(UNTITLED)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP70T00666R000200110032-7
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 11
• Document Creation Date: December 12, 2016
• Document Release Date: August 23, 2002
• Sequence Number: 32
• Publication Date: December 9, 1965
• Content Type: BRIEF

DCI BRIEFING 9 DECEMBER 1965
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The crisis brought about by Southern Rhodesia's Unilateral Declaration
of Independence on 11 November 1965 has expand.ed.far beyond. the borders of
Zambia and. Rhodesia. There is increasing likelahood.that Zambian and. UK
actions to bring down the rebel government of Ian Smith migh precipitate a
complete economic break between Zambia and. Rhodesia. This would have very
serious economic consequences not only for Zambia and. the UK, but for much of
the ind.ustralized. West as well. Present economic relations between Zambia and.
Rhodesia are nearly on a "business as usual basis" however, African emotional
envolvement in the UDI question is high and pressures on the UK to bring down
the Rhodesian government by economic and. military sanctions are increasing.
The problem has three important aspects: 1) the vulnerability of Zambia to
Rhodesian Sanctions, 2) the importance of Zambian copper to the Free World.,
and. finally 3) the vulnerability of Rhodesia to economic sanctions.
The Zambian economy is uniquely vulnerable to Rhod.esian countermeasures.
Zambia's vital copper industry is wholly dependent on coal, electric power and
transport supplied. by Rhodesia. The country as a whole gets 93% of its
electric power from Rhodesia -- the balance comes from Katanga. About 68% of
this power is generated. at the jointly-owned. Kariba dam astride the Zambezi
River which forms the bound.ry between the two countries. The Kariba generat-
ing facilities, however., are all located. on the southern bank of the Zambezi
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and, are controlled. physically by Rhodesia. It is this facility which Zambian
President Kaund.a insists British troops occupy. The UK has thus far refused.
to agree to what would be an invasion of Rhodesia.
Coal for Zambian thermal plants, for smelting copper, for the railroad in
Zambia and. various other industrial uses all comes from Rhodesia's Wankie coal
fields southeast of Livingston. Last year Zambia used, more than 1 million
tons of this coal. There is now considerable interest in developing Zambia's
Kand.abwe coal deposit as substitute to Wankie coal but we do not believe this
to be a realistic alternative. The quality is very low and. we are not at all
certain that it can be used. for steam locomotives, thermal power plants or
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perhaps even in copper smelting furnaces.
Access to the Indian Ocean ports of Portuguese Mozambique via the rail-
road, through Rhodesia is absolutely essential to the uninterrupted production
of Zambian copper. Last year about 2 million tons of goods moved over the
Rhodesian Railroad. system into Zambia and, a like amount was shipped. out.
If, for whatever reasons, Rhodesia were to halt the flow of electric power
cease shipments of Wankie coal, and. d.eny Zambia transit rights through
Rhodesia the modern sector of Zambia's economy, including-copper mining, would.
be brought to an almost immediate halt. Copper production would. cease. Short
of physically occupying Rhodesia, it would. be virtually impossible, by airlift
or other high-cost emergency transportation measures, for the Western Powers to
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supply enough good.s to meet even Zambia's minimum needs and. a level of imports
necessary to maintain copper production would. be out of the question. To
develop ad.equate alternate land, transport routes to Zambia would. be a matter
of several years time and considerable outlay.
We estimate that about 900,000 tons of emergency imports would. be required,
to keep the Zambian economy on a care and, maintenance basis only with no copper
being produced. The three alternative transport routes theoretically available
to Zambia would. be through Tanzania, Congo (Leo), and. Portuguese Angola. We
estimate that about 300,000 tons of good.s annually could be moved. each way
through Tanzania. In the first instance port capacity at Dar es Salaam
(200,000 tons) and. Mtwara (100,000 tons) is the limiting factor. Goods could.
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move from Tanzania to Zambia via the East African Railway to Kigoma to Lake
Tanganyika where they would be transloaded. into barges and. ferried. to the port
of Albertville in theCongo and thence by the Congo railroad. system to Ndola.
