The Orconera Iron Ore Company Limited was incorporated in London on 17 July 1873. On the 1st of the same month, its representative had signed two contracts with the company Ybarra Hermanos y Compañía for the lease of a mining railway concession and several important mines, which were ratified in Bilbao before the notary Serapio Urquijo on 23 September 1874. The company's share capital was set at £200,000 and divided into 20 shares of £10,000 nominal value. Three major European steel companies, the British Dowlais and Consett and the German Krupp, subscribed a quarter each. Ybarra Hermanos y Compañía kept the remaining 25%, i.e. 5 shares representing a capital of 1,250,000 pesetas. In fact, the initial agreement to set up Orconera was agreed in 1872 Dowlais and Ybarra on a 50/50 basis, but Consett and Krupp were finally given entry. In 1879, bonds were issued for a value of 150,000 pounds at 7% annual interest for 9 years, which were subscribed by third and equal parts by the foreign partners and redeemed in 1888 (Archivo Foral, Fondo Ybarra, file 2015/09).
The aim of the Orconera partners was the same as that which shortly before had driven the creation of Bilbao Iron Ore and Luchana Mining, and which would lead to that of Franco-Belga a few years later: the backward vertical integration of the European iron and steel companies with the mines of the Vizcaya ironworks, in order to obtain at low prices and, above all, in a safe and regular manner, the supply of phosphorus-free iron ore they needed to manufacture the ingot for Bessemer steel with which to feed their newly-established converters (Escudero, 1998: 182-6). From 1876 it was agreed that each foreign partner would receive 200,000 tons a year, and the Spanish partner 100,000 tons for its Baracaldo factory, at the preferential price of one shilling and 7 pence - about 2 pesetas - above the cost of production. In 1882, the Ybarra family transferred this contract to Altos Hornos de Bilbao in exchange for half a peseta per tonne supplied (Archivo Foral, Fondo Ybarra, file 2087/01).
Orconera was also set up to take over the Ybarra mining railway concession. In this sense, the three partners of Ybarra Hermanos y Compañía, Juan and Gabriel Ybarra and Cosme Zubiría, rewarded their first-born sons by leaving in their hands the fulfilment of the formalities required to obtain the concessions for the railway and an ore loading bay in the Nervión estuary from the authorities. In this way, José Antonio Ybarra Arregui, Fernando Luis Ybarra Arámbarri and José María Zubiría Ybarra obtained fabulous profits with just the effort involved in making several trips to Madrid and London and, above all, controlling the movements of the people sent to the Spanish capital to obtain permission for the loading bay and the exemption from customs duties for the railway material. 1871 and 1873, several future directors of the Orconera and a group of deputies worked under the orders of José Antonio Ybarra to achieve both (Archivo Foral, Fondo Ybarra, file 2065/01).
The railway line had been d of public utility in November 1871 by the Civil Governor of Biscay without major problems after a favourable report by the engineer Ignacio Goenaga, in order to facilitate and speed up the necessary expropriation of the land through which the line was to pass. The new line would run ‘from the Orconera and El Espinal mountains to an anchorage at Luchana, with a branch to the Carmen factory’. The engineer in charge of the plans and the works was Pablo de Alzola y Minondo, who accompanied Fernando and José Antonio Ybarra on one of their trips to England, and who was assigned an annual salary of 15,000 pesetas for two years in May 1872. Two new branches were also quickly approved and the use of the left bank of the Nervión as it passed through Luchana was granted for use as a wharf (Archivo Foral, Fondo Ybarra, files 1999/12, 2012/02, 2086/02, 2086/05 and 2087/01).
The Orconera company leased the railway concession in June 1873 and took charge of its construction. The price it agreed with the three concessionaires was 4 pence - about 0.4166 pesetas - per tonne of its own ore transported, with an annual minimum of 1,666 pounds sterling, and a staggered remuneration was established for the ore of others. The mining lease was even more remunerative. The brothers Juan and Gabriel Ybarra and their brother-in-law Cosme Zubiría leased the very important mines called Orconera, Carmen and Previsión, as well as others of lesser rank such as Magdalena, Concha and half of César to Orconera Iron Ore for a fee of 8 pence - some 0.833 pesetas - for each tonne extracted, and a minimum annual fee established at 3,333 pounds sterling. To these six mines, three excesses were added - to Carmen, Magdalena and Previsión - on 18 June 1881 and the fifth part of the Trinidad mine on 21 December 1883 (Archivo Foral, Fondo Ybarra, files 2012/02 and 2016/08).
