TRANSMITTAL OF MATERIAL

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01003A001700200001-0
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 15
• Document Creation Date: November 16, 2016
• Document Release Date: April 6, 2000
• Sequence Number: 1
• Publication Date: November 20, 1963
• Content Type: MF

010
Approved For Release 2005/12 CIA-RDP79TO1003A001700200001-0
september 1963
MU4 ND M FOR: Chief, teeemination Control Branch, DD/CR
StJ&JZcT
Chief, Publications Staff, CSR
Tran$ ittal of Material
It is retueeted that the attached copies of CIA/RR CB 63-75,
Rueasaffirms Intention. to Build T..er Steel.. Combine at GeA&t,
1 e~ r , Djfjdent:jajj, be forwarde as ft e:
State, DR Communications Center,
Room 7818, State Dept. Bldg.
For baesiee in Berlin, Bucharest, Budapest,
Moscow, Prague, Sofia,, Warsaw, Bonn, FrOmkfurts
London, Paris., Rome, end Vienna
25X1A
Attachments; _ 8 of CB 3-75
Copies 76
E~~~. Cry
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CONFIDENTIAL
Current Support Brief
RUMANIA REAFFIRMS INTENTION
TO BUILD LARGE STEEL COMBINE
AT GALATI
CIA/RR CB 63-75
16 September 1963
CENTRAL INTELLIGENCE AGENCY
Office of Research and Reports
CONFIDENTIAL
GROUP 1
Excluded from automatic
downgrading and
declassification
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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, Secs. 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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 Approved For Release 2000/05/12 : CIA-RDP79T01003A001700200001-0
RUMANIA REAFFIRMS INTENTION
TO BUILD LARGE STEEL COMBINE
AT GALATI
After the recent Moscow CEMA meeting, at which the proposal for
supranational planning was placed in abeyance, top-level Rumanian of-
ficials reaffirmed their intention to construct a large steel combine at
Galati. Rumania hopes to make maximum use of its own reserves of
raw materials but also expects to continue to rely heavily on Soviet and
Eastern European suppliers of iron ore and coking coal. If, however,
raw materials cannot be obtained from Bloc sources for any reason, the
Rumanians have claimed that they could be obtained from a number of
possible Free World suppliers. 1/ Although the USSR promised in 1960
to assist in building and equipping the Galati Combine, Rumanian offi-
cials have been silent on the question of Soviet participation for some
time. However, a contract has been signed with a French-British con-
sortium for construction of a plate mill, and negotiations are underway
with other Western countries for steelmaking equipment. 2/
1. Background
Controversy over the merits of the Galati Combine is generally
considered to have been one of the main issues in the recent quarrel
between Rumanian and CEMA planners over Bloc economic integration.,
CEMA opposition to the Galati Combine had been foreshadowed in June
1962 in a CEMA directive, Basic Principles of the International Socialist
Division of Labor, which stated in part:
It would be advisable to develop metallurgy with
a complete production cycle chiefly in those coun-
tries that are fully or almost fully supplied with ore
and industrial fuel, or with at least one of these basic
raw materials, 3/
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Adoption of this principle would have
significant steel industry by Rumania, whi
neither of coking coal nor of iron ore to s
like Galati. However, Rumania considers
Combine to be one of the key projects in t
only. When completed in :1970, Galati is
of the planned national production of 7. 5
year. 4/
DP79TO1 003AO01 700200001 -0
recluded development of a
h has the necessary supplies
pport a large steel combine
construction of the Galati
e industrialization of its econ?-
account for 4 million tons
The apparent Soviet sanction for building of the Galati Combine ap-
pears to represent another concession to national economic aspirations.
There has been no concrete evidence as yet, however, that the USSR
will uphold its agreement to participate in the construction of the combine.
