Cablegram unnumbered 17 March 1938 SECRET,
Government has received report from its Geological Adviser [1] to the effect that known deposits iron ore capable of being mined economically of considerably less magnitude than hitherto believed. Report quite serious. Adviser urges Government limit or prohibit export ore pending survey resources. Government has decided announce Saturday [2] embargo operate in 3 months exportation of iron ore.
Government is much concerned by the necessity for taking this action particularly in view of the fact that as you are probably aware Western Australian Government has granted leases at Koolan Island Yampi Sound to Brasserts and Company London who had entered into agreement with Nippon Mining Company of Japan under which the latter Company provides substantial loan to operating company for the purposes of working deposits and shipment of ore to Japan.
Three Japanese experts at Yampi Sound and the Japanese Company have already incurred substantial expenditure. We feel however that in view of alarming nature of reports re our iron ore resources we have no alternative. Glad if you will advise British Government.
LYONS
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1 See Document 140, note 1.
2 19 March 1938.
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[AA : A1068, C 47/1/4, ii]