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Thursday, 20 May 1965

Senator CANT (Western Australia) . - I shall take the opportunity during this debate to bring to the notice of the Senate something that I regard as somewhat of a scandal in Australia. I refer to the rape of Australian mineral resources throughout the country, with particular reference to iron ore. I think we all are aware that large deposits of iron ore have been discovered since the Government in 1960 lifted the embargo on the export of iron ore. Prior to the lifting of the embargo all iron ore, with the exception of that owned by the Broken Hill Pty. Co. Ltd., leases for which had already been granted, was reserved to the States. For this reason iron ore was not a commodity that was sought by individual prospectors or by companies seeking to invest. I think it can correctly be stated that most of the deposits of iron ore were known and had not been evaluated. Upon the lifting of the embargo the Government of Western Australia threw open the whole of the State for examination by prospectors and made available large reserves to various people and companies. The result is that big deposits of iron ore have been registered. lt is estimated that the deposits of high grade ore run into many thousands of millions of tons. The deposits of ore of all grades would be very much greater still. In fact, it is not known exactly how much ore there is in Western Australia and in other paris of Australia. I shall refer later to the deposits in the Constance Range and in the Savage River area in Tasmania. Contracts are being sought by an overseas company for the purchase of iron ore in the Northern Territory. There are many thousands of tons of lower grade ore in Western Australia much of which can be brought to export grade by a system of pelletising and many more thousands of tons can be brought to export grade by means of beneficiation. I am not trying to show that Australia in the foreseeable future will be short of iron ore to carry on industry to the extent that the Australian Government or private enterprise organisations would wish.

High grade ore is generally considered to be ore which has an iron content of more than 60 per cent. Ore that is suitable for pelletising generally has an iron content of between 50 per cent, and 60 per cent. Ore of lower grades has to be beneficiated to render it suitable for blast furnaces. To illustrate the size of the ore bodies in Australia I propose to refer to only one, and that is not the largest. I shall refer to the deposit owned and controlled by Hamersley Iron Pty. Ltd. at Mount Tom Price. That is only one part of the huge reserves which the company controls. In fact it controls reserves in an area of 2,700 square miles. The proven ore with an iron content of 64 per cent, at Mount Tom Price, amounts to 226.8 million tons, and there are 29.4 million tons of lower grade ore with an iron content of between 50 per cent, and 60 per cent. I emphasise that that is the amount of proven ore. It is known that that quantity of ore is there. If we consider the inferred deposits in this area, the quantity of ore becomes very much greater. The inferred deposits of high grade ore at Mount Tom Price amount to 610 million tons and the lower grade ore to 84 million tons. The quantity of ore of all grades in the reserve of 2,700 square miles, is estimated to be 100,000 million tons. There is a large proven deposit at Mount

Newman, and at Mount Whaleback the proven deposit of high grade ore is 245 million tons.

Hamersley Iron Pty. Ltd. has a firm contract to export to Japan 65.5 million tons of high grade ore. The company is at present negotiating to sell to Japan 56 million tons of pelletised ore. The price per ton is difficult to ascertain because the published information refers only to the price for the total amount of ore that is to be shipped. The price for the 65.5 million tons to be exported by the company will be £280 million. The ore body is to be developed in four stages. The first stage will involve a complete evaluation of the ore body which has not yet been completed. The work is proceeding. The second stage will involve the construction of the facilities necessary to export the ore which will be quite extensive. They will include the construction of a port, the construction of a town at the port, the construction of a town at the mine or open cut and the construction of a standard gauge railway. Some 500 or 600 miles of standard gauge railway will be constructed in association with the working of the ore bodies in the Pilbara area. The third stage in respect of which the company is at present endeavouring to reach an agreement concerns the export of processed or pelletised ore. The fourth stage of development will be the construction of an integrated steel plant wilh a capacity of not less than one million tons per annum. The agreement to develop this ore body runs over a period of 25 years.

