Louis Shattuck Cates, one of the preeminent figures in twentieth century mining, succeeded Walter Douglas as President of Phelps Dodge in May 1930.
His engineering background was from the Massachusetts Institute of Technology, where he graduated in 1902. His assumption to the presidency of the company was unique in that he had no prior affiliation with Phelps Dodge.
His previous experience included briefly working the Parral silver mine in Chihuahua, Mexico; serving as superintendent of the Boston Consolidated Mining Co. in Bingham, Utah; and later serving as general manager of the Utah Copper Co. after its merger with the Boston Consolidated Mining Co. in 1910.
It was here that Cates developed a lifelong friendship with Daniel C. Jackling, who bestowed upon Cates a heightened understanding of open pit mining operations recently successful at the large porphyry copper deposit at Bingham Canyon, Utah.
Cates, a man of few words, possessed exceptional management and organizational abilities as well as extensive mining and metallurgy experience.
Jackling assigned Cates to oversee the operations of the Ray Consolidated Copper Co. at Ray, Arizona. Thatβs where Cates perfected the timberless, or caving system.
Catesβ presidency of Phelps Dodge began at the height of the Great Depression. His goal was to broaden the companyβs role in copper production from mine to market. He faced many challenges, including a depressed copper market, an ongoing debate about the employment of underground or open-pit mining operations and a lower level of financial investment in current mining ventures.
Catesβ interest in poker stretched beyond the table in his recognition that Phelps Dodge needed more properties to ensure its future expansion in the copper industry. His first action as president included the acquisition of the Nichols Copper Co., a refining enterprise in New York. William Henry Nichols, the companyβs namesake and chemist is credited with having discovered a low-cost and efficient method of producing sulfuric acid from copper pyrites. The companyβs large-scale electrolytic copper refinery at Laurel Hill had traditionally processing copper from the Phelps Dodge Arizona mining properties. A second Nichols Refinery, whose annual capacity was 100,000 tons of cathode financed by Phelps Dodge and the Calumet and Arizona Mining Co. for $3.5 million, was established at El Paso in 1930. It was a closer locality to the mining operations of Phelps Dodge and a direct connection for ore transport on the Southern Pacific and Texas & Pacific railroads.
Rival companies were also targeted in Catesβ plans for the expansion of Phelps Dodge.
The Calumet and Arizona Mining Co.βs holdings included the New Cornelia Mine at Ajo and extensive mining properties at Bisbee, including the Campbell, Cole, Irish Mag and Junction Mines.
Cates convinced Phelps Dodge stockholders that the company had cash and securities on hand β acquired during earlier time periods of profitable earnings β that could be used in the purchase, which occurred in the fall of 1931. Timing proved beneficial in that the Calumet and Arizona was practically bankrupt from lavish expenditures on dividends throughout the 1920s.
Catesβ mentor, Daniel Jackling considered Catesβ exploitation of the Clay ore body at Morenci to have been the boldest undertaking in the history of mining. Comprising light-gray porphyry rock under 50 million tons of overburden led to an extensive drilling campaign financed by Phelps Dodge between 1928 and 1930.
Early estimates surmised the deposit could produce two to three hundred million tons of ore with copper averaging slightly over one percent. Its successful development, beginning in the late 1930s, led to the Morenci Mine being the current largest producing copper mine in North America.
Cates would later extend Phelps Dodge interests abroad with the investment of $4 million worth of company stock in the American Metal Co. in Rhodesia. Cates was also influential in securing Phelps Dodge a partnership involving working several copper deposits in the Peruvian Andes.
The consortium involving ASARCO, Cerro de Pasco, Newmont and Phelps Dodge formed the Southern Peru Copper Corp. in 1955, progressively developing the Toquepala, Quellaveco, and Cuajone ore deposits. Dividends from these investments would add millions of dollars every year over the ensuing decades to Phelps Dodge, along with classifying Southern Peru Copper Corp. as Peruβs largest single copper producer.
Cates resigned as president of Phelps Dodge in 1947. However, he remained chairman of the board until his death in 1959, having made a positive contribution to the history of copper mining in Arizona and the world.
