171 Mr J. A. Lyons, Prime Minister, to Mr Torao Wakamatsu, Japanese Consul-General in Sydney

Letter 29 March 1938,

I desire to acknowledge the receipt of your letter of 26th March [1], on the subject of iron ore, and to inform you that this matter has been exercising the minds of the Government for some time. A preliminary survey which was carried out last year revealed the possibility of a shortage of ore, and arrangements were then made for a more detailed examination to be made. Dr W.

G. Woolnough, Commonwealth Geological Adviser, was selected for this work and he has now submitted a report [2] which is most alarming. Further, the views which he has expressed are supported by others equally well informed on the subject. Expert opinion is that tonnages available will not suffice for more than a couple of generations.

You will appreciate that in considering this matter the Commonwealth Government faces a question of grave national importance. The responsibility devolves upon it of conserving raw and irreplaceable material required for the vital and rapidly expanding steel industry in Australia.

I feel sure that the seriousness of the position will be apparent to you, but you may be assured that in considering future action full cognisance will be taken of the situation which already exists and of the special circumstances surrounding the working of the deposits at Yampi Sound.

The whole question is now receiving close attention, and you will be informed of any decisions which may be reached.

J. A. LYONS

1 Document 170.

2 See attachment to Document 203.

[AA : A981, AUSTRALIA 90]