Founding of Inco The company was founded following the discovery by blacksmith Tom Flanagan in
Copper Cliff, Ontario of
chalcopyrite deposits, while the
Canadian Pacific Railway was being built in 1883; the township of
Sudbury soon followed in 1884 when JL Morris, provincial land surveyor, laid it out. Initially, ore was shipped for smelting to a plant in
Constable Hook, New Jersey, owned by the Orford Copper Company. Processing revealed in 1884 that the ore was also rich in nickel and exploration tests revealed an enormous potential. In 1893
Robert M. Thompson patented the Orford "Tops and Bottoms" process; this was the first commercially viable method of separating
Pentlandite-borne
Nickel from the CuFeS2
Chalcopyrite-borne
Copper. The
Spanish-American War focused the eyes of the world on
nickel steel, because in the
Battle of Manila Bay and the
Battle of Santiago de Cuba, the American losses were negligible while the Spanish losses were catastrophic. This was the result of the nickel steel used by the Americans to clad their hulls. The Spanish Navy had ignored to their peril the 1889 paper by James Riley, "Alloys of Nickel and Steel", and the market for nickel was made. The next year saw the introduction by
Bethlehem Steel of a virtually indestructible nickel steel automobile axle. and that year, the
International Nickel Company, Ltd. was created by Thompson and
John Pierpont Morgan and
American Nickel Works, with a capitalization of $28 million. and named for Inco President
Ambrose Monell. Meanwhile, the development of
austenitic stainless steel was launched by a pair of
Krupp engineers known today as AISI Type 304 or simply
18/8, which indicates a nickel content of 8%. This novelty would assure the 20th-century success of the firm. In 1916, the International Nickel Company of Canada, Ltd. was incorporated in
Copper Cliff in Sudbury; this entity was a subsidiary of New York-based Inco. The company built a new refinery in
Port Colborne in 1918 and during the following year, the company first began using the trade name Inco. During the
1919 Ontario general election,
The Toronto World pursued a simmering scandal from 1916 concerning Inco and alleged provincial support of wartime shipments of the metal to Germany via the
cargo submarine Deutschland. On 31 October 1928 the Canadian body corporate and its American parent switched roles and the Canadian became the parent. A significant proportion of these sales found their way to the United States, with other notable markets including the Soviet Union, Great Britain, Japan, and Germany. Approximately 9 percent of company's total sales from 1934 to 1939 were to Nazi Germany, mainly to meet the growing demand of the country's armaments industry.
Head office to Toronto When
Robert Crooks Stanley became president of INCO in 1922, priority was given to high quality research. A head office for the Canadian operations of Inco was soon established in Toronto. In 1922 Stanley closed the
Bayonne NJ refinery in favour of the new
electrolytic one in
Port Colborne, Ontario, while at
Alfred Mond's
nickel carbonyl refinery in
Acton, London Inco was able to produce
platinum. Stanley's excellent contribution to Inco was his devotion to alloy research, which contributed to the expansion of the market for the base metals it produced. In his first Annual Report in 1922 after becoming President, Stanley informed the shareowners of the new Development and Research Department. At the same time, management told the directors that "we had no market developed [for Monel] which would justify a mill, but we assured them that with a mill we could build a market which would earn the preferred dividend." The directors thereupon invested three quarters of all the liquid resources of the company into the Huntington WV plant to satisfy a market which management had just said did not exist.
Permanickel,
Ni-span-C,
Inconel X and
Nimonic were all discovered under his watch, most at his
Huntington Works baby. JL Agnew originated the Geology Department of the firm, as a result of his investigations into the
Frood Mine problem, which precipitated the 1929 merger with the Mond Company. This department was instrumental in the Manitoba discovery 25 years after his death. During World War II, Inco's
Frood Mine produced 40% of the nickel used in
artillery by the
Allies. From 1939 to 1945, Inco delivered to the Allies 1.5 billion pounds of nickel. After the war, demand for nickel remained high because of the
Korean War and the
Cold War of the 1950s. Because of the Mond merger, Inco had ownership of nickel properties in
Petsamo Province,
Finland (now known as
Pechengsky District) and had invested a fair sum in them. These properties were conquered by the
Soviet Union after the
Continuation War of 1941-44. As a result, reparations needed to be negotiated between Inco and the Soviet Union, through the Canadian government after 1944. The parties settled for $20 million, which was paid with difficulty. In its heyday during the 1950s, Inco produced 85% of the world's nickel supply. In 1956, geologists discovered the
Thompson, Manitoba ore body and named it for Inco Chairman John Fairfield Thompson. The first Canadian-born President of Inco, who held the office between 1960 and 1966, was named
James Roycroft Gordon. The year 1969 saw a bloody four-month long strike at Inco's Sudbury operations, and the firm's share price was cut in half. Also in 1972 the
Inco Superstack was built in Sudbury; at the time senior technical staff like
Paul Queneau thought this would solve the
SO2 acid rain pollution problem. In July 1974, Chairman L. Edward Grubb decided to diversify Inco's holdings and make the first ever
hostile takeover bid for Philadelphia-based
Electric Storage Battery Company (ESB), aided by
Morgan Stanley.
United Aircraft Corporation entered as
white knight and served to increase Grubb's bid to a 110 percent premium above the pretakeover price. ESB manufactured amongst other products the
Ray-O-Vac battery. That site was sold in the 1980s.
Downturn During the first half of the 1980s Inco bled a lot of red ink, "which caused the elimination during the five years from 1980 of more than 12,000 jobs worldwide, or 35 percent of its work force, including more than 6,000 jobs in Canada." It then produced one-third of the world's nickel.
Charles F. Baird was the chairman and CEO. The SO2 abatement project (SOAP) instigated a $600 million clean-sheet recomposition of the smelter plant that allowed INCO to capture 90% of their emissions, and commercialize
sulfuric acid. In late 1994,
Diamond Field Resources discovered nickel, copper and cobalt ore bodies at
Voisey's Bay Mine (VBM) in
Labrador, Canada. The deposit was estimated to contain 141 million tonnes at 1.6% nickel and was imagined by the then-chieftains of Inco as a 21st-century replacement for the waning Copper Cliff resource. In 1996, the VBM was purchased by Inco for 4.3 billion
Canadian dollars. Some say that Inco overpaid for VBM because of the presence of Falconbridge at the auction. In order to generate cash Inco sold its manufacturing sites of nickel alloys to
Special Metals Corporation in 1998 for US$408 million. In the previous year, the division had generated US$668 million in revenue. Special Metals Corporation however filed
Chapter 11 in March 2002. In February 2001, nine-year CEO Michael Sopko stepped down while he announced a $400 million profit. He was replaced by New York lawyer
Scott Hand. In 2002, the VBM purchase was regarded as a "costly blunder... when the company had to write down a third of the value of the $4-billion acquisition only six years after the purchase," but in early 2004 that did not prevent Hand from making a bid for
Noranda and
Falconbridge, both of which were at the time owned by
Brascan, who then declined the Inco offer. The bait in the water attracted
Mick Davis and
Roger Agnelli. Hand was not deterred from his takeover madness and went to Australia to try his luck in the
Western Mining sweepstakes, where he was outbid by XStrata's offer of US$5.7 billion and the ultimately successful BHP Billiton bid of $7.3 billion. Not last in the waters was
Teck Cominco's
Don Lindsay, a product of
CIBC World Markets and who had advised Falconbridge in their failed acquisition of VBM. == Leadership ==