which would provide a basis for such trade. The countries of South and Southeast Asia, desiring to develop at an accelerated rate, require capital equipment which can be supplied by Japan in exchange for raw materials, once the basis for the exchange is established. Tapping the potential for increased production of food, fibers, and minerals (including chrome, nickel, tungsten, iron ore, coking coal and manganese), however, is presently beyond the financial capabilities of the region. But initial phases of this development could be undertaken with United States financial assistance. Therefore, the basic materials program will attempt to develop sources of food and industrial raw materials in Asian, Pacific, and Middle East Areas which will contribute to the needs of Japan and the region as a whole, and reduce future requirements for United States financial assistance to cover commodity imports from dollar sources. The basic materials program would supplement other programs for internal development of individual Asian and Pacific countries-by financing projects intended to serve regional needs which are beyond the capacity of the producing country. Major effort must be devoted initially to completion of agricultural, economic, geological and engineering analyses essential to undertake projects which can best meet the objectives indicated above. IV. RELATION TO OTHER PROGRAMS AND FINANCING 1. Acquisition of strategic materials for United States stockpile.-This program does not provide funds for the procurement or development of materials for the United States stockpile. 2. Export-Import Bank and the IBRD-No project that either bank is prepared to finance will be financed from basic-materials funds. Therefore, the two banks will be advised as to all basic materials projects which MSA believes warrant financial support, to enable the banks to undertake the financing of such projects before any decision is made to use basic-materials funds. 3. Private investment and foreign investment.—The basic-materials program financing, by helping to accelerate projects essential for United States objectives which could not otherwise be carried out, will open up new areas and encourage further private and foreign investment. 4. Country programs.-The basic-materials development projects under section 514, although developed on the basis of global priorities, will contribute to internal strength and stability of producing countries, as well as to the requirements of other free-world countries. Therefore, even though basicmaterials program projects are intended primarily to serve needs of other countries, they should be considered an integral part of producing countries' development programs, and not as wholly separate enterprises. Accordingly, the basic-materials projects will be carefully examined to assure integration with country programs. V. PROJECTS The illustrative list of projects, which totals $50 million in dollars and dollar equivalents, consists of projects which, on the basis of information available today, MSA would select as most likely to qualify for MSA financing in fiscal year 1954 in the amounts indicated. Of course, before financing is undertaken, MSA will in most instances need to make an independent assessment of the engineering details. In addition to this illustrative list of $50 million of basicmaterials projects, there is a list of about $96 million of further projects to be explored. Some of the projects included in the illustrative list for fiscal year 1954 will fall by the wayside or will be found to be eligible for bank financing when they have been fully worked out. To the extent that these projects are so disposed of, they will make room for other projects which will mature from among those on the list of further projects to be explored. Beyond either of these listings, we would expect that some other projects will mature within the fiscal year which would actually have a somewhat higher priority than those included on the illustrative list, and we would, therefore, expect to reserve a significant fraction of the fiscal year 1954 appropriation for obligation in the latter half of 1954. In particular, we would expect that with the further development of projects in the Far East, the ratio of funds that would actually be obligated in the Far East would be higher than that shown in the illustrative list. Grand total MSA basic materials program, fiscal year 1954: Further projects to be explored_. BASIC MATERIALS PROJECTS FOR FISCAL YEAR 1954 [Millions of dollars and dollar equivalent] TITLE I DEPENDENT OVERSEAS TERRITORIES Illustrative list A. United Kingdom territories:1 (1) Wankie Collieries (2) Sinoia-Kafue Cutoff_ (3) Kague hydroelectric scheme. (4) Lake Victoria ports__ 50.0 96.35 Estimated dollar cost 7.0 21.0 5.6 4.2 17.8 C. Portuguese territories:1 (1) Minerals banks in Angola, Mozambique, and Goa‒‒ 3.0 Subtotal dependent overseas territories___‒‒‒ 30.8 More detailed description of these projects may be found on pp. 8-10 of the congressional presentation statement covering the dependent overseas territories program, May 12, 1953. 