S/AE Files
The Chairman of the Combined Development Trust (Groves) to the Chairman of the Combined Policy Committee (Patterson)
My Dear Mr. Chairman: Under the tripartite agreement28 the United Kingdom and the United States were given, subject to certain limitations, a first refusal on all uranium mined in the Belgian Congo for a ten-year period following the completion of the contract for 3,440,000 pounds between the Combined Development Trust and African Metals Corporation of September 25, 1944. Deliveries under this contract have been proceeding satisfactorily and it is probable that they will be completed by March 1946.
To insure future supplies of uranium for the ten-year period, we have been negotiating for the past six months with the Belgians for the purchase of large quantities of uranium oxide to be mined at the Shinkolobwe Mine in the Belgian Congo. These negotiations have now been completed and two contracts were signed by the Combined Development Trust and African Metals Corporation on October 27, 1945.29
The first contract involves the purchase by the Trust of all the uranium oxide content in high grade ore which can be produced from the mining operations down to the 150 meter level to a maximum of twenty million pounds of oxide and the Trust has been granted options with respect to the oxide contained in the lower grade ores down to that level. As in the earlier contract, African Metals retained the ownership of the radium and the precious metals contained in the ore and these will be returned to African Metals in the form of sludges after processing for the extraction of uranium. Initial deliveries of the ores will be made at Lobito or Matadi. Present information indicates that deliveries of the twenty million pounds will be completed by 1949.
The second contract is for the purchase of all the oxide which can be economically mined at Shinkolobwe within the ten-year period of the tripartite agreement and after the completion of the contract for twenty million pounds. The terms and conditions of this contract are the same as under the contract for twenty million pounds. Present estimates of the possible quantities involved in the second contract are about forty million pounds.
Because of the length of time involved, the Belgians insisted upon the protection of the purchase price by a gold clause. The British [Page 82] Government agreed to a gold clause with respect to the portion of the cost payable by them and in lieu of a gold clause on the American share, it has been agreed that a premium of fifteen per cent would be paid on the American share. This fifteen per cent increase will be discontinued if the American Government becomes authorized by legislation to agree to a gold clause. The price for uranium oxide under both contracts and subject to the adjustments noted above, will be $1.90 per pound for oxide contained in the high grade ores, and for the oxide contained in the lower grade ores the price varies from $1.85 per pound in the case of ores having a content of less than twenty-five per cent but not less than five per cent to fifty cents per pound in the case of ores having a content of less than one and one-half per cent.
Respectfully submitted,
Major General, U.S.A.