811.20 Defense (M)/2471
Draft Proposal for the Purchase of Tungsten by the United States84
The Metals Reserve Company, hereinafter called the “Buyer”, is prepared to grant the following terms in the purchase of, receipt, and payment for the total Argentine production of ores and/or concentrates of tungsten (including wolframite, hubernite, ferberite, scheelite and complex ores of tungsten) in accordance with the terms and conditions hereinafter set forth during a three-year period provided, however, that the deliveries in any one year shall not exceed 1800 short tons of tungstic oxide (WO3), with the understanding that any deficiency under said 1800 short tons in any year may be carried over into the next succeeding year or years within the three-year period, with option on the part of the Buyer to accept, under the terms hereof, all additional tungsten ores and concentrates produced in Argentina over and above said 1800 short tons. Furthermore, the Buyer suggests that not later than six months prior to the expiration of the three-year delivery period negotiations be entered into to consider a renewal of a purchase agreement for two (2) years or more as may be agreed upon and for such yearly quantity and upon the same terms and conditions as provided in this offer except for the price thereof which shall then be determined.
[Page 366]The ores and/or concentrates delivered under this offer are to meet the following specifications and requirements and shall be paid for according to the following schedule of prices:
Class A—High Grade Wolfram Concentrates: Standard quality will be: WO3 minimum 65%; tin maximum 1.5%; arsenic maximum 1.0%; sulphur maximum 1.5%; copper maximum 0.8%, and will be paid for at $21.00 per short ton (2,000 lbs.) unit of WO3 net dry weight, on a C.I.F. New York basis.
Penalties and Bonuses: In case of deviations from the above analysis, the following penalties or bonuses will be paid:
Penalties: For each percent WO3 below 65% down to and including 60%, a penalty of $0,045 per short ton unit of WO3, net dry weight, fractions in proportion. For each further percent WO3 below 60% down to and including 55%, a penalty of $0.09 per short ton unit of WO3, net dry weight, fractions in proportion. If the WO3 content should be less than 55%, Buyers have the option of rejecting the material under this Clause, or accepting it at a mutually agreed allowance.
Tin: If tin exceeds 1.6%, a penalty of $0.03 per short ton unit of WO3 for each 0.1% tin above 1.5% will be paid by the Seller.
Arsenic: If the arsenic content exceeds 1.0% but is less than 1.5%, the Seller will pay a penalty of $0.15 per short ton unit of WO3. If the arsenic content exceeds 1.5%, but is less than 2.0%, the Seller will pay a penalty of $0.20 per short ton unit of WO3. If the arsenic content is less than 3.0% but more than 2.0%, the Seller will pay a penalty of $1.00 per short ton unit of WO3. The Buyer is not obligated to accept more than 10 tons per month of this last class of material having arsenic content between 2.0% and 3.0%.
Copper and Sulphur: Any ores and/or concentrates with content of copper above 0.8%, or content of sulphur above 1.5%, but which is not subject to the rejection options set forth below, shall be paid for at $20.00 per short ton unit of WO3 subject to the above mentioned penalties for WO3, tin and arsenic.
Rejection Options: The Buyer has the option of rejecting under Class A, or of purchasing subject to the above mentioned penalties, all ores and/or concentrates with:
- a)
- WO3 content below 55%;
or
- b)
- Arsenic content above 3.0%;
or
- c)
- Copper content above 1.6%;
or
- d)
- Sulphur content above 2.0%
Bonuses: For ores and/or concentrates which, on account of their low impurities and high WO3 contents, are better quality than standard Argentine material, premiums will be paid on the following basis: If the tin content is less than 1%; arsenic less than 0.2%; sulphur less than 0.75% and WO3 content not less than 65%, the following prices will govern:
| For | 65% | WO3 | $21.10 | $US per short ton unit. |
| “ | 66% | “ | 21.20 | “ |
| “ | 67% | “ | 21.30 | “ |
| “ | 68% | “ | 21.40 | “ |
| “ | 69% | “ | 21.50 | “ |
| “ | 70% | and over | 21.60 | “ |
Class B—Low Grade Wolframite Concentrates: Concentrates or ores containing from 55% WO3 to 30% WO3 in the form of wolframite will be subject to the same penalties for WO3, tin, arsenic, copper and sulphur, and to the same rejection options for impurities as for Class A ores and concentrates and will pay an additional penalty of $US 1.–per short ton unit of WO3. Buyer shall have option of rejecting ores or concentrates of this Class below 30% WO3.
Class C—High Grade Scheelite Concentrates: Standard quality will be: WO3 minimum 60%; tin maximum 0.5%; arsenic maximum 0.5%; sulphur maximum 1.0%; copper maximum 0.2%; and will be paid for at $21.00 per short ton (2,000 lbs.) unit of WO3 net dry weight on a C.I.F. New York basis.
