Mr. CROSBY. Yes. We have reduced the purchases, well, the exchange totally to slightly over $500,000. Mr. GROSS. Has the United States permitted contractors who contracted for orders of Rhodesian chrome prior to the effective date of the sanctions to take delivery of these orders and, if so, is this not a violation of the sanctions? Mr. ARMITAGE. No, sir; we don't consider it a violation of the sanctions. The Executive order which gave legal effect in the United States to the sanctions provided for exceptions in hardship cases which are defined pretty much as you stated. Mr. GROSS. Did the U.N. tell us we could do this or that we couldn't do it? They seem to be writing the ticket. Did they tell us whether we could or couldn't do this? Mr. ARMITAGE. I think this has not been challenged, to my knowledge. Mr. GROSS. Did we do this unilaterally? Mr. ARMITAGE. We did this in the Executive order. Mr. GROSS. Unilaterally? Mr. ARMITAGE. Yes. Mr. GROSS. Now this resolution, which I believe was in your statement, Mr. Armitage, that you pump for House Resolution 45. Would the United Nations and the State Department, which apparently is an appendage of the United Nations from what I have heard here this afternoon, accept an amendment to include in this resolution every nation that has denied the right of self-determination to its people? Suppose we just made this resolution all encompassing and put in the Soviet Union and all of the other countries such as China, with whom we are apparently about to embark on trade 1 relations. Suppose we put them all in, all nations that deny their people the right of self-determination, such as the Latin American countries ruled by dictators. How about that? Would Foggy Bot#tom accept that and transmit it to the United Nations? Mr. ARMITAGE. I believe that would be more than we would want to take on, sir. Mr. GROSS. I thought so. In other words, you don't want to apply around the world with an even hand what you are now applying to Rhodesia? Mr. ARMITAGE. I wouldn't say we don't want to. I say we would view that as being outside of our capabilities. Mr. GROSS. It wouldn't be in violation of the Constitution if we did it in the Congress, would it? Mr. ARMITAGE. No, sir; if you passed a resolution. Mr. GROSS. What about asbestos? That is a subject that has not been raised here this afternoon. Did we import asbestos from Rhodesia? Mr. LAWRENCE. In this field we have an ample objective of around 13,000 tons. We have about 13,000 tons available to us, so we have no problem on that one. Mr. GROSS. Where are you getting asbestos now? Mr. LAWRENCE. Canada is supplying us with asbestos. We are getting some locally out of Arizona now. Mr. GROSS. What has happened to the price of the imported product, anything? Mr. LAWRENCE. I am sorry, I don't have it, but I could furnish it for the record. Mr. GROSS. Mr. Chairman, I would like to have that information, with your permission. Mr. FRASER. We will include that information in the record. Mr. GROSS. Does Russia import any Rhodesian ore that you know of? Mr. ARMITAGE. Chrome ore, not to my knowledge. Mr. CROSBY. Occasionally we have heard of Russian ships docked in Africa to pick up Rhodesian chromite but verification has proved this not to be the case. Mr. FRASER. What we have heard so far suggests that the Rhodesian chrome mines are continuing to operate and they are continuing to sell. To the extent that chrome finds its way into the world market, I suppose that lifting of the sanctions is not going to increase the world supply and would simply make over what might be happening covertly. Mr. LAWRENCE. I think you could characterize it that way, Mr. Chairman. I would say this ore is entering into world commerce and certainly at rates almost comparable to that from U.S. companies operating the mines. Mr. FRASER. If we wanted to learn more about how that chrome is being marketed, what would be the best way to get more information on this? Mr. LAWRENCE. The Department of State will have to answer that. They have the only means available that I know of, and I don't know whether they have that even, to determine where it is going. (The following information was furnished for the record). RHODESIAN MARKETING OF CHROME ORE Rhodesian chromite is not sold on the free market. There are no regularly published price quotations for Rhodesian chrome ore based on actual transactions. Whatever Rhodesian chromite is being traded in the world is likely to be sold at below world market prices and under conditions unfavorable to the Rhodesians. The principal exporters or merchants of chrome ore prior to the imposition of sanctions were the following firms located in Rhodesia: Arnhold, Wilhelmi & Co., P.O. Box 2511, Salisbury; The British Metal Corporation, Ltd., P.Ó. Box 1544, Bulawayo, and P.O. Box 2366, Salisbury; Continental Ore (Africa), Ltd., P.O. Box 3411, Salisbury; Mr. CROSBY. Mr. Fraser, I think probably the only source of information on this, and this is only indications, would be the kinds of reports that are made to the U.N. Sanctions Committee, but I would like to add a word or two about the operation of the chrome mines and the nature of it. In the case of Foote Mineral, as nearly as we can judge from what scraps of information we get, the mine is operating at just about a subsistence level and is not producing, as far as we are aware, any profit as such. This is a operation well below capacity or what a company would want to achieve if it were going to be in business and making a profit. Mr. FRASER. What was the year-end production from that mine? Mr. CROSBY. I don't have those figures but I think one of their particular interests has been the maintenance of the mine itself and maintenance of the equipment. I think they have managed to maintain the functioning of the mine and keep it from