The Press THURSDAY, FEBRUARY 15, 1962. Labour’s Aluminium Agreements

Press, Volume CI, Issue 29748, 15 February 1962, Page 12

The Press THURSDAY, FEBRUARY 15, 1962. Labour’s Aluminium Agreements

Now that more is known of the arrangements for establishing an aluminium industry in New Zealand, concern about the possibility of an expensive dispute, in which the New Zealand taxpayer may lose heavily, is matched by surprise that the Labour Government could, apparently, have been so careless in its negotiations with Alcan and Consolidated Zinc. The agreements quoted by the Minister of Industries and Commerce (Mr Marshall) appear to reveal a direct

conflict They suggest that the Labour Government, in its resolve to hasten

industrial development, neglected rudimentary precautions against impossible

commitments. It w’as so willing to protect new industries that it forgot the impossibility of giving

effective protection to two commercial rivals simul-

taneously. The result is an extraordinary tangle, from

which the National Party Government must try to extricate New Zealand with the least damage to its finances and to its business reputation overseas

Because Labour Ministers seem to have lacked a co-

ordinated policy on negotiations with the aluminium companies, nobody is likely to be reassured by statements such as that issued at Oamaru by the former Minister of Finance (Mr Nordmeyer).

On the one hand, the Labour Government purported to guarantee Alcan permission to import from its parent company (Aluminium, Ltd., of Canada) all its requirements of aluminium ingots for 10 years, and half its requirements for a further five years. Moreover, the Labour Government undertook to “ use its powers “ and influence to ensure “ that Aluminium, Ltd., “ would not face com-

“ petition which rendered * its enterprise un- “ economic On the other hand, the Labour Govern- 1

ment, after making its bargain with Alcan, apparently encouraged Consolidated Zinc to believe in its own freedom to process and market its products within New Zealand. Had the Labour Government not meddled imprudently in big business, Alcan and Consolidated Zinc could have been allowed to settle their affairs in their own way. Unfortunately, the economics of the world aluminium industry may be too delicate for any of the giant combines to surrender readily an advantage secured over its competitors. About two years ago the London “Financial Times” commented that “ there “ are undoubtedly a very “ large number of major “ aluminium-producing pro- “ jects at present in the “ planning stage; and if “ even a fraction of them “ come into operation they “ may meet with consider- “ able marketing diffi- “ culties ”, Forecasts of world consumption vary widely; continued surpluses of producing capacity are far from improbable. Aluminium producers are among those whose future has been made more than usually uncertain by current trends in world trade. Because vast quantities of electricity are required, there has been a tendency to build new smelters in undeveloped countries where producers

can generate their own power. New Zealand, politically stable yet with abundant power resources, must be very attractive to investors fearful of political upheavals in the newer States of Africa or Asia The aluminium industry is closely integrated with the production and marketing of other non-ferrous metals. If the Labour Government had been more cautious, New Zealanders could have welcomed unreservedly the

I chance of sharing in pro- • jects for stabilising and ■ expanding the world ' industry.