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Doe Run History

Johnny Jones, 22 October 2003

I shared with you some of our neighbors' and city's history (Ogles, Ogles 2). Would you like to know something about the history of the mining company here?

It started with St. Joe, which began March 25, 1864, incorporated under the laws of New York. It was just another investment. "Few of the incorporators know or cared much about the mining business." There were 100,000 shares at $10 par value, which raised a million dollars to buy mining lands in St. Francois County, Missouri. Some of the land had been mined under Spanish deeds going all the way back to 1770. In fact, "Lead had been mined in Southeast Missouri since the earliest French and Spanish explorers traveled the region."

But the new company did not fare very well at first.

"July brought an `immense drought - which prevented the washing of mineral, and in early autumn a raid by the Confederate Army not only broke up the company's operations, but prevented the return of the workmen for nearly two months. As if the fates were bent on total annihilation, those disasters were followed by an unusually bitter winter, and the cycle was completed by springtime floods so heavy that all transportation was delayed by several weeks....Worse still, their expenses had been twice the amount of their sales."

Are you feeling better yet? The stock went down from $10 to $2.25 per share. J. Wyman Jones was asked to be president, but he refused to accept unless the indebtedness was liquidated somehow. "Through pressure and a seventy-five cent per share assessment the debt was eliminated."

But after this rocky start, by 1975 the company was ranked by Fortune magazine as the 264th largest industrial corporation, one of the premier mining companies in the world. "Innovation, modernization and expansion had fueled diversification. St. Joe...had become not only the leading U. S. lead producer but the owner of substantial zinc mining interests in New York, iron ore in Missouri, U. S. coal, global oil and gas ventures and base and precious metal operations."

But the mining industry is cyclical, so St. Joe saved during the good times for the bad times that would come. Perhaps it was St. Joe's "war chest," estimated at over $600 million, that attracted Seagram's and prompted a hostile take-over attempt. St. Joe sought a "white knight" and found Fluor Corporation. There was a big change after that time. A Solomon Brothers report summarized, "Doe Run is a relic of Fluor's ill-fated acquisition of St. Joe Minerals Corporation in 1981. The company officially was created on November 1, 1985, through the combination of Fluor's St. Joe Lead operations and certain lead properties contributed by Homestake Mining....In May 1990, Fluor purchased the remaining 42.5% of Doe Run from Homestake Lead Company of Missouri."

"By 1990 Fluor had already sold all of St. Joe's divisions with the exception of the Massey Coal operations that it retained primarily as a cash generator and Doe Run, which was believed to be of little strategic value. Fluor management felt that the lead operations' highly cyclical and unpredictable business did not fit with its core engineering and construction business."

So they looked for exit strategies. One of them was sale to a third party.

"In 1994 the Renco Groups acquired Doe Run by using high interest (11 to 13%) financial instruments as a source of funds. The Renco Group, established in 1980 by industrialist Ira Rennert, is a holding company for a diverse group of businesses. Presently these include AM General, producer of the HUMVEE, Renco Steel, WCI Steel, Rencoal, Consolidated Sewing Machines and other assorted companies."

Since Renco bought Doe Run, the company has made some acquisitions: Magmont Mine, owned by Cominco/Dresser in 1996, and Asarco in 1998. Buick Resource/Recycling has provided employment for the area, as well as a smelter based on recycling rather than mining. The debt was restructured two years ago, which allowed the company to survive. There has been hardship for the community with the economic downturns, particularly in prices of metals.  But more recently, the price of lead has improved.

This company has seen a lot of changes. It found catastrophe in its founding, then success, downturns and upswings.

Fluor was right: The mining industry is highly cyclical and unpredictable. But in spite of that, the company formed originally as St. Joe has lasted 139 years.

That's quite a history.

Quotes from John Morrissey's "The Doe Run Company: Another Century?" I want to thank John for gathering the information and sharing it.