Much has been made of the amount of money that will be invested to bring this project to completion. The amount estimated to be expended - indeed, agreed upon between the company and the Western Australian Government - is £78 million. I emphasise that the fourth part of the project, that is the establishment of an integrated steel plant with a capacity of one million tons per annum, will not come into operation until 25 years from the date of obtaining the export contract and the commencement of the export of the ore. Expenditure on the integrated steel plant will amount to approximately £40 million. So over the next 25 years investment by this company in Western Australia will amount to £38 million, or a little more than £H million a year.

A similar agreement has been entered into with the Mount Newman Iron Ore Co. to develop the deposit at Mount Whaleback. The company has entered into an agreement to sell to Japan 100 million tons of high grade ore. At this point of time no attempt has been made by the Mount Newman Company to sell any of the secondary processed ores. The proven quantity of high grade ore in the Mount Whaleback deposit is 245 million tons. To give some idea of the value of this ore, I point out that its world market price is approximately £4 5s. a ton. Some of the ore in Western Australia has been sold for £4 5s. a ton and some for £4 7s. 8d., but we make take £4 5s. as being a rough average. If we take a line through the inferred ores at Mount Tom Price and have a look at those at Mount Newman, it can safely be assumed that the quantity of high grade ore and lower grade ore at Mount Whaleback would be very much in excess of the 245 million tons I have mentioned.

An agreement has been entered into with Mount Goldsworthy Mining Associates, which has contracted to sell to Japan 16.5 million tons of high grade ore. This company is committed only to develop the ore body in three stages. The first stage is to make a complete evaluation of the deposits. Then will come the export of high grade ore, and then the secondary processing of lower grade ore. These three companies propose to establish separate ports for the export of ore. Hamersley Iron Pty. Ltd. and Mount Goldsworthy Associates will each establish a port at Port Hedland three miles apart. Surely one port would be sufficient to serve both interests. The Mount Newman company proposes to establish a port at King Bay. Estimated expenditure in connection with the Mount Newman undertaking is £78 million, with £40 million being reserved for the establishment after 25 years of an integrated steel plant. Estimated expenditure on the development of the Mount Goldsworthy deposit and the port facilities is £23 million.

The Cleveland Cliffs company, the iron company that is acting in association with the Mitsui Trading Co., has contracted to sell 71.4 million tons of pelletised ore. This company is developing a deposit of lower grade ore on the Robe River, and it will construct a railway from Mount Edith to

Preston Point. The secondary processing plant will employ a comparatively large number of workers. It must be realised that most of the work performed at the Mount Newman, Hamersley and Mount Goldsworthy projects will be done with heavy earth moving equipment. They will be virtually big quarries, and the labour force will be very small. Automatic equipment at the ports will not engage a great amount of labour. However, it is estimated that secondary processing on the Robe River will employ approximately 500 men. Estimated expenditure upon the development of this project, including the port and railway, is £56 million.

Further south and out from Geraldton, a consortium has entered into a contract to sell to the Japanese 5.1 million tons of high grade ore from Tallering Peak and Koolanooka Hills. The amount invested in the development of these two ore bodies is not known to me. lt will not be very great, because most of the port development work will be carried out by the State Government and the ore will be transported by road. The value of the contract is estimated to be £29 million.

The estimated value of all this ore that has been sold is £1,169 million. I forgot to mention that the secondary processed ore on the Robe River has been sold for approximately £5 9s. 6d. a ton, the total price being £391 million for 71.4 million tons. But £1,169 million is far from being the value of the ore bodies that have been reserved to the various overseas companies. I emphasise the words " overseas companies ". Later I shall attempt to give some idea as to how these companies are held and what is Australia's interest in them. But the value of the assets that have been handed to these overseas companies runs into many thousands of millions of pounds, not just the sum of £1,169 million that I have mentioned and which is the value only of the very small quantity of ore that they presently have. It is confidently estimated that in the very near future Australia will become the major source of ore supply to the Japanese steel industry. The Japanese steel industry's contracts with other countries are running out and they are transferring the trade to Australia because of the high grade ore available here and the shorter distance of transport. Considering the value of the ore which is to be exported and the value of the asset that the State has just given away for, in effect, a peppercorn rental - and from which the Commonwealth of Australia will benefit very little - it is interesting to see how these reserves arc held.

