Manawatu Evening Standard. SATURDAY, MARCH 5, 1938. IRON ORE INDUSTRY.

Manawatu Standard, Volume LVIII, Issue 82, 5 March 1938, Page 8

Manawatu Evening Standard. SATURDAY, MARCH 5, 1938. IRON ORE INDUSTRY.

This week the Government caucus has been giving consideration, among other matters, to the legislation it proposes to have passed for the ultimate development of the Onakaka iron ore deposits, and the Bill covering the subject, and giving the State a monopoly of iron and steel production, made its appearance in the House of Representatives last evening. The remainder of the session is to be short and the Prime Minister has stated that only essential Bills will be brought before the House. The proposal now before Parliament is so ambitious, and fraught with much hazard, that to commit the State to embarkation on it must be vie,wed with concern. The extent of the Onakaka deposits in the Nelson province is enormous, and smelting furnaces could be worked over a lengthy period of years. Not since 1925 have the mills been worked at full capacity, even though a pipe-makiug plant was erected in the hope that it would attract sufficient orders to keep the .smelters busy during the time when they were not employed in the production of pig iron for other purposes. This not having been successful, the works have been idle, though the debenture holders have made strong efforts to keep them going. Their case was placed before the Tariff Commission in 1933, but the subsequent report was not favourable. In his first announcement the Prime Minister revealed the ambitious nature of the Government’s plans. It is intended to establish mills capable of producing steel for Government and commercial use. Naturally this would involve a tremendous cost in the purchase of rolling mills of large dimensions, which are both expensive to establish and to operate. The public credit will be used to finance the scheme, there being power to borrow up to £5,000,000 through the Reserve Bank. In Australia there are plants,working under most favourable conditions in the matter of their supplies of ore, coal, and export of' their product. New Zealand-pro-duced steel would have to compete with the efficiency of these mills, but whether successfully without the shelter of heavy duties is another matter. If such duties were to be imposed then their effect would be felt by any industry which required the sheltered product. The history of the iron ore enterprise in New Zealand, however, does not give much encouragement of a successful issue. Generous State assistance in the past has not enabled operations to be conducted at a profit, and now

there are shorter hours and higher wages to contend with. In the circumstances the public may be pardoned for doubting whether a sound economic industry can be built up, whose product will be able to compete with Australian steel produced not only on a large scale but cheaply. The chances of doing so do not by any means appear bright.