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December 14, 2016
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March 1, 1999
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December 15, 1953
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Approved For Release 2001/09/11: CIA-RDP80-00809A000500330027-3 U.S. Officials Only CONFIDENTIAL CENTRAL INTELLIGENCE AGENCY INFORMATION REPORT SUBJECT Fantors Affecting Future of US Copper Companies/New }Linoral Pos aibilities/Conviuniat Influence in Nitrate Fields/Man in the Street Opinions PLACE ACQUIRED (BY SOURCE) DATE ACQUIRED (BY SOURCE) DATE (or INFO.) Sep 52 to Sep 53 r>,1 >ocu$twl cor r.lw. ur>.$?1,0> .ntcl~.o r>I w?*, rw.1 .v u11 or 00* ~0,rtO 111011. .,101.001$1.0100 0r 111.1 ,I. .1011000 101 ?,0 r .r 104 ..I 0001. ?I ?$1,310. ,rI 1..0I$,II,0w 0. .[r[. L?1,0010* , V. 000X0?, 00 0? .101(9? 1? II u?U100t( tI RI10, ,I DATE DISTR. /5 Dec 53 NO. OF PAGES 3 NO. OF ENCLS. SUPP. TO REPORT NO. 1. An inoraaso of Chilean administrative controls over US-owned copper companies, and oven the possible nationalisation of those oompenles, is a favorite topic of convoroation among Chileans connected with the mining industry. If I wore a US amier of a copper company in Chile I would be nervous about the under- ourrunte I found during my year in Chile affecting the statue of foreign copper interuets. Thn Chileans are watching both Peru and Bolivia very closely for signposts of the future. If Bolivia makes a reasonable success of its tin industry, thoro is no doubt in my Judgment that the US copper companies will be in trouble. 2. The Peipoto copper smelter is instructive. The Chilean Government put up the funds to build It, and when it was found that the smelter was not getting the needed ore, copper ore concentrating mills were constructed to keep it supplied. Then it. turned out that there was enough not enough ore to keep the concentrating mill* busy, and an several popper mines were bought. The whole operation is still small but the pattern is potentially dangerous to the U8 firms. All of the output of the Paipote smelter, which is run by a Ahito Russian named Zaue uivitoh assisted by a German and a Yugoslav, is being sold to Ooraasp 'CMeral Ropublio). I did not learn the identity the German oonsignee(s) but the sales are being negotiated in Santiago by a P aipote smelter representative and I think the prior, an of September 1953, was US 32 cents a pound. The smoltorta Capacity is 50 tons a day. Gold and silver in the ooppor is being recovered In Germany. 3. I hoard nothing to indicate Chilean ooppor sales to other countries or the possible trwsahlpmont to the Soviet bloc of the copper which in being sold to Germany. But neither did I observe anything suggesting that the Government is eonoarnod about transshipments or has established machinery to prevent or discourage it. LQy contacts with Chilean officials convinced me that price alone will dotormino copper polioioc. If the Chileans fool they oar got more for their copper, they will do the thing which they believe necessary to got it. 0^'7FIDRNTT at L A T P A GE FOR S i.l .JriCT & AREA C. This report Is for the use within the USA of the intelligence components of the Departments or Agencies indicated above. It is not to be transmitted overseas without the concurrence at the originating ofllce througl, the Assistant Director of the Office of Collection and Dissemination, CIA. Approved For Release 2001/09/11: CIA-RDP80-00809A000500330027-3 Approved For Release 2001/09/11: CIA-RDP80-00809A000500330027-3 f~jXq%ng are acme of the presently unexploited miner Cbile (a) Some years ago a copper dopoeit in the Collahuasi area was mined by a UK firm which abandoned operations when the copper content of the ore deolin5d to 20%. This deposit and several others like it in the sans area are available for additional economic exploitation. (b) A Canadian firm has located popper along the coast north of the Camarones River. My understanding is that these are good sized deposits with attractive profit possibilities given a stable political outlook over the next few years. (o) Mining geologists are generally agreed on the strong possibility of tungsten and .. yh ltrun 'nposits in Qrue. (d) Vary good lead deposits have been found in southern Chile in the Puerto Aysen area. I hoard indirectly that there was a chance of other mineral deposits in the area but I did not hear what they might be. The lead findings here and the possibility of additional ores has exacerbated Chilo9s occasional border difficulties with Argentina. Lake Buenos Aires outs across the boundary at this point and there are intermittent border skirmishes which the Chilean Government has been afraid to publicize. (a) A Chilean acquaintance mentioned casually to me that there are uranium prospects in the Andes, but he volunteered nothing beyond that and I did not see fit to press him. 5. Oommnanist agitation is fairly heavy in the nitrate towns of northern Chile where the people, extremely poor and discontented, are in a mood to listen to anything. Communist agitators are also working over into the popper areas. The walls of buildings in the northern towns are plastered with Communist posters calling for nationalisation of mines (an issue on which the Communists can make town cause with some anti-Oonmmnist Chileans), and attacking int1 tion and crooked politicians. I suspect the Ooaunists are rather strongly ent-,mohed in the nitrate unions and panibly in the copper mining unions as well. The Chilean Communists in the mining areas employ the baser and sickle as a revolutionary symbol but make no attempt to sell the USSR or eq other Oommmnist country to the people. Occasional demonstrations organised by the Communists are quickly broken up by the oarabinieri. My general lapression, besed on considerable contact with the people in small. towns throughout Chile, is that the Communist campaign has thus far been really effective only in the nitrate fields. He thinks all US citizens are millionaires and he neither likes nor dislikes them. 1:1NF.T.DERI:?A'~J~g1r~:ICIAIS ONLY I- - Approved For Release 2001/09/11: CIA-RDP80-00809A000500330027-3 P Approved For Release 2001/09/11: CIA-RDP80-00809A000500330027-3 C1 7FILEIMA1/US OFFICIA '-,Z'1 He is disappointed that IbGioa has failed to nationalise parts of the ooonoay, in contrast to the wealthy Chileans who continue to fear that Ibanez may do no. He wants a land reform program, if he is a farmer. He worries more about the price of copper than about anything also. His second greatest worry is inflation. He has practically no interest in international affairs outside the Western hemisphere and he has no idea as to what the Korean War has all been about. But he )mows there has been trouble in a place called Korea. He is interested in affairs in Venezuela, Colombia, Brazil and the other Latin American republics and is not badly informed on these planes. A surprisingly large number of Chilean work-era have radios. -end- L I F3 PA R Y SLIB.IECT .8a AR'EA.? CODES 779.4 8/732.08 1J 1J 5/732.08 Ii 1/732.08 Ii 1/732.09 1J 111.5 1J 114.577 IJ 890.4 1J 890.6. IJ(IH) L- Approved For Release 2001/09/11: CIA-RDP80-00809A000500330027-3