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