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Wednesday, 9 November 1938

Mr McEWEN (Indi) (Minister for the Interior) . - The arguments used by the honorable member for Swan (Mr. Gregory) in support of his motion show that he is not fully acquainted with all the circumstances of the case. As for the amendment of the Deputy Leader of the Opposition (Mr. Forde), it is only necessary to point out that what he proposes has, in fact, already been done by the Government. His amendment is to the effect that the Government should undertake a comprehensive survey of Australia's iron ore resources. It is within the knowledge of the Deputy Leader of the Opposition, as of other honorable members, that many months ago the Government arrived at that conclusion and acted upon it. It initiated a survey of the iron ore resources of Australia, and I shall give details of that survey a little later.

I should like to set out clearly the history of events which led up to the imposition of the export embargo by the Government, and to the decision to embark upon a survey of the iron ore resources of the country. It was stated by the honorable member for Swan, and reiterated by the Deputy Leader of the Opposition, that the Prime Minister (Mr. Lyons), and the Leader of the Government in the Senate at that time, had stated that there existed no reasons for preventing the export of iron ore from Australia. That is true: those statements were made, but, unfortunately, it transpired that the statements had been made without such knowledge as later came into the possession of the Government. Very briefly, the history of that phase of the matter is as follows : On the 16th November, 1935, the Premier of Western Australia advised the Prime Minister of a proposal to develop the iron ore leases at Yampi Sound, and to export the ore to Japan. At that stage, the Commonwealth Government and its officers believed - and their belief was in accord with the general impression of most Australians - that the iron ore resources of this country were very substantial ; in fact, so substantial ns to be practically unlimited. Acting on that belief, the Prime Minister advised the Premier of Western Australia that he saw no reason why the leases should not be developed for export purposes. It is the attitude of the Government to-day, as it was then, that if there is more than sufficient iron ore in Australia to provide for our requirements now ami in the future, there exists no reason why the surplus should not be exported to foreign countries. Shortly after rJ-nt expression of opinion by the Prime Minister, doubts were raised regarding the extent of our iron ore resources. On the 9th March, 1937, Cabinet decided that an investigation should bc made, and all the States were approached in an effort to obtain information on the subject. It may be noted here that the Constitution leaves all matters pertaining to raining within the control of the State parliaments. It is another unfortunate aspect of Australia's federal system of government that the governments which were constitutionally hi control of mining had not, in the exercise of their powers, conducted a survey of the iron ore resources of tho various States. No doubt they desired to make the survey, but the fact remains that they did not do so, probably because of shortage of funds. In reply to the inquiries addressed by the Commonwealth Government to the State governments, information was furnished on the 18th June, 1937, and was submitted to Mr. Nye, the chief executive officer of the North Australian survey, for comment. On the 22nd June, J 937, Mr. Nye furnished a report in which he said, among other things, that there was. evidence in the information supplied by the States that iron ore deposits were adequate for the immediate heeds of Australian industry.' but that there was considerable reason to doubt the adequacy of those resources to meet the needs of the more distant future. Acting on that report, Cabinet decided, on the 5 th August, 1937, that Dr.' Woolnough, the Commonwealth Geological Adviser, should make an investigation. On the 11th August, 1937, the States were asked to grant no further leases where there was any prospect of the Ore obtained- on those leases being exported. They were told that the preliminary investigation had raised a doubt fis to the adequacy of Australia's total resources. On the 31st August, 1937, the Prime Minister announced that, in view of the definite information then in his possession, he saw no justifiable reason immediately to interfere with the development of the Yampi Sound leases. Further inquiries proceeded, and, on the 14th April last, Dr. Woolnough submitted a report in which he stated that, unless our known resources of accessible iron nrĀ« were conserved, Australia, in a little more than a generation, would become an importer rather than an exporter of iron ore. On the 19th May, 193S, the Prime Minister announced that the exportation of iron ore would he prohibited as from the 1st July last. That action was not claimed to have been taken by reason of final and sufficient information as to the total resources in Australia. The prohibition was imposed rather because serious doubt had been thrown upon the previous estimates, and consequently most serious apprehension had arisen as to the adequacy of the resources for the future development of Australia's iron and steel industry.

Mr Drakeford - What were the previous estimates?

Mr McEWEN - I shall say something on that point later. Throughout the history of the investigation of these resources, we have experienced, without a single exception, successive and serious diminutions of the estimates, not only of the total resources of Australia, but also of each individual group.