Hamersley Iron Pty. Ltd. consists of Conzinc Riotinto of Australia Ltd. commonly known as C.R.A. and it holds 60 per cent, of the equity in the deposits, the other 40 per cent, being owned by Kaiser Steel. There is a small Australian shareholding in these deposits. The Australian shareholding in Con Rio, as it is commonly termed, is 10 per cent., and so is 10 per cent, of Conzinc Riotinto's 60 per cent, equity in the huge asset of iron ore at Mount Tom Price. The consortium to develop Tallering Peak and the Koolanooka Hills deposit is Western Mining Corporation Ltd., which has an Australian shareholding, the Cleveland Cliffs Iron Company of Ohio and the Home State Mining Company of California, in equal shares; so that whatever the Australian shareholding in Western Mining Corporation Ltd. is, it is only that much of one-third equity in Tallering Peak. Mount Goldsworthy Mining Associates consists of the Cyprus Mines Corporation of California, the Utah Construction and Mining Company of California and Consolidated Goldfields (Australia) Pty. Ltd., which is substantially an English company, although 1 noticed recently that it is placing some shares on the Australian market. The Mount Newman Iron Ore Company consists of American Metals Incorporated, 50 per cent, and the Colonial Sugar Refining Company Ltd. 50 per cent. I noticed recently that through this shareholding the Mount Newman company is attempting to raise development capital on the Australian market. The Robe River deposits will be developed by the Cleveland Cliffs Iron Company of Ohio with a 65 per cent, interest and the Mitsui Trading Company of Japan with a 35 per cent, interest.

There is another fairly large deposit of iron ore some 140 miles north of Perth, at Mount Gibson. It contains approximately 50 million tons of ore, and because it is owned by Japanese interests it is difficult to know what are the negotiations for the sale of this ore, since those concerned do not have to tender or reach an agreement. The only agreement - if and when they decide to export - will be the agreement for the development of this deposit between the com pany and the Western Australian Government. It has not yet reached this stage.

If the Australian shareholding in all of these deposits is analysed we find that it runs out at between 13 per cent, and 15 per cent, and that the other 85 per cent, or 87 per cent, of these huge deposits of ore is owned and/or controlled by overseas interests. Obviously the profits from the sale of the ore Irom these deposits will go to overseas shareholders. I notice, too, that the Cleveland Cliffs company proposes to raise money on the Australian market to develop its mine, but this is to be done by way of loan and not by way of equity holding. Of course this is not satisfactory - at least to the Opposition. We are of the opinion that there should be a rather large Australian equity in all these things. As I said earlier, the whole investment in the development of these ore bodies will amount to about £200 million, but £80 million of it is not expendable for another 25 years, if it is ever spent. I say that, despite the fact that these companies have entered into agreements with the Government of Western Australia and I think I say it on fairly firm grounds. This ore is situated in semidesert country, where there are no fuel supplies. There is no coking coal at all in the State of Western Australia and the ore will have to be transported to a place where there is coking coal and high grade limestone, or the flux and coal will have to be brought to the north of Western Australia.

That is the first reason why I say that the fourth part of the project is unlikely to proceed. Australia has developed over the years with one steel industry. Broken Hill Pty. Co. Ltd. has a monopoly and also holds very large deposits of iron ore in various parts of Australia. Is it likely that, having had B.H.P. in a particularly reserved position, with a monopoly, over all these years, within the foreseeable future - within 25 years - we will have another two steel industries? I think it is quite unlikely, although I believe that B.H.P. was somewhat worried about it only a few weeks ago. As I said earlier. Hamersley Iron Pty. Ltd. is presently negotiating with Japan for the sale of pelletised ore, which is the third step in the development of its Mount Tom Price deposits. At the time when Hamersley Iron put the proposition to the Japanese buyers, B.H.P., which controls some large deposits of lower grade iron ore in the Pilbara area, also sought to sell pelletised ore to Japan. This was a designed move by B.H.P. to prevent Hamersley Iron fulfilling the third step in the development of its project.