Rumania has been heavily dependent on. the
USSR, for the technical assistance, equip
quired for the development of its iron and
doubtedly Rumania desires a continuation
the Galati Combine and may even have agr
project to obtain that help. On the other
turned to the Free World as a source of
facilities as well. as for iron ore and cokin
available from the Bloc and domestic sour
Soviet Bloc, principally the
ent, and raw materials re-
teel industry to date. Un-
f this help in constructing
ed to reduce the size of the
nd, Rumania already ha s
ipment for new metallurgical.
coal to supplement supplies
es. Free World participation
appears likely to assume considerable importance in the construction
and operation of the Galati Combine.
2. Equipment Procurement
In 1961, Rumania made a pronounced shift away from the USSR
toward Western manufacturers of metallurgical equipment for its steel
industry. It has procured from West Gerniany a complex of four struc-
tural and wire rolling mills with a, combined capacity of 1 million tons
for the Hunedoara Combine and two spiral weld mills for a pipe-
fabricating plant in Bucharest. 5/ In addition, Rumania has sought to
contract with Western manufacturers for old-rolling and tinplate equip-
rnent for a new plant at Iasi near the Soviet border. 6/
Rumania has signed a $42 million contract with a French-British
consortium for delivery for the Galati Co bine between mid-1964 and
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early 1965 of a plate mill and accessory equipment with a capacity of
600, 000 tons. Inquiries also have been directed to other Western manu-
facturers of equipment for other rolling mill facilities for Galati. Nego-
tiations are now underway with the Voest firm of Austria, a US firm,
and possibly several other Western European firms for the purchase of
basic oxygen steelmaking facilities. Available information indicates
that the capacity of the initial converter units planned for Galati will not
exceed 1. 8 million tons of steel per year. 7/ This apparent reduction
in the size of the first stage of the Galati Combine, which earlier was
reported at 2. 5 million tons, may represent a Rumanian concession to
obtain Soviet support for Galati.
It is not clear at this point to what extent the USSR will assist
Rumania in equipping the Galati Combine. In June 1960, Rumania an-
nounced that the USSR was to provide a blooming- slabbing mill with an
annual capacity of 3. 3 million tons and a semicontinuous sheet mill with
an annual capacity of 1. 5 million tons. 8/ An agreement subsequently
signed in November 1960 between the USSR and Rumania provided for
extensive Soviet technical assistance in the construction of the Galati
Combine but included no specific provisions for delivery of equip-
ment. 9/ In July 1963 the head of the Rumanian Institute of Industrial
Designing reportedly was to visit Moscow to discuss Soviet technical
aid for Galati, but results of this visit have not been disclosed. 10/
3. Supplies of Raw Materials
A major problem facing Rumania in operating the large Galati
Combine is that of assuring adequate domestic supplies of iron ore.
Production of iron ore now appears to be leveling off -- output in 1962
was not significantly higher than in 1961. In addition, the ore being
mined is of increasingly lower grade, and the deposits now being ex-
ploited are increasingly difficult and costly to mine. These two factors
cast considerable doubt on fulfillment of the goal for 1965 of 4 million
tons of iron ore. Moreover, the new reserves expected to supply a
substantial portion of this planned increase in production are still largely
unproved. Consequently, Rumania may not be able to supply from do-
mestic sources the planned 50 to 60 percent (in terms of iron content)
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of its requirements in 1965, and its ability
tion of its needs will decline rapidly after
comes into operation.
to supply any significant por-
965 as the Galati Combine
The USSR is Rumania's principal extei
imports from the Free World have assume
cent years.
