Foreign Relations of the United States, 1948, General; the United Nations, Volume I, Part 2

Department of State Atomic Energy Files

Memorandum Prepared in the Office of the Under Secretary of State (Lovett)¹

top secret

[Washington,] September 17, 1948.

Subject: Outline of Indian atomic energy situation. (For briefing of Ambassador Henderson,² September 17, 1948)

Current U.S. Objectives With Respect to Indian Atomic Energy Raw Materials

1. The U.S. Government has currently two main areas of interest, namely, in beryl (the mineral source of the metal beryllium) and monazite (the mineral source of thorium, cerium, and other “rare earth” metals).

2. With respect to both, the U.S. desires (a) to secure relaxation of embargoes maintained by the Indian officials for a long period, (b) to increase available supplies required by the U.S. for industrial and stockpiling requirements (and, in the case of beryl, for indeterminate atomic energy requirements) and (c) to secure from the GOI assurances or arrangements precluding access to these materials by unfriendly nations.

3. The U.S. Government has for the past several months been negotiating independently with the GOI regarding beryl in view of the particular interest of the AEC in beryllium for atomic energy purposes. The U.S. has no understandings with the British or other nations regarding sources of beryl in contrast to certain arrangements which exist regarding source materials through long-standing relationships with the British and Canadians in atomic energy development; these nations cooperate with the U.S. with respect to supplies of radioactive raw materials such as monazite. India falls within the competence of the U.K. with respect to these materials. (Similarly, the U.S. has taken the lead with respect to Brazilian monazite.) The U.S. is kept advised of developments and lends assistance to the furtherance of British objectives when such is feasible and appropriate.

4. Beryllium is one of the materials specified for control by the Central Government under the provisions of the Indian Atomic Energy Act of 1948. The U.S. discussions have to some extent impinged on the British areas of interest in monazite, not only because of this relationship but also in view of the peculiar inter-relation of the U.S. and British commercial interests which results in Indian dependence on the U.S. for supplies of thorium nitrate (extracted from monazite). Thorium nitrate is an essential material to the production of incandescent gas mantles and consequently of importance to the maintenance of lighting facilities in India.

mineral policy of india

1. A declared policy, understood not to have been officially adopted, but aggressively pushed by certain influential personalities in the GOI, maintains that India must use her strategic mineral resources as a lever to barter for her desiderata for future industrial development.

2. Imposition of the embargoes on beryl and monazite may be accredited directly to aspirations for establishment of plants in India capable of processing the materials to be manufactured compounds to meet domestic demand and provide export surpluses. Obviously, local processing would enhance India’s foreign exchange position.

3. The general policy is also reflected in recent maneuvers by India to secure advantages from her important position in the world’s production of manganese ore and mica.

atomic energy control

1. On April 6 the Indian Parliament passed the Atomic Energy Bill placing exploration, production, processing, export or import of radioactive substances and beryllium under the control of the Central Government. There was established in August, an Atomic Energy Commission constituted by Dr. Homi Bhabha (Chairman) Director of the Institute of Fundamental Research, Bombay, Dr. Sir Shanti Swarup Bhatnagar, Secretary of the Department of Scientific Research, and K. S. Krishman of the National Physical Laboratory, Delhi. Dr. Bhatnagar has been Nehru’s³ chief adviser on atomic energy policies and has been very cooperative with the Embassy in reaching tentative understandings regarding the lifting, of the beryl embargo. However, it has become apparent in recent months that his influence on Nehru is fluctuating and that Nehru is receiving advice at cross purposes from other sources, including one Professor Saha of Calcutta who has definite anti-U.S. leanings and perhaps pro-Soviet inclinations.