If there were a second steel industry in Australia and Hamersley Iron Pty. Ltd. were able to complete the third step, the B.H.P. company would feel the blast furnace on the back of its neck. This has not come about because the secondary processed ore sold to Japan has come from Cleveland Cliffs and from the Robe River. This has given the B.H.P. company a breathing spell. It is now negotiating to sell a quantity of pelletised iron ore to Japan, intending to use the lower grade ore from South Australia. This is designed to retard the completion of the projects with the Mount Newman and Hamersley holdings, so that the B.H.P. company will still retain its monopoly.

Of course, the B.H.P. company has not been very honest with Australia in respect of its monopoly of the Australian steel industry. I shall refer to that later on. In considering the amount of money that will be expended on the development of these projects we must look again at the B.H.P. company, because most of the materials that will be used in the development of the railway lines and ports will be fabricated steel. The B.H.P. company has not been able to provide the requirements of the companies. Hamersley Iron Pty. Ltd. has only recently let to Japan a contract to provide 37,000 tons of steel rails and ties for its standard gauge railway line to Mount Tom Price. The same position will apply to Mount Newman, Cleveland Cliffs, and Mount Goldsworthy. Fabricated steel, of course, will be required for the construction of the jetties at the ports. This, too, will come from overseas. Rather large contracts are to be let. They are advertised throughout the world. Let us consider who will gain from the substantial contracts that are going to overseas firms. The labour content will be Australian but the profits under the contracts will go to overseas companies. Most of the work on the leases, except in the case of Cleveland Cliffs, will be done with heavy earth moving equipment, which is being imported from overseas. The unloading of this heavy equipment at the port of Fremantle for use by Hamersley Iron Pty. Ltd., which is the undertaking moving most quickly, has been publicised on television and in the Press. Expenditure on this equipment will go overseas and the profits on it will go to overseas manufacturers.

I think it can safely be assumed that out of the amount of £120 million that will be expended within the next 25 years in the development of these projects, the amount accruing to the Australian people will be approximately 65 per cent. The rest will go out of Australia by way of profits on contracts and for the supply of materials and equipment. It is interesting to note what Australia will get out of it apart from expenditure on materials obtained in Australia, the amount expended on labour, and the taxation revenue received by the Commonwealth. This ore is to be exported under royalty contracts. A quantity of 5.1 million tons from Tallering Peak and Koolanooka Hills will attract a royalty of 4s. 6d. a ton. The royalty payable on the Mount Newman, Mount Goldsworthy and Hamersley Iron production will be 7± per cent., with a minimum of 6s. a ton. The 71.4 million tons of secondary processed ore from Cleveland Cliffs on the Robe River will attract a royalty of ls. a ton. I have not gone into the totals, except in the case of Cleveland Cliffs, in respect of which the value of the contract is £391 million. The amount exported will be 71.4 million tons at £5 9s. 6d. a ton, on which the royalty accruing to the Western Australian Government will be £3 million.

At the end of the war the Japanese steel industry was almost non-existent. Today it is the third largest producer in the world, despite the fact that it has to import the great bulk of its raw materials, iron ore and coal, from Australia. We have very large resources of these raw materials and there are very large deposits of high grade limestone in the Pilbara area, which the B.H.P. company intends to use eventually in its Kwinana steel plant. With all of these resources, we are an importer of steel. This is brought about by the conservative attitude of the B.H.P. company, which estimates what Australia's future requirements will be and bases its expansion programme on these estimates, which have always been, by accident or design, lower than requirements. Every year we have had to import steel from various places, including Japan. The B.H.P. company proposes, when its Kwinana steel rolling mill comes into operation, to export 300,000 tons of pig iron annually to

Japan. This will be fabricated into steel there and probably exported back to Australia. This is a tertiary development into which the B.H.P. company proposes to enter. The pig iron will go to Japan for completion of processing.

I can see no reason why the Australian industry should not have been expanded and even now should not be expanded to use the raw resources that are available in this country. Instead, Japan has become a major steel producing country and is providing employment for thousands of workers. Australia should be that steel producing country. Australia should not be selling its raw resources to overseas companies. Australia should not be exporting ore to Japan. Australia should be employing thousands of workers in this industry instead of the very small number required to develop the local projects.