Penalties and Bonuses: In case of deviations from the above analysis, the following penalties or bonuses will be paid:
Penalties: WO3 For each percent WO3 below 60% down to and including 55%, a penalty of $0.09 per short ton unit of WO3, net dry weight, fractions in proportion. If the WO3 content should be less than 55% Buyers have the option of rejecting the material under this Clause or accepting it at a mutually agreed allowance.
Tin: If tin exceeds 0.5% a penalty of $US 0.03 per short ton unit of WO3 for each 0.1% tin above 0.5% will be paid by the Sellers.
Arsenic: If the arsenic content exceeds 0.5% but is less than 1%, the Sellers will pay a penalty of $US 0.15 per short ton unit of WO3.
Copper and Sulphur: Any ores and/or concentrates with content of copper above 0.2% or content of sulphur above 1.0%, but which is not subject to the rejection options set forth below, shall be paid for at $20.00 per short ton unit of WO3, subject to the above mentioned penalties for WO3, tin and arsenic.
[Page 368]Rejection Options: The Buyer has the option of rejection under Class C or of purchasing subject to the above mentioned penalties, all ores and/or concentrates with:
| a) | WO3 content below | 55%; |
| or | ||
| b) | Tin above | 1%; |
| or | ||
| c) | Arsenic above | 1%; |
| or | ||
| d) | Copper above | 0.5%; |
| or | ||
| e) | Sulphur above | 1.5%. |
Bonuses: For ores and/or concentrates which, on account of their low impurities and high WO3 contents are better quality than standard Argentine material, premiums will be paid on the following basis: If tin content is less than 0.2%, arsenic less than 0.1%, sulphur less than 0.75%, and WO3 content not less than 60%, the following prices will govern:
| For | 60% | WO3 | $21.10 | per short ton unit. |
| “ | 61% | “ | 21.20 | “ |
| “ | 62% | “ | 21.30 | “ |
| “ | 63% | “ | 21.40 | “ |
| “ | 64% | “ | 21.50 | “ |
| “ | 65% | and over | 21.60 | “ |
Class D—Low Grade Scheelite Concentrates and Ores: Concentrates or ores containing less than 55% WO3 and more than 30% WO3 will be subject to the same penalties for WO3—tin, arsenic, copper and sulphur, and to the same rejection options for impurities, as for Class C ores, and will pay an additional penalty of $US 1.00 per short ton unit of WO3.
Rejection Option: The Buyer has the option of rejecting under Class D or of purchasing subject to the above mentioned penalties, all ores and concentrates containing less than 30% WO3.
Weighing, Sampling and Assaying: By Ledoux & Co., Lucius Pitkin, Inc., or Walker & Whyte, Inc., as determined by mutual agreement between Sellers and Buyer—expenses to be shared equally by Buyer and Sellers.
Payment: Eighty percent of the estimated value in the port of embarkation of the ores and/or concentrates will be paid to Sellers by Buyer upon receipt of shipping documents which will be sent to New York promptly by airmail by Buyer’s agent or agents. Estimated value to be based on Sellers’ weights and assays as stated in Argentine Customs Declarations. The Balance due will be paid upon receipt of the final certificate of weight and assay issued by Ledoux & Co., Lucius Pitkin Inc., or Walker & Whyte, Inc.
[Page 369]In no case will final payment be delayed more than 30 days after arrival of steamer in New York. If any ores and/or concentrates are delayed for more than 30 days at the port of embarkation on account of lack of steamer space, the Buyer will pay 80% of the estimated value in the port of embarkation, based on Sellers’ weights and assays, to the Sellers, and if shipment is delayed for an additional 60 days for the same reason, a further advance of 10% of such estimated value will be made to the Sellers.
Delivery: To Buyer’s agent F. O. B. steamer port of Buenos Aires, Argentina. All expenses of storage, insurance, and other delivery charges in port of embarkation shall be for Sellers’ account.
Shipment: Consigned to Metals Reserve Co., in bond, with “On Board” Bills of Lading.
Method of Shipment: The Sellers will make the shipment freight collect, such freight to be deducted from the final returns. The Sellers will make their own arrangements for shipping, but upon written request from the Sellers, the Buyer agrees to cooperate to obtain adequate shipping facilities at normal rates from the port of Buenos Aires, Argentina. Any increase or decrease in the present freight rates will be for account of the Buyer.
Insurance: Marine and war risk insurance, in favor of Buyer, at 10% over invoice value will be covered by Sellers at Sellers’ expense with such companies as may be satisfactory to Buyer.
Duties and Taxes: United States duties and taxes on the ores and concentrates after delivery thereof to Buyer will be for account of Buyer.
Force Majeure: Sellers shall not be liable for any default or delay caused by any contingencies beyond their control preventing or interfering with their making shipment, including strikes, floods, fire, wars, rebellions, acts of nations, peoples or princes, or any other contingencies of any kind whether similar to those specifically mentioned or not, affecting the Sellers.
- Submitted to the Argentine Ministry for Foreign Affairs by the Chargé in Argentina with a covering memorandum dated June 18, 1941. Copy transmitted to the Department by the Chargé in his despatch No. 2599, June 18, 1941; received June 27.↩