The story
Founded by Marcus Daly in 1881.1
History of Anaconda Copper
Beginnings
Marcus Daly, a self-taught miner, engineer and geologist, bought a small silver mine called Anaconda in 1880. At the time, Daly was working for the Walker brothers, mining investors and bankers from Salt Lake City, Utah. He was a mining superintendent of the Alice, a silver mine in Walkerville, a suburb of Butte. While working in the Alice, he noticed significant quantities of high grade copper ore. Daly scouted the Anaconda and several other mines in the area and recommended the mine to the Walker brothers, who sent a professional geologist to inspect the Anaconda. The Walkers were not interested in the mine, and Daly sold his interest in the Alice to purchase it himself.
Placer gold and silver lode mining had taken place at Butte, placer mining at Helena, Bannock and Virginia City, Montana Territory, respectively, and Butte was nearing the end of its silver lode mining phase. Lacking capital to develop the mine, Daly sought financing from San Francisco mining magnate George Hearst and his partners, James Ben Ali Haggin and Lloyd Tevis, of Hearst, Haggin, Tevis and Co. and the Anaconda Company was born in 1881 with Daly as a 25% partner in the enterprise. Daly had recommended Hearst purchase the Ontario Mine, a silver mine in Park City, Utah, which consequently made Hearst many millions.
Huge deposits of copper were soon developed and Daly became a copper magnate. When surrounding silver mines "played out" and closed, Daly bought up the neighboring mines, forming a mining company. In 1883, Daly built a smelter at Anaconda, Montana, building a company town to support the workers, and connected his smelter to Butte by his Butte, Anaconda and Pacific Railway.
Butte became one of the most prosperous cities in the country, often called "the Richest Hill on Earth." From 1892 through 1903, the Anaconda mine itself was the largest copper-producing mine in the world. It produced more than $300 billion worth of metal in its lifetime.
Rothschilds
In 1889 the Rothschilds tried to gain control of the world copper market. In 1892 the French Rothschilds began negotiations to buy the Anaconda mine. In mid-October 1895 the Rothschilds, French and British, bought out the stock in Anaconda held by Hearst's widow, Phoebe Apperson Hearst, for $7.5 million. By the late 1890s the Rothschilds probably had control over the sale of about forty percent of the world's copper production.
Rockefellers
The Rothschilds' role in Anaconda was brief. In 1899, Daly teamed up with two directors of Standard Oil to create the Amalgamated Copper Mining Company which grew to become one of the largest trusts of the early 20th century. The leading roles were played by Henry Huttleston Rogers (John D. Rockefeller's associate and a director of Standard Oil) and William Rockefeller Jr.'s son, William G. Rockefeller (John Rockefeller's nephew). They were aided by stockbroker Thomas W. Lawson. Although Rogers and William Rockefeller were Standard Oil directors, the company of Standard Oil did not have a stake in this business, nor did its founder and head, John D. Rockefeller, who disliked such stock promotions.
By 1899 Amalgamated Copper acquired majority stock in the Anaconda Copper Company, and the Rothschilds appear to have had no further role in the company. By his death in 1900, Marcus Daly was the figurehead president of the holding company valued at $75 million.
Lawson later had a falling out with Rogers and Rockefeller, and wrote of the experience in a book Frenzied Finance (1905). Colored by Lawson's bitterness, the book offered insight into aspects of high finance.
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Beginning of WWII
Butte mining, like most U.S. industry, remained depressed until the dawn of World War II, when the demand for war materials greatly increased the need for copper, zinc, and manganese. Anaconda ranked 58th among United States corporations in the value of World War II-military production contracts. That relieved some of the economic tensions.
The end of World War II brought another depression in the copper industry because of a decline in demand after war production ended.
1950s
During the post-war years, demand and prices for copper dropped. At the same time mining costs had risen precipitously. As a result, copper production from Butte's underground vein mines dropped to only 45,000 mt annually. Anaconda tasked its engineers with devising new techniques to keep mining profitable. The answer was called the "Greater Butte Project" (GBP). The project would exploit lower-grade underground reserves by the block-caving method. Anaconda sank a new shaft, the Kelley, and the mine began producing in 1948. The new method was successful, although short-lived. They also began stripping ground for what was to become the Berkeley Pit.
In 1956 Anaconda netted the largest annual income in its history: $111.5 million. After that year, ore grades continued their decline, mining costs were rising each year, and profits were diminishing. To survive, the company switched to open-pit mining, a very area-consuming method. The Berkeley Pit kept expanding and ate away at the older parts of Butte.
1970s
As the 1970 Chilean presidential election approached, Anaconda Copper was concerned about the impact that the election of the socialist Salvador Allende would have on their profits. The company offered $500,000 to the US Government to aid their attempts to sway the election in favour of Allende's competitor, Jorge Alessandri. However this offer was rejected. Ultimately Allende was elected and in 1971 he confiscated the Chuquicamata mine from Anaconda, stripping Anaconda of two-thirds of its copper production. In 1973 Allende's government was overthrown in a military coup which was encouraged by the United States government, and the successor government of Augusto Pinochet paid Anaconda compensation of $250 million.
Losses from the Chilean takeover however, had seriously weakened the company's financial position. Later in 1971, Anaconda's Mexican copper mine Compañía Minera de Cananea, S.A. was nationalized by president Luis Echeverría Álvarez's government. An unwise investment in the unsuccessful Twin Buttes mine in southern Arizona further weakened the company. In 1977 Anaconda was sold to Atlantic Richfield Company (ARCO) for $700 million. However, the purchase turned out to be a regrettable decision for ARCO. Lack of experience with hard-rock mining, and a sudden drop in the price of copper to sixty-odd cents a pound, the lowest in years, caused ARCO to suspend all underground mining operations in Butte in 1980. ARCO closed the Berkeley Pit and shut off the deep pumps in 1982, allowing the pit and mines to fill with water. The Continental Pit, the last active Anaconda mining property in Butte, was closed in 1982, but resumed mining in the early 2000's.
Six years after ARCO acquired rights to the "Richest Hill on Earth", Butte's mines were completely idle. ARCO founder, Robert Orville Anderson, stated "he hoped Anaconda's resources and expertise would help him launch a major shale-oil venture, but that the world oil glut and the declining price of petroleum made shale oil moot." At the time of the sale to ARCO, Anaconda had large working hard coal holdings in the Black Thunder mine at Thunder Basin, Wyoming. ARCO planned to diversify its energy business into coal. In June 1998, Arch Coal completed the acquisition of the coal assets of Atlantic Richfield.
From Wikipedia’s article on Anaconda Copper, shared under CC BY-SA 4.0.3