811.20 Defense (M)/1466

The Minister in Bolivia (Jenkins) to the Secretary of State

No. 698

Sir: I have the honor to refer to the Department’s telegram No. 11 of January 28, 6 p.m., in regard to the negotiations for the conclusion of a tungsten contract between the Metals Reserve Company and the Bolivian Government or one of its agencies, and my despatch No. 614 of January 30, 1941,87 commenting thereon.

It would be of assistance to the Legation if the Department could advise it of the present status of these negotiations. Various local mining interests seem to be in possession of information in regard to the matter, probably from the Bolivian officials concerned, and it would be helpful if the Legation were in a position to judge as to the accuracy of their statements.

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According to the local mining interests mentioned, some progress has been made in Washington in regard to terms on the rough basis of a two or three years’ contract for all Bolivian tungsten production and a price of approximately $17 per unit. These sources also state that some at least of the small miners who sell to the Banco Minero, which in turn now sells to Japanese buyers, prefer to continue present arrangements with Japan as they now receive higher prices than they would under the proposed United States-Bolivian contract, disregarding the greater security inherent in the latter. However, as indicated in the last full sentence on page three of my despatch No. 614, the Bolivian Minister of National Economy88 appears disposed to force small miners by means of a Decree to sell to the Banco Minero at a price to be fixed by it and thus make their production available under the proposed United States-Bolivian contract.

In connection with this general problem, it is understood that the Banco Minero has contracts with Japanese interests which run through next June so that the full amount of tungsten handled by it would apparently not be available for sale to the United States until after that time. It is also understood that the Banco Minero makes most of its Japanese sales to a Japanese combine composed of Mitsubishi, the Taibo Commercial Co., Itoh & Co., Sanwa & Co., and the Matsura Trading Co. The two German firms of Kyllmann, Bauer & Co. and Juan Eisner & Co., established in Bolivia, have been buying some tungsten ore from the Banco Minero, placed in port, and shipping it to Japan consigned to Sanyei Yoko. It is not clear whether the latter is the combine referred to.

It has been further learned that Bolivian tungsten going to Japan has recently been shipped in double bags, as reported in my despatch No. 696 of March 10, 1941,89 to be understood to be the case with some shipments to the United States. This would seem an added indication, besides various others previously reported, that such ores are not retained in Japan but go on to a destination in Germany.

Respectfully yours,

Douglas Jenkins
  1. Not printed.
  2. Edmundo Vásquez.
  3. Not printed.