INTERNATIONAL BAIeK FOR RECONSTRUCTION AKNf D.:VELOP1iThNTt RESEARCH DEPART1,1ENT Public Disclosure Authorized ERM64 Public Disclosure Authorized THE IRON AIM STEEL INDUSTRY OF NORW.JAY Public Disclosure Authorized Prepared by-: Andretw C. Huang Apparoved by: Joseph S. Gould FM - 64 Public Disclosure Authorized March 1, l948 copy . TABLE CF COTENTS SUNRY I PURPOSE AND SCOPE II THE BASIS OF THE NORUEGIAN IRON AND STEEL INDUSTRY III i W NITERIALS IV IRON AND STEE PRODUCTION AID CAPACITY V DOESTIC IRON AID STEEL RUIRr240iTTS VI LABOR SITUATION AISD PRODUCTIVITY VII FOREIGN TRADE VIII THE EBPANSION PLAN APPENDIX Table I Production, consvmution, imports and exports of iron and steel II _ Production of iron and steel 'oy products, 1937-43 III - Principal imports and exports of iron and steel. 1938-44 IV Principal iaports of iron and steel, by countries of origin, 1938 and 1944 V Principal exports of iron and steel by countries.of destin- ation, 1938 and 1944 VI - Imports of chrome anec manganese ores by country of origin, 1938 and 1944 VII - Value of iron and steel imports and exports by country of origin, 1942-44 VIII - Actual irmports cf iron and steel by product, 1945-47 IX - Actual exports of iron and steel by product, 1945-47 X - Hard coal supply and conaurption XI - Actlual imports of hard coal by country of origin XII - Estimated requirements of hard coal in Norway by major industries XIII - Col,e stapply and consumption XIV - Consumption of oil and refractory materials in Norwegian iron and steel industry XV - Estimated mining equipment requirements of Norway XVI - Employment inde- of ores metal, iron ancd steel industries, 1943.-45 XVII _ Living conditions of mining aiac'. metal wrorkers, 1938-44 XVIII - Hourly wages of mining and metal workers, annual average XIX - Labor force and number of establishments - Nining, iron and metal industrieso XX - Employment of mining industries, 1936-45 XXI - Labor :Vorce and number of establishments - Iron and metallurgical industrry SIhIRY 1. The Norwegian iron and-steel industry is based on ample reserves of medium grade iron ores, cheap hydroelectric power, and an increasing domestic demand for finished steel products. The industry is very small from the stendpoint of tonnage produced, accounting for about one percent of the total of Western European countries. 2. Norway is the fifth largest iron ore producer in Western Europe wtith an outpat estimated at 1,,6 mIllion tons in 19386 About 90 percent of the domestic iron ore production was exported before the war, ohiefly to Gaimany as concent;.rates in exchnange for finished steele Only about 30 percent of domestic requiremrnets of finished steel was supplied oy the homne industry, 3. High production costs ancl the relatively low quality of domestic iron ore, along with reduction of capacity through extensive war damage will further intensify the baiance of payments problem within the iron and steel industry itself,. While iron ore exports are not expected to exceed 50 percent of the 19j.38 level in futu:ce years, the vol:ame of finished steel imported is expected to be twice the prewar level by 19510 4. Normy is self-sufficient in both pig iron and serp. A relatively high proportion of scrap (about 70 percent in 1938) was used in making crude steel due to a large domestic supply as compared with total steel pro- ductione 5. Norway produces substantial quantities of ferroalloys using imported ores and is in a good competitive position due to an ample supply of inexpensive electric power< Annzual production of ferro-silicon, ferro-manganese, ferro>-hroze, and ferro-silicon-manganese totalled 140,000 tons before the war. Practically all of these were exported to Gernany, the U.K. and Belgium-Luxembourg in exchange for finished steel. 6. The iron and steel industry produces all types of cornmercial steel with emphasis on those items required by the domestic construction and sl;ip- biilding industries* However, domestic needs of finished steel are far in excess of home Froduction, Prior to the war about 70 percent of industrial steel was supplied by imports largely from Germany* 7. The prewar, existing and prpjected capacitiep of the iron and steel production in Norway are as follows, in thousands of metric tons: a2 8 -9/j,7 19S1 Iron ore 1,7C0 700 1,000 Pig iron 45 80 200 Crude steel 70 70 100 Finished steel 90 90 200 8. The Norwegian iron and steel development plans contemplate expansion of both crude and finished steel production. The country, howiever, will not be self-sufficient in finished products, at least during the next five years on account of heavy reconstruction requirements even if the plan is completed according to schedule. PURPOSE ANM SCOPE This report is one of a series