The way Alexandria Mayor Charles E. Beatley Jr. sees it, operators of a 50-year-old business in his town do not understand the difference between a junkyard and a gold mine.

The operators say the trouble is that his honor believes their junkyard is the gold mine, containing some of the most valuable -- and undeveloped -- real estate in the Washington area.

Yesterday Ralph Powell, the yard's foreman, stood by a car shredder that loomed against the blue sky, and spoke for many of the Alexandria Scrap Corp.'s 50 workers.

"I'm 47-year-old and I've got a 7th grade education. If I lose this, there aren't nothing I know to fall back on," he said. "They don't care about the working man who's out there paying taxes and trying to help himself."

What has infurated Powell and scrapyard president Stanley J. Asrael is that Beatley has eyed the scrapyard, located in the city's Cameron Valley between Duke Street and the Capital Beltway, as a prime site for a high-rise office complex. The yard is near a future Metro station and, as Beatley puts it, a junkyard "is not compatible to the future usage" of the area.

Operators of the junkyard, which has been there since 1963, think otherwise and have been fighting City Hall's efforts to strip them of their needed permits with a barrage of press releases and other tactics. On Saturday the debate will come to a head when the Alexandria City Council holds a hearing into charges that the yard has violated city codes by not fencing its land and by allowing scrap to accumulate nearby.

"We've known a long time that the neighborhood was going to change, and that future land use was not for that type of low-level industrial operation," says Beatley.

Scrapyard president Asrael acknowledges that the area is changing and that he is going to have to move sometime -- but not now. He says he cannot find a new site and is fearful that a sudden rejection of his permits would put both him and his 49 employes out of work.

In his press releases, Asrael has extolled the virtues or an urban junkyard, borrowing his rhetoric from environmentalists. "Of special note in these days of energy, natural resources, and pollution awareness, the City Council should know of our unique value to the community through our ability to grade and shred various recyclable metals for the community," he says in one.

He also voices concern that his business is being attacked because it is a junkyard. "I'm concerned that a business that makesa an important contribution to the area is being forced to move because it can't compete with the glamour and allure of new office buildings," he says.

Asrael and his workers say that the firm handles 80,000 tons of scrap a year and provides a valuable service to the city by getting rid of and recycling everything from newsprint to beer cans and washing machines. The yard handles the "things that just used to pile up in the fields and on the street corners," says foreman Hubert Carr.

The owners of a new office building near the scrap firm complained to the city's zoning administrator about the yard last spring. "All of a sudden, large numbers of scrapped automobiles began appearing immediately adjacent" to their building, according to J. Howard Middleton, attorney for the Tavern Square Corp., owners of the highrise.

Middleton contends that his clients were damaged by a pile of crumpled cars when a national association, which tentatively had agreed to move into the building, suddenly changed its plans.

Charles Moore, Alexandria's zoning administrator, then cited Alexandria Scrap Corp. for having no fences around parts of its complex and for using land not specified by its permits. When the firm failed to comply after 60 days, Moore took the cadse to the city attorney.

Yard president Asrael contends that use of the extra land and lack of fences, went on for years without any objections from the city. "Everyone knew we were using it," he says.

Asrael also says that his firm applied for a new permit in October, outlining elaborate plans for landscaping the area to make it less unsightly.

The current city code requires only an eight-foot high fence, which would cost the firm about $10,000. Asrael says he is willing to build an eight-foot berm, with an eight-foot fence on top of that, as well as to plant trees and shrubbery at a cost of between $40,000 and $50,000.

In any event Asreal acknowledges his firm's days in Alexandria are numbered. The Southern Railroad, which owns the land, has indicated that