COAL BELOW COST

Sun (Auckland), Volume IV, Issue 1081, 19 September 1930, Page 1

COAL BELOW COST

COMPANIES MUST FAIL DIRECTOR VIEWS SITUATION The present price war between coal companies in the Waikato will hasten the, closing down of at least two of the smaller mines. This view was expressed by the chairman of directors, Mr. H. Luke, at the first annual meeting of Wilton Collieries, Ltd., held this morning. In reply to a question from a shareholder, :\ir. Luke said the recent reductions in price were unfortunate, hut should not affect the Wilton company greatly, as the modern plant being Installed would enable coal to he produced at a cost no higher than that of any other company. ‘‘No company can afford to continue indefinitely to sell coal at below cost,” he pointed out. In spite of reductions in price, there would still be sufficient margin for the new mine to show a profit in the near future. Some mines would have to fail, two he knew of personaly being sure to cease working this year. One is producing between 30,000 and. 40,000 tons a year, and the other's annual production is about 20,000 tons greater. Although the price of coal had fallen, shareholders should have no fear said Mr. Luke. So far money had been spent on the mine in development work with no return, but within eight weeks coal-cutting would begin, and it would not be long before dividends would follow. He personally had every confidence in the futuie The position would be helped along, though unwittingly, by the establishment of a coal carbonising plant at Taupiri shortly, the slack from neighbouring mines being utilised in this new manufacture. This would leave a market for slack open to the new company.