2. The aspirations of Indian officials in atomic energy development appear illimitable. Nuclear research organizations have been set up. Two Indian scientific institutions have made inquiry in the U.S. for cyclotrons (the expensive but fundamental research tools used in basic nuclear investigations). Statements have been made that India will have atomic energy piles utilizing her thorium resources, and Indian officials have stated that if necessary, India will seek from other governments desirous of obtaining her monazite and beryl, cooperation with respect to development of her atomic energy program.

monazite

Technical Facts

1. Monazite is the mineral source of thorium, cerium and other rare earth compounds. The mineral occurs in beach sand deposits co-mingled with other minerals of industrial value including ilmenite, the source of titanium oxide used widely in paints and other applications. The constituent minerals of the sands are separated in concentrating plants utilizing gravity and electromagnetic equipment. To extract commercial compounds such as thorium nitrate and cerium compounds, it is necessary to employ a difficult and expensive chemical process. Such processing is now done in the U.S. and U.K., and has been done in the past in France, Germany and Japan. Because of the high cost of reagents required (mostly acids) and the difficult technical process used, it is doubtful whether this process could be done on an economic competitive basis in India. Thorium nitrate, thus extracted, is used in incandescent gas mantles. The cerium compounds extracted are important in the manufacture of illuminating arcs used in motion picture projectors and military searchlights, also in “sparker” flints and abrasives (cerium oxide) used in polishing optical lenses.

2. Although research is proceeding in the U.S. on thorium as a source of fissionable materials, no definite conclusions can be reached at this time as to its eventual possibilities, the best views being that at least as far as the U.S. atomic energy program is concerned, it will be many years before thorium will be important in this field. A press release to this effect will be made soon by the Atomic Energy Commission.

3. Before the embargo, Travancore was the chief world source of monazite. At present the only principal producer is Brazil, although minor amounts are now produced in the U.S. and formerly were produced in the NEI, Australia, and China. Present production of Brazil is only on the order of 2,000 tons annually against stated U.S. requirements alone of 5,000 tons annually. Travancore formerly produced about 3,000 tons a year which was shipped to the U.K., U.S., France and Germany. In 1947 small sporadic shipments were made only to the U.K. (some of which were divided with the U.S. industrial concerns) but since September 1947 there has been a complete ban on exports.

4. Under the joint understanding, all monazite exports of Brazil are consigned to U.S. consumers. It was the intention that British requirements would be supplied by Travancore. However, the main British consumer has now requested the large American importer to contract to supply 1,000 tons of Brazilian monazite over the next two years. This request must eventually be considered in the light of the governmental understanding and the prospects for successful conclusion of the India-U.K. negotiations.

5. Shortages of monazite threaten continuation of supplies of cerium compounds. Strong pressure from important and influential industrial groups in the U.S. has been applied in the past and may become more emphatic. This pressure could result in a breach of the security prevailing over the monazite understandings of the U.S. and U.K. if any explanations were forced as to why the U.S. Government is not in a position to negotiate on an independent basis.

Negotiations

1. In accordance with the understandings mentioned previously, the British began negotiations in 1946 for control of the Travancore monazite supply. In early 1947, agreement was reached between the Government of Travancore and the British Ministry of Supply providing inter-alia for purchasing by the Ministry of Supply of 9,000 tons of monazite at a stipulated price for a three-year period commencing January 1, 1947. In return the British undertook to contribute their good offices, in subsidiary negotiations to be conducted by the Travancore Government with the British commercial firm of Thorium Ltd., looking to the erection of a thorium processing plant in Travancore. The MOS also undertook to purchase the resulting production of thorium nitrate for a period of five years at agreed prices.

2. Some of the terms of this agreement have been disclosed by the Travancore Government in press releases made in 1947. The main secret retained is that there is a broader scope to such arrangements. The U.S. industry, as far as is known, is unaware of the paramount understandings and this makes difficult explanation of the reasons precluding direct negotiations by the U.S. Government for Travancore monazite, a course which might appear reasonable in view of indicated British failure to secure shipments of material for over a year.