The company tried to start its activity and extract ore already during the civil war, using its influence over the Carlist chiefs Dorregaray and Cástor, but it was forbidden to use drill holes (Archivo Foral, Fondo Ybarra, file 1601). As a result, it began regular production once the war ended in 1876, extracted 452,000 tons in 1880, rose to 629,000 in 1885 and reached almost a million tons in 1890, maintaining this level at least until 1900 and becoming the first company in the sector without any close followers except for José Martínez Rivas. 1876 and 1936, it produced one fifth of the iron ore from the Biscayan deposit, forty million tonnes out of a total of approximately two hundred (Escudero, 1998). The company was undoubtedly a success for two reasons: it fulfilled its most ambitious objective, which was the regular and cheap supply of ore to the foreign iron and steel industry, and it generously remunerated the capital invested.
The magnitude of the profits achieved by the Ybarra family in the Orconera business exceeded even their own forecasts, according to their testimony. Juan María Ybarra wrote in his will that the mining railway had yielded ‘substantial returns which at first could not have been suspected’ (Archivo Foral, Fondo Ybarra, file 2302/03). 1876 and 1930, the family group obtained a sum of approximately 80 million pesetas mining and railway royalties and dividends from their 25% share in the company's capital. A further 20 million came from Franco-Belga. However, this round figure of one hundred million, to which a further fifty million should be added from its steel activity, was distributed among numerous heirs based in various Spanish regions and cities who had ceased to behave as a unitary investment group except for the receipt of these revenues (Díaz Morlán, 2002: 156-9).
On another level, the Orconera played a fundamental role in the social conflicts in Vizcaya and in the development of the socialist movement. The famous strike of 1890, which ended with the acceptance of the workers' demands thanks to the decisive intervention of General Loma, began on 13 May with a group of two hundred workers from Orconera, which spread to the neighbouring La Arboleda mines and then went down to Gallarta and Ortuella, a town where 7,000 and 9,000 miners gathered the following day. When the Sestao and Baracaldo factories were added, the number of striking workers rose to 30,000. It was then that the socialist party, with Facundo Perezagua at its head, took over the leadership of the protest movement, but the arrival of the army put an end to the intentions of marching on Bilbao. In exchange, Loma forced the bosses to sign a pact with the workers' representatives abolishing the compulsory use of barracks and reducing the working day in the mines to ten hours (Fusi, 1975: 87-94).
That was a famous occasion that was remembered for years and which spread the feeling among the miners that organised militancy was unnecessary to achieve the desired improvements, which hindered the extension of the trade unions in the mining area. Since 1890, and except for the not so important protests of 1892 and 1903 - the first of which also arose spontaneously in the Orconera - Vizcaya did not experience another conflict of similar importance in the mining area until 1910. On 15 July of that year, the workers went on strike and demanded a nine-hour working day. The Association of Mining Employers refused to give in and the struggle dragged on for almost two months, until on 6 September Martínez Rivas made it public that he accepted the workers' demands, an attitude copied by Horacio Echevarrieta the following day. This position broke the employers‘ unity and undid their strategy of resisting the workers’ pressures, so that the strike was won by the workers when the employers accepted their demands on 20 September. It should be pointed out that both the main mines of Rivas -Unión and Amistosa- and that of Echevarrieta -La Parcocha- were enclaves surrounded by the Orconera mines, in the central area of the farm, next to La Arboleda. What happened there necessarily affected the working conditions of the whole mining area.
The 1910 strike was the greatest moment of glory for the socialist leader Facundo Perezagua but, after the First World War and his replacement by the more moderate Indalecio Prieto, relations employers and workers during the 1920s and 1930s until the outbreak of the Civil War were characterised more by negotiation than confrontation, both in mining and in industry in Vizcaya. Orconera continued to maintain its hegemonic position in the production of ore in the province, employing a quarter of the workers at the Somorrostro iron ore mine: 1,700 out of a total of 6,900 in 1924 (Olábarri, 1978: 454).
The export of iron ore through the port of Bilbao remained at the same level during the Civil War as in the previous years, at around one million tonnes -slightly less in 1937-, and fell during the Second World War. The combined production of Orconera and Franco-Belga 1938 and 1955 ranged half and two thirds of the province's total. The deposit ed clear signs of exhaustion, but there was still room for business, as the iron and steel industry still demanded the nearby ore to supply itself, despite the fact that most of its needs were covered by the ore coming from the Rif and other places. Altos Hornos de Vizcaya, which had already bought the Orconera shares in the 1940s, took over the rights to the mines in the 1950s for 21 million pesetas. Until then, it had continued to pay the rental fee to the numerous heirs -more than a hundred- of those Ybarra who signed the old leases in the 1870s (Díaz Morlán, 2002: 282-3). Finally, in 1968 AHV converted all its mining interests in Biscay into a subsidiary called Agruminsa, which survived with not very high annual productions - around 200,000 tonnes of iron content in the last years - until it was decided to close it down in 1993.
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