Foreign Relations of the United States: Diplomatic Papers, 1943, Europe, Volume II

811.20 Defense (M) Spain/958: Telegram

The Ambassador in the United Kingdom ( Winant ) to the Secretary of State

London , August 14, 1943.
[Received August 14—4:45 p.m.]

5347. For Department and OEW. Embassy recommends pursuit of wolfram preemption in Spain with full vigor. Recommendation is based on considerations brought out in memorandum just completed by EWD.⁶⁴ Estimates used in memorandum, which apparently differ in some respects from current OEW figures (Embassy would appreciate full statement thereof as soon as possible) are based on new and very exhaustive review of Axis tungsten position just completed by MEW in cooperation with Treasury. MEW concurs in EWD memorandum, text which follows:

“The battle for tungsten (based on MEW estimates).

1. Wolfram is the source of tungsten, a metal vital to Germany for the production of (1) high speed machine tools and (2) armor-piercing shells. The American and British Governments have for a long time been engaged in a bitter preemption struggle with the Germans for wolfram in the Iberian Peninsula, the sole source of supply (except for possible blockade-running from the Far East) now open to Germany. During the month of July we have scored a signal success in this campaign.

2. It is estimated that Germany’s minimum requirement for wolfram in industrial uses is 4,300 tons per year [apparent omission]. This quantity goes primarily into making ferro-tungsten for high speed steels, and tungsten carbide for edging tools. In addition to this basic industrial requirement, tungsten has a strategic military use in the form of tungsten carbide as a core material in anti-tank armor-piercing shells. There is no absolute minimum quantity of tungsten for carbide cores for projectiles, but it is believed that 1,500 tons of wolfram were used for this purpose in 1942, and the demand is undoubtedly increasing. There is recent evidence that the enemy is now using such cores in shells as large as 88 mm. ammunition. Analysis of captured enemy material and intelligence reports on the enemy’s supply position indicate that there is no adequate alternative core material now available to Germany.

3. There is virtually no production of wolfram in German Europe (less than 250 tons per annum). The only sources of supply now open to Germany are (a) blockade running from Japanese-controlled areas (b) Spain and (c) Portugal.

4. (a) We are satisfied that Germany has obtained no wolfram from the Far East this year. Attempts to use this alternative source have been frustrated by the services during recent months. In view of the present supply position, however, Germany will probably again try to make use of this avenue to acquire wolfram.

(b) Spain is now producing wolfram at the rate of 430 tons per month. Germany acquired from Spain 680 tons of wolfram from January 1 to June 30, of which about 525 tons were shipped to Germany. However, in June Germany acquired less than 50 tons. During July, strenuous efforts made by the American and British Governments to preempt wolfram in Spain have achieved a total victory. Germany bought no free wolfram during that month. Germany had exhausted her buying power, at least temporarily, and the total Spanish production (other than a negligible amount, 28 tons, mined in German-owned properties) was acquired by our agents. If this position could be held, German use of wolfram would be reduced to the amounts made available to Germany by Portugal, plus what she would draw from German mines and stocks held in Spain. These stocks may amount to as much as 800 tons.

(c) Portugal, where there is no free market and allocations to the belligerent powers are made by the Portuguese Government, is now producing wolfram at the rate of 520 tons per month. From January 1 to June 30 of this year Germany imported from Portugal 1,040 tons of wolfram.

5. To summarize:

During the first half of 1943 MEW estimates the position was as follows: Rate of enemy demand: (All figures in metric tons) basic industrial 2,150, cores for shells 750 (this figure could be expanded greatly) total 2,900 or a demand rate of 484 tons per month. Enemy supplies and acquisitions from January 1 to June 30, 1943: Spanish stocks on January 1, 1943, 600, purchases in Spain to June 30, 680, Portuguese stocks 200, purchases in Portugal 850, domestic production 125, total 2,455 or a monthly rate of 409 tons.

6. At the beginning of the second half of 1943, it is estimated by MEW that stocks of wolfram within Axis Europe were probably near exhaustion. Until Germany reestablishes her buying power in Spain, provided of course that we can maintain our preemption program (which means finding the necessary local currency), Germany will be limited to approximately 170 tons of new wolfram per month, consisting predominantly of the supplies made available to Germany by the Portuguese Government, as compared with an essential industrial demand of 358 tons a month. In yearly figures this would mean that as against Germany’s essential industrial requirements of approximately 4,300 tons, she would be able to count on about 2,000 tons. Clearly a critical situation for Germany would result, which would not be materially relieved by the importation of stocks held in Spain which now may amount to as much as 800 tons. The enemy could not even meet his industrial requirements and would have no margin for the use of tungsten carbide in armor-piercing ammunition. The success of our preemption campaign in wolfram would be felt eventually on every European battle front where tanks are used.

7. We may look forward, consequently, to major efforts on the part of Germany to reopen her access to Spanish supplies. This access could be gained in three ways: (1) by a letdown in our preclusive buying campaign in Spain; (2) by greatly augmenting her shipments of goods to Spain, Germany could get export licenses to ship her wolfram stocks already purchased and held there, estimated to amount to as much as 800 tons; and (3) by acquiring pesetas, either through making further supplies available or by forcing credits out of the Spanish Government, she could reestablish her purchasing program in Spain (this will be difficult, however, because Germany is already 800 million pesetas in arrears in the clearing and we have driven the price of wolfram to very high levels).[”]

[Apparent omission] All figures in this paper are on the basis of wolfram having 65% Wo3 contents.

Winant

64. Economic Warfare Division of the Embassy in London.