply the average Canadian home with light, heat and power for twenty-five years. A single pot consumes as much electricity in one day as the average city home does in eight years. Arvida, with twenty-five potrooms of one hundred and forty pots each, uses more electricity each twenty-four hours than all industrial and domestic consumers of Montreal and Toronto combined. Alcan, of course, is far and away Canada’s biggest consumer of electricity.

Obviously, with a kilowatt appetite of that size, aluminum production’s No. 1 requirement is a whopping supply of cheap electricity. There is the explanation of how Canada, without a dribble of the raw materials, can still be the world’s most efficient and second biggest maker of aluminum. The only reason Canada isn’t the world’s leading producer is a one-and-a-half-cent-apound duty on aluminum imported into the U. S., which gives U. S. producers the extra hedge of protection they need to stay in profitable business. And that kilowatt appetite, too, is the story behind the story of aluminum’s repeated retreats to new and undeveloped frontiers. For aluminum can’t compete with other industries for electric power. It has to find its power in a spot where no one else will want

it. But sooner or later the other industries crowd in along aluminum’s pioneering trail, the power price is bid upwards, and aluminum has to move again to a more distant frontier.

Aluminum’s frontier - seeking trail started in a woodshed in Oberlin, Ohio, in 1886 where a young scientist named Charles Martin Hall discovered the electrolytic process of smelting the metal from its ore. Aluminum, before that more rare than gold, was launched on a career which was to see it become a competitor of steel.

That same year Hall took his discovery to Pittsburgh where the first aluminum plant was erected. Electric power had to be produced by steam. The best Hall could do was produce aluminum at five dollars a pound. At that price no one would buy it. The aluminum industry, for the first time, was up against the problem which was to dictate its history to this day. Hall had to find cheaper electricity and increase production so he could turn out a product that could compete on the metal market with iron and steel.

It couldn’t be done in Pittsburgh where other industries, then beginning to use electric power, could pay more for it. Outside, however, where the competition was less, power was cheaper, and Hall figured that by increasing production from ten to a hundred tons a year he could lower the aluminum price from five dollars a pound to one dollar. Hall borrowed a million dollars and, in 1891, built a bigger plant at New Kensington, a Pittsburgh suburb. Demand for cheaper power had forced aluminum to make its first move along the trail which now, sixty years later, has it burrowing like a giant mole into the heart of a remote B. C. mountain.

But even at a dollar a pound Hall’s aluminum was still begging for buyers. To show prospective customers how it could be used the aluminum firm went into the manufacturing business and started producing cooking utensils. Storekeepers wouldn’t risk their reputations with the newfangled pots and pans, so the aluminum company put college students on the road during summer vacations selling the aluminum ware door to door. One of their most aggressive young salesmen was a youth named R. E. Powell. Powell was certain that the new light-weight metal was going to go places. It did—and so did Powell. He has been president of the Aluminum Company of Canada for the past twenty years.

Slowly a demand for aluminum was built up. But new industries moved into New Kensington and the price for power was going up too. Their newfound aluminum market was none too secure, and an increase in price would knock it for a loop. To attract the much larger market that was developing, aluminum needed cheaper power, greater production and a lower price.

In 1893 the aluminum industry moved again, this time to pioneer a

new type of power source—-the vast and hitherto untapped energy of Niagara. Two large aluminum plants were built at Niagara Falls, N.Y., and a long-term contract signed for the purchase of two tnousand horsepower from an electric firm that was building Niagara’s first hydro-electric generating station. Previously Niagara had been too remote from centres of industry to warrant power development there. But its cheap power and remoteness were just what aluminum needed and the first large hydro-electric plant in North America was financed there with aluminum industry backing.

Thus it was aluminum that started Niagara along the road to its present nydro-electric greatness. But, on the o^her hand, Niagara also put the struggling aluminum industry on its feet. With Niagara’s cheap and abundant power feeding the potlines the aluminum price was chopped from a dollar down to forty-eight cents a pound by 1896. At this price there was a booming market and for the first time the aluminum industry was rolling along in the black.

A New Eden in Quebec

The New Kensington plant, crippled now by a power price the industry couldn’t hope to meet, was switched over to the manufacture of aluminum products. All production of primary aluminum metal was concentrated at Niagara.

