COAL FOR POWER PLANT.

New Zealand Herald, Volume LXVII, Issue 20624, 24 July 1930, Page 12

COAL FOR POWER PLANT.

KING'S WHARF STATION.

REGULAR SUPPLY ASSURED.

GOVERNMENT LEASES MINE.

COLLIERY FIRM'S AGREEMENT.

[BY TELEGRAPH. —SPECIAL REPORTER.] WELLINGTON. Wednesday. An agreement was signed between tho Government and Glen Afton Collieries, Limited, to-day, whereby the Government will lease to tho company for 40 years tho Mac Donald State Mine, Glen Afton, subject to certain conditions, one of which is that adequate coal supplies shall be made available to the Auckland Electric-Power Board for its steamgenerating plant at King's Wharf during the period that the Arapuni hydroelectric works aro out of commission. The company has guaranteed also that if tho Government establishes its proposed steam-generating unit in tho Waikato, it will supply a certain amount of the coal required for that purpose. In the House of Representatives to-day Mr. W. Lee Martin (Labour —Raglan) asked the Minister of Minos, Hon. A. J. Murdoch, if it was correct that the Government proposed to lease the Mac Donald mine to tho Glen Afton Collieries. The Minister replied that the Government had that day concluded an agreement to that effect.

"On what terms is the lease based?" asked Mr. H. E. Holland, Leader of tho Labour Party. Tho Minister: On satisfactory terms. Start of Negotiations. Mi". Martin: How long have tho nego tiations been going on? Were they started before you took offico ? The Minister: A long time before. Mr. W. E. Parry (Labour —Auckland Central): We will want a further answer than that.

Interviewed subsequently tho Minister said tho Mac Donald mino property was acquired by the State in 1919, for tho sum of £51,000. Incidental charges amounted to between £3OOO and £4OOO, and interest accruing on tho capital amounted to £27,000, so that tho Stato had £BO,OOO worth of "dead money" in the property. A little prospecting had been done but tho initio had been idle since 1919.

Before the Arapuni troublo Glen Afton Collieries had been negotiating for tho purchase of tho property, but tlioso negotiations had not developed. When tho Arapuni breakdown occurred tho Auckland Power Board was faced with having again to generate power at the King's Wharf station, and tho dairying industry also was depending on securing somo power from that source. The Power Board and Glen Afton Collieries had como to an agreement contingent on the Government leasing the Mac Donald mino to the company. Supply Within Six Months.

The company was to guarantee to supply to the board, within six months of taking over the mine, between 3000 and 4000 tons of coal a week. The prices agreed to were 8s a ton for slack and 15s 6d a ton for crushed coal on the railhead at Glen Afton. Tho terms also included a provision whereby, if tho Public Works Department started a steam generating plant in the vicinity, it should be supplied with up to 300 tons of coal a day at the same prices as thoso charged to the power board. It was felt in tho circumstances, said the Minister, that tho board should havo every assistance from the Government in being assured of adequate coal supplies. The Glen Afton Company would pay to tho Government a royalty of 8d a ton on all coal mined from tho Mac Donald mine. It was estimated that the company would provido employment for 200 extra men, and ho haj received advice to-day tliaL 100 men wore already on the job. Right of Termination. The Glen Afton Company would havo tho lease of tho mino for 40 years. Tho agreement between tho company and tho power board for the supply of c«al was for 10 years, the board having the right to terminate tho agreement at the end of three years. If the arrangement broke down within tho period of 10 years the Government had the right to reviso tho royalty, tho company to pay not less than 8d and not more than Is. "One of the difficulties facing tho power board was tho cost of coal," said the Minister. "I understand that already (ho board has paid £BOOO fo Australia for coal, and that it is about to pay out a similar further amount." The company would havo to pay at least £SOO a year in royalties, but in view of the agreement entered into for tho supply of coal to tho power board, and the prospect of tho Stato plant yet to bo erected also requiring supplies, it was anticipated that tho Government would derive a much larger amount than £SOO from tho royalties. Tho proceeds would enable tho Government to meet its interest and sinking fund charges.

SAVING IN COST.

SUPPLIES NOW ON HAND.

BOARD'S LARGE CONSUMPTION

Commenting yesterday on the lease csf tho McDonald State coalmine to the Glen Afton Collieries, Mr. W. J. Holdsworth, chairman of tlio Auckland Electric-Power Board, said the board's consumption was 3400 tons a week. Tho board had guaranteed to take 3000 tons of coal a week from the company at an upset price of 8s a ton on trucks for slack coal, and 15s 6d a ton for crushed coal. Tho board had been paying 10s a ton for slack and up lo 17s 6d a ton for " run of tho mine."

Last week the board had only two days' supply of coal on hand and had heen forced to purchase expensive southern and;overseas coal. The position had now improved, as the board had been able to secure 30,000 tons of slack coal, which had been dumped at King's Wharf. Mr. Iloldsworth added that the new arrangement would keep money in the country and provide relief for unemployment. .