811.20 Defense (M) Chile/350: Telegram
The Ambassador in Chile (Bowers) to the Secretary of State
[Received 6:18 p.m.]
252. [From Graham.] Metals Reserve for Bridgman.76 Department also please note. Had first meeting Minister of Commerce77 and committee appointed study revision Metals Reserve contract. Most important point is question as to whether Metals Reserve intends extend contract and for what period. Chilean representatives request extension 3–year period. They also request following: (1) 10% increase copper concentrates, (2) 25% increase copper ores, (3) increase price silver equal price now being paid Bolivia, Peru, (4) definite price cobalt, tungsten, antimony, lead and zinc placed Chilean ports with details penalties impurities, (5) payment in gold by Federal Reserve Bank to Banco Central of Chile for all gold exported from Chile in copper bars, concentrates and ores, (6) price Chilean ports for copper matte contained in gold which they plan produce small smelter in north, (7) increased quota in quantity manganese to be purchased, (8) increase price 15% current price manganese and increase in [apparent omission] iron from 5 to 7%, (9) additional considerations on priorities on materials necessary for operation these mines and some small coal mines to be opened up in south, (10) declaration of Metals Reserve of policy that will be followed in future to give possible financial aid new and existing properties. We were also informed that at meeting to be held next week with Minister of Commerce and Minister of Finance78 that Chilean Government will make us formal declaration of desire of the Chilean Government to obtain increased price for copper not only for small mining industry but for three large copper mines. Costs in Chilean mines have increased as cost of living in Chile has gone up 30% last 6 months. Our definite recommendations are that we give small mining industry Chile 10% increase price ores and 5% increase price concentrates just as we did on last revision and that remainder of contract be left as is with exception such minor changes as possible increase silver definite price Chilean ports materials requested. We also recommend immediate approval continuance our [Page 829] contract with Chagres and Naltagua on present basis. View existing conditions we feel our recommendations are fully justified. Please advise earliest convenience. Horace Graham.