STOCKPILE REVIEW TASK 9 - RELIABILITY OF KEY US SUPPLIERS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85-01156R000300370015-9
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 4
• Document Creation Date: December 21, 2016
• Document Release Date: May 27, 2008
• Sequence Number: 15
• Publication Date: January 11, 1984
• Content Type: MEMO

Approved For Release 2008/05/27 : CIA-RDP85-01156ROO0300370015-9
CONFIDENTIAL/NOFORI.
MEMORANDUM FOR: Mr. Richard Levine
NSC Staff
NIC 00235-84
11 January 1984
FROM: Maurice C. Ernst
National Intelligence Officer for Economics
1. The objective of Task 9 is to obtain an Intelligence Community
assessment of the reliability of foreign suppliers of strategic materials
to the US in a wartime scenario. This assessment covers 26 key US metal
and mineral suppliers during a three year conventional war with the Soviet
Union. The projected reliability of each country is judged by two
criteria:
-- Intentions, i.e., would a country withhold supplies from the US
for political reasons.
-- Capabilities, i.e., would terrorist/insurgent activity
significantly disrupt production and exports for a sustained
period of time.
These are the only criteria used; other potentially determining factors,
such as oil availability, are not considered under Task 9. In accordance
with the agreed war scenario, the following assumptions are made:
-- The military reach of the USSR and ground combat is confined to
areas of Western Europe, the Persian Gulf, and South Korea,
eliminating these countries as exporters. The military and
subversive capabilities of Cuba and Vietnam are not a factor.
-- Civilian air and sea transportation are readily available,
international shipping is fundamentally secure.
-- The international financial system is functioning.
-- Sufficient oil, technicians, machinery and spare parts are
available in the countries evaluated to maintain or even increase
production.
This Memo is Classified
CONFIDENTIAL/NOFORN
in its entirety.
The Director of Central Intelligence
Walinpoe, D.C. 20505
 2. Under these assumptions, a review of the political and economic
dynamics in each of the 26 countries concluded that all but two would be
willing to sell minerals and metals to the US or the world market during
the war. It was agreed that political ideologies, systems, and orientation
would, in the assumed war scenario, have little bearing on the willingness
of countries to sell their products. Economic/financial factors would
dictate continuation of exports unless desired imports could not be
obtained with the export proceeds.
3. China and India, however, neither of which is a major US supplier,
were considered to be exceptions to this general rule. In both of these
countries exports of strategic materials are very minor sources of foreign
exchange, so that the economic incentive to export these products would be
small. Moreover, both countries would probably go out of their way to take
a neutral position in the conflict and avoid antagonizing either side.
Although it is possible that China and India would continue to sell
strategic materials to both sides, they might also withhold them. It is,
therefore, prudent not to count on their supplies being available in
wartime.
4. Even though a supplier of strategic materials may be willing to
export, it may be unable to do so for at least a significant period of time
because of terrorist or insurgent activity. During a prolonged
conventional war, it is reasonable to expect a major upsurge in this sort
of activity, with increased Soviet instigation and support, if not under
direct Soviet control. Where well organized insurgent or guerrilla groups
already exist, as in Central America and Southern Africa, the potential for
effective disruptions of production and transportation facilities will be
high. In many countries these facilities are highly vulnerable to
disruption.
5. The potential for effective disruption of exports of strategic
commodities by insurgent or guerrilla groups, or by terrorists, is
considered especially high in three countries--Zaire, Zambia, and
Zimbabwe. Some of the main export transport routes from these countries
are already effectively denied. In wartime, the possibilities for
disrupting exports become vast indeed. Moreover, substantial ins rgent
groups already exist in the area and it would not take much to improve
their effectiveness. It would not be prudent for the US or the West to
count on the availability of any strategic minerals from these countries
during a protracted war, although interruptions may turn out to be
temporary and partial.
6. In eight other countries--Botswana, South Africa, Sri Lanka,
Bolivia, Chile, Guyana, Peru, and Suriname--there is judged to be a
substantial risk of interruptions of exports of strategic minerals during
the war period. The degree of risk is sufficiently large that these
nations should not be relied on for defense material needs, however, they
are probably sufficiently reliable to be used for the needs of the civilian
sector.
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CONFIDENTIAL/NOFORN
7. In the case of South Africa, the degree of risk depends on the
extent to which Moscow had been able to build up its insurgent and
terrorist assets in neighboring countries before the conflict started.
Under present circumstances, the South African government would probably be
able to control any terrorist activity with little damage to its
facilities, because the insurgents are neither strong nor well organized.
The situation could change substantially, however, if Moscow made a major
effort prior to the war, although the build-up would take time.
Consequently, South Africa, and probably also Botswana, can be considered
reliable suppliers at present, but could become unreliable if circumstances
changed. The reliability rating of these countries reflects a compromise
between these two scenarios, based on the assumption that the growing
expectation of war would in any case motivate Moscow to take at least some
steps to improve its assets in that area.
8. In Sri Lanka, Bolivia, Chile, Guyanna, Peru, and Suriname, there
is clearly a potential for disruption of exports, as indicated by a history
of racial or religious antagonisms, class conflict, and in some cases
guerrilla movements. These conflicts, however, are not easily exploited
for long by the USSR for its own national purposes and are unlikely to do
sustained damage to production or export facilities.
9. The remaining 13 countries are considered to be reliable sources
of supplies for strategic minerals for all defense and civilian needs.
This does not preclude brief interruptions because of strikes or other
problems, but indicates that the chances of lengthy shutdowns or transport
interruptions are considered very low.
10. Table 1 presents the rankings of each of the 26 countries with
respect to reliability of supply, and provides supporting information
concerning their importance to US imports and to world productive capacity
and remarks concerning the vulnerability of their production and transport
systems.
11. The rankings are as follows:
Category 1 (highly reliable): Gabon, Guinea, Australia, Indonesia,
Japan, Malaysia, New Caledonia, Philippines, Thailand, Canada, Brazil,
Jamaica, Mexico
Category 2 (fairly reliable): Botswana, South Africa, Sri Lanka,
Bolivia, Chile, Guayana, Peru, Suriname
Category 3 (unreliable): Zaire, Zambia, Zimbabwe, India, China.
12. Table 2 -- derived from Table 1 -- shows US mineral and metal
imports and estimated Free World productive capacity which fall in each
category. In the unreliable category (3), cobalt and industrial diamonds
are noteworthy with a 64 and 22 percent share of US imports,
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CONFIDENTIAL/NOFORN
respectively. In Category 2 there are four imports with over a 50 percent
share of the US market (platinum group metals, vanadium, ferrochrome, and
industrial diamonds), and two (chromite and ferro-manganese) with about a
40 percent share. In the case of diamonds, 83 percent of US imports fall
in Category 2 and 3.
13. The large majority of the more abundant metals and minerals,
however, including all the major metals, fall in Category 1. Moreover, it
appears that many supplying countries have substantial reserves as well as
the capacity to supply increased amounts demanded by the US under the given
scenario.