Three Main Points In Lakes Power Agreement

Press, Volume XCIX, Issue 29108, 21 January 1960, Page 14

Three Main Points In Lakes Power Agreement

(heu Zealand Press Association)

WELLINGTON, January 20.

The ultimate production value of a Southland aluminium smelting industry could reach £5O million a year, the Minister of Works (Mr Watt) said in a broadcast tonight.

“Even in its early stages the industry could approach the total output of Norway’s aluminium production today. In its ultimate stage it could equal the present production of France and Norway combined,” Mr Watt said.

“Major fields for the investment of capital in the proposal would be in the harnessing of the hydroelectric resources of the southern lakes district to produce the necessary electricity, and in the building of smelters for the processing of the raw materials used in the production of aluminium.

“The investment in the power works and in the smelters would be up to £l5O million, and over the years probably £5O million would be spent in payments to New Zealand labour and possibly a further £2O to £3O million on New Zealand materials,” Mr Watt said.

“But it must not be supposed that the development of the aluminium industry will take place immediately. Careful investigation must be carried out before the final decision to proceed with the construction can be taken.”

Mr Watt said the production of aluminium depended on an adequate supply of cheap power. A reduction of O.ld a unit of electricity would reduce the cost of the final product by £6 a ton. Manapouri was the only area in New Zealand where power could be produced in quantity to permit the establishment of a major aluminium industry to sell its product on the world market. “In the production of this electricity, the company has undertaken to aim to enhance the scenic beauty of the area and not to detract from it,” he said. Mr Watt said the 99-year agreement signed last night consisted of three parts.

(1) Within 18 months the company must complete its preliminary investigation Before mid-1961 it must advise the Government whether it will proceed with the project

(2) The second part of the agreement provides that within the next 10 years the company must construct a power station capable of producing continuously—24 hours a day—at least 100,000 kilowatts. This will be as many units of power as the output of Karapiro and Whakamaru combined. (3) Within the following 20 years this output must be raised to the full potenital of the area—more than 600,000 kilowatts continuously.

“This means that it would be producing four times as many units as Roxburgh—all this without the agreement committing the New Zealand Government to capital expenditure,” Mr Watt said. At the termination of the agreement all fixed assets, including the tunnels, dams, and power houses, will belong to New Zealand.

“Clauses are provided which, while safeguarding the Crown, ensure the company such stable conditions as to encourage the establishment and development of a major industry on a basis for trading in the markets of the world,” Mr Watt said. “While it is important to remember that the development of this great project will bring to New Zealand immense benefits, it is also important to realise that much has yet to be done before the final decision can be taken ”