SIGNIFICANCE OF JAPANESE SELF-SUFFICIENCY IN COKING COAL

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01082A000100030002-5
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 8
• Document Creation Date: December 12, 2016
• Document Release Date: October 23, 2000
• Sequence Number: 2
• Publication Date: November 18, 1949
• Content Type: PERRPT

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copy A:-'O. 30
FAR EAST/PACIFIC DIVISI(M
t' ICE CP REPOF TS A1E E: TL.ATE`.
CE TRAL L T?,:LLIG.E.CE AG.Z -CY
STAB ITUDY NO. 34
NOTICE: This document is a corking paper, not
an official CIA issuance. It has been co-ordina-
ted nithin ORE,* but not cdth the I.AC Agencies.
It represents current thinking by specialists in
CIA, and is designed for use by others engaged
in similar or overlapping studies. The opinions
expressed herein .-ay be revised before final and
official publication. It is intended solely for
the information of the addressee and not for fur-
ther dissemination.
25X1A9a Copy fors
NO.CHANGE IN CLASS, O
XL DECLASSIFIED
CLASS. CHANGED TO; TS $ C
NEXT f"EVi~:.'.N C7,ATE:
AUTF : H 70.2
n 1T n;', < 372044
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 Approved For Release 20 P79-01082A000100030002-5
This study has been pursued as
partial basis for a projected esti-
mate of Japan's vulnerability to po-
litical and economic pressures from
Conimmist Asia as a aoraoquence of
its stoel industry regvirementsa
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~. ~i~~l1lr+
SlGIIIFICANCE OF 3APM!E5r SELF-SUMFICIEi 84
Problem% Japan long has been short of high-grade coking coal for f2etalluirgi-
cal use. Mile Japan actually is almost self-sufficient in coals for produe-
tin of coke, coking processes have been so uncconor2ic as to ?rovide production
inadequate for Japan's needs. Recent reports allege that Japan can become self-
sufficient in coking coal at an economic.-level if it adopts certain technical
methods. This study aims to determine the effect of Japanese self-sufficiency
in coking coal for metallurgical use an US security interests, in the event cur-
rent experiments demonstrate Japans capability for self-sufficiency.
Con2.usionzu Japan's self-sufficiency in coking coal for metallurgical use
would favor US security interests, assuming US-orientation of Japan, in that
(1) internally, Japanese economic and pol-itieai stability would be strengthened
and (2) externally, the Chinese Communists and the USSR would be deprived of a
trade lever to force Japan to turn toward Communist-dominated areas of Asia.
AssumAtianst 1. Japan will continue under US control.
2. A U5&.-oriented Japan would be an essential part of a
Soviet self-sufficient Far Eastern war-making complex.
iseass= Coking coal! is essential for making coke which is used in production
of iron and steel. Japan has large reserves of coal; the coals of Japan as mined,
however, are not satisfactory for metallurgical coke of sufficient stability for
use in blast furnaces. Until political factors intervened, Japan imported high-
grade coking coals from China, Manchuria, and Sakhalin and imported anthracite
coal from Indochina. These were blended with the coals of Japan to produce a
metallurgical coke having adequate stability.
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 CtPID#;ITIAL
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Coking coal requirements are about tro tons of coal per ton of pig
iron produced. Importod high-grade coking coals for combination rich domestic
coal constitute 35-1+0% of Jatsan' s total coking coal requirement. SCAP csti-
mates that 2.30 million metric tons of coking coal rill have to be imported
annually by 1953 to meet its 1953 projected goal of 5.76 million metric tons
of coking coal for pig production.
1. Political: Barring political considerations., Japan's most logical
foreign sources of coking coal are China, Manchuria, Sakhalin end Indochina.
However, political considerations arising from Communist control in most of
these areas and from Japans aversion for Comm;=-Ism, deter it from satisfying
its requirements there. Sakhalin is for all practical purposss now part of the
USSR. Although the 13-SR has expressed some desire to trade Sakhalin coking coal
for Japanese rolling stock and heavy equipment, Sakhalin must remain a doubtful
source so long as Ja-ian rein= ins anti.-Communist and amcurrently able to meet its
minimum requirements rithout reliance on Soviet-dominated aro,s, Similar obser-
vations can be made about China and Manchuria as a source. It may be that the
Chinese Communists 'rill. be ril.ling to trade their high-grade coking coal for
Japanese products. however, so long as the Chinese Communists are oriented to
the USSR, the coals under their control cannot be considered readily available
to Japan, except as they may be employed as an economic weapon to force political
concessions from Japan in the event Japan cannot otherwise meet its essential re-
quirements. Indochina cnthracite can be used as a blond to produce only a slight
quantity of high-grade coking coal, and political disturbances there make it highly
doubtful that much coking coal will be available for export.