covering the iron and steel iidustries of the individ-aal Europeen coiuntries and is intended for consolidatioi later in a study of the European iron and steel industry as a whole to determine those areas with best prospec ts for fut,ire reconstruction and developmento E iasis -is plac-eId In this report on the maximum capacity which is -to be providad for particu,alar types of products required for home consinption and e c'rt0 This preliininary report is based primarily on the Norwegian o.fficial stati,sitical and commnercial books and other goverment reports now available in the Barnk and in various United States Government agenflies. along with the C.E,ET,C reports and worlring rapers, It isl-b no means complste0, Nvuch essential aC.:7uiati.aa is lacking, particularly with respeet to existing capacity for production of specific items of finished steel ana probabole domestic reouirements for finished steel in futu!re years, Such inforxmation must be obtained from the sourceo THE BASIS ;F THE NORWIEGIAN IRON AMD STEML INWIJSTRY The basis of the iron and steel industry in Norway consists of ample reserVes of medium grade iron ores and plentiful, cheap hydroelectric power. Practically all coke required for the industry was imported from tl-e U.KI., the Netherlands end Germany before the war. Inefficient operation of the plants, combined. with high labor costs, places Norwegian iron and steel products in an unfavorable position in the e=rt market. Norway is not an important iron and steel producing aantry nor has the country been self-sufficient as far as iron and steel products are concerned. Production of iron ore had started early in the 16th cdntury when charoal was used to reduce the iron ore to pig iron. On account of the deficiency of domestic conl production and high production costs, the country has been comnelled to export abcut 90 percent of its iron ore in exchange for finished products to meet domestic requirements with an adverse balance in thle industry. Production of steel, even in its most active prewar year, amounted to only about 1 percent of that of the total Western %iTro-eancountries. Plans are under consideration to expand the iron and steel industry in Norway because of the currenit stagnation of ore mining due to the decline in German demand and anticipated increase of domestic requirements for recon- struction purposes. However, because of lack of coal and hig,h production costs, lack of skilled labor and for technical reasons, Norway will not be self-sxxffi.cient as far as finished steel is concerned at least during the next five years. Within the industry, iron ore mininR is the predominant branch and it is ine of the tvwo chief mining industries of the country. Iron ore produ.ction ameunted in vralue to about 28 million kroners or abcut 50 percent of total cres extracted in Norway in 1938. Pig iron and steel are produced aimost exclusively in electric furnaces. In additioni, a substantial production and trade has been developed in ferroalloys, particularly ferro-chrome, which requiro electric fur-aaces for economic production. In Norway the iron and steel industry, intncudin; iron ore mining and the metallur-ical industries, is one of the most important, ranking with, forestry as far as national income and foreign, trad. arb concerned. -3- M..W T Lo Iron -ore There are three principal iron ore mines in operation in Norway - the Sydvaranger Mines at Kirkenes in the extreme north of the country; the Fosdalen mine at Malm and the Rodsand mine at liesset, both in the center pert of the country. The ore extracted by the open pit operation at the Sydvaranger mines is magnetite occurring in Archeaean Gneisses in the form of long bands of varying thicknesses. Crude ores have an average of 34 to 35 percent iron content, .01 to 07 percent phosphorus, o01 to .07 percent sulphur, .1 to .4 percent manganese, and .04 to .35 percent titanium oxide. The ore reserves are estimated to be 200 million tons to a depth of 250 meters. The ores concen- trated by magnetic separators yields a product with 66 percent iron content, In 1935, 770 workers were employed in these raines writh an output of 1.3 million tons of iron ores. The ores of the Fosdalen mine are a mixture of pyrites and magnetite. They occur in two elongated lenses overlying one ano-ther. The lenses are in general six meters wide with a 70 degree dip and 18 degree pitch. The cre contains about 45 percent iron and is mined underground by the shrinkage stoppage method0 The crude ore is treatecl in man,netic concentrating plants yielding product with 65 percent of iron content. In 1935, 181 miners were used to extract a total o, 246,477 tons of crude ores which yielded 142,219 tons of concentrates after dressing.