U.S. Borax Inc.

    Country:  United States

    Business Type: Trading Company

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  • U.S. Borax, Inc. is the leading producer of borates in the world. Borates are derived from borax, a mineral salt that the company mines and refines at locations in California and Argentina, then ships throughout the world. Uses for borates include glass and fiberglass production, ceramic glazes, detergents, soaps, agricultural nutrients, and pest control products. The company, famous for its "20 Mule Team" trademark and the long-running "Death Valley Days" radio and television program, is owned by British mining giant Rio Tinto plc.


    U.S. Borax traces its origins to the year 1872, when a gold prospector named F.M. Smith discovered a borax deposit at Teel's Marsh, Nevada. After establishing a mine there, Smith soon became a leading producer of borax, which was then being used in gold processing, ceramic glazes, detergents, water softening, soaps, and food preservation.


    Smith's San Francisco-based sales agent, W.T. Coleman, was also developing his own borax operations, and during the 1880s he acquired a number of borax mines in the California desert, including one at Death Valley. This rich deposit was located 165 hot, arid miles from the nearest train station at Mojave. To bring ore to the railroad, Coleman's employees devised a carefully engineered transport system. This was the famous "20 Mule Team," which actually consisted of 18 mules and two horses. The animals pulled three wagons, one of which held water, that could haul more than 20 tons of ore from the mine to the railhead. The 185-foot long line of mules, horses, and wagons journeyed for ten days across rough trails that ranged from below sea level to 4,000 feet above, in heat of up to 130 degrees. Use of the large mule teams lasted only from 1884 to 1888, when production at Borate, California, superseded the Death Valley mine's output.


    In 1888 Coleman went bankrupt, and his borax holdings were subsequently purchased by F.M. Smith (now known as "Borax" Smith), who established the Pacific Coast Borax Company two years later. The firm used the 20 Mule Team brand name on its products, which it began marketing abroad in 1896 when Smith established a partnership with a British company. Three years later Smith and a group of British investors also formed Borax Consolidated, Ltd., which assumed ownership of Pacific Coast Borax, as well as the mining interests of Desmazures and Groppler and other companies that operated mines in Turkey, Chile, and Peru. Borax Consolidated subsequently acquired additional operations in France and Argentina.


    In 1906 Pacific Coast Borax began building a rail line, the Tonapah & Tidewater Railway, to haul ore in California and Nevada. Though the project was never fully completed, what was built did enable the company to more easily transport borax ore to existing railways at Barstow, California, and Beatty, Nevada.


    In 1913 "Borax" Smith's financial empire collapsed, and his shares in Borax Consolidated, Ltd. were sold on the London stock exchange. Smith had held controlling interest in the firm and its subsidiary Pacific Coast Borax, and the sale put ownership of both firms completely in British hands.


    Pacific Coast Borax continued to prosper following the departure of Smith, however. In 1914 the Death Valley Railroad was built to transport borax to the new Ryan mine that had been developed in the area. The company's production also reached 110,000 tons of borax per year during World War I. In 1923 Pacific Coast Borax consolidated its refining operations with the construction of a new facility in Wilmington, California, near Los Angeles.


    The company's production capacity grew again in 1925 after a doctor digging a well discovered the world's largest known borax deposit. It was subsequently acquired by Pacific Coast Borax, and a mine and mining town were constructed. The site, appropriately named Boron, California, became operational in 1927, at which time the company shut down most of its other mines. Pacific Coast Borax also diversified around this time into hotel management, opening a luxury resort facility in Death Valley called the Furnace Creek Inn.


    In 1930 the company took its marketing efforts to the new medium of radio by sponsoring "Death Valley Days," a dramatic serial that chronicled the exploits of prospectors and cowboys in the Old West. The program caught on with the public and was broadcast for many years, ultimately switching over to television where it lasted until 1968.


    By the 1940s, Pacific Coast Borax was primarily mining two sites, at Boron and at neighboring Trona, California. The company's mines operated much like coal mines, with workers taking an elevator to an underground cavern where the ore was extracted from the earth. The ore was then sent to the surface in chunks, where it was crushed and screened to pebble size for shipment to the company's refinery at Wilmington. Working conditions in the desert were hot on the surface, but underground the temperature was a constant 72 degrees, with 25 percent humidity. The company's employees were paid well, with Pacific Coast Borax providing housing and food at a discount rate. The price of borax, which had been $700 a ton during the 20 Mule Team days, was now less than $50 due to the greater efficiency of processing and transport.