The industry, now the Aluminum Company of America, popularly labeled “Alcoa,” couldn’t keep Niagara’s power to itself for long, however. Other industries noticed Niagara’s cheap power and began moving in and bidding up the power Drice. Aluminum was in the middle of the same old squeeze play again. Alcoa began looking around for another frontier. And this time it was going to need more than just cheap power. Aluminum production was now big time and, since its raw materials had to be imported from abroad, it had to find a spot that could be served by sea transportation. Rail freight charges to Niagara as well as increasing power rates were slowly strangling Alcoa.

Alcoa found its industrial Eden in Quebec. In 1899 the Aluminum Company of Canada was formed as a subsidiary of Alcoa and the aluminum trail crossed to Canada. Where the St. Maurice River tumbles down off the Laurentians to empty into the St. Lawrence at Three Rivers, aluminum started once more to carve an industrial empire out of wilderness. Power rights on the St. Maurice were con-

trolled by the Shawinigan Water and Power Company, but Shawinigan then in its infancy had no finances to develop the power it owned. The new Canadian aluminum industry footed the bill and erected the first St. Maurice powerhouse at the little forest community of Shawinigan Falls. In 1901 Alcan began producing its first Canadian aluminum. There was no one else to use the power, raw materials of bauxite and cryolite could come by sea to within twenty-five miles of its Shawinigan Falls smelter—it was the most economical aluminum production setup yet. The price was slashed from forty-eight to thirty-two cents a pound, sales increased and the industry’s power requirements, which had been one hundred and twenty-five horsepower at Pittsburgh, two thousand horsepower at Niagara, now soared in a few years to thirty thousand horsepower.

Production increased from one thousand tons a year to six thousand. Then the same inevitable squeeze began again. The isolated forest settlement of Shawinigan Falls became a thriving industrial community of forty thousand people. New industries began offering higher rates for power. By 1926 the Shawinigan Falls smelter was paying twice as much per horsepower for electricity as it had in 1900, but aluminum was selling at six cents a pound less.

Shawinigan would have to stay in production to help supply the big market that had developed for Canadian aluminum, but somewhere the industry needed a new frontier once more to expand production and offset the growing Shawinigan costs. Alcan moved to the Saguenay Valley, one hundred miles north of Quebec City.

Here the aluminum industry tried a new strategy. Alcan would generate and control its own power, then no one else could come along in the years ahead and steal it from them. Canada had a foreign market now (largely II. S. and Britain I for all the aluminum it could produce and the first Saguenay powerhouse was designed to turn out a thumping one hundred thousand horsepower. In the forest of the Saguenay’s bank Alcan built the new city of Arvida and an aluminum smelter with an initial capacity of thirty thousand tons a year, five times greater than the Shawinigan Falls smelter. Twenty miles downstream at a point where seagoing ships could dock with bauxite from British Guiana it built the harbor of Port Alfred. Arvida is now a city of eleven thousand, centre of a bustling industrial area with picturesque street plan and landscaping. Alcan didn’t merely open a new

frontier, it planted there a model city that is one of Canada’s outstanding show places. Port Alfred’s annual tonnage places it now among the leading ten Canadian ocean ports. Twentyfive years ago when aluminum’s frontier retreat forced it to the .Saguenay, this area was a backwash of a few isolated farming communities. By World War IT it was one of the few spots in Canada that rated anti-aircraft guns and a squadron of Spitfires standing by as a defense against possible enemy attack.

It was 1926 when Alcan made its move to Arvida. At this time Alcan was still a wholly owned subsidiary of the Aluminum Company of America. In 1928 it was cut loose from the apron strings of its American-owned parent, for Alcoa by this time was a sprawling industrial goliath with subsidiaries all over the world too widespread to be efficiently managed by a single firm. The divorce of Alcoa and Alcan was complete, there was no interlocking directorate. Actually one slender link remained, for when Alcan was established as an independent Canadian company its newly created shares were sold only to individuals already holding Alcoa shares. For a time, therefore, the two companies had the same shareholders but totally separated boards of directors.

Shut-Down At Shawinigan

The Alcan-Alcoa connection has been a political and legal football for years. In 1937 The U. S. Department of Justice charged under U. S. anti-trust laws that the two firms were a big and sinister international aluminum combine. Court hearings which dragged out for nine years finally proved in 1946 that the two were actually aggressive and bona fide competitors. In 1950 the squabble came up again and this time, to assure that no joint control could develop in the future, a U. S. judge ordered Alcoa shareholders who still also owned shares in Alcan to dispose of their shares in one or other of the companies. At this time Alcan was still eighty-five-percent owned by U. S. shareholders. The court order will release a large number of Alcan shares and permit a greater percentage of Canadian ownership.