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 {lttl~'IDExMAL
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2. Economies As a remit of the limited availability (luring 19 from its
historical sources, Japans has had to turn to more distant sources, chiefly the
US and Cnnttca, for the greater part of its coking coal imports. During 1948, it
cost US $29-31 per ton to import coking coal to Japan from the US and Canada as
compared with a cost of US e14-l3 for the limited supplies of coal imported from
the Soviet Per East (Sakhalin) and China. Although the US is paying for the cok-
ing coal, imports from the US (which constituted about one-half of Japan's 19148
coking coal imports) Japan viii have to assume all the costs r;hen US subsidies
are vrithdracm. At such time, the higher costs of the north American imports
would be a heavy burden on the Japanese steel industry.
Under the exigencies of the war, Japanese technicians used a carbonized
low-volatile coal product called "coalite" in blends rith Hokkaido coals for
making metallurgical colce. A-lthou.gh their experiences were not entirely sue-
aeaeful, a visiting expert consultant to SCAP believes that by proper production
and application of coalite, employing methods used pith some success in the US,
Japan can become self-sufficient in coking coals. The consultant states that
there is no Insurmountable technical difficulty. Ile believes that the Japanese
have neglected to use some very simple methods of increasing the stability of
metallurgical coke. Three to six months' experiments presently are being under-
taken to test the validity of the claims and proposals of the consultant.
Tice remainder of this discussion assumes that his observations are correct.
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 F'IDENTIAL
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1. Economics By being self-sufficient in metallurgical cope produced
from its own resources of coal, Japan can effect considerable savings, both
for the product itself and on shipping. This would be true eveen if its former
foreign sources became fully available at not more than normal market prices;
and the savings vrould be considerable when compared to current costs involved
in procuring the high-grade coals from North American sources.
Since Japan depends considerably upon imports for its survival, savings
in exchange are of extraordinary importance. Its progress toward a self-support-
ing status will be eased to the extent to which it can use its exchange otherwise
requisite for coking coal imports in purchasing other needs.
2. Political: An adequate domoetie supply of satirfaetory metallurgical
coking coal would eliminate Japan's vulnerability to China's current ability to
exploit Japan's dependence upon imported coal by eeonoriic -aressure for political
and economic concessions by Japan, otherwise avoidable only by US subsidy of
Japan's coal import requirements.
,The JCP has stressed Japan's dependence upon Communist-controlled areas as
a means of influencing Japan's orientation toward Communist areas. The JCP is
busily organizing associations to promote China-Japan trade and is bleating about
the value of such trade. Although the significance of that trade is marked, both
as a source of iron ore and salt as roll as high-grade coking coals and as a nar-
ket for many exports, elimination of Japan's dependence for oven one of the vital
commodities vrill decrease the validity and effect of JCP propaganda. At the least,
some ctiffenin: in Japanese morale (and national pride) as a counter-action to JCP
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propaganda should result from the reali_ ation 7 at Japan has w ti:c:.eec"ec' in a-,
chiovi.ng self u^ufficy envy in a vital rn r.terial.
The forces of the r 't probably v ill be encouraged by the progress in
ufficiency, Since a large part of their nun? or are _ndustrialists, the savings
in costs (and increase in profits) should be a hoc'... Incr. ease in political rar-
chests of the rightist parties can be expected. At the some the progress tovard
self'-sufficiency y be expected to bolster the hopes of thoso rightists who look
for Japan's resurgence as first-rate poT;er,
3, Ettlitary: Uodersa xr?_ar requires steel production o ilen~oc,. a prime military
objective is to deprive an energy of the materials ento'ing into the manufacture of
steel. It a.: the exigencies caused by ;IS blockade of its metallurgical coking
coal sources rhich led the Japanese to expend the application of coaiite. Should.
Japan ever rearm,, ,_olf--sufficiency in coking coal mould increase JapTxa's military
potential.
US3ocirity aspect s
Japanese self-sufficiency in coking coal would have favca a , effects On uS
security interests, assn Lng a pro --US orientation in that it ?erou?d (1) eliminate
Japanese dependence upon foreign sources of supply; (2) decrea e Japan's vaulner-
ability to ocono:,ic penetrt ;ion by the USSR; () deprive the USSR and the Commu.
nists of Northeast Asia of a means of bringing upon Japan economic pressure for
political and economic concessions contrary to the -interests of the US; (4) re-
lieve the US of the need to subsidize Japan's coal requirement,-7 as a means of
eliminating its of horr>ise dependence upon Cownwiist-controlled areas for its in
port requirements and (5) eliminate the drain on US sources rc ulting from :geed
to supply Japan.
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Japanese self-"sufficiency in coking coal could have =f abi effects on
US security interests assuring a pro-LUSSR orientation in that it round (1) re-
lieve the USSR of the necessity of shipping coking. coals to Japan; (2)
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