Mr Holloway - The officials Atop pen counting the offal, and only took into consideration the rich ore.

Mr McEWEN - There is much to bo taid in support of the honorable member's statement.

The honorable member for Swan (Mr, Gregory) based his case on a series of contentions from separate aspects of this matter. He introduced, with very great force, the international implications of the embargo. We must all agree that it is undesirable to deny to any foreign country access to raw materials; but I am sure that the honorable member recognizes that this objection to the prohibition could be upheld only if conclusive evidence were available that the supply of raw material was adequate for the nation's own use. He also referred, as did the Deputy Leader of the Opposition CMv. Forde), to the economic aspects of the embargo. He told us, with considerable force, of its economic effect upon Western Australia, and also upon individual miners and mining interests. The Deputy Leader of the Opposition' dealt more particularly with, the economic effect of the embargo on the national development of Australia's steel industry. The honorable member for Swan further mentioned that the projected development at Yampi Sound has been prevented.

Mr Martens - He was quite right in that regard.

Mr McEWEN - It would be futile to deny that the imposition of the embargo has had an immediate effect upon development at Yampi Sound; but I hope to satisfy honorable members that, although Western Australia has suffered temporary loss, inevitably the resources at Yampi Sound will be fully exploited later.

The general right of every nation to make a preferential reservation of its raw materials and natural resources for its own use will not be disputed by any honorable member. The honorable member for Swan quoted a statement by Sir George Pearce during the time when he was Leader of the Government in the Senate, that to deny access to these resources by, for instance, Germany, would be to strengthen the claims of that country for colonies. It has been pointed out, and none of us wish to dispute the fact, that to deny to any foreign country access to raw materials is to engender at least an unfriendly attitude to the country imposing the embargo; but it is conceded by every civilized nation that any country has a right to reserve for its own people first use of its natural resources. Not only has this principle been generally conceded, but the Raw Materials Committee of the League of Nations, during the time when Japan was a member of the League, declared, on behalf of all the member nations, that, whilst it was desirable that access to raw materials should not be denied to foreign countries, it was the belief of all members of the League that each country should have the first right to its own raw materials, and that only when there was a reasonable surplus of those materials should there be an expectation that they would be made available to other countries. Only because serious doubt has arisen in the mind of the Government as to the adequacy of Australia's resources of iron ore has it imposed the present prohibition.

Every one of us hopes that it will not be necessary to maintain the embargo permanently. The Government has made it clear that if the investigations demonstrate that sufficient reserves of iron ore are available in Australia for our own immediate and future requirements, it will lift the embargo, and make available to foreign countries any surplus which Australia can afford to export. The embargo has not been aimed at any particular country. The Government's action has been taken for one reason only, namely, the need for conserving for our own people the resources which we are fortunate enough to find in Australia, and which are certainly necessary for the development of our industries.

Mr Martens - Without any suggestion from anywhere else?

Mr McEWEN - I am happy to bo able to reply that this action has most definitely been taken without any outside suggestion.

The point on which the honorable member for Swanhas dwelt most fully is his doubt that there is a fear in the mind of the Government regarding the adequacy of Australia's resources of iron ore. He has referred to the opinions of various authorities, and has quoted some who have said that the resources are adequate. He remarked that one authority estimated sixteen years ago that' Australia had' visible and potential resources of iron ore totalling800,000,000 tons. I believe that that estimate was made by a committee from Great Britain, which visited this country for only a few weeks. It made no personal investigation, but, collating the estimates in certain old reports, merely ventured that opinion. It certainly had no information available to it which is not equally available to the present Government.

Mr Gregory - The Government imposed the embargo after a very short examination.

Mr McEWEN - But after an examination sufficient, to leave grave doubt as to the adequacy of the supply. The Government does not claim to have acted on definite and conclusive information. It took what it believed to be the proper course, when a sufficient degree of doubt was raised regarding the adequacy of our resources.

Mr Price - Would it be a difficult or long task to ascertain how many tons of iron ore we have in Australia?

