811.20 Defense (M) Chile/232: Telegram

The Ambassador in Chile (Bowers) to the Secretary of State

1273. For Bridgman, Metals Reserve:

“Reference your cable August 4 [3]. We have discussed your cable fully with Minister of Commerce, President Caja Crédito Minero, President National Mining Society and group of Chilean engineers appointed as experts. We have explained fully existing situation and particularly the impossibility of further aid gold mines in view priorities situation. We definitely refused accept Los Vilos as port but stated we would again review situation in 6 months time if port had been improved. Caja Crédito has stopped some gold mines and is devoting attention to increase copper production. In this regard they wish permission to increase tolerances in copper concentrates from 35 grams gold to 60 grams gold as they state they can in this way treat copper ores 4 to 5 percent containing 10 to 15 grams gold and make concentrates from materials that are now not being exploited and absorb some of unemployment gold mines. Instead 5% on concentrates and 10% on ores which is price increase we suggested they request 8% and 15% respectively. All other matters settled. In view of this situation we recommend you allow tolerances up to 60 grams gold on copper concentrates and offer increased price copper ores and copper concentrates 6% and 12% respectively. We believe on this basis we can close arrangement immediately and would appreciate your prompt attention.”