MEMO FOR THE CHAIRMAN OPERATIONS COORDINATING BOARD FROM ARTHUR S. FLEMMING

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80B01676R001100090111-0
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 11
• Document Creation Date: December 19, 2016
• Document Release Date: January 11, 2006
• Sequence Number: 111
• Publication Date: March 8, 1955
• Content Type: MF

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J. tentative estimate of loc imports L I 1953 of all forKis of copper suggests
-ini.mua'a of 110,000 tons,, rising to 125,000 tons in 1.954. These estimates are
currently being reviewed
tiji 4-
visedj subsequently.
19541
one halt of the 1954 imports occurred after 16
ro11owing the removal of uncovered copper wire from c, ba.rgo.
Chilean copper moves fro C n.lean ports to 14est :uropeal refineries and/or
`.jest iropean ports for onward shipment to the Sloe.
mexican copper moves
in a similar pattern. Although the Belgian Congo and &iudesia are important
producing areas only a few reports identify copper from ,,his origin as moving
the Bloc via 1 uropean r'ree =orts. 'Ili* flow o ? Turkish copper bound for
the Bloc via test ?uropean Free ;worts diminished after '. urkey entered CoCt
tear :astern copper scrap is
shipped to the Bloc from the Mediterranean to the Black ..: ea ports.
354,,000 Metric '}ores (.iecover.aole Copper Content
of ore) 14.3% of Free . orld 'roduction
knd St ate esery e
tad strategic stoc=. piles in tl1e 113SFi are 240,(X0 metric tons
uraile operationad reserves and inventories total 175,E tons. Total Bloc
eonswaption (including additions to reserves) exceeds total current pro-
duction, the USSR plans to increase co or production in the current five
year plan. Soviet resources for such an expansion are limited and the plans
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a not being fulfilled. This failure assumes additional significance when
it is realized that soviet planners apparently set the planned rate of growth
for the copper producing industry at a slower rate than the growth rate
planned for copper consuming industries. Thus, even if planned growth of
the copper industry was realized, there would still be a gap between pro-
duction and consumption through 1960.
It is difficult to measure, precisely, the contributing effect Bloc
demand has had on the recent world increases in copper prices. he-labor
33trikees in mining and shipping were major contributors to the increase but
it is the consensus of market opinion that the pressure of Bloc bids has
ed a significant part in increasing copper prices.
It is possible that future sloc de4 ands will have some impact on
copper prices. The President's Materials Policy Commission concluded in
1952'that the normal growth of free Vorld needs for copper in the period
through the mid 197O's would require a very large investment effort. Known.
copper resources are ample to take care of any foreseeable needs, but
r or exrusnle, One
market service reports standing Bloc bids in 1 urope at four coats per
pound over the market.
r development and exploitation will at most keep pace with growing-
demand., and more probably will lag slightly behind that growth due to
hindrances to investment in tho underdeveloped countri-Is in which the
bulk of the resources are found. It is therefore reasonable to conclude
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SECRET
that any superposition of Bloc demand on the i'ree World copper market during
the next decade or so would serve to maintain copper at E. relatively high
and any serious Bloc deficiency in copper over the, long term could
well produce temporary but serious spot difficulties and promote general
instability in the world market.
d co or itineProducon _`cop]-)er content of ore) 1;5
'housand Metric
Tons
ercent
'total
United States
361
34.7
Northern Rhodesia
15.3
Chile
364
14.7
Canada
230
9.3
Belgian Congo
214
8.6
co
64
2.6
Japan
58
2.3
1l others
309
12.5
Total Free World
2, 4800
Current a-o i,, on
Embargo on cop Tar and coi per rase alloys in Lhe t,orm of ores and
concentrates, scrap, metal, and semifinished products. `:urvei.llance on
>zncovered wire and cane and on insulated single strand conductor wire of
0.014 inch or less diameter. No control of other insulated wire and cable*
liecez t Chars: ss
The items now under surveillance were under cozirlete embargo until
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16 August 1954.
