STATE MINE IN WAIKATO'

Taranaki Daily News, 25 July 1930, Page 3

STATE MINE IN WAIKATO'

LONG LEASE TO COMPANY OUTPUT TO SERVE POWER PLANT SUBSTITUTE FOR ARAPUNI WORKS An agreement was signed on Wednesday between the Government and Glen Afton Collieries, Limited, whereby the Government will lease to the company for 40 years the MacDonald State minty Glen Afton, subject to certain conditions, one of which is that adequate coal supplies shall be made available to tne Auckland Electric Power Board for its steam-generating plant at King’s wharf during the period that the Arapuni hydro-electric works are out of commission. The company has guaranteed also that if the Government establishes. its proposed steam-generating unit in the Waikato, it . will supply a certain , amount of the coal required for. that purpose. ■ ' . • In the House of Representatives Mr. W. Lee Martin (Labour —Raglan) asked the Minister of Mines, Hon. A. J. Murdoch, if it was correct that the Government proposed to lease the MacDonald mine to the 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 the Labour Party. ( '. . ■ ’ ■' The Minister: On satisfactory-terms. START OF NEGOTIATIONS. • Mr. Martin: How long have the negotiations been going on? Were they started before you took office? The Minister: A long time before. Mr. W. E. Parry (Labour —Auckland. Central): We will wanj: a further answer than that. Interviewed subsequently the Minister said the MacDonald mine property was acquired by the State in 1919, for the sum of £51,000. Incidental charges amounted to between £3OOO and £4OOO. and interest accruing on the capital amounted to £27,000, so that the State had £BO,OOO worth of “dead money” in the property. A little prospecting, had been done but the mine had been idle since 1919. .' Before the Arapuni trouble Glen Afton Collieries had been negotiating for x the purchase of the property, but those negotiations had not developed. When the Arapuni breakdown occurred the Auckland Power Board was faced with having again to generate power at the King’s wharf station, and the dairying industry also was depending on securing.some power from that source. The Power Board and Glen Afton Collieries had come to an agreement contingent on the Government leasing the MacDonald mine to the company. ' SUPPLY WITHIN SIX MONTHS. The company w<is to guarantee 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 Gd a ton for crushed coal on the railhead at Glen Afton. The. terms also included a provision whereby, if the 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 those charged to the power board. It was felt in the»circumstances, said the. Minister, that the board should have every assistance from the Government in being assured of adequate coal supplies. The Glen Afton Company would pay to the Government a royalty of 8d a ton on all coal mined from the MacDonald mine. It was estimated that the company would provide employment for 200 extra men, and he had received advice that 100 men were already on the job. RIGHT OF TERMINATION. The Glen Afton Company would have the lease of the mine for 40 years. The agreement between the company and - the power board for the supply of coal was for ten years, the board having the right to terminate the agreement at the end of-three years. If the arrangement broke down within the period of ten years the Government had the right to revise the royalty, the company to pay not less than 8d and not more than 1(6 • “One of the difficulties facing the x power board was the cost of coal,” sa’d the Minister. “I understand that al-' ready the board has paid £BOOO to Australia for coal, and that it is about to pay out a similar further amount.” The company would have to pay at least £5OO a year in royalties, but in view of the agreement entered into for the supply of coal to the power board, and the prospect, of the State plant yet to- be erected also requiring supplies, it was anticipated that the Government would derive a much larger amount' than £5OO from the royalties. The proceeds would enable the Government to meet its interest and sinking fund charges’. •