COMMENTS ON 'REPORT ON ALLOY METALS.'

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01049A000700110005-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 14
• Document Creation Date: November 9, 2016
• Document Release Date: July 7, 1999
• Sequence Number: 5
• Publication Date: July 11, 1952
• Content Type: MEMO

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SECURITY I ORMATH1!1
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SECU( INFOINA 1ON
ATTACHMT
WORT oN 4j= METALS
C~ a ?"t.EL p action a /'or a lack of processing facilities within the bloc. The
This study is written in connection with the proposed denial
program against Czechoslovakia. Its ultimate purpose is to select
targets for denial which will most damage the Czech econoaar in the
short run.
In practice, however, Czech trade cannot and should not be
studied to the exclusion of all Soviet bloc trade. The same suppliers
ship strategic goods to various Soviet bloc countries; reports often
fail to state the country of destination within the bloc; and the
Czechs could be supplied with strategic goods from the West via another
bloc country. Therefore, this study considers the whole Soviet bloc
with a rhaasis on Czechoslovakia. E4
gx' ...[rim i"wrne-+ta an Usies
Several, alloy metals are believed der be in short supply throughout
the Soviet bloc - mol,yb , vVa#nadium, zirconium, titanim and cobalt.'
Of these metals only molybdenum will be considered in this report, since
there is virtually no available trade information an the others.
Estimates fail to show a shortage of tungsten if Chinese production is
considered. Nevertheless,, there is considerable evidence of east wee' t1
trade in that natal. This may be due to a below-normal Chinese
latter is more likely since the Czechs recently tried (unsuccessfully)
to have Chinese tungsten ore processed in Austria. In view o
above tungsten will be covered in this report along with molybdenum.
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W " $ EC1IBITY FORMATW T
It is probably safe to assume that the shortage of molybdenum
and tungsten in Czechoslovakia is greater than in most other bloc
countries. Production of these items are negligible and at the same
time requirements are high due to the industrialized state of the
Czech economy. They are included in practically every list of commodities
in which Czechoslovakia is most deficient. In a recent directive sent
to Czech procurement agents, molybdenum was mentioned along with cobalt
as being the most pressing shortage. (l)
on and molybdenum are used in electrical and electronic
equipment and ass "a steel alloy. l ingeten and molybdenum wire may be
classified as serious bottlenecks in the production of electronic tubes.
Although little information its available on Czech-Soviet trade, it is
more than likely that most of the Czech manufactures which require
,ungeten and molybdenum are exported to the USSR and other satellites.
Tungsten and molybdenum can be substituted for each other when used
as alloys, but are normally not interchangeable in the electrical and
electronics fields.
III Con le
Volybdeniuu and molybdenum products are on International List I
and shipments to the bloc from all COC( countries are thus embargoed.
Alloys containing 5% or more tungsten are also subject to embargo.
Tungsten metal and alloys (including Ferro-tungsten but not steel auoys)
and tungsten compounds are on International List II, and are thus
subject to quantitative control. Apparently no upper limit or country
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quotas have been set by COCCM on exports of these items so far.
Wolframite, the principal ore of tungsten, is on neither lat.
Spain is not a amber of COMM. However, Spanish Wolfram is
exported only to the U. S. unless shipments are authorized by a UN
control comittee. In addition, end-use certificates are required for
Wolfram exports. Sweden requires that export licensee be obtained for all
strategic goods going to the bloc. Generally, List I items are not
exported to the bloc and List II items are quantitatively controlled.
In addition to COCCOM controls, these metals are allocated by
the International Materials Conference (IIC). The entire western
is allocated to western countries. In theory this would preclude
shipment to the Soviet bloc.
In fact, however, IMC is far from effective in shutting 0
supplies to the Soviet bloc. The principal shortcoming is that IMC
does not require end use screening. Thus, while ores or concentrates
may be consumed only in western plants, the resulting products may
be sent to the Soviet bloc. In addition, we shall see that even the
ores and concentrates of tungsten, at least, go directly to the bloc
in spite of the allocation system.
Finally, one other measure of control should be cited which
applies to molybdenum. The United States accounts for about 85% of
the world production of molybdenum. The only other exporters of
molybdenum: under IMC are, Chile and Norway and the contribution of
the latter is very small.. Thus molybdenum ore output is highly
concentrated and is relatively easy to control. Furthermore, U. S.
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export controls are more rigidly enforced than are those of other
nations. Tungsten, on the other hand, is produced in significant
quantities in a large number of countries. Under IMC more than 12
nations export tungsten.
IV at Waet TZ142 in Mauston
It is extremely difficult to procure statistics on east west
trade in both tungsten and molybdenum. In most official reports they
are buried within larger categories. The source which gives the best
picture of legal trade is GOCCk. Lately, commitments to the Soviet
bloc which are submitted to the U. S. Government in connection with
the Battle Act have served as another source.
For the period January-June 1951 there were no COCCU exports to
the bloc of tungsten item which appear on International List I. For
the some period the only significant exports of List II tungsten
products to the bloc were 15.2 metric tons (210,0oo) from West Germany.
There were also insignificant exports from the Netherlands and the UK.
Thus, we may assume that the Soviet bloc receives few legal
exports of tungsten products from COCCI countries.
How then does the Soviet bloc, and especially Csechoelovakia,
most its requirements? The lamest source is ps wbiy China which
accounts for over one third of world production. Chinese tungsten
for the most part p&y reaches the 1aropean Soviet. bloc in the
form of ore and concentrates. The next most iportant source of tungsten
is Spain ; .. u
SECRE
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The following reports indicate that Spain is supplying the
bloc: 25X1 C
Thus,it is more than likely that the bloc is supplied from Spain, usually
via S%ise intermediaries.