2 It has been decided to include in this submission only $1 million for the Sinoia-Kafue Cutoff in the illustrative program for the United Kingdom territories instead of $5.6 million as shown in the congressional presentation statement of May 12, 1953. The balance of $4.6 million appears below in the list of further projects to be explored. Southern Rhodesia : Further projects to be explored A. UNITED KINGDOM TERRITORIES 1. Expansion of Pig Iron Capacity, QueQue: The iron and steel plant at QueQue came into operation in 1948 and was soon producing 110 tons of pig iron and 80 tons of steel a day. It is located close to limestone deposits, ample water supplies, and extensive deposits of iron ore which analyze at 50 percent. The production of this mill should, however, be considerably increased if it is to meet the growing demands of the expanding economy of central Africa. An increased output of pig iron would lower production costs at the mill and provide the area with a greater supply of highgrade, low-priced material which would directly support expanded minerals production by making material available to the local mining industry and indirectly through the resulting expansion of secondary industries__ 2. Sinoia-Kafue Cutoff: The expansion of minerals production in the copper belt, particularly copper and cobalt, is hamperednot alone by suitable energy sources at reasonable cost-but also by the unavailability of transport to bring in equipment and supplies and to take out production. The normal route for the Northern Rhodesia part of this area, and in part for the Congo portion, is over the Rhodesian railways and then the Mozambique railways to ports in that latter territory, primarily Lourenco Marques and Beira. ECA financed, in part, a detailed transport survey by Knappen, Tippetts, and Abbett, which resulted in recommendations that two cutoffs be built to improve transport in this area. The first, the Pafuri cutoff, is now under construction, being financed by loans from the EXIM Bank and the IBRD. This Sinoia-Kafue cutoff was the second one recommended, and it is expected that work will begin in fiscal year 1954. It will shorten the haul from the port of Beira to the copper belt region by approximately 500 miles, and thus not only improve transport for that area, but by making possible a more efficient use of existing equipment, help to relieve the general transport shortage in the haul area... British East Africa: 1. Improvement in Lake Nyassa Transport System: Lake Nyassa in east central Africa has become increasingly important as a means of internal transport for the cargoes of northern Rhodesia, Tanganyika, and Nyasaland. In the years 1936 and 1948 the cargo carried on the lake increased from 1,662 tons to 4,244 tons. This tonnage, however, has in the past been handled by barge from shore to motor vessel because of the constantly changing level of the lake. The British have proposed to dam the Shire River, a project which would at once stabilize the level of the lake and provide new resources of hydroelectric power for the mines and industries of this central African region. The proposed dollar sum will facilitate part of this development and allow the improvement of transportation on the lake. The movement to Mozambique ports of the important products of the mines and plantations of the region, among them sisal and corundum, would be greatly increased by this improvement---Gold Coast: 1. Tema Port: The completion of a new port at Tema on the eastern section of the coast of the Gold Coast is related to, and would be justified by a basic material standpoint, because of the proposed carrying out of the Volta River scheme. This scheme is a joint development on the part of the United Kingdom and Gold Coast governments, and United Kingdom and Canadian aluminum producers, with estimated total cost of approximately $400 million. Under this scheme, it is anticipated that the Gold Coast would be producing, in the first stage (about 1960) 80,000 tons of aluminum a year, and ultimately, in the final stage, better than 200,000 tons of aluminum per year. The building of the new port of Tema is an essential step in the carrying out of this program and, as well, in the final operation of it----- Total United Kingdom territories__‒‒‒ Estimated dollar cost 2.8 4. 6 4.2 5.6 17.2 1 Further projects to be explored-Continued B. FRENCH TERRITORIES French North Africa 1. The expansion of mining development in Tunisia for lead, zinc, and manganese is hampered by the lack of power at reasonable cost. It is proposed that there should be a hydroelectric plant to meet this requirement-- 2. The North African governments are pursuing a policy of mechanizing the production of food grains which are exported to Western Europe. The maintenance of present production and, of course, such increases as climatic and soil conditions permit, will require increased investment in equipment, for agricultural producers, with particular attention to the equipment of native cooperatives. Approximately $5 million will be required for this purpose, fiscal year 1954---. French West Africa: 1. Technical assistance projects requests are now in preparation under which United States technical assistance