AUSTRALIAN MINING.

Otago Daily Times, Issue 20202, 13 September 1927, Page 13

AUSTRALIAN MINING.

IN THE DOLDRUMS

BROKEN HILL’S PLIGHT

TWO MINES PROBABLY TO CLOSE.

(From Oue Own Correspondent.) SYDNEY, September 2,

Never has the mining industry in Australia faced such critical times as now. In practically all t’ o States some form of the. operation of minora] fields is in a parlous condition. Following closely upon the recent abandonment of operations at Mount Morgan an' 1 at the Ncwnes shale oilfield, comer, the announcement that the price of metals has decreased so much that two of the less profitable Broken Hill mines probably will bo forced to shut down. Those are the Broken Hill Proprietary, the oldest of the Barrier group, and the Block 14 mine.

Broken Hill is one of the greatest silverlead fields in the world. Untold millions have been paid in dividends from milling 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 mines. Now the low prices of metals and the reduction of working hours have combined to make operations so unprofitable that two of the companies with low-grado ore are seriously contemplating closing. Disclosing this probability at the annual shareholders’ meeting, Mr IT. (1. Darling, chairman of the Broken Hill Proprietary, said : “ Metals aro now standing at a figure which renders mining operations unprofitable. A stage is reached where it is cheaper practically to cease operations and to bear overhead expenses than to continuo working at a big loss. Although the price of metals is the chief factor responsible for the present situation, it must not he overlooked that the direct and in direct costs arc heavy. While there has been reduction in the effective hours worked underground from 35 to 30 hours, with a corresponding reduction in output, the most serious aspect of the hours question at Broken Hill is the reduction from three to two shifts daily. But for this the present output of ore would be 50 per cent greater. a- permitted valuable products being recovered, which, under present conditions, can only bo obtained at a loss.” How hard the Barrier group of mines have been bit from the reduced price of metals may be seen from a comparison of metal prices and share values of the four stronger Barrier mining companies—B II South, North 8.H., Sulphide Corporation, and Zinc Corporation. The prices of the three metals produced—lead, spelter, and silver—at the end of August last year wore £32 3s 9d per ton, £34 Is 3d per Inn, and 2s 5 l-16d per oz respectively. At the end of May they were £24, £2B, and 2s 4d 3-16 d. To-day they are £22 7s 6d, £27 11s 3d, and 2s Since the end of May the market values of shares in these four companies have depreciated bv £2.6so,ooo—North B.H. bv £1,050,000‘ B.H. South bv £640.000, - Sulphide bv £285,000, and Zinc by £675,000. If 'a comparison is made with the end of March the depreciation of share values is about £4,000,000 Many investors, especially small men, who came in at the height of the boom in metal prices, have been hard hit. For instance, thousands of small investors were attracted by a dividend of 40 i per cent, and bonus to place their money i 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 f at that figure. Of course, if these share- j holders patiently hang on to their scrip j and wait for brighter days, they will poa- j sibly get more than their money bad:. But it is a dubious proposition.