CZECHOSLOVAKIA TO AID DEVELOPMENT OF NONFERROUS INDUSTRIES IN UNDERDEVELOPED COUNTRIES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01003A001500290002-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 8
• Document Creation Date: December 9, 2016
• Document Release Date: November 9, 2000
• Sequence Number: 2
• Publication Date: March 21, 1963
• Content Type: BRIEF

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SECRET
Current Support Brief
CZECHOSLOVAKIA TO AID DEVELOPMENT
OF NONFERROUS INDUSTRIES
IN UNDERDEVELOPED COUNTRIES
CIA/RR CB 63-29
21 March 1963
CENTRAL INTELLIGENCE AGENCY
Office of Research and Reports
State Dept. declassification & release instructions on file
SECRET
GROUP 1
Excluded from automatic
downgrading and
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This material contains information affecting
the National Defense of the United States
within the meaning of the espionage laws,
Title 18, USC, Sees. 793 and 794, the trans-
mission or revelation of which in any manner
to an unauthorized person is prohibited by law.
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S-E-C-R-E-T
CZECHOSLOVAKIA TO AID DEVELOPMENT
IN UNDERDE,AELOPED COUNTRIES
As part of a generally developing pattern of Soviet Bloc relationships
with underdeveloped non-Bloc countries, Czechoslovakia during 1961-62
agreed to aid in the development of nonferrous industries in Morocco and
Indonesia and has proposed a similar arrangement with Bolivia. These
agreements, in general, are in line with an earlier series of arrangements
riod
between Czechoslovakia and other Bloc countries, c concluded Czechoslovak
from 1957 through 1961, that provided for export
capital and technical guidance in return for a portion of the output from
the new facilities.
1. Agreements with Morocco
In May 1961 and April 1962 the governments of Czechoslovakia and
Morocco signed agreements for the joint development and exploitation
of copper deposits at Talaat Nouamane, 110 kilometers southeast obfut
Agadir, in Morocco. 1/ The total cost of the project is unknown,
it will include a plant for the are ctotcurrent US dollars). The US
$400, 000 (all dollar references agreements specify that payment is to be in the form of copper concen-
trates at a fixed price of $728 per metric ton and is to be completed
within 5 years after the beginning of production, which is scheduled to pay start in 1963. After the c~o mpurchasef the Moroccaneoutputoof c peer at
have the right to continue p
the world market price. 3/
In contrast to previous agreements with Bloc countries (the USSR,
Poland, and Bulgaria) on copper, the Moroccan agreements appear to
be questionable from the point of view of cost. Moroccan copper re:
serves heretofore have evoked no interest by foreign investors, and adi production is negligible
Bureau of Mining Research and,Development,
General of the Moroccan
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the deposits are not sufficiently rich to permit exploitation "along usual
capitalistic lines with a normal return on investment. It 4/ Although the
ores are not of high quality, the principal cost factors relate to the small
size of the deposits and the relatively high cost of energy. 5/ The agree-
ments appear to be advantageous to Morocco, however, because they pro-
vide for a low rate of interest on the loan (set at 3 percent) 6/ and a guar-
anteed market with a fixed premium price for 5 years of $728 per metric
ton of copper contained in concentrates. 7/ The present price for refined
copper is $683. 44 per metric ton f. o. b. New York, 8/ and the price of
copper in the form of concentrates is considerably lower.
2. Agreement with Indonesia
In February 1962, Czechoslovakia signed an agreement with Indonesia
providing for Czechoslovak assistance in geological prospecting of copper,
lead, zinc, and gold deposits on Java, Sumatra, Timor, and Sulawesi.
The agreement also provides for aid in the development of any mining
enterprises that may be established as a result of the prospecting. Again,
payment is to be in ores and concentrates. 9/ At present, Indonesia does
not produce copper, lead, zinc, or gold in significant quantities, although
small quantities of these ores have been mined by primitive methods in
the past. 10/
3. Proposed Agreement with Bolivia
Throughout 1962, negotiations for an agreement providing for the
construction of an antimony smelter in Bolivia by Czechoslovakia have
been underway. A draft agreement actually was signed on 22 June 1962
between the Czechoslovak firm Technoexport and the Banco Minero of
Bolivia. 11/ To date, however, this agreement has not been ratified by
the government of Bolivia. 12/
The draft agreement of 22 June 1962 provided that Czechoslovakia
would make capital available on credit valued at about $1. 9 million, of
which $1. 2 million would consist of capital goods and technical aid for
direct use