In 1928, as soon as it was cut loose from its former U. S. control, Alcan began preparing for a vast expansion which would reduce production costs and create a much greater demand for Canadian aluminum throughout the world. Shipshaw, until recently the world’s biggest power development, was planned and work began that same year. Then came depression and the demand for aluminum was cut in half. The first section of Shipshaw was completed, the second and much larger section was postponed. Alcan in its Shipshaw No. 1 powerhouse had two hundred and sixty thousand horsepower that it didn’t know what to do with. By 1932 production at Shawinigan Falls was costing much more per ton than at Arvida, and the Shawinigan Falls smelter was closed down. Arvida’s thirty - thousand - tons - a - year capacity could fill the demand almost twice over.

When World War II loomed everybody, including Germany, Japan and Russia, clamored for Canadian aluminum. Alcan expanded its Arvida smelting facilities, started drawing on Shipshaw’s idle horsepower and, between 1937 and 1939, doubled its production. But 1939’s production of around eighty thousand tons was just the beginning. With the outbreak of war Britain and the U. S. flooded Alcan with orders that soared up into the neighborhood of two hundred thousand tons a year. Quebec was the only place in the world where aluminum

production could be tremendously boosted with economy and speed.

Shipshaw’s second section, construction of which was postponed in 1931, was rushed to completion in eighteen months in one of the war’s most spectacular engineering projects. A police force of five hundred stood guard against sabotage as the job boomed along. Expediters roamed the country begging for materials for a project which, because of wartime secrecy, they could not name. When the dust and dynamite fumes cleared away Alcan had the world’s biggest power plant. (Grand Coulee and Boulder Dam in western U. S. have since become slightly larger.) Instead of Shipshaw’s original 260,000 horsepower its generators were now cracking out 1,500,000 horsepower.

New smelters were built at Beauharnois near Montreal, at Shawinigan Falls once more, and at La Tuque, another power site on the St. Maurice River. Power was rationed. Other industries which had bid up the power price and driven aluminum out of Shawinigan Falls ten years before were now taking a back seat to aluminum. Every kilowatt that could be obtained was funneled into the aluminum plants. Alcan’s production by 1944 was a staggering half million tons a year. Most of it wound up in Allied planes. The air forces of Germany and Japan were first defeated on the aluminum potlines of Quebec.

At war’s end the demand for aluminum remained as brisk as ever, but now the old economic factors were back again to haunt the aluminum trail. No longer was government-dictated power rationing feeding electricity into the aluminum plants. Aluminum now had to find its own power and pay for it at the going rate. The result was that the Beauharnois and La Tuque smelters were closed down at once. Alcan couldn’t meet the power rates there and turn out aluminum for the highly competitive peacetime market. In 1950, with the war preparedness program increasing the pressure for aluminum, Beauharnois was reopened. But it is only a stopgap necessitated

by abnormal conditions. Its power cost is almost prohibitive and it is operating on an insecure year-to-year power contract which will terminate as soon as someone else offers more money for the same power. Beauharnois’ aluminum is needed for the time being, but economically it is a white elephant that Alcan will write off as soon as conditions permit.

Shawinigan Falls has remained in production since it was reopened during the war, but actually the aluminum trail has long since passed it by and, like Beauharnois, it is living on borrowed time. Power at Shawinigan is now costing three times as much as it did when aluminum first moved there in 1900. And meanwLile the price at which aluminum can be sold has dropped from 1900’s thirty-three cents a pound to eighteen today.

Will aluminum’s old bogeyman ol competing industrial development and rising power costs strike at Arvida too? Arvida was to be the perfect aluminum establishment, the last Canadian aluminum frontier. Alcan would have its

own electric power there and no one could bid the cost up on them. But it hasn’t worked out that way. Even owning its own power hasn’t protected Alcan against the economic squeeze which four times before has driven aluminum production to a new frontier.

Arvida today is producing more and cheaper aluminum than any other site in the world. In fact its aluminum output will increase during the next few years when two new Saguenay River power developments now under construction come into production. But already, before Arvida has even reached its zenith, the historic aluminum bogeyman has appeared.