The fact that in the post-war period Japan, without Taw resources, has been able to elevate itself to the position of the third largest steel producer in the world while Australia is importing steel is an indictment of B.H.P. Tt is time that the Commonwealth Government stepped into the field and developed some of our raw resources in the interests of Australia. The funds which would be used in developing these resources would be only a book entry on credit in a bank account and would be operated on for only a short time. The Hamersley organisation has stated already that it will be receiving returns from the sale of ore by 1967 and that portion of those returns will be reinvested for the development of the project. There is no reason why the Commonwealth Government, through the Commonwealth Bank, could not create similar credits for the development of our iron ore resources.

I do not regard as a sufficient answer any statement that this is a State matter and something over which the Commonwealth has no control. The Commonwealth Government can do whatever it wants to do by agreement with the States and the granting of funds under section 96 of the Constitution. That poses no problem. The Commonwealth Government, of course, can force agreement with the States if it has a mind to do so. It has complete control of export licensing and can say to the States at any time: " Sufficient of the raw resources of this country have been contracted to go overseas. Export licences for any further quantities will not be granted. We will reserve the resources for a second steel industry in Australia". I think that is the logical step for the Commonwealth Government to take so that Australia will benefit from its own raw resources. We have no excuse for not being self sufficient in steel production. That we are not self sufficient has been brought about only by a lack of initiative on the part of private enterprise. Private enterprise, apart from B.H.P., is not prepared to invest in the steel industry.

I did not want to discuss balance of payments problems but I think it worth mentioning that the Treasurer (Mr. Harold Holt) went to the United States a few weeks ago to inquire about the restriction on the export of dollars from that country. After reading the statement that he made on his return I came to the conclusion that he was not very successful in his mission. Unfortunately, Australia cannot ask America to continue to invest in Australia and then place restrictions upon the investment. In other words, Australia cannot say to America, " We want you to invest 200 million dollars in Australia this year but you will have to allow 30 per cent., 40 per cent, or 50 per cent, of equity to Australian private enterprise ". We have accepted investment under any conditions which have been imposed. If we were to place a restriction on it - I think the day when we could place a restriction on it has gone - the investment would not come here unless it wanted to. For many years the Australian Labour Party has urged Australian equity shareholding. The Leader of the Country Party, Mr. McEwen, has been disturbed for the past three or four years about the lack of Australian equity in Australian industries. Recently the Prime Minister (Sir Robert Menzies) said that he was somewhat disturbed about it.

Sitting suspended from 1.2.46 to 2.15 p.m.

Senator CANT - At the suspension of the sitting I had given what I believe to be one reason why there will not be any further Australian equity in the companies that have been granted the large assets of iron ore deposits in Western Australia. 1 believe there is another reason, connected with our balance of payments position, lt would cost huge amounts of money now to buy an equity shareholding of substantial proportions in this industry. It would cause a rather large outflow of money from Australia and would react against a favorable balance of payments position.

I have pointed out that there has been a big sell-out of Australia's iron ore resources, much of the blame for which can be laid at the door of the Western Australian Government. Part of the blame can also be laid at the door of private enterprise, particularly B.H.P. I suggest that the position may be rectified by the Commonwealth Government's stepping in and ensuring that whatever resources are left, will be retained for the use of Australians and the benefit of the Australian economy. Without doubt Australia would benefit from a second steel industry. Private interprise is unwilling to establish it and in my view it thus becomes a national issue. The Commonwealth Government should provide the funds through section 96 of the Constitution so that a second steel industry may be established.

J now direct the attention of the Senate to other mineral resources which are being disposed of against the interests of the Australian people. Honorable senators are aware of the desperate attempts being made by the Commonwealth Government to find a resettlement area for the people of Nauru as the phosphate deposits of that island are being worked out. Because the land cannot provide an alternative livelihood for the Nauruans, urgent attempts are being made to find another place for them to live. Desperate attempts are also being made in Australia to find phosphate resources. Quite recently the Western Australian Government threw open certain areas of land in that State as prospecting areas for phosphate. Eight companies have applied for reserves to prospect and each company is owned or controlled overseas. Reserves totalling in area 20,542 square miles have been granted to the applicant companies. If phosphate deposits are found, they will be owned and controlled by overseas interests. Phosphate is vital to primary industry upon which we depend to earn our overseas balances. Surely a government placing first the interests of Australia would not repeat the mistake that was made with respect to iron ore, but would attempt to establish in the industry an Australian equity sufficiently large to control the prices of the commodities being sold to primary producers. This desirable result has not been obtained to date.

