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Wednesday, 29 June 1938

Mr LYONS (.Wilmot) (Prime Minister) . - 'by leuw While not attempting to traverse all the points raised by questions in Parliament and in statements made in tho press, it is, nevertheless, proper that I should inform the House of the main reasons which have determined the Government to adhere to its policy to prohibit the exportation of iron ore from Australia as from the ]st July, 1938.

The criticism of the Government's action can be grouped under two heads. It has been urged that, until a complete survey of Australia's iron ore resources has been made, the prohibition of the export of ore cannot be justified. It has been contended also that no fresh evidence has appeared since August, 1937, to warrantthe change of policy on the part of the Commonwealth.

It is true that a detailed survey of Australia's iron ore resources has not yet been made, but, nevertheless, facts supplied by its geological advisers have convinced the Government that the deposits of iron ore economically accessible are so limited as to cause very great concern as to the future of the iron and steel industry. This most disturbing information has come to the knowledge of the Government only within the last few months.

Subsequentto August of last year, a general review of iron ore deposits was made by the Commonwealth Geological Adviser, and it was the serious position revealed in his report which compelled the Government to prohibit the export of iron ore. From his report, the Government learned with alarm that there are only two groups of ore deposits in Australia which can be economically developed. These are the Iron Knoh group in South Australia and the Yampi Sound group inWestern Australia. Moreover, it hasbeen suggested that the estimated available tonnage of both these groups bad been greatly exaggerated.

Dr. Woolnoughhas stated quite definitely that it is certain that, if the known supplies of high-grade ore are not conserved, Australia will, in little more than a generation, becomean importer rather than a producer of iron ore.

Taking the estimated tonnage of ore available in the groups mentioned and assuming that the whole of this ore will respond to economical methods of mining, and that the quality of the ore will be maintained, we would have something more than 200,000,000 tons to meet the requirements of Australia's industries in the future. We are at present using more than 2,000,000 tons of ore per annum and expert opinion is that within the next few years this quantity will be greatly increased. If the expansion of the steel industry is to proceed at the rate at which it has moved during the last quarter of a century, the present consumption of iron ore will be doubled or trebled before many years have passed. Obviously, therefore, our resources viewed in relation to our requirements are dangerously limited.

Attent ionhas been drawn to the fact that the Commonwealth Government is taking into consideration only the quantities of iron ore that can be economically developed. This is admitted. The Government's advisers have stated that there are quantities of ore in Australia which by reason of their inaccessibility cannot be economically developed. For the purpose of placing Australian industry in a position to meet the competition of other countries which have access to cheap raw materials these deposits are valueless. Moreover, improvements in methods of treatment, &c.,; are not likely to alter this state of affairs within any foreseeable period.

Reference has been made to the fact that no embargo has been imposed upon the exportation of pig iron and steel. The position in regard to those commodities differs from that of iron ore for the reason that up to the present the quantity of pig iron and steel products exported is very small. The situation is, however, being closely watched by the Government.

The Government has had before ita proposal that a quota system be applied to Yampi. A total of 25,000,000 tons was first mentioned. Later the Yampi Sound Mining Company suggested 15,000,000 tons and this proposal has been accorded the support of certain members of this House. The representations of the sponsors of this scheme have been fully considered in all aspects. It has been decided, however, that it cannot be adopted. If a quota were applied to Yampi, it would be necessary both on constitutional grounds and on the grounds of equity to apply it equally to all other localities of the Commonwealth. The adoption of this course would result in a substantial depletion of the accessible resources of iron ore in Australia.

As will readily be understood, at the time of the Government's pronouncement arrangements were in existence for the export of quantities of iron ore from Australia to Japan and elsewhere. If the prohibition were rigidly enforced as from the 1st July, shipping companies and consumers who may not in the short time available be able to make any alternative arrangements may suffer hardship. Some boats are already on the water to lift ore, whilst others are under charter, and certain of these boats are expected to carry other commodities from Australia. In these circumstances and with a genuine desire to maintain good faith with the people of Japan and other countries interested in these shipments, the Commonwealth Government has decided to permit the export under licence of the following quantities of ore which were arranged for prior to the pronouncement on the 19th May, and which will not have been shipped before the 1st July, provided that these shipments are made on or before the 31st December next: -

Contracts between Messrs. Brown and Dureau and Japanese interests - 89,094 tons.

Contracts between the Broken Hill Proprietary Company Limited and United States interests - 55,000 to 60,000 tons.

In conclusion I desire to make some general observations concerning the whole matter.

The right of a government to decide what are a country's requirements of raw materials and by what means these can best bo mot is inherent and cannot be disputed. The decision to prohibit exports of iron ore was made in pursuance of this universally recognized right.

The Japanese Government and other governments affected will recognize that it is not only the right but also the duty of a sovereign state to secure its natural resources for its national industries. This applies particularly to an irreplaceable commodity like iron ore, which is vital to industrial life.

Large quantities of iron and steel will be required for the development of Australia, which is, after only 150 years of occupation, still quite definitely in the developmental stage. During the last five years local consumption of iron ore has increased very considerably, and indications are that the momentum will be greatly increased, involving the consumption of greater quantities of ore within the next fewyears.

I desire to state again most emphatically that the prohibition of the export of ore is to be general in its application. This means that not only foreign countries will be denied access to our resources of ore, but also that Great Britain and the rest of the British Empire will be similarly affected; it is quite definitely in no way intended by the Commonwealth Government that the prohibition should be discriminatory against any country.

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