COMMENT FROM THE CAPITAL SHOULD THE STATE EXPLOIT THE CHATHAMS PEAT WAX?

Press, Volume CXI, Issue 32561, 22 March 1971, Page 14

COMMENT FROM THE CAPITAL SHOULD THE STATE EXPLOIT THE CHATHAMS PEAT WAX?

(By

C.R. MENTIPLAY.

Wellington reporter of "The Press")

I ?*'. WELLINGTON, March 21. Montan wax, which is found in large > quantities in the peaty soil of the Chatham Islands, might be the basis of a new industry. Although representatives of the three companies which L are seeking rights over large areas in the main islands are reticent about ? the prospects, there is evidently a feeling that this “bonanza” will p be considerably Jonger-lived than the crayfish boom. Already there is a strong political angle. Mr T. M. McGuigan (Lab., Lyttelton), whose electorate embraces the Chathams, has had some caustic remarks to make concerning the apparent reluctance of the Government I to develop the Chathams, or even to grant the islands the privilege of an economic survey. ,

On February IJ, "The Press” reported the active interest of three companies in the islands. They are: Signal Pacific, of Sydney; George Pahiell, Ltd, of Auckland; and Messrs Nicholson and Wallace, of Sydney. At that stage some 35 applications had been filed under the Mining Act of 1926, each one for prospecting licences over areas up to 10,000 acres. These applications were heard by the Commissioner of Crown Lands, acting as adjudicator under the Mining Act, on February. 1. Some were adjourned; the decisions on the others were reserved until April 6. Although a number of minerals are named in the applications (indicating that the companies plan to carry out their own mining survey of the areas named) it iscommon knowledge thait their main interest ues in the presence of peat (or montan) wax.

This wax is of great industrial importance. It is used for electrical insulation, Wax coating on leather, for the production of shoe polishes, brewer’s pitch, cosmetics, waterproof sealings for submarine cables and turbines, and also in the manufacture of explosives and a wide range of other products. The Chatham Islands are geologically remarkable in that they have deep deposits of peat. These deposits are right on the surface, set that mining by the relatively inexpensive open-cast method would offer no problems. By contrast, some of the peat areas of Central Europe being worked for this purpose require the sinking of shafts more than 500 ft True montan wax is obtained from coal and lignite, and this is said to be of higher quality than the peat wax; but it is also becoming increasingly hard to obtain. The present interest in the deposits in the Chathams (which are reputed to be worth many millions of dollars in refined form) is an indication that a significant world market exisits. On Friday, Mr McGuigan received answers from the Minister of Mines (Mr Shelton) to a series of written questions which he submitted some time ago. The’first Concerned the stage which had been reached, asked what overseas companies were involved, what overseas earnings were expected, and what safeguards were intended to protect the Chatham Islands property-owners. I Mr said that two : of the three companies were . overseas-owned, and that during hearings in the War- ! den’s Court three decisions . had been reserved and the i other cases adjourned. , “Until the deposits have . been thoroughly prospected • it is not possible to predict i overseas earnings or financial benefits,” Mr Shelton wrote. “This depends on the extent > and grade of the Wax dei posits, world price levels, and i. production costs. At this ; stage no special safeguards—- : that is, safeguards not apply- . ing generally in respect of 1 propecting operations ap-

pear to, be required to protect the Interests of the pro-perty-owners.” No State plans Mr McGuigan asked whether, in view of the world-wide demand for montan wax and its prospects for earning overseas exchange, the Government had any plans for developing the industry itself by exploiting peat deposits “not only in the Chatham Islands but in other parts of the country, and the low-grade coalfields which contain this wax, particularly those in the South Island.” . Mr Shelton said that the Government had no such plans. "It believes in private enterprise rather than in the State control of industry,” he told Mr McGuigan. “In the mining industry, the result of this policy has been a tremendous increase in prospecting activity by both local and overseas interests. “At the present time there is every indication that private interests can cope successfully with the exploration of our peat wax resources and any subsequent development that is economically feasible.” Mr McGuigan is not satisfied with these answers, nor with the Government’s attitude. His main dissatisfaction arises from Government reluctance to make a regional survey of the islands with a view to establishing their potential. Some recent suggestions made in official circles have included one that it would be better to depopulate the islands and resettle the islanders on the New Zealand mainland than to continue spending money on air and shipping subsidies and in ■ the construction of facilities such as airstrips and roads. War-time interest “It is a sad commentary on Governmental inactivity and lack of interest over the years that no steps have been taken to exploit the known wax deposits in the Chatham Islands peat fields and in the lignite coal seams in Otago and Southland,” Mr McGuigan said after receiving Mr Shelton’s answers. “There is every indication that a thriving export market could have been developed, as there is a world-wide demand for montan wax. Yet it needed a war for the po- ■ tential of the deposits here 1 to be recognised.” Asked to explain this, Mr McGuigan said that in 1941

a scientific team studied and reported on the wax deposits in the Chatham Islands peat This was done because world supplies of the wax, which came mainly from what are now Iron Curtain countries, were in jeopardy. However, nothing was done; and local interest in the deposits disappeared. "There has been a revival of interest—not by the Government but by two overseas companies and a New Zealand concern,” Mr McGuigan said. “It is deplorable that an industry potentially worth millions of dollars has not been investigated thoroughly and possibly developed before now.” World shortage

The sudden interest in New Zealand fields has been caused by the present world market being limited by lack of supply. l This is particularly so in the “hard wax” field, where modem technology has meant a sharplyrising market. Synthetic substitutes are being used merely because the natural product is not available. Mr McGuigan, whose recent visit to the Chatham Islands entailed much on-the-spot study of their resources, can give no estimate as to the value of the deposits. “But the potential for sales by a new producer is believed to be considerable,” he said. “The size of the present montan wax sales is not a good guide. Australia alone uses $16,000,000 worth of this wax annually, most of the hard waxes being imported as few, if any, are produced in Australia.” The special features of montan wax are related to its high melting point. As a protective material it is noted as a “stay-on” wax. It comes from woody coals and lignites, from which it is readily extracted. Coals containing wax have been mined in New Zealand, Czechoslovakia, Russia and the United States; the present main source is central Germany.

“The Minister’s admission that the Government has no plans to develop this industry Is in itself an indictment of a Government which should be exploring every avenue of capitalising on New Zealand’s uncovered mineral wealth. It could mean a tremendous boost for the South Island and the Chathams,” Mr McGuigan said.