Atomic Energy Files, Lot 57 D 688

The Special Assistant to the Secretary of State (Arneson) to the First Secretary of the British Embassy (Marten)

top secret

Dear Tim: Herewith for your information is the substance of two communications recently received from Ambassador Johnson1 on the problems of monazite in Brazil.2

In one communication,3 Ambassador Johnson reported on a meeting he and Assistant Secretary Miller4 had with Foreign Minister Neves Fontoura at which the question of monazite was briefly mentioned. In the discussion, the Foreign Minister made no reference to [Page 697] the 1945 Agreement.5 He said that Brazil wished to encourage the establishment of a processing industry in the country and stated that they would welcome the establishment of such a plant by the United States. He did not indicate whether he thought the plant should be established by private capital, but the inference was that the plant would be subject to Brazilian law under United States control and responsibility. The Foreign Minister did not expect an immediate answer to this proposition and said that if in the meantime the United States required monazite, Brazil would furnish it. His attitude on the matter seemed friendly and direct. He did not suggest, as he had in an earlier meeting, that our need for monazite would be specifically used as a bargaining point.

The Foreign Minister reiterated categoric assurance that none of this material would be shipped to any destination without U.S. concurrence. Ambassador Johnson told the Foreign Minister that he appreciated what he had said and that our views on this matter would be put in writing. The Foreign Minister indicated his agreement to this and said he would reply.

Ambassador Johnson has kept the British Ambassador informed on the substance of these meetings. He has told the British Ambassador that he has not brought up with the Foreign Minister the question of British interests under the Secret Agreement because he felt it would be beneficial to keep the matter as simple as possible. He told the British Ambassador, however, that in his letter to the Foreign Minister he would point out that Great Britain has an interest in the 1945 Agreement. Ambassador Johnson’s understanding from the British Ambassador is that British interest in the matter is largely (1) that no monazite be exported to undesirable destinations and (2) that about 500 tons annually be secured for private industrial purposes.

Ambassador Johnson feels that in his letter to the Foreign Minister he should not suggest that the United States contract for the entire Brazilian production because he feels that such a suggestion would have unfavorable reception. Concerning the suggestion that the United States establish a processing plant in Brazil, he will state that he has reported the matter to his Government and is expecting instructions. In the meantime, he will endeavor to secure support for the prompt issuance of export licenses covering two lots of monazite which have been sold to the United States Government for stockpiling.

Ambassador Johnson recommends that the Brazilian suggestion concerning the establishment of a processing plant in Brazil should have the early consideration of the Department and the Atomic [Page 698] Energy Commission. He points out that both material and political interests behind this Brazilian desire are strong and articulate and he urges the Department to reach a definite conclusion in the matter. He adds that if the Foreign Minister concurs in our suggestion for a contract ensuring a continuous flow of supplies, the question of the longer-term arrangement is bound to come up and our position would be helped if we can make some constructive suggestions. He recalls that Lindsay of the Lindsay Light and Chemical Company at one time had an opportunity to establish a plant in Brazil.

Ambassador Johnson says he expects to deliver his letter to the Foreign Minister some time next week and would appreciate suggestions. He will give a copy of this letter to the British Ambassador.

In the other communication, Ambassador Johnson states that he has received reliable confirmation of his earlier conviction that the attitude of Foreign Minister Fontoura as expressed in the first communication represents a change in the Brazilian approach to the monazite problem. The Foreign Minister is not now thinking of monazite as a bargaining point. Also, he is aware of the nature and activities of Orquima and does not desire to serve the purposes of that project. He reflects the policy and intention of President Vargas6 and of public opinion generally in the intention to encourage the establishment of a processing industry in Brazil. Probably he thinks it would not be practicable for the United States Government to establish a processing plant in Brazil but quite likely he would welcome a serious proposal from private American interests on this matter.

Ambassador Johnson suggests that to him the wisest approach would be to suggest that we will attempt to interest a private American firm in such a venture and then to inquire from the Foreign Minister what sort of terms the Brazilian Government could offer which would make such a project of interest to a private firm. Ambassador Johnson feels that the Foreign Minister is too realistic to believe that private U.S. interests could be interested in setting up a monazite processing plant without assurance of acceptable conditions beforehand. Ambassador Johnson feels confident that since the Foreign Minister has stated that Brazil will not ship the raw material to any destination without U.S. concurrence and at the same time having said that if the United States Government needs monazite, Brazil will furnish it, he will therefore be prepared to work out a practicable solution with us. Ambassador Johnson hopes therefore that he will soon be able to take to the Foreign Minister some constructive suggestion for a long-term solution to the problem following a temporary contract for the shipment of raw materials.

Ambassador Johnson feels confident that the Foreign Minister’s change in approach on this problem has been discussed with President [Page 699] Vargas and has his approval. The Foreign Minister stated both to Ambassador Johnson and to Assistant Secretary Miller that the idea of bargaining with the United States for advantage in the present world situation is contrary to his desire and intention. The Foreign Minister’s influence with President Vargas will probably be along this line and will have to meet some counter pressure.

On March 7 Ambassador Johnson telephoned me from Rio, saying that he wished to get his letter off to the Foreign Minister. I told the Ambassador that we would proceed to give prompt consideration to the problem of the establishment of a processing plant in Brazil. I suggested that it might be useful now to ask the Brazilians what they could expect to offer which would be of interest to a private firm considering this proposal.7

Sincerely yours,

R. Gordon Arneson
  1. Herschel V. Johnson, United States Ambassador in Brazil.
  2. For additional documentation on this subject, see vol. ii, pp. 1184 ff.
  3. Telegram 1117 from Rio de Janeiro, March 1, not printed.
  4. Edward G. Miller, Jr., Assistant Secretary of State for Inter-American Affairs, visited Brazil in February during the course of a trip to several South American countries.
  5. For text of the Memorandum of Agreement between the Governments of Brazil and the United States with respect to monazite sands and other carriers of thorium and thorium compounds, signed in Rio de Janeiro, July 6, 1945, see Foreign Relations, 1945, vol. ii, pp. 2023.
  6. Getúlio Dornelles Vargas, President of Brazil.
  7. Note No. 493 from Ambassador Johnson to Foreign Minister Neves da Fontoura on the subject of monazite, June 11, is printed in vol. ii, p. 1201.