Foreign Relations of the United States, 1948, The Western Hemisphere, Volume IX

811.20 Defense(M)/2–1748

Memorandum by the Assistant Chief of the International Resources Division (Anderson) to the Director of the Office of American Republic Affairs (Daniels)

confidential

[Washington,] March 12, 1948.

Subject: Latin American Supplies of Strategic Materials.

I regret that other (and heavy) demands on my office have prevented an earlier response to your memo to Mr. Cale,¹ dated February 17, 1948² requesting an account of materials which might be procured for the stock pile from the other American Republics. It is now my understanding that the National Security Resources Board in cooperation with the personnel of the Munitions Board and the Bureau of Mines is engaged in a comprehensive study of the stock piling program, including a review of the potentialities of the Latin American countries as contributors to the strategic stock pile. (I further understand that the NSRB will transmit to the Department a statement indicating whatever particular barriers may be inhibiting the increased procurement of materials from these sources.)

In view of the initiation of these studies, this division will not attempt, other than a general—and admittedly sketchy—review of the problem at this time.

I attach, with the anticipation that the material will have some value in connection with your preparations for the Bogota conference, the following:

1. A list on a country basis, of the principal strategic materials produced in the Latin American republics.

2. Brief comments regarding the problems relating to certain strategic material production situations.

3. Estimates of the amounts of stock pile funds which might be expended in 1947 on the principal strategic materials produced by Latin American countries, assuming that there is a marked loosening of supply with respect to copper and lead during the interim.

Appendix I

List of Principal Strategic Materials

Countries	Principal Strategic Materials
1. Argentina	Quebracho (extract)
	*Lead
	*Beryl (production now dormant)
	Tung Oil
	Tungsten (concentrates)
	Zinc (in concentrates)
2. Bolivia	Antimony (in ores)
	*Copper (in ores and concentrates)
	*Lead (in ores and concentrates)
	Zinc (in concentrates)
	Tungsten concentrates
	*Tin (in concentrates)
3. Brazil†	*Beryl
	*Manganese ore
	*Mica, block and film
	Quartz
	Tungsten
4. Chile	*Copper
	Iodine
	*Manganese ore
	Sperm Oil
5. Colombia	Platinum (crude alloy)
6. Cuba	Manganese ore
	Copper (in concentrates)
	Chromite, metallurgical grade
7. Mexico	Antimony (in ores)
	*Copper
	*Lead
	Zinc (metal and concentrates)
8. Paraguay	Quebracho (extract)
9. Peru	Antimony (in ores)
	*Copper
	*Lead
	Vanadium (in oxide)
	*Zinc (in concentrates)

Appendix II

Comments on Certain Material Situations

Antimony—Chinese production is rapidly increasing and good progress is being made toward stock pile objectives. Procurement of about 4000 tons annually for the next three years may mean about 2000–2500 tons per year from Latin America.

Beryl—Argentina applied an embargo on exports over a year ago causing almost complete cessation of beryl production. Prospects of securing removal of embargo regarded as very unfavorable. Brazil continues production at a moderate rate but U.S. industry and stock pile could absorb up to 2000 tons additional per year for next five years.

Chromite Ore—The objective for refractory grades has been fulfilled. A limited quantity of higher-grade Cuban ores are a possible procurement item for the stock pile.

Copper and Lead—Indications are that the Munitions Board will buy any foreseeable surplus of these metals which may become available in Latin America during the next five years. Total purchases may total $200,000,000 in the case of copper and $75,000,000 for lead. These two items are, by far, the most significant with respect to Latin American strategic material production contributions.

Iodine—Two-thirds of the total objective is filled. A limited amount may be purchased from Chile in future years.

Quehracho Extract—World source is River Plate area where production is approx. 80% from Argentina, 20% from Paraguay. Stock pile purchases are currently about 10% of total exports of 350,000 tons annually and may be expected to continue at that a somewhat decreased rate for the next two years to attain objectives.

Tantalite—A large part of the objective will be attained through expected surplus transfers.

