Dredge halt big blow to West Coast

Press, 16 July 1982, Page 1

Dredge halt big blow to West Coast

Greymouth reporter

The low price of gold and escalating costs have forced Kanieri Gold Dredging, Ltd. to put its partly constructed new dredge for the Grev River into mothballs for two years and pay off 56 of its staff of 69.

The company last year had a payroll of sl.4’ million spent in the Greymouth district and spent several hundreds of thousands in servicing and transport, including a power bill of more than $300,000. The retrenchment is one of the biggest setbacks on the West Coast since the late 19605, when the Dobson coalmine closed, and comes at a time when closings of sawmills on the West Coast are becoming more likely as the result of incorporation of forests in South Westland into the Westland National Park.

The dredging company last year stopped working with its present dredge on the Taramakau River, and moved most of its staff to assist in the construction of the new dredge at Ngahere, while retaining some to carry out ground restoration work, and the dismantling of the old structure.

The initial estimate for the new dredge, which had reached the stage where the pontoon was almost readj for launching, had beer SUSIO million, according tc the principal of Kanieri Gold’s owners, Marlex Corporation of the United States Mr Noel Conway. This had now reached $2O million which would not be covered by the proved gold reserves in the river at present, and the bankers had called a stop.

Mr Conway said that the new estimate of almost $2O million was reached after two independent dredgebuilding firms had been Called in to review the design and construction costs estimated earlier. After reviewing the situation last March, the mining division of the Continental Bank, which had been funding construction of the new dredge, had refused to'increase its funding- ’ Since then, Marlex had been advancing funds it had borrowed since that time to keep the project moving, saF

Mr Conway. However, the company was not "walking away" from the project, he said.

It would maintain a minimal presence in a low profile, but would be in a position to reactivate the project within two years if necessary.

Mr Conway was hopeful that the price of gold would increase within that period. The remaining staff would include drilling crews on the Grey River to determine fur* ther gold reserves other than those already known, and staff members to continue clearing the site of the Taramakau enterprise, The company had made provision for meeting redundancy payments after the cessation of 30 days notice. The news of cessation of work on the new dredge came as a surprise to many West Coast residents yesterday.

the president of the West Coast Trades Council, Mr R. F. Beadle, said that while the reduction of work was a shock, the main problem would be how to place 56 people in the Coast workforce, where there were already more than 500 unemployed. Mr Beadle, who is secretary of the Westland Dredge Workers’ Union, among others, is also chairman of the Buller-Westland Employment Advisory Committee.

He said that while the displaced workers would get redundancy, it was only a stop-gap measure. They still had to get work to meet their commitments and provide for their families. Skilled men would have to leave the West Coast to seek work, and some might have to move as far away as Marsden Point. The loss of the Kanieri Gold payroll would have a serious effect on the economy of other businesses and the West Coast in general, he said. A similar severe spinoff had followed the closing of the Dobson mine some years ago, when the bulk of the miners had to move elsewhere for employment. Mr Beadle said that a wage-packet could be increased eight to 10 times in the number of other jobs it created, and this could have an even more serious effect.

The Mayor of Greymouth, Dr B. M. Dallas, said that the decision was inevitable once the price of gold fell below §6OO an ounce. “It is a blow, but I suggest that more consideration must be given to extending the smaller gold claims in the area,” he said. ! “Several of them are working successfully, and we should look at assistance to extend them under private enterprise.” Dr Dallas said that the gold mines were outside the borough's territory, but the town benefited from the Kanieri Gold payrdll. The $1.4 million payroll was similar to that of the Greymouth Borough Council. The engineer-manager of the West Coast Electric Power Board, Mr I. G. Webster, said that the dredge

company’s power account last year of more than $300,000 was mainly the result of the dredge’s working 24 hours a day at Taramakau. Allowances had been made in this year’s estimates for a deficit as a result of the stoppage of work on the river. However, it had been expected that this would have been. realised again when the new dredge started working at Ngahere. The only positive fact was that the board would now not have to build a new line to the Ngahere site, estimated at $lBO,OOO to $200,000 in the coming year. The shelving of the dredge project was a tragedy for the

Grey area, said West Coast’s M.P. Mr T. K. Burke. The dredge had been a “major economic boost” to the area and looked like a bright prospect while the price of gold was high, he told the NZPA. Unless the price of gold increased dramatically or a lot more was discovered, it seemed unlikely the dredge would be revived. Mr Burke' said he hoped adequate redundancy arrangements would be made for the sacked'workers. He also hoped the Government would become involved and order an examination of the dredging company’s finances. . Health and social welfare officers should also be involved “to help smooth the rough path,” Mr Burke said.