    Borates, in addition to being used in metal processing, soaps, and water softening, were now utilized for many other purposes. As much as half of the quantity produced went into making glass and enamel glazes, in the latter case as a replacement for the more hazardous lead. Additionally, borates were increasingly used in fertilizers, in leather production, and for washing citrus fruits to help prevent mold and decay. The U.S. government had also reportedly begun employing borates for use in defense projects, in particular as a component of rocket fuel.


    In 1956 Pacific Coast Borax was merged with U.S. Potash, another mining concern owned by Borax Consolidated, Ltd., to form U.S. Borax & Chemical Corp. U.S. Potash had been acquired by Borax in 1930 to develop potash deposits in North America. As part of the arrangement, ownership of the reconfigured company would be shared with a New York banking group headed by Lazard Freres & Co., which was investing $7 million for an 8.5 percent interest in the company. A loan of $16 million was also taken out, which would help the firm with new plans to convert the Boron, California mine into an open-pit operation, enabling greater recovery of ore. Manufacturing facilities were also expanded to handle the higher quantity of mineral being extracted. The U.S. government had reportedly put pressure on the British owners of Pacific Coast to transfer control at least partly to American hands, given the huge deposits held by the company and their importance to national defense.


    The early 1960s saw the company building its international business with shipping terminals constructed in Wilmington, California, and Rotterdam, Netherlands. Borax NV was established as a sister company in Europe, along with a joint venture called Deutsche Borax. In Turkey, a major borax source was found in 1960, which was subsequently run by the nationalized Etibank company, U.S. Borax's only major competitor. In 1966 U.S. Borax also sold its Death Valley-based resort to the Fred Harvey Corporation.


    U.S. Borax and Chemical was acquired in 1968 by RTZ Corporation (later known as Rio Tinto plc) through a merger with Borax, Ltd., U.S. Borax's principal owner. Rio Tinto was the world's largest mining concern. The Potash operations were subsequently sold to the Canadian government.


    In 1980 U.S. Borax spent $80 million to construct a boric acid production plant at its Boron, California mine site. U.S. Borax was the world's leading producer of boric acid, which was largely used in metal refining. The mid-1980s also saw the company acquire Pennsylvania Glass Sand Corp. from ITT for $80 million and the Ottawa Silica Co. of Illinois for $46 million. Both were top producers of silica, used along with borax in the making of glass and fiberglass. They were subsequently merged to form U.S. Silica.


    U.S. Borax was also pursuing other mineral interests at this time. The company had acquired a molybdenum deposit site in Alaska during the mid-1970s, and attempted during the 1980s to reach an agreement with the U.S. Forest Service for environmentally acceptable methods of mining it. U.S. Borax was ultimately unable to work the mine, however, and sold it in 1991 after reportedly spending $100 million on the project. More successful was the company's joint venture with Santa Fe Pacific Corporation to operate the Trinity silver mine in Lovelock, Nevada. The short-duration project commenced in early 1988, and depleted the ore in only two years. The company was also looking for gold mining opportunities in Nevada during this time.


    In 1988 U.S. Borax sold its consumer products division to Greyhound Corp., owners of soap and cleaning product maker Dial. The new owners continued to use the 20 Mule Team trademark on containers of Borateem bleach, Boraxo powdered hand soap, and Borax cleanser. The company reportedly had been seeing declining revenues for the division, which took in approximately $43 million in annual sales. U.S. Borax would continue to use the 20 Mule Team name when marketing its own industrial products. Also during the year Ian L. White-Thomson was elected president of U.S. Borax. White-Thomson, an Oxford graduate, had begun working for Borax Consolidated, Ltd. in 1960 as an assistant sales director.


    In 1991 U.S. Borax announced plans for a new, 125,000-square-foot headquarters and research facility in Valencia, California. The new building would consolidate existing operations in Los Angeles and Anaheim, placing them closer to the Boron, California mine site. Since the early 1980s the company had been improving its efficiency and increasingly using automation at its plant, as well as upgrading equipment.


