I desire to acknowledge the receipt of your letter of November
23rd [1], in which you stated your views-based on the result of
preliminary reconnaissances by the Commonwealth Geological Adviser
[2] of some of the iron ore deposits in Australia-on some
technical points contained in my Note Verbale of September 8th and
in a report dated August 20th presented to me by the Chief
Geologist of the Nippon Mining Company [3], and which I handed to
you, for your reference; together with the abovementioned Note on
the subject of the embargo on the exportation of iron ore from
Australia.

In view of your contentions in paragraphs 5, 6 and 7 of your
letter above-mentioned, it seems necessary to make clearer the
technical points set out in 4. of my Note Verbale on the deposits
at Koolan Island:

The chief point of paragraph 4. of my Note was not to state that
there was no wide difference in cost between underground mining
and open-cut methods, but simply to stress the fact that, as, in
modem mining technique, underground mining below sea-level differs
very little in method and expenditure from underground mining
above sea-level, deposits even below sea-level are not
economically inaccessible. It follows, therefore, that deposits
below sea-level should naturally and necessarily be taken into
account in making a reasonable decision on such matters as the
reservation of iron ore resources, or an embargo on its
exportation, unless it should be the intention of the Commonwealth
Government to leave undeveloped all those deposits which cannot be
exploited by open-cut methods. In the latter case, the production
of iron ore in Australia would be far smaller than if the embargo
were lifted and the exploitation work at Koolan Island were
carried on by the Yampi Sound Mining Company, which is in a
position to mine economically even the iron which is below sea-
level.

However, I expect that, on completion of the exhaustive survey of
the iron ore resources throughout Australia-especially at Koolan
Island-which the Commonwealth Government is conducting, and which
will occupy a considerable time, I shall be notified of the
decision made by the Commonwealth Government on the plan of
compromise suggested in my Note Verbale for the reasonable
settlement of this question, due consideration having been given
not only to technical points, but also to the effects on the
amicable political and economic relations between our two
countries which might ensue should the embargo not be lifted.

TORAO WAKAMATSU