Reports indicate also that various other countries have supplied
tungsten to the bloc:
1. Tungsten is procured by the Italian Communist ?arty for 25X1 Cved Fc
25X1 C the Czech Legation in Rome
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RMATION
2. In mid-1951 the Hollandsche Uetalburgiache Bedrijven, NV
of Arnhem., Netherlands contracted to supply 200 tons of
mixed tin and tungsten concentrate to Metalimex, Prague.
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Ten tons of tungsten ore from Bolivia were shipped by
Met urgische Gesellachaft, A.G. of Zurich from Lisbon
or Tangier to Antwerp or West Germany for possible trans-
shipment to the bloc. The seller was A. de Beaumont of
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Lisbon
ungsten from Bangkok were shipped to the USSR
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via Gothenburg
Finally, special note should be taken of the shipment of tungsten
products to the Soviet bloc, especially those used in the electrical
and electronics industries. There are only a few plants in Europe
which can produce these items. Available evidence indicates that these
products are findin&; their way to the bloc through a few channels.
1. Of the 10C? million meters of tungsten wire produced by
Lwealampa ASwaden) in 1950 about 60 was shipped to
the USSR These shipments are still made under
a trade agreement. In addition, large 4uantities of
processed tungsten in other forms are shipped to the bloc.
Baport licenses issued in January 1.952 for tungsten alloy
and tungsten metal amounted to about $,:
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- SECU,1TY INFO
Tungsten products for use in the electrical industry have
been supplied to Czechoslovakia, East Germany, and Hungary
by Comeercio Trust of Vaduz, Liechtenstein. Two of the
manufacturers are Retallwerke Plansee of Austria and W. C.
Heraeus of Hanau, Germany. Shipments are routed via Switzerland
and are handled by the forwarders Gondrand Freres and Jacky
Raeder 25X1 A
Osram, a Wiest Berlin firm, sold tungsten wire valued at about
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$10,000 to USIA
4. Rilma of Zurich signed an agreement to deliver tungsten sheet
metal and filament to East Germany
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Summarizing, there appear to be only two main channels for tungsten
products. The Swedish - USSR channel is legal and is certainly the
largest source of supply for the bloc. The second channel, Yetaliwerke
Planses and W. C. Heraeua to the satellites via Commercio Trust, is
illegal and is next in
o the Swedish channel. Two other
suppliers are listed above, and there are probably a few other minor
ones on which no information is available. In addition, mkt illegal
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take place, thus alleviating the bloc's need for that metal.
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VI. U-6-4
est Tra,ew fn4olvbdenum
Available information indicates that there are few trade channels
for molybdenum. It also seems apparent that the Soviet bloc has been
lose successful In procuring molybdenum than it has in procuring tungsten.
There are certainly very few legal exports to the bloc of molybdenum.
For the period January-June 1951 there were no COCCM exports of molybdenum
items which appear on International List I (this list includes all forme
of molybdenum) Austria, not a m mber of COCOL, is currently o ttted
to ship molybdenum products valued at 035,000 to Poland. In addition
Sweden is committed to supply Czechoslovakia and the USSR with molyb-
denum wire under a current trade agreement. The Swedes claim that this
wire can be used only for electric light bulbs, and is therefore of no
strateglo importance. It is likely that no other legal exports of these
items take place.
The Soviet bloc is therefore forced to import a significant portion
of its molybdenum supplies illegally. The information available on this
subject is listed below:
1. As with tungsten,, large quantities of molybdenum products
been shipped from Metallwerke Plansee and W. C. Heraous to
the satellites via Commaercio Trust. The forwarders were
again Gondrand Freres and Jacky Maeder 25X1 A
2. Stefan Dobritsa of Vienna supplied the Czechs with molybdenum
wire through an unspecified Swiss colleague 25X1 A
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Rilu of Zurich, an interne
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signed an agreement
to deliver molybdenum products to East Germany
4. Wadi A. Cuaik, official of the Mexican Ministry of Eeonomica,
was looking for suppliers of ferro- molybdenum (and other
metals on behalf of the Czechs 25X1 A
Ambrosetti, a forwarder in Chiasso, shipped molybdenum (also
vanadium and titanium) to General Transport, a notorious east-
weet trade forwarder. Destination was unknown
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6. Metall.iraport Trust of Zurich offered USIA a a hall amount of
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chrome-molybdenun alloys 25X1 C
7. Molybdenum sheets from Metaaliwerke P7ansee have been shipped
to East Germany through the Zurich intermediary, alter
Uunziker. 25X1 A
Tracont A.G. of Zurich is chipping
molybdenum ore to a Belgian firm for processing and re-export
to the bloc.
In su a:ary the above information shows that the bloc has obtained
molybdenum and itta products from several middlamen and from two producers
illegally. Since the U. S. dontrols most of the West's supply of
molybdenum ore, it is safe to assume (1) that little or no molybdenum
ore finds its way to the bloc, and (2) that processed molybdenum going
to the bloc is made from U. $. ore. There are only a few producers of
molybdenum products in Europe. Of these only Metallwerke Plonsee and
W. C. Reraeue are know to have supplied the bloc. (Information on
several manufacturing plants have been checked, but there is no evidence
that they have exported to the bloc.) The main channel seeris to go
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products is known and there may be several others, including those listed
above whose source of supply was unknown. Next to Commercio Trust the
most important intermediary is probably Riluma,
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