3. Although some shipments were licensed for export by the Travancore Government in 1947, toward the latter part of the year no shipments were permitted because of the alleged failure of the British to fulfill their commitment to promote the establishment of the processing plant. In February, 1948 the British presented a memorandum to the Travancore Government seeking to rebut certain allegations of the latter officials, without anticipating that it would form a basis for profitable subsequent discussions. In April of 1948 the British decided to continue discussions through the States Ministry of the GOI in view of the relinquishment of sovereignty in these matters by the state to the Central Government, obviously as a consequence of the passage of the Atomic Energy Act.

4. The British reported to the Department in June of this year that agreement had been reached regarding the size of the processing plant to be established in Travancore and that a successful conclusion of the negotiations was anticipated before the end of the monsoon season. Lack of further information would indicate that these expectations have not been fulfilled.

5. While the British continued negotiations with the Central Government regarding monazite, the U.S. Embassy in New Delhi was discussing beryl with the Indian officials. As explained later in this paper, the negotiations on beryl became related to the question of continuation of shipment of thorium nitrate to Indian consumers from the U.S. under license by the U.S. Atomic Energy Commission.

6. The Embassy and consular establishments in India, acting on instructions from the Department, made investigation of some 30-odd gas mantle plants in India in order that the Atomic Energy Commission have a proper basis for consideration of the Indian applications for supplies of thorium nitrate. During their contacts with the Indian firms our officials were constantly urged to lend assistance to expedite shipment of the supplies in order that no disturbance of India’s lighting facilities occur. The Embassy and the Department, therefore, viewed with alarm the avowed intent last spring of the chief U.S. manufacturer of thorium nitrate to suspend shipments of the material to India pending resumption of shipments of monazite desired by his company (admittedly because of the demand for cerium products).

7. At the persuasion of the Department, the U.S. manufacturer was induced to withhold this action for a time on the grounds that (1) it would not be effective and would create ill will in India not in the best interests of this country, (2) it would materially impair the progress made to lift the beryl embargo, and (3) the receipt of needed supplies by Indian consumers could be favorable to promoting our interests. It was agreed, however, that the Embassy would make it clear to the Indian officials that continued shipments of thorium nitrate to India could not be envisaged unless additional supplies of monazite were forthcoming from Travancore . . . . Thus our policies do lend backstop assistance to the British in their negotiating efforts. (In connection with the above it should be noted, there were some indications that the British themselves favored an immediate stoppage of thorium nitrate shipments last spring). The Department feels that unless the British achieve a settlement within the next few months, the manufacturer can no longer be dissuaded from embarking on its previously declared course of action.

Recommendations for Further Action

1. The Embassy has taken advantage of opportunities to remind Indian officials and Indian consumers of thorium nitrate that they cannot depend on continuation of U.S. shipments unless additional supplies of monazite are made available to the U.S. The Department concurs with the Embassy suggestion that the complaints of Indian importers regarding their inability to secure adequate supplies in the U.S. continue to be brought to the attention of the GOI officials on an informal basis. The Embassy gives assurances that any appearance of U.S. pressure on India will be avoided. The British have been made aware of the U.S. policy as set forth above.

2. It is suggested that the Ambassador might wish to discuss the monazite problem with the U.K. High Commissioner in New Delhi, using as a basis for discussion the points made in the Department’s briefing.

beryl

Technical Aspects

1. Beryl is the sole source of the metal beryllium containing about 4% by weight of the metal in a complex silicate mineral. Beryllium oxide is extracted from beryl by a complex chemical process, technological information for which is believed to be entirely in the hands of three relatively small U.S. companies. Beryllium oxide is used in certain high temperature refractory products and in fluorescent lights.