flooding and, if I may add a more general word, I think this is in certain respects an exception, because the effect of the sanctions on the economy of Rhodesia in general has been to bring about the kind of stagnation that has resulted in very serious disintegration of the rolling stock of the railroad, of the flying equipment of the air service, tractor services are growing older all of the time, and one statistic is that in 1969 some 30,000 production hours in agriculture were lost because of tractor breakdowns, and so forth. This is a general observation by way of pointing out that, although the sanctions have not actually forced Ian Smith to make an agreement with the British, the sanctions themselves have had a very serious effect on the economy of the country, and the figures that the Government itself puts out in Rhodesia about economic developments indicate that since 1965, the economy has grown a total of just about 5 percent per capita, something under 1 percent a year in terms of real production. When you compare this with the fact that the South African economy over the same period has grown 57% percent, you get some measure of the catastrophic impact that this has had. It has not forced them to their knees, but any responsible government would seriously regard the situation which has been generally as a result of sanctions. Mr. FRASER. Let me pursue the chrome mine at the moment. What part of the country are they located in? Do you know? Mr. CROSBY. I am not really sure. Mr. KYLE. They are in the Great Dyke region in Rhodesia. Mr. FRASER. How many separate mining operations were there? Mr. CROSBY. There are two American ones. Mr. FRASER. What about Rhodesian? Mr. CROSBY. We may be able to get that for you. I think we should be able to. Mr. FRASER. What you might get, if you can, would be a list of all of the separate mines that were in production prior to the sanctions and then whatever information you have as to the extent each of them is continuing to produce ore and in what proportion. (The information referred to follows:) At the end of 1965, about 10 to 15 companies were producing chromite from around 25 to 30 mines in the Great Dyke and adjacent areas. The Great Dyke constitutes the major reserve of chromite in Rhodesia. In that year the largest producer was the Rhodesia Chrome Mines, Ltd., a subsidiary of the Union Carbide Corporation. Together with mines of Rhodesian Vanadium Corporation, Ltd., a wholly-owned subsidiary of the Foote Mineral Company, the output of the Rhodesia Chrome Mines, Ltd., had until that year accounted for about 75 percent or more of Rhodesia's annual chromite output. Other chromite producers in the Great Dyke were listed in 1965 as follows: African Chrome Mines, Ltd. (subsidiary of Union Carbide Corporation) Corsyn Consolidated Mines, Ltd. Frances Mines (Pvt.), Ltd. C. de L. Souchon Southridge, Ltd. Current production figures of the mines listed above, using either the 1959 list or the less detailed list for 1965, are not available. Mr. FRASER. I want to go back to this question. If it is the fact that chrome production continues in substantial amounts in Rhodesia, clearly the market must be outside of Rhodesia and, while I think we know that Portuguese Territory and South Africa have not observed the sanctions, the question is, what other countries are not observing the sanctions? That is the question I am interested in. You say the U.N. Sanctions Committee has information on this? Mr. CROSBY. Yes, the U.N. Sanctions Committee receives reports of charges of violations of the sanctions. Mr. FRASER. What do they do when they get the charge? Mr. ARMITAGE. They refer the reports to the countries whose nationals or whose ships allegedly violated the sanctions and ask for a report or documentation on what has happened. Mr. FRASER. Is this information public? Mr. ARMITAGE. Yes, sir. There are large bales of it. Mr. FRASER. Who in the U.S. Government monitors this on behalf of our Government? Mr. ARMITAGE. We do and the Africa Bureau does, but this business of trying to document these violations is a very difficult maneuver because the people who are furnishing the documentation, the people who are interested in getting around the sanctions are usually a jump ahead of the information. that is supplied. Mr. FRASER. I have the impression that people who are in the chrome business know what is going on with Rhodesian chrome. They have some sense of how it is getting out on the market and in what form. Mr. ARMITAGE. I would guess they do. Mr. FRASER. There are people in the United States who are knowledgeable about this. Can we get this information from them? Mr. ARMITAGE. I haven't gotten any reports in which they have indicated that. I think they probably know about what the general situation is. Mr. Lawrence suggested that they did, but to know what specific way and how they violate so you can pin the violator, I am not quite so sure. Mr. CROSBY. We have had one case that went to court where the company was actually established as having violated the sanctions last year. The company was fined by the court and will have other commercial fines to pay. Mr. FRASER. What company is that? Mr. CROSBY. Muller is the name. Mr. FRASER. What kind of company is that? Mr. CROSBY. It is an importing company, an American importing company. Mr. GROSS. May I ask a question, Mr. Chairman? Mr. FRASER. Yes. Mr. GROSS. Have you discovered any British or Greek vessels flying foreign flags, Liberian or others carrying chrome or any other so-called contraband to Rhodesia? Mr. CROSBY. No, not British. Mr. GROSS. Does the information that you just mentioned cover the registry of vessels that have been carrying on any kind of illicit trade? Mr. CROSBY. There is a good deal of information about the registry of vessels; yes, sir. |