AGREEMENTS ON ALUMINIUM

Press, Volume CI, Issue 29742, 8 February 1962, Page 14

AGREEMENTS ON ALUMINIUM

Southland Product May Be Barred In N.Z. (From Our Oum Reporter) WELLINGTON, February 7. The Government is still trying to decide whether an agreement between Alcan Industries and the previous Government was made before or after an exchange of letters between the company and the previous Minister of Finance (Mr Nordmeyer).

A clarification of this question is likely to decide whether the aluminium products of Consolidated Zinc Pty., Ltd., coming from its smelter in Southland, may be sold in New Zealand.

The Minister of Industries and Commerce (Mr Marshall) left his office tonight after extensive consultations for further study of the problem at home. He carried an armful of documents more than a foot thick, which comprised “the whole story as known” of the aluminium agreements.

When asked tonight how it was proposed to restrict or prevent the sale in New Zealand of the products of Consolidated Zinc, Mr Marshall said there was no such intention. He added, after further questioning, that there were aspects of the matter which would have to be examined by the Crown Law Office. The summary of conditions for the establishment of the plant of Alcan Industries, Ltd., at Wiri (near Auckland), says: “The Government will endeavour to ensure that the company will not face competition which will render its enterprise uneconomic.”

It is understood, however, that Alcan established its factory under a promise of a complete monopoly in New Zealand.

This promise, while not explicit in the agreement nor in an appendix to an agreement, is contained in an exchange of correspondence between the company and Mr Nordmeyer. Import licences are believed to have been guaranteed to permit sufficient aluminium ingots to enter the country to meet the entire New Zealand demand for fabricated products

It is believed that Alcan Industries may be in a position to bring a lawsuit if Consolidated Zinc Pty.; Ltd., attempts to market aluminium products in New Zealand. The question may have to be resolved by the Supreme Court if a way is not found whioh is satisfactory to the three parties concerned.

Government authorities believe that the Alcan agreement, complete with the exchange of letters and other papers, is binding, and that the company has in fact a monopoly which can be broken only by positive measures. One of these could be the payment of compensation to Alcan Industries. As the Wiri factory was opened recently by Lord Alexander of Tunis and is now in production, it is suggested that compensation would not be light. The other means could involve “reasonable” discussions between the Government and the Alcan directors, during which every effort would be made to resolve differences. A solution could be to persuade Alcan to use Southland aluminium for its manufactures. An examination of the Consolidated Zinc agreement fails to disclose, according to some authorities, any permission to sell its products in New Zealand. These authorities contend that Consolidated Zinc may merely import its raw materials, use New Zealand power to convert them into aluminium and its products, and export them for sale overseas