THE NORTHERN ADVOCATE Registered for Transmission through the Post as a Newspaper. TUESDAY SEPTEMBER 27, 1949. Outlook For New Zealand Goldmining

Northern Advocate, 27 September 1949, Page 4

THE NORTHERN ADVOCATE Registered for Transmission through the Post as a Newspaper. TUESDAY SEPTEMBER 27, 1949. Outlook For New Zealand Goldmining

Devaluation of sterling continues to provoke controversy regarding the ultimate effect upon New Zealand of the drastic action taken by the

Government of the United Kingdom. However, there is agreement that the effect upon the goldmining industry in the Dominion will be substantial. For this relief much thanks, the industry may well say, for it has been cold and sick at heart in recent years. As a result of the adjustment of the value of sterling, the price of gold has been lifted at a single bound from £B/8/6 an ounce to £l2/4/6 an ounce. This must have a restorative influence upon an industry which was threatened with increasing poverty. Following upon the war years, goldmining operations became increasingly difficult, and, despite the fact that the Government removed taxation on gold to the extent of £l/14/8 an ounce, mining companies remained hard pressed to make a profit. Last year the industry deteriorated still further as a result of the return of the New Zealand pound to parity with the pound sterling, the price of gold falling from £lO/15/- a fine ounce, less tax of 12/6 an ounce, to £B/8/6.

As was to be expected, the difficulties encountered by mining companies resulted in a rapid decline in output, which fell from 149,150 ounces in 1943 to 128,364 ounces in 1945, and 112,260 ounces in 1947, which marked the lowest level reached since 1920.

In 1947 the quartz mines produced 1144 ounces more than in the previous year, but the dredging returns showed a decrease of 7697 ounces, and alluvial mines a decrease of 458 ounces.

In the light of these figures, it is interesting to recall that some 30 years ago the annual production of gold in New Zealand was round about half a million ounces.

In 1945 the gold exported amounted to 121,000 ounces; in 1947 the quantity was 99,000 ounces, and last year it was only 58,000 ounces. The exhaustion of the richer fields, to which the earliest rushes were made, and the reduced margins of profit on poorer fields as an outcome of higher operational costs have conspired to produce this decrease. The increase in the price of gold brought about by means least expected—devaluation of sterling—has changed the whole outlook of the

industry, as was- indicated by the immediate activity of overseas speculators on the London Stock Exchange. In contradistinction to the feverish nature of overseas speculation, however, the increased price of gold has had the effect in New Zealand of stimulating mining along developmental lines on various fields. For example, the increased price has ensured continuance of operation at the large Blackwater quartz mine at Waiuta, near Reefton. This mine, which employs more than 100 men, produced about 10,000 ounces of gold last year, compared with something like 100,000 ounces for the whole of the Dominion. It is reported to be likely that the new price of gold will lead to the reopening of some partly abandoned quartz mines and to the development of new areas on the West Coast. The effect in the North Island is expected to be of a cheering nature, for it is reported that the directors of the famous Martha Mine, at Waihi, who had given orders to close down, thus creating a prime problem for the people of the town and district, have now decided to carry on.

It would seem, therefore, that the goldmining industry, which has played a prominent part in the economic development of the country, is about to get its second wind, though it would be foolish to imagine that the records established in the heyday of goldmining will be equalled or approached. There are several reasons for this, one being that relatively little scope now exists for improvements in the design of dredges. Another reason has been put forward by the Minister of Mines, Mr McLagan, who said: “One weighty reason for the decline in gold production is the gradual exhaustion of our auriferous deposits, an exhaustion which must be regarded as inevitable after well nigh a century of active prospecting and mining operations; further, many* considerations in the national interest, sqch as destruction of land of potential value for agricultural or pastoral use, river control, soil erosion and the development of hydro-electric schemes, which were of slight concern in the past, must now restrict the field available for mining.”

In spite of these obvious drawbacks, there is nevertheless a substantial quantity of gold still to be obtained, and the higher price now ruling will stimulate effort to recover it.