“We have discovered we can never completely control the value and distribution of power, even when we make it ourselves,” said Alcan vice-president McNeely DuBose. “Electricity is too much of a public necessity for anyone to control. We can’t stand in the way of Canadian expansion and drive other industries away from our areas with a big stick. We’d be more unpopular than the Communists if we tried.”

The fundamental explanation for aluminum’s sixty-five-year frontier retreat is that, after aluminum has done the spadework, all other industries can come along afterward and use aluminum’s power to better advantage. Aluminum smelting requires more than twice as much electricity per dollar of product as is required for the production of chemicals such as chlorine and caustic soda; the power required for the production of one ton of aluminum will make eighteen tons of newsprint. There are now four big pulp and newsprint producers, in addition to a host of smaller manufacturing companies, using Alcan power in the Saguenay Valley. Once taken on, these industries have to be supplied. When low water curtailed Shipshaw’s power output in October, three Arvida aluminum potlines had to be closed down to release power for Alcan’s other customers.

Since 1949 the demand for Alcan’s aluminum has been greater than the supply. And it was obvious by then that Arvida too will someday be choked off by the economic pressures that have always dogged aluminum’s trail. Alcan engineers had studied potential power sites in Norway, South Africa, New Zealand, Borneo, Labrador and British Columbia. In January this year Alcan president Powell, the onetime pot-andpan salesman, told a Washington subcommittee investigating the aluminum situation: “We have considered the

availability of hydro-electric power in all parts of the free world and have selected the Nechako-Kitimat site as the most economical large power site

to be found anywhere.” In April Alcan and the B. C. Government announced definitely that the deal was on. Alcan has agreed to pay British Columbia about two hundred and fifty thousand dollars a year for water-power rights and rental for land flooded, in addition to all regular land, income and corporation taxes.

At that time there wasn’t a road, rail line, airport or seaport in the whole area. Now cat-jockeys sitting at the controls of their smoke-spurting bulldozers for sometimes eighteen and twenty hours a day (overtime pay gives them one hundred and thirty dollars a week) are uprooting hundred-foot trees like toothpicks and pushing roads through at a mile a day. Dynamite crews are chewing out mountain tunnels at one hundred feet per day, the heavy yellow smoke of their blasting pouring like pea soup out of the tunnel mouths and down the cliff faces to the valleys below. At Kemano, the powerhouse site, cats are leveling trees one day, portable sawmills are sawing them into lumber the next, and carpenters are slapping it into new camp buildings on the third.

Helicopters buzzing around like dragon flies are the main transportation for men and supplies. Some of the camps can be reached no other way. Survey crews have been dropped off where there was nothing but a ledge six feet wide on which a helicopter could land. For one survey camp there wasn’t even a pimple on the mountainside big enough to accommodate a helicopter. A mountain-climbing crew went ahead and built a shelf of fourinch poles. When the ’copter sat down on it its tail protruded out over an abyss hundreds of feet deep.

A New Trail Is Blazed

Alcan expects to have a first stage completed and be producing aluminum by 1954. The entire project may not be finished until 1960. Out of it all B. C. will get two new seaports (Kemano and Kitimat), a new city (Kitimat), a hydro-electric output double its present capacity, and the opening up of an isolated section with such tremendous power potentialities that it could become a leading industrial area.

Only the aluminum industry with its vast power requirements and its need to concentrate an integrated power, smelting and seaport development in one area has the capacity to tackle an undertaking of this magnitude in one stroke. No other industry has production units large enough to warrant development of a million-horsepower hydro project in a frontier no-man’sland where even the towns must be carved out of forest and workers moved in by the thousand before production can begin. In the normal way development of such a remote area would take decades of slow expansion and nibbling at the edges of smaller industries. Aluminum does it all at once, then the trail is blazed for other industries to follow.

And what about aluminum’s historic frontier retreat? Alcan has no delusions now about keeping its power to itself. Already, with the foundations of Kitimat barely laid, other industries are eying the cheap power of Kemano’s yet unbuilt underground powerhouse. Powell River Pulp and Paper is investigating the possibility of establishing a pulp-and-newsprint mill there. Alcan’s Vancouver office has received numerous enquiries from smaller industries. Says vice-president DuBose: “It wouldn’t surprise me if someday British Columbia will be so filled with people and its power requirements so great the aluminum industry will not be able to continue there either.” it