Mr McEWEN - I believe that the investigation will not be unduly long. It is not sufficient to know the dimensions of the beds of iron ore; it is also necessary to find out their assay value and their mineralogical characteristics. It is important to know whether the ore is suitable for smelting, or whether it is of a refractory kind. It is certainly necessary to consider the resources from economic aspects. It is of not the slightest use to say that there is 5,000,000 or 7,000,000 tons of iron ore at Tennant Creek, and to include that in the iron ore resources of Australia. Such resources have been taken into account in the total figures which the honorable member for Swan has mentioned, but they are of value only if they are economically available, and it is possible to exploit them profitably in the interests of Australian industry. Therefore, the Government proposes to conduct an exhaustive and detailed examination of all the iron ore resources of this country. In this regard, the Commonwealth Government has called to its assistance the Mines Departments of the various States and their respective experts, and has asked every State government whether it would choose with its own Mines Department and its own officers to conduct a survey of its own ore, or whether it would prefer that the Commonwealth Government should do so. With this inquiry has gone the offer of the Commonwealth to bear the cost of the survey, irrespective of whether a State elects to conduct the survey itself or asks that the Commonwealth should do so. The States have elected in different ways.

I propose briefly to refer to a few of the known deposits in Australia, and to give a short history of them, so far as the claimed knowledge of their magnitude is concerned. We have heard much, for instance, of the Portland Roads deposit in Queensland. An investigation has lately been made of that deposit by Dr. Woolnough in company with the Queensland State Geologist, and the conclusion which they arrived at- and in this they are in agreement - is that this deposit is much too highly contaminated with silica and rock material, and is too scattered for economic working. The ore is too friable to stand transport without high loss, and therefore the deposit must be regarded as of no value when assessing the iron ore resources of the Commonwealth. The deposits at Mount Lucy, in Queensland, aro regarded - and in each instance I am stating the joint opinion of Dr. Woolnough and the 'State "Geologist - as too small and too impure in the bulk. Then there is the deposit at Iron Island, off the Queensland coast. A preliminary reconnaissance indicated that that deposit rep- resented a bulk of iron ore of some 2,500,000 tons. A more close examination has disclosed that it is merely a sheeting of iron ore over a core of diorite, and it has been necessary to reduce the initial estimate from 2,500,000 tons to 500,000 tons. The ore has also been disclosed to be of the magnetite variety which is refractory and not amenable to smelting. At Biggenden, Queensland, there is a deposit which was estimated at 600,000 tons, a very small quantity in considering the iron ore resources of the Commonwealth. This earlier estimate still stands, but considerations of quality eliminate the deposit from consideration. It contains impurities of various kinds, including bismuth, and the ore itself is of the magnetite variety. At Mount Philp and Mount Leviathan, in the Cloncurry district, there are undoubtedly large deposits but these are 400 miles from the coast and very much further from airy potential smelting centre. The cost of transport would put these deposits quite outside the range of economic consideration.

Mr Gregory - For the present.

Mr McEWEN - For so far into the future as it is possible for us to look. At Cadia and Carcoar, in New South Wales, there are deposits originally estimated by the State Geologist at 39,000,000 tons. They would be included at that figure in the total cited by the honorable member for Swan (Mr. Gregory). This is one deposit which has been actually worked. Exploitation has proved that there are very substantial quantities of enclosed rock, and very great impurities in the ore. There is conclusive evidence that the total volume of usable ore in those deposits is 2,000,000 tons as against an original estimate of 39,000,000 tons. Certain other deposits in New South Wales disclose similar features.

In the opinion of the State Geologist in Victoria, there are no deposits in that State of any consequence which could possibly be taken into consideration.

Turning to Tasmania, there is a deposit at Beaconsfield which was originally estimated by people who were regarded as competent investigators at 35,000,000 tons. It is obvious that they did not make a very comprehensive investigation because drillinghas proved that the deposit is entirely superficial where it was first regarded as being deep-seated, with the result that the original estimate has to be entirely eliminated. In respect of Blythe River, Tasmania, the original estimate was 24,000,000 tons; but there have been progressive investigations and diminutions of the estimate until to-day the most comprehensive and the most authoritative survey may reduce the original estimate of 24,000,000 tons to 12,000 tons - not one shipload !

Mr Martens - Who made the estimate?

Mr McEWEN - Certain geological experts whose names I cannot furnish offhand. There are certain other possible deposits -in Tasmania, but preliminary investigations fail to disclose them as being of any consequence. In the west coast area of Tasmania, where the greatest hope was held out, there is evidence that any iron ore that exists is of a refractory nature, that is, of the magnetite variety.

Mr Mahoney - That is only guess work.