    Consequently, production increased 20 percent while the number of employees dropped, reaching less than half the 1980 total of 2,400 by 1994. The company continued to seek new sources of borax, with its primary mine at Boron projected to have about 40 years of reserves left. Annual sales were now estimated at $500 million, with net profits of more than $100 million a year. U.S. Borax was also actively researching new methods of improving its product, and seeking new uses for borax derivatives. These included environmentally safer methods of manufacturing paper, and a safe-to-humans termite pesticide.


    In 1995 U.S. Borax sold its U.S. Silica division to D. George Harris and Associates for $120 million. The move was due in part to the company's desire to shift its focus to the international borax market, in particular Russia and China. Three regional offices were subsequently opened in the latter country. By this time the company was shipping its products to some 80 countries around the globe.


    U.S. Borax celebrated the 125th anniversary of F.M. Smith's first borax mine development in 1997, building a $1 million, 6,000-square-foot visitor's center at its Boron complex that featured educational displays and examples of mining equipment from the past and present. Always aware of its history, U.S. Borax refurbished a set of original 20 mule team wagons the following year. No expense was spared in the restoration, which involved experts from around the country as well as Borax employees. Once completed, the wagons were given their official "last ride" at the January 1, 1999 Rose Bowl Parade in Pasadena, California. Afterwards, they were retired to the visitor's center at Boron, hitched to a train of 20 fiberglass mules--made, in part, from borax.


    During 1999 the company acquired the assets of Lake Minerals Corporation, which operated a trona mine at Lone Pine, California. Trona was a mineral salt used in the borate refining process. The year also saw the installation of a new president and CEO, Preston S. Chiaro, with Ian L. White-Thomson assuming the role of chairman. In 2001, the company entered into a joint agreement with Millennium Cell, Inc. to develop a synthesis process for converting sodium borates to sodium borohydride. The latter was used to generate pure hydrogen via a Millennium-developed process.


    With a long and storied history behind it, U.S. Borax remained the leading producer of borates on the planet. Its future for the near term looked bright, though when its principal mine in Boron, California, was exhausted new sources of the mineral would be needed. Efforts to locate similarly rich supplies were ongoing, and with Rio Tinto's strong financial backing the company appeared well situated to meet this goal.


    Principal Subsidiaries

    Borax Argentina S.A.; Borax Asia Pte. Ltd. (Singapore); Borax Benelux (Belgium); Borax Espa?a S.A. (Spain); Borax Europe Ltd. (U.K.); Borax Fran?ais S.A. (France); Borax Italia S.R.L. (Italy); Borax Japan Ltd.; Borax South America (Brazil); Borax U.K.; Deutsche Borax Gmbh (Germany); Borax Rotterdam NV (Netherlands).

    Principal Competitors

    Eti Holding, Inc.

    Further Reading

    Apodaca, Patrice, "U.S. Borax Still Mines 'White Gold,' But Much Has Changed Beneath the Surface for the Company," Los Angeles Times (Valley Edition), April 5, 1994, p. D10.

    Benson, Michael, "Borax Says Giddyap! One Last Time to 20 Mule Team," Wall Street Journal, September 16, 1998, p. CA1.

    "Borax Mule Team Takes Its Final Ride," Engineering and Mining Journal, February, 1999, p. 16JJ.

    "Borax to Transfer Pacific Coast Borax Ownership to U.S. Firm," Wall Street Journal, May 1, 1956, p. 26.

    Gooding, Kenneth, "Borax Steps up Search for New Deposit," Financial Times, October 16, 1996, p. 41.

    ------, "Cleaning Up in the Widening Borax Market," Financial Times, November 20, 1990.

    Marcus, Jerry, "Rio Tinto Borax and U.S. Borax, Inc.," Engineering and Mining Journal, October, 1997, p. 24.

    "Rio Tinto, Borax Propose a Merger for $127,224,000," Wall Street Journal, January 8, 1968, p. 6.

    Schachter, Jim, "Dial Hopes to Buy a Bit of History from Borax," Los Angeles Times, February 25, 1988, p. D1.

    Sullivan, Robert J., "Borax Bonanza--Steaming Mojave Desert Yields Record Output of the Versatile Chemical," Wall Street Journal, August 6, 1947, p. 1.

    — Frank Uhle

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