An area rich in mineral resources lies in the north west of Western Australia, above the Pilbara district and in what might be termed the Kimberleys area, north of the 20th parallel. Recently this area was thrown open to be prospected for various minerals and, in particular, for copper. It is known that lead, zinc and gold are in the area. Travellers by ship along the coast of this region can see the green tinges of copper on the sides of the hills surrounding the ports. This large area of land has been granted as a prospecting area to the Freeport Sulphur Co. of America, Consolidated Mines Selection Co. of London and Westfield Minerals Ltd. of Canada. Obviously if minerals in any workable quantity are found in the area, the three companies 1 have named - all working as one company - will own and control them.

A large United States company has an interest in copper found at Yuendumu in the Northern Territory. Conzinc Riotinto of Australia Ltd. is producing copper at Rum Jungle in the Northern Territory. The mineral resources at Mount Isa are substantially owned by the American Mining and Smelting Co. An American company has bought the Whim Creek copper mines in Western Australia and a Canadian company is interested in a high grade copper show 15 miles north of Cooma in New South Wales. Apart from Cobar and Mount Morgan, the known copper resources of Australia are wholly or partially owned by the overseas companies to which I have referred. It is interesting that the Whim Creek copper lode is the last known large lode of soluble copper in Australia. This is a very valuable trace element in fertiliser. As I have shown, another basic raw material needed by Australia is being sold out to overseas companies.

I think the Minister will appreciate that the Savage River iron ore deposits in Tasmania no longer belong to Australia. Investments will be made to develop the area and the ore will be pelletised for shipment overseas. The funds to be invested will be provided by Picklands Mather of the United States and Mitsubishi Shoji of Japan.

Senator Henty - Who arranged that?

Senator CANT - The Tasmania-! Government would make the arrangement, because the resources are in that State. But it does not represent such a rape of raw materials as has been arranged by the Liberal Government of Western Australia.

Senator Henty - The Labour Government of Tasmania.

Senator CANT - Yes, and it is a Liberal Government of Western Australia. I did not want to enter into politics because we are debating a national issue which should not be confined to the narrow limits of the interests of the States. These raw resources belong to Australia and not to any particular part of it. Before the embargo on the export of iron was lifted the iron ore deposits were in fact reserved to the States. Since the embargo was lifted they have been given away and eroded.

Let us consider the situation in relation to bauxite. Deposits in the Darling Ranges in Western Australia are estimated to amount to 3,000 million tons and this is under the control of Alcoa of Australia Pty. Ltd. Western Mining Corporation Ltd. has a 20 per cent, interest in these deposits. As 1 have said, there is a small Australian shareholding in Western Mining Corporation Ltd. Admittedly the bauxite from the Darling Range is being treated in Australia. The first stage - the process which reduces the bauxite to alumina - is reached in Western Australia and the alumina is then shipped to Geelong in Victoria where it is eventually turned into aluminium. Nevertheless, the bauxite from the Darling Ranges is substantially owned and controlled by overseas interests.

The bauxite deposits at Weipa in Queensland are foreign owned - by Comalco Industries Pty. Ltd. The bauxite at Gove in the Northern Territory is still in the melting pot, so to speak. Several propositions are before the Commonwealth Government to take over these deposits. One proposition provides for a 50 per cent, interest in the deposits for a French company and a 50 per cent, interest for the Colonial Sugar Refining Co. Ltd. Broken Hill Pty. Co. Ltd. also has an application for the Gove deposits in association with an overseas company. So, substantially, the bulk of the bauxite deposits in Australia are owned and controlled overseas with the exception of the Gove deposits and it is likely that Broken Hill

Pty. Co. Ltd. or Colonial Sugar Refining Co. Ltd. will get the resources at Gove.

