Kennecott Copper Corporation

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IN THE MATTER OF KENNECOTT COPPER CORPORATION Dor:kel 8765. Order, July, 1975 Denial of respondent's petition to reopen proceeding to consider the question of relief.

FEDERAL TRADE COMMISSION DF:CISIONS Dissenting Statement 8G F.

Appeamnces For the Commission: Fiodie P. Favarella and Joseph Eckh.aus. For the respondents: John L. Warden, Sullivan CT()"rnwell New York City. John Bodner, Francis O'Brien, IIowrey, Simon, Baker & Murchison Wash., D.

ORDER DENYING PETITION TO REOPEN PROCEEDINGS On .July 7, 1975, Kennecott Copper Corporation filed a "Petition to Reopen the Proceeding" pursuant to Section 3.72 of the Commission Rules of Practice. The Bureau of Competition filed an "Answer in Opposition " on .July 14, 1975. The arguments raised in both Petition and Answer are essentially the same as those presented before the Commission one year ago when it denied a similar petition by respondent to reopen. The Commission has again considered the arguments of petitioner and does not believe that adequate grounds have been shown to warrant reopening to consider the question of relief. The order in this matter was intended to separate Peabody from Kennecott in a way that would leave Peabody as a viable, vigorous competitor in the mining and sale of coal, as it was before its acquisition. We fully expect that Kennecott will come forth with a firm proposal as of October 1 to acbieve this result, either via sale or spinoff. Accordingly, IT IS ORDERED, That the "Petition to Reopen the Proceeding" be, and it hereby is, denied.

Commissioners Thompson and N ye dissenting. DISSENTING STATEMENT JULY 23, 1975 By THOMPSON Cornrniss'ioneT.

Respondent Kennecott has petitioned the Commission to reopen this matter for the purpose of receiving evidence on the question of whether, in view of certain alleged changes in the industry and in the economy at large since our divestiture order was entered and affinneo by the courts, reconsideration of that order might now be in the public interest. I believe this petition raises a number of serious issues that ought to be examined thoroughly by this Commission and thus would have granted it to the extent of ordering an administrative hearing on the relief question before one of our administrative law judges on an expedited basis, subject, however, to an agreement by re6pondent that no appeal would be taken from the deeision rendered by the Commission on the basis of that supplementary record. , . . p KENNECOTT COPPER CORP. 317 ;1J;") Dissenting Stateme SEPARATE STATEMENT SEPTEMBER 4, 1975 By ENGMAN Chairrnan.

In ruling on a similar petition to reopen filed by Kennecott approximately one year ago, I stated:

Although the Commis"ion has decided to deny the petition to reopen the Commission order of divestiture in this matter, this action does not deny recog-nition of the importance of the ultimate question that wi\! eventually confront lhe Commission whether rliwstiture under a plan to be submitted by respondent wi!1 accomplish not only separation of Kennecott's ownership and control over Peabody, but also continuation of Peabody "as a going eoncern and effective( competitor in the mining, production and sae of coaJ" as provided in the Commission s order. This question - which in my view is the crucial question underlying the issues that have been argued to us on this petition cannot be determined now but must await completion of steps by Kennecott to develop an appropriate divestiture plan for Rubmission to the Commission. Nothing in the present petition causes me to believe that the situation is any different today than it was a year ago. DISSENTING STATEMENT SEPTEMBER 4, 1975 BY NYE Contrru:ssioner.

I continue to believe these proceedings should be reopened for the purpose of assessing the changes in the structure of the coal industry which have oceurred since the Commission filed its original order in this case over four years ago.

During just the last year, every government and private study of the national energy problem has concluded that the energy needs of the country can be met only by a massive increase in coal production.' The Federal Energy Administration has begun to order public utilities to convert their generating plants from oil and natural gas to coal.' More large oil companies and public utilities have entered the eoal industry. The most recent production statistics indicate that 20 percent of the total industry production of coal was produced by firms which were either not involved in coal production, or only negligibly so, when the Commission entered its original order.

It thus appears indisputable that, since the Commission last examined the facts, the need for coal has inereased dramatically, concentration in the coal industry has declined markedly, major companies have aggressively acquired and begun to exploit coal , E.I/- N:ltional Plan for Energy-y Re "ar"h, Development and D"monstration. Prepa.red by 1J", Ener y R..sea.reh and Development Administralion. at the direction of C"ngTess, r,'leas..d by the Pr"sid..nt "n . June :m, 197. , Wall SI"",,'J /111' July . 1975 e: , column :JI8 FEDF:RAL TRADE COMMISSION DECISIONS Order 86 F.

reserves, and the feared entrencbment of Peabody s dominance of the coal industry through Kennecott' s ownership has not materialized. There is no suggestion that any customer, competitor, or potential purchaser of Peabody will be prejudiced if the Commission undertakes the requested reexamination. Therefore, I find no substantial public interest to weigh against the benefit to be derived from examining the evidence concerning current developments in the coal industry. I would grant the petition to reopen.