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Wednesday, 7 December 1960

Mr DAVIES (BRADDON, TASMANIA) .- We have before us a bill to amend the Copper Bounty Act of 1958. That act provided for a bounty to be paid on refined copper sold in the period from May, 1958 to 30th June. 1960. The Tariff Board was asked to reexamine the situation, and because the time available for its inquiry was limited the act was extended to 31st December, I960.

Under the provisions of the act as it stands at present the copper industry receives assistance through a combination of bounty and duty. The duty operates when the overseas price of copper falls below £275 a ton. The bounty is paid at a maximum rate of £45 per ton on refined copper produced and sold in Australia, subject to a profit limitation of 10 per cent.

This assistance, by way of bounty and duty, gives producers a return of about £335 a ton.

The Tariff Board has recognized the importance of copper production, both to the national economy and to the economies of the several isolated mining communities, and it has recommended continued assistance. The Government has acted on the Tariff Board's report, and the members of the Opposition support the bill the provisions of which implement the recommendations of the board. The board has recommended that the duty should operate when the overseas price of copper falls below £290 a ton, and that a bounty rate of £35 a ton should apply when the overseas price of copper is £290 a ton or less. This bill will increase returns by £5 a ton for copper sold for use in Australia.

While supporting the principle of the duty and bounty, I must express disappointment at the amounts provided. I have in mind particularly the position of the Mount Lyell Company in Tasmania. This company had submitted a request to the board for a minimum return of £365 a ton on production for a period of five years - as and when sold - subject to the profit limitation of 10 per cent. This request was supported by very detailed evidence. However, it has been refused and the bounty will be paid on copper sold in Australia. It is highly probable that Mount Lyell will have to export some of its output, and perhaps even a considerable part of it. If the bounty is to be paid only on the remainder sold in Australia, it would appear that the company will be in serious difficulties.

This must surely be a matter of concern, especially when we realize that Queenstown, with a population of 5,000, Gormanston and the port of Strahan are almost entirely dependent for continued existence on the Mount Lyell mine. A considerable amount of private and public money has been invested in this area. As the Tariff Board reported, many houses, shops, service stations and so on have been renovated or rebuilt since its previous report in 1957. A modern hospital has been provided, and the State Labour Government, under the very progressive leadership of the Honorable Eric Reece has built a new high school at

Queenstown at a cost of more than £150,000. This has been very appropriately called the R. M. Murray High School in recognition of the grand work done by the father of the present mine manager.

The annual production of Mount Lyell is approximately 10,000 tons of copper. The largest producer in Australia, Mount Isa - this is apparently where our trouble will come from - has expanded its production and refining of copper to the point where it is estimated that this year it will produce about 40,000 tons of refined copper. By late 1961 or early 1962, Mount Isa will be refining at the rate of 60,000 tons annually and ultimately expects to be able to mine, smelt and refine 100,000 tons of copper a year. The present consumption of copper is between 50,000 and 55,000 tons a year, which means that Australia now has a very substantial quantity of copper available for export. There is no doubt that, with the great expansion occurring at Mount Isa, the exportable surplus of copper will increase considerably over the next five years. The Tariff Board reports that by 1965 it seems likely that almost half of the total Australian production of more than 130,000 tons will need to be exported. When we look at these figures, the Mount Lyell company's request for a minimum return as and when sold, as against a return for copper sold in Australia, is very sound.

A few years ago, all the copper produced at Mount Lyell was sold in Australia, but now, with the increased production at Mount Isa, a quarter of it will have to be exported without the benefit of a bounty. This proportion of exported copper will later rise to half the total mine output, and may be even higher. So, it will be seen that this mine, on which the economies of the towns in the area depend, will suffer under the provisions of the legislation.

Costs are necessarily higher at Mount Lyell than they are at any other mine in Australia. T am certain that there is no mine anywhere in the world which works with a lower grade ore. The ore content at Mount Morgan is a little over 1 per cent., at Mount Tsa 4 per cent., at Ravensthorpe 2 per cent, and at Peko 6 per cent., but at Mount Lyell it is .7 per cent. The estimated average ratio of waste to ore is .83 to 1 at

Mount Lyell. This means that the company must remove over 1,000,000 tons of over-burden and almost 1,500,000 tons of ore each year to maintain its annual production of 10,000 tons of copper. It is recognized as the most efficient mine in the country. It must be, if it is to carry on with such low grade ore.

The management of the mine deserves only the highest praise for its efforts. The way the affairs of the unions are conducted is a tribute to the mine management and to the unions. They come together at intervals, sit down in a round table conference and work out an agreement that rs satisfactory to the mine management and to the unions. It is a mining field noted for the absence of industrial strife. The management has been more than generous in looking after the community and providing amenities not only for its employees but also for others who may have no direct connexion with the mine. The mine management has been active in assisting with the provision of health services, education and hospital facilities in this isolated area.

I believe that the company was justified in asking for a minimum return of £365 a ton. Production costs are rising all the time. This was referred to by the honorable member for Lalor (Mr. Pollard). Recent rises in the basic wage and margins have meant an increase of £150,000 in the wages bill of the company over the past eighteen months. The cost of stores, mine machinery and all other goods associated with the industry has increased in recent times. In view of this, I support the contention of the company that provision should be made in the legislation for an escalator clause to provide for basic wage and margins increases as awarded by the Commonwealth Conciliation and Arbitration Commission. The Tariff Board has refused to add to the cost structure of the mine the expenses involved in prospecting and exploration operations outside the company's mining leases. There may be some justification for this attitude, but it should be pointed out that these isolated copper ore deposits are usually found on the edge of other mineral deposits. The Government should give every encouragement and assistance to any company that is prepared to prospect and explore adjacent territories, for metals along with wool and other primary products constitute our greatest export earners. The Mount Lyell Company has been actively exploring in the Morse Valley. Costs are considerable and must be debited against some section of normal mining operations.

Mr Duthie - They are using helicopters.

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