One of the largest deposits of iron ore in Australia is in the Constance Range in Queensland, but this ore is of somewhat lower value than that in South Australia and Western Australia. Broken Hill Pty. Co. Ltd. had an option on it for some time but eventually, after higher grade ores were found in Western Australia, the company did not exercise the option. Now a large overseas mining corporation is interested in it.

Mount Isa Mines Ltd., an American mining and smelting company, is interested in investigating lead and zinc deposits in the Northern Territory, on the MacArthur River. Adelaide Steamship Co. Ltd., which is not an Australian company although there is some Australian shareholding in it, is developing a large salt works at Shark Bay in Western Australia. The product of the salt works will be shipped to Japan, lt is estimated that shipments will total 600,000 tons a year. Again, this mineral industry is not under the control of Australian interests but is controlled by overseas companies.

Most of the tin resources in Australia are under overseas ownership or control mainly through Consolidated Goldfields (Australia) Pty. Ltd. and Aberfoyle Tin N.L. and the subsidiaries of these companies. This applies also to the mineral sands in Australia and particularly the titanium deposits in Western Australia.

Oil exploration in Australia is 85 per cent, foreign owned or controlled. This is a vital matter, because the Minister for National Development (Mr. Fairbairn) stated a few days ago that we would have only 10 weeks' supply of oil in Australia if our overseas supplies were cut off. Despite this, the exploration for, and production of, oil in Australia are 85 per cent, owned and controlled overseas. The refining and distribution of oil in Australia is 95 per cent, owned and controlled overseas. Even this is not the full story of the way that the resources of raw materials in Australia have been abandoned by Australian governments, both State and Federal.

Senator Cormack - Where would the honorable senator suggest we get the capital to do all these things?

Senator CANT - We have had capital before when we have required it. We built the Trans-continental railway without capital and we could do the same again if it became necessary.

Senator Cormack - The capital of the oil refineries alone would amount to £300 million.

Senator CANT - That is so. But we had the basis of an oil refining industry when we had the Commonwealth Oil Refineries Ltd. We sold out to what was then the Anglo-Iranian Oil Co. which later became

B.   P. (Kwinana) Pty. Ltd. The basis of an industry was there but one of the first things this Government did after it was elected to office in 1949 was to dispose of

C.   O.R. At least that company had provided something for us to build upon. 1 know that large amounts of capital are needed to develop these resources but that does not mean that we have to lose control of them to attract the interest of other countries. Other countries have not done so. They have retained an equity in their raw resources. But this Government and the State Governments - I do not lay all the blame at the door of this Government - have all been so hungry for overseas investment that they have been taking money from overseas at whatever price it would come here. As a result, we are in a difficult position with our balances in the United Kingdom. We have certain overseas balances which, although they are held in sterling, might not be available to us when we want them. Now we are almost down on our knees begging people to invest in Australia. Any success that the Treasurer (Mr. Harold Holt) achieved by his recent visit to the United States of America will only postpone the evil day. The day will arrive when Australia will have to produce the capital to develop its own resources and that time could be not very far off. We were given a warning two or three years ago of the action that the U.S.A. would take, when that country introduced the interest equalisation tax. That gave us fair warning that the money market in the U.S.A. would close up. The Government took no notice and went along relying on money coming in. Then when President Johnson announced that American overseas balances were getting out of hand and that he had to close down, we had to go down on our hands and knees to ask the Americans to continue their investments in Australia.

It is not certain yet that all the money required for the development of the ore projects in Western Australia will be forthcoming from the United States. It is said that some of them will be developed, but there are two considerations here. President Johnson has said that Australia will not be affected by the decision to act on American overseas balances. Nevertheless, overseas investment in Australia will not continue, or at least it will not continue in the volume we have known.

The American administration has said that American investment in Japan should be limited to 100 million dollars per year. If we look at this subject properly, we will find that because our main resources have been given to American companies we will require American finance to develop them just as the Japanese people will require American finance to be able -to buy them. This is the position that we are getting into. We are just disposing of the valuable assets - the heritage - of this nation for practically nothing at all. I think that this Government, State Governments and private enterprise stand indicted because of the actions they have taken.

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