Shipments could.blso be trucked. along the Great North Road.. Plans for an
emergency airlift call for flying goods from the airport at Dar es Salaam to
Nd.ola,, However, the capacity of this airlift would. be limited. to about
100,000 tons annually
This airlift capacity is
not, however, additional to the 300,000 tons we estimate as the maximum which
can be moved through East Africa but a part of it.
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The second. alternative transport route is through the Congo (Leo) via the
Katanga system (BCK) and. CNL, the so-called. route nationale. This would. involve
transload.ing goods onto barges at the Kasia river port of Port Francqui. A
second. transloading from barges to the railroad. would. be required. at Leopoldville
for onward. shipments to the Congo port of Matad.i. The capacity of this route
we estimate at 100,000 tons per annum.
Theoretically Zambia would. have access to the Benguela (CFB) system
which transits Portuguese Angola to the port of Lobito. We estimate that the
excess capacity of this line is about 600,000 tons per annum, 400,000 outbound.
and 200,000 tons inbound.. However, the mining interests in Katanga would. have
first call on this line. Since Katanga now imports about 300,000 tons of Wankie
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coal from Rhodesia annually in addition to 150,000 tons of general merchandise,
it is apparent that the redirection of this Katanga traffic would. more than use
ih1 bauNA
up all of the Benguela surplus ticapacity (450,000 from the Congo verses 400,000
},abound for the Benguela). A similar situation obtains for inbound. Benguela
!capacity.
Thus it is clear that no combination of alternative transport can fully
meet the 900,000 tons per annum minimum need.s of Zambia. At best 400,000 tons
could, be carried. leaving a deficit of 500,000 tons.
COPPER
The Zambia-Rhodesia confrontation assumes world-wide economic importance
because of Zambia's position as the Free World's second. largest copper producer,
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the US is first. For nearly two years copper has been in very tight supply.
Efforts by the world's copper companies to increase production have failed. to
keep pace with consumption and, prices have risen substantially on the open
market. As a result neither producers nor consumers have been able to build, up
reserve stocks. The only important copper stocks in the Free World. is the
US strategic stockpile and, even this has been d.rawnd.own markedly in recent
months. At the end. of last June, the stockpile was about 1 million tons now
it is less than 600,000 tons. Releases were made to supply needed copper to
US defense industries and. for coinage. The stockpile is now less than half
of the US annual consumption.
The elimination of Zambian pro d.uction, expected to reabh 760,000 tons
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this year, would. be extremely serious. While the US does not depend. on
Zambian copper -- we import from Chile and. Canada -- many Western European
nations and. Japan to. Last year imports of Zambian copper accounted, for 45%
of UK copper imports, 20% for West Germany, 27% for Sweden and a like amount
for Italy. A.striking 65% of Japanese primary copper imports came from Zambia.
STAT
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Rhodesian Vulnerability
The economy of Rhod.esia is surprisingly well balanced. -- almost a miniature
of South Africa. As a result, we believe that Rhodesia can weather the impact
of sanctiondVannounced.by the UK and. other countries thus far. Very likely
Rhodesia could. survive a complete break with the United. Kingdom. The trade
ban announced. by the UK could. be troublesome for Rhodesia, but sterling
restrictions adopted thus far are relatively ineffective. This is largely
because Britain continues to handle the financial transactions generated. by
continued. Zambian-Rhodesian trade. We do not, however, rule out the possibility
of further excalation, with a series of measures and. countermeasures by both
sides, which could. halt such trade.
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If a world-wide embargo could. be imposed. it would. be a most effective
measure. However, the international experience with Free World, sanctions
taken against Communist China during the Korean War shows that air-tight
sanctions are almost impossible to impose and, are often circumvented..
Harsher sanctions against Rhodesia would probably be largely offset by aid. from
South Africa, Portugal and, perhaps other countries. A effective world.-wide
embargo against Rhodesia would, require a naval and. air blockade of southern
Africa, including South Africa and. Portugues African territories. Further-
more, even during the Korean War we did. not mount a blockade against North
Korea. A blockade, even if the necessary ships and. planes were available,
would. be enormously expensive.
STAT
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