BROKEN HILL’S PLIGHT.

Hawera Star, Volume XLVII, 10 September 1927, Page 6

BROKEN HILL’S PLIGHT.

DEPRESSION IN MINING. TWO IMINES LIKELY TO CLOSE. Never has the mining industry in Australia faced such critical times as now. In practically all the States some form of the operation of mineral fields is in a parlous condition. Following closely upon the recent abandonment of operations at Mount Morgan and at the Newnes shale oilfield, comes the announcement that the price of metals has decreased so much that two of the less profitable Broken Hill mines probable will be forced to close; These are the Broken Hill Proprietary, the oldest of the Barrier group, and the Block 14 Mine, writes the Auckland “Herald’s’’ Sydney correspondent. Broken Hill is one of the greatest silver-lead fields in the world. Untold millions have been paid in dividends from mining there during the last 40 years, and there are still millions of pounds worth of metals underground. A city of 30,000, on the far western edge of New South Wales, is totally dependent on the products of the i mines. Now the low price of metals and the reduction of working hours have combined to make operations so unprofitable that two of the companies with low-grade ore are seriously contemplating closing Disclosing 'this probability at the annual shareholders’ meeting, Mr. H. G. Darling, chairman of the Broken Hill Proprietary, said: “Metals are now standing at a figure which renders mining operations unprofitable. A stage is reached where it is cheaper practically to cease operations and to Lear overhead expenses than to continue working at a big loss. Although the price of metals is the chief factors responsible for the present situation, it must not be overlooked that the direct and ihdirect costs are heavy.

INCREASE IN WORKING COSTS. ‘‘While there has been reduction in the effective hours worked underground from 35 to 30 hours with a corresponding reduction ill output, the most serious aspect of the hours question at Broken Hill is the reduction from three to two shifts daily. Rut for this the present output of ore would be 50 per cent, greater, and would permit valuable products being recovered which, under present conditions, call only be obtained at a loss. How hard the Barrier group of mines has been hit from the reduced price of metals may be seen from a. comparision of metal prices and share values of the four stronger Barrier mining companies—B.H. South, North 8.H., Sudphide Corporation and Zinc Corporation. The prices of the three metals produced—lead, spelter and silver—at the end of August last year were £32 3s 9d a ton, £34 Is 3d a ton and 2s 5 1-1 fid an oz. respectively. At the end of May they were £24, £2B and 2s 4 3-16. To-day they are £22 7s fid, £27 11s 3d and 2s lick Since tlie end of May the market value of shares in these four companies have depreciated by £2,6so,ooo—North B.H. bv £1,050,000, B.H. South by £640,000, Sulphide by £285,000 and Zinc by £675,000. If comparision is made by the end of March the depreciation of share values is about £4,000,000. DECLINE IN THE VALUE OF SHARES.

Many investors especially small men who came in at the height of the boom in metal prices, have been hit hard. For instance, thousands of small investors were attracted by a dividend of 40 per cent, and bonus to place their money in North Broken Hill when that company’s £1 shares had risen to £7. That was early this year. To-day those shares _ are worth but 755, and the market is weak at that figure Of course, if these shareholders patiently hang on to their scrip and wait for brighter days they will possibly get more than their money back. But it is a dubious proposition.