COAL EXPORTS TO JAPAN: Northland’s latest move in battle

Press, Volume CXII, Issue 32975, 22 July 1972, Page 11

COAL EXPORTS TO JAPAN: Northland’s latest move in battle

(By

KEN COATES)

The 'Northland Harbour Board is making another bid, in its battle against the Lyttelton Harbour Board, to influence the Government and potential Japanese buyers of West Coast coal to purchase exports through Whangarei. The Lyttelton board stands firm that railing the coal for shipment through Lyttelton is the most economic plan, and this is favoured by the Marubeni Corporation, an interested Japanese buyer.

The key to Northland’s plan is the use of barges from Westport and shipment from Marsden Point in huge dual-purpose bulk carriers which bring oil, but which would take coal to Japan.

The Northland board says it has had studies made by the experienced Hawaiian Tug and Barge Company. It claims that it has gone sufficiently far in its study to say that if New Zealand wants to sell its coal, it will get a higher price by exporting through Marsden Point than in any other possible way. It cites the Tasman Maru which brings 95,000 tons of crude oil from Kuwait, leaves Marsden Point for Western Australia where it loads 95,000 tons of iron ore pellets, and sails for Tokyo where it unloads and leaves for Kuwait again. This cycle is repeated like clock-work every three months. Big saving The board claims that oil companies which use the mammoth ship for importing crude oil save $1 million a year in freight costs, and the importers of iron ore pellets ■make similar savings. And naturally it also claims that Marsden Point could handle this trade better than any other port in New Zealand — in spite of a 600mile barge haul from Westport. These views have been sent io the Minister of Minrs (Mr Gandar) by the board which adds “once the barge has been loaded and hauled out of Westport Harbour, there is little difference in cost between 200 miles by rail and 600 miles by water. “So convinced are we of the soundness of our proposal,” the Northland board says, “that when our study is complete, we will be quite prepared to recommend to the public, not only that they approve of the scheme, but that they actually invest in it.” The Lyttelton Harbour Board looks with suspicion on these claims, a suspicion that at present seems to be shared by the Government. The board points to ap-

proval by an officials’ committee studying West Coast development last year of Lyttelton as the most economic port through which to export coal, timber products and ilmenite sand. This committee considered use of the rail link to Christchurch and shipment through Lyttelton as the most economic transport alternative from the country's point of view. Lyttelton plans The Harbour Board has plans for loading and other equipment at Lyttelton designed to deal with an estimated four 1000-ton train loads of coal daily. Estimated to cost between $3 million to $4 million, these facilities would load 55,000-ton bulk carriers with a turn-round time of two or three days. Board officials also say that surveys of the railway line between Ngakawau on the West Coast and Lyttelton, including an assessment by Japanese consultants, show that it is adequate for the transport of one million tons a year without major reconstruction.

They talk of some upgrading of the capacity of the Otira tunnel being necessary as well as bridge work. Powerful diesel locomotives would be needed as well as modern rolling stock. One estimate of the cost of all the facilities needed to handle the coal ready for shipping is between $l3 million and $l6 million.

To objections that shipment through Lyttelton would involve the New Zealand taxpayer in huge expense, the board points out that railway rolling stock and equipment could be provided by the Japanese as part of a package deal. The cost would simply be recouped by the Japanese by in-built arrangements during the term of the contract.

Not interested The manager in New Zealand of the Marubeni company, Mr Y. Nunotani, says his company, which represents six steel mills owned by the major steel manufacturing companies, is still keen to buy New Zealand coking coal. The New Zealand Government is well aware of this interest, and the signing of any deal for West Coast coal is dependent on its attitude, he adds. Mr Nunotani is emphatic that his company would not be interested in shipping coal through Whangarei. “Frankly speaking, although it is a fine harbour, the Tasman Sea is very dangerous for barging and we are not interested in the northern scheme, regardless of price,” he said. The Under-secretary of Mines, Mr Dick, said two months ago that because of the business recession affecting Japan's economy prospects for selling Buller coal were rather dim. Japan’s quest A subsequent Tokyo report pointed out that Japan's drive to find new, good quality and perhaps cheaper sources of raw mateirals was undiminished. Mr Nunotani says indications are that his country’s economy will improve markedly in the second half of this year. Another Japanese company, Ataka and Company, is making a survey of coalfields near Greymouth, and has said it hopes eventually to take between 500,000 and one million tons of coal a

year from the area. This would be in addition to the one million tons from the Stockton open-cast area. West Coast interests are naturally keen to see Westport retained as an operational port, a fact which is not Tost on the Northland Harbour Board. Canterbury interests, while naturally keen to see Lyttelton become the coal outlet port, are asking some pertinent questions about the Whangarei barging scheme. Bar harbour These include the willingness of the Japanese to use bulk carriers of the type envisaged, when the steel companies and their buying agents have their own ships. The problems caused by the bar at the entrance to Westport Harbour in bad weather, and the economics of the long barge haul up the West Coast of the North Island and around North Cape also draw questions. Lyttelton Harbour Board officials point out that handling and loading facilities would still have to be provided at Marsden Point.

They say they would be amazed if the Northland Board came up with a cost per ton aboard ship at Whangarei which was less than that involved in the Lyttelton scheme — without being subsidised by Northland’s lucrative port operations.

Lyttelton port officials also say potential Japanese buyers emphasise that steel companies in Japan will not be equipped to handle 100,000ton ships such as Northland envisages, until 1978. Just to what extent the Japanese will want to use these mammoth carriers after this date remains to be seen, but the Lyttelton board is also quick to point out that if the buyers want to use this type of shipping, it will provide the necessary facilities to handle it. Lyttelton is also becoming rather impatient and claims that New Zealand, may, if it dallies much longer, lose the opportunity of selling coal to Japan. Gas a factor It claims that a change in steel-making process scheduled by Japanese steel companies over the next 15 years will mean a decline in demand for coking coal. The thinking here is that if New Zealand continues to postpone making a decision to sell some of its coal, even at today’s rather depressed prices, it might lose the chance of significant sales, because of Japan buying elsewhere. However, because it is presumably interested in getting the best price possible, and also in conserving fuel resources, the Government looks like continuing its wait-and-see policy. Another factor here is a decision of the Government as to whether to buy gas for power generation from the Maui natural gas field. Meanwhile, the “battle of the boards” is likely to continue. Northland's latest move is reported to be commissioning a survey of the railway between the West Coast and Christchurch. But whatever the moves made in the battle, the outcome will be determined by a willing buyer, a willing seller and Government approval. As yet, Northland has provided no evidence of prices that would influence a willing Japanese buyer to make a bid.