895B.2547/1–2754: Telegram
The Chargé in Korea (Bond) to the Department of State
720. During past two weeks ROK Government concern over expiration tungsten purchase agreement1 has been expressed to Embassy several times. Letter of January 24 to Secretary Dulles from Foreign Minister Pyun, being air pouched to Department, contains following main points supporting argument that UN should renew present purchase agreement:
- 1.
- Rapid development tungsten mining was possible only because of assured market.
- 2.
- If assured market removed Korean mines will incur “terrific deficits” in light present slump world tungsten prices.
- 3.
- Fact that 80 percent world tungsten produced Communist China makes it necessary keep principal free world sources operating.
- 4.
- Price support given to US tungsten mine would be extended to Korean mines by renewing purchase agreement.
- 5.
- If (4) impractical new purchase agreement should be negotiated stipulating “new reasonable price”.
Local press quoted government source January 26 stating ROK Government may issue “White Paper” warning US it will be forced sell [Page 1738] tungsten to hostile nations if purchase agreement not renewed. In view Pyun’s point (3) the possibility this move appears slight.
Events cited above constitute opening of expected campaign for agreement renewal. In view of large profits and dollar earnings accruing to ROK Government under present agreement, increasing pressure may be anticipated. Embassy convinced government has little hope renewing agreement present basis but wishes negotiate new agreement for as high a price as possible. (Utah representatives believe price as low as $30 per STU would be accepted in showdown, however.)
Korea tungsten mining company President Ahn Bong Ik left for United States January 25 on three months survey US chemical plants. Because of molybdenum content of Korean tungsten concentrate, chemical treatment essential before it can be sold on world market. Ahn’s trip therefore indication ROK Government realization it may not be able renew purchase agreement.