Mr McEWEN - That is the pronouncement of competent investigators. What I have said goes to show that in the eastern States of Australia, with the exception of the Cloncurry district, there is not one iron ore deposit of any consequence. I invite any honorable member of this House who doubts that statement to mention the name of any one deposit in the eastern portion of Australia which is of economic consequence. The deposit in the Cloncurry district is more than 400 miles from the seaboard and the cost of transport eliminates it from economic consideration.

Two States only. South Australia and Western Australia, are of consequence so far as the known and available deposits of ore are concerned. Investigations up to the present disclose that in South Australia there are only two known deposits, one at Iron Knob in the Middleback Range, and the other near Broken Hill, a small deposit and so far inland that it must be eliminated. The initial estimate of the Iron Knob group of deposits was that it contained iron ore practically without limit; but, on more close investigation,a limit was placed on the amount of ore available by the State Geologist, Dr. Ward, at 200,000,000 tons. Dr. Ward, however, has said quite recently that the original estimate of 200,000,000 tons will have to be most seriously reviewed.

Mr Forde - That discounts the quotation of Dr. Ward in 1922 cited by the honorable member for Swan.

Mr McEWEN - That is so. Dr. Ward is at present engaged on behalf of his State in conducting a survey of the iron ore resources of South Australia. Turning to Western Australia, and excluding for the moment the Yampi Sound deposits, there is a known deposit at Wilgie Mia in the Weld Range, which is estimated at 26,500.000 tons. There has never been a detailed survey, and it is certain from investigations that have been made that this ore contains very much barren material. The deposit is situated 305 miles distant from Geraldton, the nearest port, and is, therefore, also necessarily eliminated from economic consideration. Then there is the Peak Hill field, which is situated at a distance of 70 miles from the nearest railway, and then 335 miles by rail from Geraldton, a total of 405 miles of land transport to the coast. No estimate has been made of the resources of this field. At Tallering Peak there has been no estimate. The deposit has been seen by Dr. Woolnough, but not closely examined by him. He reports, however, that this deposit is not of major dimension and there are indications of considerable contamination by silica. Here again land transport costs are a factor in any assessment of this deposit as being economically valuable. Then there is the Koolyanobbing deposit, situated near Southern Cross, which is being surveyed by the Government Geologist of Western Australia at the present time. It is 30 miles from the railway and a total of 268 miles from Fremantle, and therefore, also has to be eliminated from economic consideration.

Turning to the most controversial deposit, that at Yampi Sound, here again the history has been one of diminishing estimates. In the years gone by, there, was an opinion widely held that the amount of iron ore at Yampi Sound could be regarded almost as illimitable; but in 1920 an investigation was made as to its magnitude by the then State Mining Engineer of Western Australia, Mr. Montgomery.[Leave to continue given.] In 1919, Mr. Montgomery, then State Mining Engineer in Western Australia, proceeded to Yampi Sound to make an investigation and assessment of the quantity of iron ore at Cockatoo Island and Koolan Island. He spent six days at Yampi Sound and estimated that the total quantity of iron ore available at that centre is approximately 97,000,000 tons.

Mr Gregory - That is above high water level.

Mr McEWEN - Yes. Subsequent assessments made by various persons - investigations have been made by private mining interests as well as by Government authorities - have agreed in certain respects, in that they have shown that of the two deposits those on the northern ends of the two islands must be eliminated from consideration because their siliceous nature renders them unsuitable for smelting purposes. The southern ore body on Koolan Island, leased by Brasserts Limited, of London, tapers from a thin deposit at each end to a thicker deposit in the centre. The whole of the deposit was taken into consideration by Mr. Montgomery, but later investigations tend to show that the tapering ends are highly siliceous and will have to he eliminated. Only the middle portion can be considered. Even acting upon Mr. Montgomery's estimate, the centre portion of the southern deposit of Koolan Island will not give a total of more than 40,000,000 tons of iron ore. At present the usable deposit at Cockatoo Island is being investigated by Australian Iron and Steel Limited, a company which has been merged with tlie Broken Hill Proprietary Company Limited. Later this deposit will he investigated by Western Australian mining authorities at the request and at the expense, of the Commonwealth Government. The result of the investigation to date compels us to reduce the expectation from the Iron Knob and the Yampi groups very materially - to what extent, I am unable to indicate. However, it is the considered opinion of the Commonwealth Geological Adviser,

