Unions To Seek Help For Gold Industry

Greymouth Evening Star, 14 October 1948, Page 7

Unions To Seek Help For Gold Industry

Reflecting the alarm which is felt in’all sections of the goldmining industry on the West Coast at the greatly-reduced price for gold offered by the Reserve Bank, following the alteration in the exchange rate, a deputation representing the two sections of the union will this week approach the Government with a request that some relief be afforded the industry, to prevent its threatened extinction. .

Although, ro dale, the Minister of Finance (M'r Nash) and the Government as a whole have not acknowledged that the alteration of the»exchange rate immediately confronted the gold-mining industry in the Dominion with a crisis, it is generally recognised on the West Coast that, with a few exceptions in the case of dredges, the industry cannot survive in this district with the price of gold arbitrarily fixed at £8 8s 6d per fine ounce. . West Coast gold is a little below 1000 fine, which means that the price to be paid for it by the Reserve Bank will be £8 8s 6d per ounce, less approximately five per cent., again less a charge of f per cent, for cleaning. The net return to the producers will thus be. approximately £8 per ounce, as against the £lO 15s 3d received (principally from the Melbourne mint) before the Government decided upon the return to sterling parity and at,the same time decreed that all gold must be sold through the Reserve Bank.

As an offset against this big drop in realisations, however, the Government removed the export tax of 12s 6d an ounce, so that at the moment West Coast gold producers are offered approximately £2 2s 6d an ounce less for gold than they were prior to the presentation of Mr Nash's last Budget.

Uneconomic Price

It is the considered opinion of those connected with the industry that only three dredges on the West Coast can be considered economic propositions under the new conditions. The others would lose money steadily on the basis of their existing costs and gold returns. The position is even more acute in fespect of the only West Coast quartz mine, at Waiuta.’ The Waiuta mine is owned by an English ■ company, the Blackwater Mines Ltd. The accounts of this company for. the year ended December 31 last showed a working loss, after charging mine and London expenditure of £ 10,262. To this was added the New Zealand gold duty, amounting to £4512. making a total loss for the year of £14,774 increasing the debit balance on the profit and loss account to £42,924. It can thus be seen that the existence of the mine, and thus the township of Waiuta must be in jeopardy. This fact was recognised by the Inangahua County Council at its September meeting and it was decided to ask the Government what it had in mind in regard to the maintenance of the gold industry. So far, however, the Government has been silent. Hopes For Relief

As the price of gold is fixed in London, it is recognised by the industry that the official New Zealand Reserve Bank price may have to remain at £8 8s Gd per fine ounce, but at the same time relief in the form of a guaranteed price, a subsidy or more freedom in gold sales has been hoped for by the industry. The gold-mining companies have not been idle and, following written representations to the Government by the South Island Placer Mines Federation, deputations from the West Coast and Waihi (where another big quartz mine is located) saw Mr Nash in Wellington. So far, results have been negative and yesterday the Reserve Bank issued a statement which contained not a crumb of hope for the harassed industry. Summed up, it stated that all gold must be sold to the bank at £8 8s 6d per fine ounce, less a small cleaning and smelting charge.

Union Deputation

The union deputation which left for Wellington this morning comprised Messrs J. Meikle and J. Laing

(president and secretary of the Gold Dredge Workers’ Union) and T. E. Elgin and, C. Rodden (representing the Waiuta quartz mines). The situation confronting -Wauita, - with the possibility that ..the mine may close and throw out of work several hundred men, who- have their homes in the township, was discussed at a stop-work meeting at the Waiuta mine yesterday and Messrs Elgin and Rodden'were appointed the union delegates to visit; Wellington. It is understood that they will be joined by a delegation from Waihi. : A spokesman of the union stated today that the deputation had nothing concrete to put before the Government. Its objective was to. dis-, cuss the matter-fully with ’the appropriate Ministers, including Mr Nash, and it would support the representations made by the employers that most of the units on the West Coast could not carry on with gold at about £8 an ounce.

“We hope to get some indication qf what the Government intended to do about the industry, and that is all I can say at the moment,” added the union official.

A Press Association message, from Wellington states that gold producers are now required to offer their entire production to the Reserve Bank' for purchase at such price as may be determined by the Minister, having regard to the current price of gold in London.

This is in accordance with Regulation 5 of the Finance Emergency Regulations (No. 2) 1940. which also provid d tor the regulation to come into force on a date to be- specified by the Minister by notice published in the gazette. This notice was published on August 19, 1948. Purchase Of Gold

Arrangements have been made for the Reserve Bank, acting through, those branches of .the trading banks at present holding gold dealers’ licenses, to purchase golcl from the producers at the uniform rate of £8 8s 6d per fine ounce, for golcl delivered for sale in a clean melted form,” says a statement issued by the Reserve Bank.

For gold that requires cleaning and melting, the price to be paid will be £8 8s 6d per fine ounce, less a charge of one-quarter per cent., on the value of the gold to cover the cost of doing this necessary work.

To enable manufacturers and dentists to obtain ' supplies of ‘ refined gold, arrangements have been made for those licensed gold dealers, pds-? sessing the faciliites to refine gold, to supply the specialised needs of these people, in the form of granulated pure gold, oi’ alloys, at a maximum price of £9 per fine ounce.