Tin—At present, stock pile purchases are not possible because of a world-wide shortage. This shortage is expected to continue through this year and possibly through 1949. Bolivian production of concentrates, in part, is being supplied to the U.S. tin smelter under a RFC contract with Bolivia which extends until December 31, 1949.

Tung Oil—New sources developed in the U.S. have increased production to point where strategic nature of commodity is open to question. Munitions Board not purchasing pending review of situation.

Tungsten—Due to transfer of large stocks to stock pile from RFC surplus, Muntions Board will defer purchase of tungsten for several years—and then will expect to buy at prices that may be uneconomical to most Latin American producers.

Vanadium—The objective has been substantially attained through recent domestic purchases.

Zinc—With the exception of Mexico, the Latin American countries produce no metallic zinc. Zinc concentrates are in abundant supply and the Munitions Board is probably not interested in purchases other than those of high-grade slab zinc.

Appendix III

Indication of Amounts of Stock Pile Funds Which Might Be Expended on Procurement of Certain Selected Strategic Materials Produced by Latin American Countries

(Annually for Number of Years Shown)

Material	Sources	Estimated Quantity Annually	Estimated Value Annually	Yrs
Antimony	Bolivia, Mexico, Peru	1000 sh. Tons	$600,000	2
Beryl	Brazil	1000 sh. Tons	$200,000	5
	Argentina (?)
Copper	Chile	50,000–100,000 sh. Tons	$20,000,000 to $40,000,000	5
	Peru	5,000 sh. Tons	$2,000,000	5
	Mexico	5,000 sh. Tons	$2,000,000	5
Lead	Mexico	20,000–50,000 sh. tons	$6,000,000 to $15,000,000	5
	Peru	5,000 sh. tons	$1,500,000	5
Manganese ore	Brazil	50,000 l. tons	$1,500,000	5
Mica	Brazil	1,000,000 lbs.	$4,000,000	4
Quartz	Brazil	700,000 lbs.	$5,000,000	2
Quebracho	Argentina	20,000 l. tons	$4,000,000	2
	Paraguay	5,000 l. Tons	$1,000,000	2
Sperm Oil	Chile	1,000,000 lbs.	$250,000	4
Zinc	Mexico	5,000 sh. Tons	$1,200,000	5
		Totals (Upper range)	$78,250,000
		(Lower range)	$49,250,000

1. Edward G. Cale, Associate Chief, International Resources Division.
2. Not printed.
3. Materials which Munitions Board is anxious to purchase when supply permits. [Footnote in the source text.]
4. Materials which Munitions Board is anxious to purchase when supply permits. [Footnote in the source text.]
5. Materials which Munitions Board is anxious to purchase when supply permits. [Footnote in the source text.]
6. Materials which Munitions Board is anxious to purchase when supply permits. [Footnote in the source text.]
7. Materials which Munitions Board is anxious to purchase when supply permits. [Footnote in the source text.]
8. Monazite omitted because of atomic energy implications. [Footnote in the source text.]
9. Materials which Munitions Board is anxious to purchase when supply permits. [Footnote in the source text.]
10. Materials which Munitions Board is anxious to purchase when supply permits. [Footnote in the source text.]
11. Materials which Munitions Board is anxious to purchase when supply permits. [Footnote in the source text.]
12. Materials which Munitions Board is anxious to purchase when supply permits. [Footnote in the source text.]
13. Materials which Munitions Board is anxious to purchase when supply permits. [Footnote in the source text.]
14. Materials which Munitions Board is anxious to purchase when supply permits. [Footnote in the source text.]
15. Materials which Munitions Board is anxious to purchase when supply permits. [Footnote in the source text.]
16. Materials which Munitions Board is anxious to purchase when supply permits. [Footnote in the source text.]
17. Materials which Munitions Board is anxious to purchase when supply permits. [Footnote in the source text.]
18. Materials which Munitions Board is anxious to purchase when supply permits. [Footnote in the source text.]