Cablegram unnumbered 2 August 1937,
URGENT CONFIDENTIAL
Your cablegram 20th January 1936 [1] relative to Yampi Sound Iron ore deposits in view of reported world shortage of high grade iron ore glad if you would consult with United Kingdom authorities with a view to ascertaining whether the position as outlined in your cablegram has substantially changed.
Preliminary survey which has been made of accessible deposits in Australia suggests that the life of these deposits particularly if they are exploited for export on a large scale would not be so long as we have hitherto been led to believe.
Government at present considering the whole matter and would appreciate urgent advice as to whether from the point of view of Empire, consideration of Commonwealth Government should be given to some restriction on exports of iron ore from Australia to Japan and whether any portion of output should be deviated to meet Empire requirements.
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1 Printed below as an editorial attachment.
Attachment
Mr S. M. Bruce, High Commissioner in London, to Mr J. A. Lyons, Prime Minister
Cablegram unnumbered LONDON, 20 January 1936 Received 21 January 1936
CONFIDENTIAL
Yampi Sound. Points raised in your telegram of 10th December have now been discussed with Defence and other United Kingdom authorities concerned who advise as follows (1) Iron ore deposits of world so extensive no need for considering conservation Yampi Sound deposits for future Empire purposes. (2) There are other Empire deposits of great richness much closer to Europe which it is impossible profitably to develop for Empire purposes.
Consequently no question of developing Yampi Sound deposits with aid of United Kingdom Government. (3) Although not at present required for Empire purposes deposits would be of more use in emergency if some steps had been taken to develop them and ore was readily available. (4) It would serve no object and it would not be desirable to prevent Japanese obtaining their ore from this source. There are many other sources available to them.
BRUCE
[FA : A2937, YAMPI SOUND]
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[AA : A461, E373/1/3] LYONS