THE PRICE OF COAL.

Otago Witness, Issue 2412, 24 May 1900, Page 51

THE PRICE OF COAL.

INTERVIEW WITH MR JOACHIM.

The resont scarcity of coal in the colony and the recent increase in the price of the West Coast product have naturally caused a good deal of comment. That there has also been a considerable amount of misconception on the subject appears from the information afforded to us by Mr George Joachim, general manager of the Westport Coal Company, in an interview accorded by him to a member of our ttaff, in which he fully explained the seeming anomaly that the retail price of Westport coal exceeds the coit of producing it at tho pit mouth by 300 to 400 per cent. The explanation is set out at length in the report of the interview which f ollowd : —

"A great deal of misconception," Mr Joachim said, " has arisen in the public press all over the colony a.s to the pries which, consumers have to pay for Westport household coal, which varies from 35s upwards in tho different ports. I stated in my eudence before the Special Commission of the llousc of Representatives, appointed lost se&sion to consider the question of the price of cool, that the average price which my compaiiy got for its whole output did not exceed 10j 6d per ton f.o.b. Westport, or, deducting railage to porb and royalty, wo got for our whole ouiDut at the pit's nioiith about 7s 6.1 per tor. Of this 7s 6:1 labour takes 4- a Gd, depreciation on plant, machinery, stores, races, and taxes, and management Is 6d, leading the comoany a bare profit of 3 s 6:1 per ion. People Lave assumed t':at this price of 10s 6d per ton applied to household •coal, have added the freights to the different ports to tVdt price, and have then asked how the enormous difference between this and the_ pr.'co they pay retail arises and who gctd this large profit. My answer i, nobody gets it, iL does not exist,' and the opinion prevailing has arisen fioin a misconception cf the whole thing." What, then, is the explanation of the difference between the price f.o.b. at Westport and the retail price?

" If the miblic were supplied with coal as it comes from the mine, they simply wouldn't burn it. V\ T e have tried over and over again to bring this coal into the market, and have foiled. The public will judge of coal by its, siae; they *vill have it large, and a3 we deD?r>d on them for our custom we 1 aye to aunp'ly that kind of coal. Now, to obtain this kind of coal which the public will buy, we hive to make a selection from the output; ihiit selected coal has to bo screened and 40 XDei- cant, of slick taken out of it, which slack h;so to be &old for ft earn, purposes for what v--e can get. The class cf coal which the public demand for household purposes only amounts to about 25 per cent, of the -whole output, and when that has been selected the value of the remainder has been considerably reduced, and has to be sold to steamer lines end other largo consumers at ve-y much reduced rate?. We cannot afford to sell household coal such as the public will buy nt less than 16k to 17s per ton f.o.b. Wesiport, and when we get this price it only brings the price of the whole output up to 10n 6:1 per ton. 'But even thid specially selected and screened coal if delivered direct from staamcr would not suit the public taste. If they vould take it from the steamer they could get a considerable induction, but the coal, from its very richness and tho absence of any stone or shale band in it, is necessarily much more friable than Newcastle, and the shipment into steamer and the digging it out again reduces some of it to slack, and before consumers will buy it it has to be carted to the yards, rescreened and the slack obtained from it sold at a serious loss. Is it to be wondered at that after the coal has passed through all these processes the price should be high? As the public taste x is now constituted, it would be folly to attempt to force the coal upon them as it comes from the mine: even a selected coal unscreened, which we could sell for 12s f.o.b. Westport. and which we have triad, has failed to meet the public taste, and so we only offer this specially selected nad douoly screened coal for which a, Ligh price must be asked."

What you have said, Mr Joachim, has reference to the cost of winning the coal and preparing it for the market. Is there any truth in the suggestion that the middlemen — the traders with whom the consumer lias to deal — net large profits from the sale of co:d?

' ' As to the retail price from the yards, I must leave the trade to explain the difference between our wholesale price and what they charge to their retail customers.. Our own experience where we have retail yards is that, after carting the coal to the yards, rescreening it, bagging it and' delivering and selling the :-,lack at a loss, there is barely a margin of 6cl per ton to pay interest on cap Hal. wear and tear of plant and risk of bad debts."

Tn what you have paid you have not touched upon the cause of the recent increase in the price. Have you any objection to explain what has necessitated that?

" Unfortunately," owing to increasing labour charges and the enormous advance in colliery requisites of all kinds-, we have had to advance our price recently, but it does not affect contracts!, and to keep up a regular output of the magnitude which ourd has reached necessitates large contracts extending over long periods. The advance in price doss not exceed 3d per ton on our output, a very trifling ris-s as compared with what has taken place in England — viz., 64- per cent."

And vvith regard to the scarcity of bituminous coal, i& that due to any exceptional cairsos?

'" As to the scarcity of bituminous coal, it is partly to be accounted for by expansion of trade, partly by difficulty in ii.rporl.ing it from Newcastle, owing to the quarantine restriction--; and partly by stoppage of other mirerf. Wo prepared for an ineress? of 1000 tons per week which, judging from the increase of pa c ;t years, should have been nniple for all requirements, but the exceptional demand has taken us for the moment at a disadvantage. In July we expect to open another section of our mine, and to be able to supply all demands."

Does the export of coal enter into the consideration of the question of the scarcity of the supply?

" No. We certainly expect to do an export trade in time to come, mid the Penarth, to load in July, will take 4000 tons id a foreign port. She has been chartered for 12 months. At present, however, the question is not to I find markets, but to supply the demand. I j do not think New Zealand's coal fieM is sufficient for any extensive export. Five years of the prpsent English output would clean out the whole of tho known coalfields in New Zealand, bituminous, pitch coal, lignite, and all." I- What was the reason that your company

made -riMiigcmeni-s to pane l .--vil abrracl foifor* the eoui i siroi:.!r tho Ic-al li'-.-nanc"' ?

\Vh.-n Aie mpcb this contract, fa" e>.por(> ing- coal, v.-c Ik d r.ot sulHciont de:nand lot our output. Now il i^ ihe ether viay about: T^e can't put ou'. enough for tlie local ira r le ; but that is only We shell so.n be aiiead of tho ira.j.e y/ith our development, and shall be g^ad c* this export trade to keen owv mines regularly going."