From Froe i or1 )
ric Tons tderegnt i't~trsl
0 0
imports
820
100.2
ounted to about of 1 percent of Free iorld production.
There are diversions of nickel sulphate into the ?31oe in addition to metallic
nickel. The total nickel content, of these imports is small in comparison
with the USSR nickel supply, although they represent an important source
to some of the Satellites. The usual route of diversion to the Floc is via
moved by truck from West to last German . Japanese traders have been
Free Forts. In addition, it has been reported that shipments
Tnentioned in a few instances.
Bloc Production
atric tons
Percent Total
45,000
99.0
atellites
500
1.0
Bloc
45,500
100.0
It is estimated that Bloc production is sufficient to take care of
m;inimir essential requirements but that in the event of the removal of
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trade controls on nickel, a .31oo buying campaign would ensue for the purpose
of adding to strategic reserves and for expansion of industrial uses.
D,
Frye World Pr c fiction
Canada
145,000
82.0
Cuba
15,000
8.5
New Caledonia
15,E
8.5
Other
I'm
X
5
Total Free World
176,900
100.0
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:d bargo on nickel and nickel base alloys containing 30% or more nic
in the form of ores and concentrates, oxide and scrap, otal, semifinished
ducts, and poor. Nickel -bearing steels contains 35% or More Of
s are also embargoed.
nt itative control on niac *I-bearing alloy stools having a nickel
of 6% or more and a combined nickel-chromium content of 22% or amore;
including steel tubing of specified sizes with the above ranges of nickel
contents.
ftrveillanae of nickel-bearing alloy steels containing or sore nicks
and of rings containing 30% or more nickel.
Tree Oha x -e as,,
Fowler,, now embargoed, was not controlled until recently. Rings formerly
embargoed? are now only partially under aurveilllane. Current control of
tainless steels vas established in 1954.
Prom Lr ' nr1_d : 200 tons
Bloc offers of premium prices for Free 1orld cobalt are indicative of at
s of cobalt. Cobalt i+orted by the Bloc during 3.
ad mainly at two refineries, ova in vest Oerma-V and the other in
The pattern of diversion involved sales to a wise f and subs 3 nt
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tray ehipr nt via Antwerp and Rotterdam. SmRller lots of cobalt have been
d via Sw.Ltzerland and Italy
m 1910 tons
oc COnsuttiOf_ and Strategic Rese
No available estimates on consumption and strategic reserves,
Df
trio Tons
Total
Australia
11
?1
Belgian Congo
8x279
69,0
Canada
796
6.6
Finland
900
6.7
Italy
33
French Morocco
600
5.0
rn. Rhodesia
677
5.6
United States
895
TOTAL
12?000
100.0
Embargo on ores, metals.. certain compounds and alloys,, and scrap
Null
The Bloc l ipor?ted a small arxunt of aluminum in 1953 (about 18$000 tons
from Nor y, Soma of this amount was unsorted in excess of COCOM quotas.
is generally adequate for 33loc needs and the small
obab]y the result of political considerations and local demand
as of the Bloc.
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COLUI.BIJAM AND TANTALUM
iac is not known to have imported either of these metals.
not possible to ascertain whether this is due to lack of demand for external
supplies or to the embargo placed on these m tals,
;scion on multilateral payments possibilities in
trade, If, ho-mver, a particular country experiences chronic
difficulty In balanring accounts with each of its trading partners, it has
ted possibility of benefiting from an increased i`1rx:ibility in
international payments. The Satellites have shown a tendetxy to be in this
position,
Yuld ha
quently? increased facilities for multilateral settlements
practical effect or,, if accompanied by credit provisions
as part of the settlement mechanism? *uld give rise to chronic debtor posi-
tions on the part of Eastern European countries, the other hand, muti-
lateralism presents certain risks for countries in a k competitive position.
They ray prefer to adhere to bilateral trading methods as a means of pushing
-their exports in return for their imports.
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