'File 61/11 VII (D 122) Hejaz-Nejd Miscellaneous' [‎74r] (160/454)

THIS DOCUMENT IS THE PROPERTY OF HIS BRITANNIC MAJESTY'S QOYERNMENT
EASTERN ( Arabia ). January 28, 1935.
CONFIDENTIAL. Section 5,
[E 602/602/25] No. 1.
Sir A. Ryan to Sir John Simon.—{Received January 28.)
(No. 4. Confidential.)
Sir, Jedda, January 7, 1935.
I HAVE the honour to refer to my confidential despatch No. 204 of the
2nd July last, relative to the activities of Mr. K. S. Twitchell, representative of
the Saudi Arabia Mining Syndicate (Limited), and to Jedda report for
December 1934, paragraph 304, and preceding reports, where the varying
fortunes of Mr. Twitchell, engaged over a period of some six months in
negotiating with the Saudi Arab Government a concession to exploit minerals
in this country, have been periodically recorded. The successful conclusion of
these negotiations was noticed in the report under reference and was announced
in the Mecca Umm-al-Qura of the 28th December in a short article, which
described the concession, signed on the 23rd December, 1934, as one for the
exploitation of the gold and other mineral resources of the country, with the
exception of oil and other liquids, over a restricted area. The agreement, the
article stated, would shortly be ratified, and thereafter the text would be
published.
2. Pending the publication of the text of the concession, the following
particulars, partly disclosed in conversation by Mr. Twitchell himself, and
partly received from other sources, are of interest; (a) The Government are to
be assigned 15 per cent, of the shares in any companies to be formed to work
particular concessions, a provision which, it is gathered, proved unpalatable to
Mr. Twitchell, who favoured the assignment of 15 per cent, of the initial
nominal capital rather than 15 per cent, of shares actually issued, as and when
issued, a point on which he found himself obliged to yield. Mr. Twitchell stated
that he successfully resisted the desire of the Saudi Government to participate,
to the extent of 15 per cent, of the shares, in the existing syndicate, a holding
for which the Government were even prepared to pay. (b) The Government is
to receive 5 per cent, of any gold eventually extracted, (c) Customs duty is to
be paid at a fiat rate of 10 per cent, on all material, &c., imported, (d) The area
finally agreed on under the concession is, roughly, the whole of the Hejaz and
Asir as far south as Birk, with the exception of certain reserved areas, notably
about the Holy Cities. This general description was given by Mr. Philby, who
said that the area first approved by the King extended as far as meridian
44 degrees, thus including a considerable slice of Nejd, but that it was later
decided to set the eastern limits much more to the west. Mr. Twitchell, who did
not allude in any detail to this point, expressed himself generally as quite
satisfied with the area actually allotted, (e) The agreement, according to
Mr. Twitchell, must be ratified by the syndicate, after which it will be published.
3. It is gathered that Mr. Twitchell is to be joined by M. * de Poll? ^h e
Dutch Moslem who has for some years resided in this country, wheie loimerl}'
he had commercial interests in work connected with the concession, although
presumably in some non-technical capacity. Mr. Twitchell left Jedda foi ^gypt
and Syria on the 26th December and is understood to be actively engaged m
making arrangements for prospecting, and, if a report from Messrs. Ge a y,
Hankey and Co. that a large consignment of pit-props has been ordered through
them by Mr. Twitchell is to be believed, for early mmmg operations as well
4. I am sending a copy of this despatch to the Principal Secretary of State
for Foreign Affairs, Department of Overseas Trade. ^ ^ave &c
ANDREW RYAN.
[306 ee—5]