IRON-ORE RUSH SECOND AUSTRALIAN STEEL INDUSTRY IN THE WEST?

Press, Volume CIV, Issue 30809, 22 July 1965, Page 16

IRON-ORE RUSH SECOND AUSTRALIAN STEEL INDUSTRY IN THE WEST?

[Bn the Perth correspondent of th* "Financial Times."}

(Reproduced from the Financial Times" bp arrano«m»nt J

The predominantly British concern Hamersley Iron Pty. is setting a cracking pace on the development of its stake in Western Australia’s iron ore deposits. In six months the company has transformed King Bay —a remote comer on Australia’s far north-western shoulder, 1000 miles up the coast from Perth—into a site that one bewildered visitor said was “just like D-Day.”

It is a race to meet a dead-line to start exporting 65.5 million tons of ore over a 16f-year period to Japanese steel mills from the Pilbara, an area that is being developed from nothing. But, more than this, it is being interpreted as a race to set up Australia's second steel industry, to compete with the Broken Hill Proprietary monopoly. Hamersley Iron is 60 per cent owned by Conzinc Riotanto of Australia, which in turn is owned 85 per cent by Rio Tinto Zinc Corporation, which merged its Australian interests three years ago. Kaiser Steel took a 40 per cent interest in Hamersley Iron in 1963. At Mount Tom Price, a stark nob in the Hamersley

Ranges 150 miles from the coast, the company has proved more than 600 million tons of hematite averaging better than 64 per cent iron—one of the world's biggest known bodies of hematite. Within its 2700 square-mile area. Hamersley Iron has found at least 3500 million tons of hematite assaying 60 to 64 per cent and a very conservative 1500 million tons of limonite, assaying between 50 and 55. It is one of four major companies exporting Western Australia's highgrade ore to Japan from the State's reserves of upwards of 15,000 million tons; at present the company is negotiating with the Japanese to start exporting the lower-grade ores as well. The original discovery of the ore reads like a fairy tale. A West Australian prospector, Mr Lang Hancock, was flying over ( the area just before the 1952 wet season began. A bank of cumulus cloud forced him down until he was flying between the sides of a red-walled gorge: as he flew at treetop height down the river, he recognised this as a virtual mountain of iron ore. At that time the find was worthless to him because Australia, which was believed poor in iron, allowed no export and B.H.P. had enough for domestic steel. Mr Hancock waited for nine years until the embargo was lifted and he interested Rio Tinto Australia in his finds, which by then covered vast areas. Gold-rush Recalled When the first export contracts were signed with the Japanese steel-mill cartel, Western Australia four d iteself in an era of expansion bigger than the gold rush at the turn of the century. The State is now being criticised in some quarters for selling the ore at 15 per cent below world prices, but iron ore development, associated projects and a record wheat harvest at a time when the eastern States are badly hit by drought have meant that Western Australia is cruising easily through a stormy economic period. Hamersley Iron’s site at King Bay is the State's biggest project. In the Bay a service wharf has been built over the continental shelf (one of the reasons why it was said for 60 years that a port for the beef and sheep-growing Pilbara area was impossible) and will be finished very shortly. The next task will be to dredge a deep-water port that will eventually accommodate shipping of 100,000 d.w.t. These ships will tie up at a £A1.25 million jetty successfully tendered for in June by the Royal Netherlands Harbour Company. King Bay has air-condition-

ed living quarters for 600 men and labour force on the whole project will build up to 2000, 800 of them on the 179-mile standard-gauge line whose rails and sleepers are now stacked ready at the port of Bunbury, 1100 miles to the south. At present a service road is being driven through to Tom Price, the emerging townsite beneath the mountain. Pellets To Japan There are four main sections to Hamersley’s agreement with tihe West Australian Government. First, to investigate: second, to spend at least £A3O million in mounting an export project (this has already been surpassed); third, to invest not less than £AB million in a processing plant for export within 10 years; and finally, within 20 years, to set up an integrated iron and steel industry. Last year Kaiser, using Hamersley iron, sent a trial shipment of processed pellets to Japan as the first step towards the third objective. They have a letter of intent from the Japanese to buy one million tons of pellets a year. Steel, however, is another story. There is no coking coal within easy reach, though natural gas Is being found in increasing quantities in the West and the Mexicans have proved with their “sponge iron” process that natural gas can do the job. Western Australia has, then, a particular interest in the quest of a number of steel concerns for a direct reduction process that would sidestep the pig-iron stage. The emergence of a second Australian steel industry might well depend on such a breakthrough. May Claim Medical practitioners have been advised by the Health Department that they may now claim general medical service benefits for attention in response to a call where the patient is found to be dead on arrival. Benefits are also allowable when the patient rejects the doctor's services.