Precious -- metal misers punch in

With today's booming prices in precious metals, executives of industrial companies using gold or silver in their manufacturing processes may wish they were alchemists -- turning granite or other cheap materials into gold. But they are practicing their own form of wizardry: conservation.

E. I. du Pont de Nemours & Co. buys an average of 17 million troy ounces of silver (14.58 troy ounces equals one pound) each year to produce industrial film and other photo products. In January, silver reached prices of up to $48 an ounce, about eight times the price one year ago.

Companies are trying to compensate for such increases by either raising prices, finding alternative metals, or conserving silver.

Du Pont is doing all three, says John C. Metzger, vice-president of the Photo Products Division in Wilmington, Del. The company has announced film price increases of between 40 and 100 percent, effective this month. There may be more increases once the impact of recent price changes is assessed, he adds.

Taking steps to use less silver and conserving silver scrap -- haphazard practices in many companies -- have become priorities.

"The photo industry will never use as much silver as it did last year," Mr. Metzger says. "Du Pont has always been concerned about saving silver, and over the last three years we've cut our silver usage by 30 percent."

While in some processes there is no silver substitute, he says, "we are working on films that contain no silver."

The Eastman Kodak Company increased prices on its Instamatic film between 15 and 20 percent. Color photographic paper is up as much as 50 percent, and professional film up 25 to 50 percent.

The Rochester, N.Y., company buys about 50 million ounces of silver yearly. Nearly 99 percent of the silver in Kodak's consumer film can be recovered when customers return the film to Kokak for developing, a spokesman says.

Raytheon, a major producer of high-technology equipment, uses large amounts of silver-coated wire. "Silver is doing a number on us right now," said a company spokesman in Lowell, Mass. "The price of wire has doubled."

Also hard hit by silver price jumps are manufacturers of sterling silver tableware, jewelry, mirrors, dental and medical supplies, and coins. In 1979, estimated total US consumption of silver by industry was 170 million ounces, according to the Bureau of Mines.

Gold prices are also hitting record highs -- $875 an ounce in January from $ 200 to $300 a year ago. This week gold has been selling for about $680 an ounce. Industry used an estimated 5 million ounces of gold last year, with the electronics industry the largest consumer.

Connectors -- small, gold-plated terminals that complete an electrical circuit -- are found in military, industrial, and scientific equipment and some household appliances.

Record-high gold prices have brought some connector manufacturers to a standstill. But other companies are agreeing to ship orders with an "adder clause" -- a surcharge in their contracts for the cost of gold-plating the connectors based on gold prices at the time of delivery.

The country's largest connector producer, AMP Inc. of Cumberland, Pa., is searching for more efficient ways of plating connectors. Among the innovations is "selective plating," which coats only the precise points that conduct electricity instead of the entire terminal.

"AMP now uses one-third less gold than it did three years ago, and we will probably reduce our usage by 10 percent a year for the next three years," an AMP spokesman said.

While silver and other cheaper materials may be used to coat connectors for certain purposes, gold is usually preferred for its endurance, good electrical conductivity, and resistance to corrosion.

Some electronics firms are reeling from the climbing price of platinum, which rose from about $370 a ounce in January 1979 to a record high of $987.20 an ounce on Jan. 21, 1980.

Until World War I, platinum, historically more costly than gold, was mined almost exclusively in the Soviet Union. It now controls about 25 percent of the world supply; South Africa, 70 percent; and Canada, 5 percent.

There is speculation that part of platinum's recent price boom was due to fears the Soviets would withhold supplies because of the deterioration in relations with the United States over the invasion of Afghanistan.

Besides platinum's value in the jewelry business, its ability to withstand high temperatures makes it a good catalyst. In the petroleum industry it is used to upgrade the octane of unleaded gasoline.

Catalytic converters, the pollution-control devices on most American-made cars built since 1975, use a blend of platinum and palladium to change toxic hydrocarbon emissions into harmless gases.

"Up to now, the amount used in the converter was too small to try to recover it," says Robert Harner, manager of Engineering and Product News at the Ford Motor Company. Now scrap dealers could conceivably sell converters from junked cars back to automobile manufacturers for "recycling," he says.

So far, this is being done on a very limited basis, "but with prices now, that may change," Mr. Harner notes.

Up to 75 percent of the platinum-palladium blend could be salvaged from an old catalytic converter, according to another Ford spokesman, Charles Gumushian.