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    "seq": 1,
    "pageIndex": 0,
    "type": "document",
    "url": "https://s3.amazonaws.com/NARAprodstorage/lz/presidential-libraries/reagan/6908381/40-485-6908381-058-004-2017.pdf",
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    "ocrText": "Ronald Reagan Presidential Library\nDigital Library Collections\nThis is a PDF of a folder from our textual collections.\nCollection: Roberts, John G.: Files\nFolder Title: JGR/World Bank\nBox: 58\nTo see more digitized collections visit:\nhttps://reaganlibrary.gov/archives/digital-library\nTo see all Ronald Reagan Presidential Library inventories visit:\nhttps://reaganlibrary.gov/document-collection\nContact a reference archivist at: [email protected]\nCitation Guidelines: https://reaganlibrary.gov/citing\nNational Archives Catalogue: https://catalog.archives.gov/\nworld bank\nTHE WHITE HOUSE\nWASHINGTON\nApril 18, 1983\nMEMORANDUM FOR FRED F. FIELDING\nFROM:\nJOHN G. ROBERTS\nSUBJECT:\nCongressional Letter Concerning\nCompania Minera de Cananea\nSix Senators and eight Congressmen have signed a letter to\nthe President requesting a briefing on financing of the\nproposed expansion of the Compania Minera de Cananea copper\nsmelting operations 20 miles south of the Arizona border in\nMexico. The expansion is to be financed in part by a loan\nfrom the Export-Import Bank and another from the World Bank.\nThe loans had the support of the U.S. representatives on the\nbanks, and the signers allege that this violates § 552 of\nPublic Law 97-121. That section directs the Secretary of\nthe Treasury to oppose any loans for the production of a\ncommodity for export if the commodity is in world surplus\nand additional foreign production will injure United States\nproducers. (The signers are from copper-producing states.)\nThe letter also asserts that pollution from the operations\nwill enter the U.S. atmosphere.\nEd Harper was given responsibility for a response; you were\ngiven an information copy, presumably because of the assertion\nthat Public Law 97-121 had been violated. That assertion,\nof course, hinges on numerous debatable points concerning\nthe world copper market, Mexico's domestic use of copper,\nharm to U.S. producers, and so on -- Harper's response will\npresumably address these factual issues. I see no need for\nany action on the part of our office at this time.\nID #. 130702 CU\nWHITE HOUSE\nF0004-02\nCORRESPONDENCE TRACKING WORKSHEET\no OUTGOING\nH INTERNAL\nI . INCOMING\nDate Correspondence\nReceived (YY/MM/DD)\nH\n/\nName of Correspondent: Dinsis De Concern\nMI Mail Report\nUser Codes: (A)\n(B)\n(C)\nSubject: Comprehensive briefing by the various agences\ninvolved in the financing of the proposed expansion\nCompania Minera de Cananea in Mexico\nof the coffer mining and smelting operations of the\nROUTE TO:\nACTION\nDISPOSITION\nTracking\nType\nCompletion\nAction\nDate\nof\nDate\nOffice/Agency (Staff Name)\nCode\nYY/MM/DD\nResponse\nCode\nYY/MM/DD\nCo Holland\nORIGINATOR 83,03,29\n/\n1\nReferral Note:\nWAT 18\nI/A 83/03/29\n5 83,04107\nReferral Note:\nRadule\nX 83 103124 KD A 830324\nReferral Note: RD letter to D Deconique\n1\nReferral Note:\n/\n/\n/\nReferral Note:\nACTION CODES:\nDISPOSITION CODES:\nA Appropriate Action\n4 Info Copy Only/No Action Necessary\nA Answered\nc Completed\nc Comment/Recommendation\nR - Direct Reply w/Copy\nB Non-Special Referral\nS Suspended\nD Draft Response\nS For Signature\nF Furnish Fact Sheet\nX Interim Reply\nto be used as Enclosure\nFOR OUTGOING CORRESPONDENCE:\nType of Response = Initials of Signer\nCode\nIf\n\"A\"\nCompletion Date = Date of Outgoing\nComments:\nKeep this worksheet attached to theoriginal incoming letter.\nSend all routing updates to Central Reference (Room 75, DEOB).\nAlways return completed correspondence record to Central Files.\nRefer questions about the correspondence tracking system to Central Reference, ext. 2590.\n5/81\n28\nRobutes\nMarch 24, 1983\nDear Senator DeConcini:\nOn behalf of the President, I would like to acknowledge\nyour recent letter urgently requesting a comprehensive\nbriefing by the various agencies involved in the financing\nof the proposed expansion of the copper mining and smelting\noperations of the Compania Minera de Cananea in Mexico.\nPlease know that we are expediting thorough consideration\nof your request in coordination with the appropriate\nPresidential advisers. I assure you that the concerns\nyou have underscored will receive prompt and close\nattention.\nWith best wishes,\nSincerely,\nKenneth M. Duberstein\nAssistant to the President\nThe Honorable Dennis DeConcini\nUnited States Senate\nWashington, D.C. 20510\nKMD: CMP : sy6-KMD2\nCC: w/copy of inc, Ed Harper - for DRAFT response\nw/copy of inc, Fred Fielding - FYI\nw/copy of inc, Dennis Thomas, Office of Legis. Affairs, Dept.\nof the Treasury, Wash. DC 20220 - FYI\nw/copy of inc, Stan Hulett, Office of Legis. Affairs, Dept.\nof the Interior, Wash. DC 20240 - FYI\nWH RECORDS MANAGEMENT WILL RETAIN ORIGINAL INCOMING\nJAMES F. MCNULTY, JR.