“S.I. STEEL SITE JUSTIFIED”

Press, Volume CIV, Issue 30727, 17 April 1965, Page 3

“S.I. STEEL SITE JUSTIFIED”

(N.Z. Press Association) DUNEDIN, April 16. The proposed New Zealand steel industry should be sited in the South Island for economic reasons—cheaper electric power and the possibility of better ironsands—an American mining and metallurgical consultant, Dr. A. Lewis, said in Dunedin yesterday.

He was one of several delegates to the recent Commonwealth Mining and Metallurgical Congress who are touring the South Island.

Dr. Lewis said the high titanium content of New Zealand ironsands meant that conventional blast furnace methods of obtaining pig iron would be useless. The titanium would cause excessive amounts of slag. A steel industry using New Zealand ironsands must be

based on electricity, and it was absolutely necessary that the electricity be the cheapest possible, he said. The chances of this were now greater in the South Island. Insufficient Investigation Insufficient investigation had been carried out into the establishment of the industry. A longer and more detailed look should be taken before a final decision was made. South Island ironsands were possibly richer in iron ore than those in the North Island, said Dr. Lewis.

“But the Government will probably site the industry in the North Island, near Auckland, for political reasons,” he said. The Government’s attitude to overseas finance was also unreasonable, but even if this attitude was altered it was unlikely that any overseas company would be interested in New Zealand because of higher labour costs and frequent industrial trouble. As a “rule of thumb” guide, it could be assumed that because the industry was to be nationalised, with Government finance, it would be uneconomic.

The cost of raw steel would rise about one-third if it was produced from ironsands, assuming a production of a million tons a year. The higher costs of electrical processes would ensure this.

It would be cheaper to use iron ore, which had a higher percentage of iron, than to use New Zealand ironsands—even allowing for the cost of transporting ore from Australia.

Dr. Lewis suggested the industry could be based on Australian ore and sited somewhere like Westport from where distribution of raw steel by sea would cost about the same to all parts of the country.

To place the industry at Auckland would put the South Island at a great disadvantage, he said.