Dr. Woolnough,that the total usable iron ore available in these two deposits is not less than 150,000,000 tons, and that it is not likely to exceed 200,000,000 tons. This has to be considered against the knowledge that Australia is at present using 2,000,000 tons a year, that two new large blast furnaces just completed will raise this amount to about 3,000,000 tons, and that our iron and steel industry is sure to expand and demand a constantly increasing amount of ore. I have given to the House the history of the successive investigations of individual deposits, showing a progressive diminution of the estimates of iron ore available. Deposits may be eliminated for various reasons - high land transport costs, their siliceous nature, or the fact that the ore is refractory. In the light of this information, I -suggest that every honorable member should concur in the action which the Government has taken in imposing an embargo upon the export of iron ore from Australia. If further investigations should disclose that there is more than an adequate supply available foi Australia's immediate and future requirements, the embargo will be lifted and the export ro foreign countries permitted. The Deputy Leader of the Opposition (Mr. Forde) quoted the following remarks of the Prime Minister: -

The Government "'ill bo prepared to examine and to consider equitable claims for reimbursement of expenditure up to this date which has actually taken place in connexion with developmental operations directed towards the exploitation (>T our iron ore resources for export.

Mr Forde - Has the Government received any claims?

Mr McEWEN - Yos, four claim* have been received. I can include the claim made broadly by the Leader of the Opposition (Mr. Curtin) on behalf of workmen who were employed, or who might have been employed at Yampi Sound. It would appear that 52 or 57 workmen, I am not sure of the number, were engaged. The company had given these workmen notice of dismissal, but I was able to arrange with the Western Australian Mines Department, which had undertaken' to conduct a survey, that every one would be employed at the then rates of wages which have since been increased. Those men are to continue in useful work associated with investigations on the island, such as tunnelling and assisting in the transport of supplies. The honorable member for Swan (Mr. Gregory) said that tunnelling involves unnecessary expenditure, and that the investigations could have been carried out more cheaply by geophysical methods. In reply to that contention I may say that the exact methods to be employed in conducting a survey at Koolan Island have been decided upon by Mr. Forman, the Government Geologist of Western Australia, and Dr. Woolnough. They visited the island together and after an inspection decided that tunnelling and certain other measures would be the most effective. We shall know not only the exact dimensions of the deposit, but also its assay value. 1 have been informed by Dr. Woolnough that he is very familiar with geophysical methods. The honorable member for Swan referred to the geophysical methods practised in Sweden. Dr. Woolnough has informed me that he has studied in the original language the full reports upon which action was taken in Sweden, and bc points out that whereas geophysical investigation discloses, not the certainty, but the probability of a deposit, it is not possible by that method to disclose the type of ore, its usefulness or its smelting properties. Moreover it is impossible to determine whether it is associated with impurities or is of a refractory nature. That can be determined only by the actual excavation of the iron ore itself. The honorable member for Swan also referred to the possibility if working the iron ore deposits at Yampi rsl and below high water level. He has informed us that similar deposits in Newfoundland are worked below the high water level, but he does not know that the geological natures of the two ores are dissimilar. He does not know that there are great cavities or voids iu the ore at Yampi Sound. At least three private companies have attempted to investigate, by diamond drilling, the magnitude of the deposits in the Yampi group, and in not one instance has it been possible to reach the footwall because of the cavities which exist. These have been set down Ivy one competent authority as embracing 10 per cent, of the volume of the deposits. With such cavities it would be quite impossible to work below high water level. 1 am informed that the deposit in Newfoundland extends below sea level on an almost horizontal slant, and is covered by a capping of rock which is impervious to water. In these circumstances it is possible for the deposit to be worked below the sea level without being interfered with by seepage of sea water. Thu deposit at Yampi Sound enters the sea at a steep slope, has no capping, and as it is full of cavities or voids, it can never to worked below high water level. None of these opinions need be accepted as conclusive or final, but we must ask ourselves whether we can permit our iron ore resources so to diminish that we shall be forced to import supplies. I believe that the Government, has taken the action which any responsible Australian Government would have taken in the light of the information and advice furnished by experts. I trust that, final investigations will prove that it will yet be possible to lift the embargo, and thus make some of our iron ore. available to foreign countries. But that will not be done by the Government until it is convinced that there is ample iron ore available for our own present and future requirements. We not wish to be compelled, a few years hence, to import iron ore in order to meet the requirements of our key industries, or have men thrown out of employment because the cost of- raw material would be prohibitive to our iron and steel industries. In the circumstances, I ask the House to oppose the motion of the honorable member for Swan.

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