will be requested to aid the French in planning expanded mining development in the tinproducing area of the Niger. On the basis of plans so developed, financing will be required to make possible the necessary exploration and exploitation of deposits known or to be discovered. It is also probable that financing will be required to improve transport and port facilities. Only a preliminary estimate can be made as to United States financing for fiscal year 1954, which is $4 million____ Total, French territories.. Angola: C. PORTUGUESE TERRITORIES 1. Luanda Purchase of semiautomatic loading equipment for the port of Luanda, to provide for increased shipments of manganese ore and other cargo___ 2. Extension of railroad from the present terminus Sa da Bandeira to Serpa Pinto: This would be the first stage of a program to extend this line to Northern Rhodesia. This program, while quite expensive, might be justified because it would open up the potentially rich mineral area of southern Angola and provide an alternate outlet for Rhodesian mineral production to the west coast of Africa (the project would not be finished under this program until an intensive examination, probably by United States experts under TA, had shown its economic validity). Total, Portuguese territories_ D. BELGIAN DOTS Belgian Congo and Ruanda-Urundi: 1. Ruzizi hydroelectric project: Financing of this project, which will result in making reasonably priced power available to the tin, columbite-tantalite and tungsten producers of Ruanda-Urundi, will need further financing in fiscal year 1954- 2. Extension of ports at Leopoldville and Matadi: Financing of this project is under consideration as part of this year's program. These 2 ports, the Congo seaport and the main Congo River port, are connected by a railroad and jointly constitute the main inlets and outlets for this important raw materials producing area. Further financing will be required in fiscal year 1954___ Total, Belgian territories__ Estimated dollar cost 3.0 5.0 4.0 12.0 0.70 20.00 20.70 2.0 2.0 4.0 Further projects to be explored—Continued E. ITALIAN SOMALILAND Belgian Congo and Ruanda-Urundi-Continued Estimated dollar cost 1. Sisal production: European and native growers sell entire present output (1.200 tons per year) to England; are expanding cultivated area and importing new varieties. Plan construction of a new processing mill and purchase of other equipment incidental to production of fiber... 2. Italian geologists, with help of an American geologist provided under the TA program, are attempting to develop a plan for the exploitation of tin and lead deposits at Magian, Somalia. If the plan is successfully worked out, the financing required under the basic materials program in fiscal year 1954 will be approximately $250,000__ Total, Italian Somaliland........ Total further projects to be explored. TITLE I II. METROPOLITAN AREAS 0.350 0.250 0.600 54.5 Austria: Power for aluminum development 3- 3 6.7 2.5 9.2 Total illustrative list of projects, title I, metropolitan areas_ Austria: Further projects to be explored 1. Lead/zinc mining development and exploration on BleibergerBergwerks-Union properties located at Lafatsch and Nasserieth, Austria. This is a program already gotten under way with 90 percent (05 percent) counterpart funds. It is expected to provide sufficient local production to meet Austria's lead and zinc requirements from domestic sources. United States aid requirements for fiscal year 1954_. 2. Copper-mining development and exploration, Kuferbergbau Mitterberg. This project is expected to make it possible for Austria to meet more than 50 percent of its domestic requirements of copper from domestic production. United States aid requirements for fiscal year 1954 3. International power development, Braunau/Inn. This power development project is to supply increased power for the production of aluminum in Austria and Germany for the VAW-Ranshofen aluminum plants. Projects for financing a portion of the cost of the expansion of these 2 aluminum production facilities are under consideration in the fiscal year 1953 program. United States aid requirements for fiscal year 1954 Total for Austria____. Germany: 1. VAW aluminum plant. A project for financing part of the expansion of this facility is under consideration in the fiscal year 1953 program. Further financing will be required from the fiscal year 1954 program. This will make available increased aluminum-production capacity to meet Western Europe's needs. United States aid requirements for fiscal year 1954--- 2.50 1.25 5.8 9.55 2.5 This is part of a project described below. The balance of $5.8 million appears in the "List of further projects to be explored." Consideration is being given to joint financing with Turkey of a mining bank. The financing of such a bank should be worked out in such a fashion that technical assistance is made available as well as financing so that funds and techniques, including managerial skills, may be made available to producers and potentil producers in order to increse the production of chrome, lead, manganese, and copper. United States aid requirements for fiscal year 1954-$4 million. |