\n5TH DISTRICT, ARIZONA\nDISTRICT OFFICE\nPUBLIC WORKS AND\nCongress of the United States\n1605 NORTH WILMOT ROAD\nTRANSPORTATION COMMITTEE\nSUITE 108\nTUCSON. ARIZONA 85712\nHouse of Representatives\n602/629-6030\nINTERIOR AND INSULAR\nAFFAIRS COMMITTEE\nMashington, D.C. 20515\nMarch 17, 1983\n130702\nThe President\nThe White House\nWashington, D.C. 20500\nDear Mr. President:\nWe urgently request a comprehensive briefing by the various\nagencies involved in the financing of the proposed expansion of the\ncopper mining and smelting operations of the Compania Minera de\nCananea in Mexico, 20 miles south of the Arizona border. We had\nbeen led to believe that such financing was not imminent, but recent\npublished reports indicate otherwise. We further urge you to take\nimmediate action to suspend U.S. participation in the financing of\nthis project until the requested briefing and subsequent review\ncan be completed. The proposed expansion would have serious adverse\neffects on the American economy and environment, and we believe U.S.\nsupport for the project, in the form of bilateral and multilateral\nassistance, is outrageous and unconscionable, and possibly contrary\nto U.S. law.\nThe estimated $1 billion expansion is to be financed in part by\na $75.7 million capital equipment loan from the U.S. Export-Import\nBank, and a $50 million loan from the World Bank's International\nFinance Corporation. The IFC has agreed to syndicate an additional\n$400 million for the project. The remaining financing reportedly\nhas been assembled by Compania Minera de Cananea, according to the\npublication American Metal Market, March 7, 1983. Thus, the IFC\nloan, which has been delayed pending the company's ability to assemble\nthe private financing, is now scheduled for disbursement, pursuant to\nthe IFC Board's approval of the loan on July 12, 1982.\nOn separate occasions, your Administration has asserted that its\nsupport for the Cananea project is based on a belief that the\nincreased copper production capacity will assist Mexico in achieving\nself-sufficiency in copper.\nHowever, according to figures compiled by the German metal\nresearch center Metallgesellschaft, Mexico in 1980 was a copper\nexporter, producing 175,400 metric tons and consuming only 123,200\nmetric tons. Thus, Mexican copper already has contributed to the\nwell-recognized international surplus of that commodity, and therefore\nhas added downward pressure to the world price, further impeding\nrecovery in the depressed American copper industry.\nLetter to the President\nPage Two\nThe improvements proposed for Cananea would increase Mexico's\noverall copper production capacity by 100, metric tons per year.\nIn light of these figures, U.S. support for the IFC loan appears to\nbe in violation of Section 522 of Public Law 97-121, which instructs\nthe Secretary of the Treasury to oppose multilateral loans \"for the\nproduction of any commodity for export, if it is in surplus on world\nmarkets and if the assistance will cause substantial injury to United\nStates producers of the same, similar or competing commodity.\"\nMoreover, you should be aware that the smelter at Cananea will\nbe subject only to the pollution controls required by the World Bank,\nwhich are substantially less stringent than those of our Environmental\nProtection Agency. After expansion, the Cananea facility will emit\nmore sulfur dioxide than all seven Arizona smelters combined will be\nallowed to emit under pending Clean Air Act standards. Further, most\nof the sulfur dioxide emitted from the Cananea smelter will find its\nway into the U.S. atmosphere, as prevailing winds in northern Sonora\nare from the southwest. In light of the fact that compliance with\nour own environmental laws has cost billions of dollars, we find it\nappalling that our government can support such an environmentally\nunsound project so close to our border.\nWe are concerned that the formulation of Administration policy\non the Cananea project appears to have lacked any serious inter-\nagency coordination. Interior Secretary Watt has registered his\nDepartment's opposition to the IFC loan in the form of a letter to\nthe executive director of the World Bank. However, Interior's position,\nwhich reflects the interests of the American mining industry and, thus,\nthe American economy, was neither sought by nor made available to the\nU.S. representative to the IFC Board. The U.S. representative joined\nthe rest of the board in its unanimous approval of the loan.\nWe further believe the Administration has displayed a lack of\ncandor in its official communications with Congress by failing to make\nnote of the Export-Import Bank loan. This agreement was not mentioned\neither in a letter of explanation from Treasury Secretary Regan to\nSenator DeConcini, or in testimony from Deputy Assistant Treasury\nSecretary Dawson before the House Interior Subcommittee on Mining,\nForest Management and Bonneville Power Administration.\nThe arguments against U.S. participation in the Cananea expansion\nare, in our estimation, forceful and numerous. We will appreciate a\nprompt and positive response to our request.\nThank you for your consideration.\nDennis Dennis DeConcini De Concinn James Sincerely, F. McNulty, Jr.\nUnited States Senator\nMember of Congress\nml\nDenator\nLetter to the President\nPage Three\nJohn John McCain M'lain\nWo reduce\nMorris K. Udall\nJohn'\nMember of Congress\nMember of Congress\nMo\npob Member Bob Rd Stump of Congress J5\nMat Bavars\nMax Baucus\nUnited States Senator\nDenator\nPete V. Domenici\nUnited States Senator\nJohn United John Melcher States melcher Senator senator\nJeff Bingaman\nBarry Dary M. Julducta Goldwater\nUnited States Senator\nUnited States Senator\nDenator\nTeldon Budd\nEldon Rudd\nMember of Congress\nMember Manuel of Lujan, Congress Jr.\nidon\nManuel\nPat Willians\nBill Rickardson\nPat Williams\nBill Richardson\nMember of Congress\nMember of Congress\nvs\nmr."
}