2. Beryllium oxide is in turn converted to metallic beryllium or an alloy of beryllium and copper containing 4% beryllium. The latter material, called “master alloy” is used in varying proportions in the manufacture of special products including ship propeller blades, precision instrument springs, well drilling equipment and tool steels, which require the unique non-sparking, non-corrosive, and non-fatiguing properties lent by beryllium to the alloys used. Beryllium metal is used in X-ray “windows” as targets in electronic tubes for production as a nuclear particle source. Its importance in atomic energy lies in its potential use as a moderator in nuclear piles as a substitute for graphite or heavy water. It is thought that the structural advantage of beryllium may give it certain advantages over the other moderating materials.

Background and Negotiations

1. Production of beryl in India became important during the war under stimulation of the FEA procurement program. An annual export of over 1,000 tons was achieved in one year. Production declined after termination of the FEA program in 1945. In 1946 beryl was included on a list of materials placed under embargo by the GOI for strategic reasons. Since then there have been no reported shipments of beryl from India. Present U.S. sources are (a) small domestic production (b) imports from Brazil which totaled 660 tons in first six months, 1948 (c) small stocks. Beryl is currently not being exported from other former U.S. sources such as Argentina and Australia.

2. On behalf of the AEC the Department instructed the Embassy to make appropriate approaches to the Government of India officials looking toward the relaxation of the beryl embargo. It became apparent soon that there were divided opinions among the Indian officials as to what should be sought from the U.S. in exchange for release of beryl. Included in proposals made by various Indian officials were (a) technology and equipment for a coal liquifaction plant; (b) export of 500,000 tons of steel from the U.S.; (c) 1% of the world’s petroleum output; (d) phosphate rock from the U.S.; and (e) assistance in the erection of a beryllia processing plant in India.

3. Only the latter (e) was considered as a practical alternative by the Department and this also was ruled out in view of the AEC desire that establishment of beryllia processing plants in other countries be discouraged for reasons of security.

4. The Department after consultation with the AEC suggested the Embassy indicate to the Indian officials that cooperation of the GOI in permitting shipment of beryl to the U.S. would be necessary should India expect to secure atomic energy research equipment from the U.S., particular reference being made to the two inquiries for particle accelerators made by Indian scientific institutions.

5. Mr. Andrew V. Corry, Minerals Attaché at the Embassy, engaged in several conversations with Dr. Bhatnagar and by May had secured assurances that the U.S. proposals would be recommended for acceptance by the Prime Minister. It was suggested by Bhatnagar that the U.S. Ambassador raise the question personally with the Prime Minister who was expected to be receptive to the idea.

6. Ambassador Grady⁴ saw Nehru the day before the former’s departure for the U.S. in June and raised the matter in connection with other important issues. Nehru gave no conclusive reply—in fact later reports indicate that he does not even recall this subject being discussed. In any event, Ambassador Grady has recommended to the Department that the matter be allowed to rest awhile.

7. The Embassy subsequently has recommended that no action be taken until the arrival of the new Ambassador in October. The Department concurs in this view.

Recommendation for Further Action

1. That the Ambassador should approach Nehru at an appropriate opportunity and state that the United States is still concerned as to when the beryl embargo is to be lifted and shipments can be resumed to the United States. At the same time, the Ambassador should query Nehru for the reasons for maintaining the embargo and indicate the willingness of this Government to examine with Nehru any problems which might facilitate the lifting of the embargo.

2. That the Indian officials be given frank appraisal of the difficulties ahead in their ambitions toward atomic energy development. The “disenchantment” will be helped through reference to the remarks of John Gustafson⁵ on thorium and monazite made at the recent meeting of the American Mining Congress in San Francisco.

1. A marginal notation on the source text indicates that this document was transmitted to New Dehli on October 15.
2. Loy W. Henderson, appointed Ambassador to India on July 14, 1948.
3. Pandit Jawaharlal Nehru, Prime Minister of India.
4. Henry F. Grady, United States Ambassador in India, April 1947–May 1948; appointed Ambassador to Greece, June 2, 1948.
5. John K. Gustafson, Director of the Division of Raw Materials, United States Atomic Energy Commission.