832.2546/6–2251: Airgram
The Secretary of State to the Embassy in Brazil
A–87. Reference is made to Embassy’s despatch 1932 of June 22, 1951,1 and the Department’s telegram No. 26 of July 6, 1951.1 While regretting the delay thus entailed, it was felt that careful consideration was required for the suggestion contained in enclosure No. 1 of the cited despatch, that the US state precisely the kind of aid it is disposed to lend to Brazil in line with the commitments undertaken in the aide-mémoire of April 10.2
Generally, the US is prepared to consider any reasonable request directly related to assisting Brazil to meet its commitments. These involve primarily (1) the ability of Brazil to produce sufficient crude monazite to meet domestic requirements in Brazil and to ship to the US 2500 tons during each of the three years of the Agreement; (2) the ability of Brazil to process sufficient monazite to produce 2500 tons of rare earth chlorides annually during the three year period.
While the US Government is prepared to implement its commitments under paragraphs C and D of the aide-mémoire, it is difficult if not impossible for the US to indicate in any detail the nature of the aid it is prepared to give, since there is no information at hand to indicate what may be needed by Brazil to carry out the commitments it has undertaken in the aide-mémoire.
It is suggested, therefore, that the Embassy, utilizing personnel presently available, explore with appropriate Brazilian officials the question of required assistance in an effort to define the general areas in which help will be needed. If desirable, specific questions may be referred to the Department for appropriate handling. Where the situation requires it, consideration will be given to sending to Brazil a technician well qualified to deal with the particular problem presented.
It is suggested that the first point of attack on the problem in Brazil might well be the production of adequate quantities of the raw monazite, which will form the basis for the processing in Brazil and at the same time permit a start to be made on the shipments of monazite to the US. It may be added that the US Government is prepared now to enter into discussions with appropriate Brazilian authorities, looking to the prompt purchase by the US of all thorium residues which may be available in Brazil.
For Embassy’s information only, while the US is prepared to carry out its obligation under the aide-mémoire to assist Brazil in expanding its monazite processing facilities, and to purchase annually for a [Page 1208] period of three years, 2500 tons of rare earth chlorides produced in Brazil, some thought has been given to the possibility that in meeting this demand, Brazilian processing facilities may be built up above a level which could be economically sustained after the expiration of the US purchase commitment. If, as now seems likely, the US requirement for rare earths can in a matter of two years be met entirely from raw materials produced in the US, the Brazilian market for this product will be considerably diminished after the US purchase obligation expires. In this connection, if it seems helpful to the Brazilian authorities, the US would undoubtedly be prepared, while purchasing the raw monazite on schedule, to consider extending beyond the contemplated three years, the period during which it will purchase from Brazil the total of 7500 tons of rare earth chlorides now planned to be delivered within three years.
If, in its preliminary determination of the kind of assistance needed from the US, a loan appears likely, it would be of some significance to know whether such a loan would probably be made to or guaranteed by the Brazilian Government.3
Acheson
- Not printed.↩
- Not printed.↩
- See the enclosure with Ambassador Johnson’s note to Brazilian Foreign Minister Neves da Fontoura, June 11, 1951, p. 1201.↩
- The substance of this airgram was incorporated into note No. 97, dated August 21, 1951, and handed to Minister Bueno do Prado on the same date by Mr. Mills at the Embassy in Brazil (Rio de Janeiro Embassy Files, Lot 61 F 30, Box 127, Folder 523.5). The Department of State files indicate that the Brazilian Government did not formally respond to this note.↩