In 1960,
imports of iron ore f
to only 58,
000 tons,
all. from India. By 19
iron ore from India and. Brazil amounted tc
total imports), and plans call for these iml
in 1963 and in the future. 1I/ In view of th
world supply position for iron ore since 19
for Rumania to obtain desired quantities of
As in. the case of iron ore, Rumania is
of coking coal. Czechoslovakia and the US;
suppliers of these imports, but in 1962, as
Eastern Europe, Rumania began to import
An estimated 50, 000 tons of premium-qual:
from the UK in 1962, 12/ and recent :report
though undetermined) amounts of coking co;
in 1963. 13/ Furthermore, in July 1963, 1
of premium-quality coking coal. from the U~
was seeking 125, 000 additional tons of US c
'nal supplier of iron ore, but
i increasing importance in re-
rom the Free World amounted
i2, combined shipments of
533, 000 tons (28 percent of
ports to increase considerably
e marked. improvement in the
37, prospects appear favorable
ore from Free World suppliers.
largely dependent on imports
3R have been the principal
shortages developed in
coking coal from the Free World,
Ay coking coal were obtained
;s indicate that substantial (al-
il were received from the UK
tmania obtained 10, 000 tons
3 for the first time and also
oal. 14/
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1. State, Bucharest. Incoming Telegram no 97, 6 Aug 63. C.
2. State, Bucharest. Incoming Telegram no 96, Sec II, 6 Aug 63. C.
3. The Current Digest of the Soviet Press, 11 Jul 62, p. 5. U.
4. JPRS. No 6686, Selected Economic Translation on Eastern
Europe, 2 Feb 61, p. 87-102. U.
5. State, Bucharest. Dsp 192, 21 Mar 62. C.
JPRS. No 15, 051, Translations on East European Heavy
Industry, 30 Aug 62, p. 45. U.
6. Commerce. OC Doc. 2139, 17 Sep 62. C.
7. Metal Bulletin, London, 27 Nov 62, p. 11. U.
State, Bucharest. Airgram A-77, 11 Oct 62. C.
State, Bucharest. Airgram A-11, 14 Jul 63. C.
8. FBIS. Daily Report (USSR and East Europe), Supplement no 8,
24 Jun 60, p. 17. U.
9. Rumania. Agerpress Information Bulletin, no 23, 25 Nov 60. U.
10. State, Bucharest. Incoming Telegram no 53, 23 Jul 63. C.
11. Commerce. Bloc Country by Commodity Series. U.
State, Bucharest. Airgram A-305, 10 Jun 63. C.
State, New Delhi. Dsp 654, 30 Dec 60. OFF USE.
The Eastern Metals Review, Calcutta, 11 Jun 62. U.
State, Bucharest. Incoming Telegram, no 190, 31 Aug 63. C.
12. Steel and Coal, London, 22 Jun 62, p. 1184. U.
Ibid. , 26 Jul 63, p. 192. U.
13. Ibid. , 28 Jun 63, p. 1243. U.
14. Ibid., p. 1225. U.
State, Bucharest. Airgram A-198, 17 Feb 63. C.
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CONFIDENTIAL
CONFIDENTIAL
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 Analysts:
(Project 23. 5016)
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R/MM
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CIA/RR CB 63-75
16 September 1963
St/P
OCR
Excluded f
downgr
dootas
rom automatic
ading and,
Jtlaattan
163 - 228
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164
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CONFIDENTIAL
18 Sep 63
11
1 Sep 63
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 Approved For Release 200 IDP79T01003A001700200001-0
uuNMEN
r to
ion of Current Support Brief No, .''5, Rn1
0-19n.W.AU-44-Lante 3tool Combine at Watt --- 16 Septambe
25X1A
NSA 25X1 A
NSAL
ORR. Distribution, St/A/Document Support Section, Room
O9 i 5, Hdgt.rs. (asst direct to St/Mt , 13 Sep 63).
Recipient
OIDDY. Room 7E32. Hdgtrs.
NlC
0C?.T Internal
ON E
St/CS/RR
'3i stribut.ed try OC:l!
C E I NT 1
OUP 1
Excluded from automatic
downgrading and,
declaUtfceiwn
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 5
Approved For Release 2000 TAP79TO1
63-75, Rumania Reaffirms Intention to Build Large Steel
Combine at Galati --- 16 September 1963 (Confidential)
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 Approved For Release 2000/65h12`"
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 RR CB
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