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Wednesday, 1 October 1958

Mr RIORDAN (Kennedy) .- The Opposition agrees to the passage of this bill. It provides for the payment of a bounty of £45 a ton on copper produced and sold in Australia for a period of two years from 19th May, 1958. In other words, the effect of the bill will be retrospective. The introduction of this measure follows a Tariff Board inquiry held last year. Representatives of the producers made submissions to the board and the board furnished the Government with a report in which it recom mended that something should be done for the industry. The Government has decided to adopt this course.

I do not object to the payment of a bounty to the small producers. In Queensland, in 1956, Mount Isa Mines Limited produced 28,199 tons, Mount Morgan Limited produced 7,388 tons, small producers in the Cloncurry district produced 1,392 tons and production in the rest of the State was 46 tons. The bill precludes payment of the bounty where the profit of the company is more than 10 per cent. That means that Mount Isa Mines Limited is excluded from participation in the bounty payments.

In his second-reading speech, the Minister for Air (Mr. Osborne), who introduced the bill, said that small producers would be regarded as mines producing up to 50 tons of refined copper a year. On the Cloncurry field, where the small mines operate, the ores run somewhere from 8 per cent, to 9.5 per cent, copper content. On that basis, to produce 50 tons of copper, a man need only produce 600 tons of copper ore. These men do not work alone; they work in parties of two or three, or a one-man show may employ two men. If they produce more than 50 tons of refined copper in a year, they can be excluded from participation in the bounty. If a small producer is denied the bounty because he produces, say, 60 or 70 tons of copper, he is placed in the same category as Mount Isa Mines Limited and Mount Morgan Limited, which produce thousands of tons a year! It is true that a line must be drawn somewhere, but the line should not be drawn so far down the list. If the small man is to be encouraged, the limit of 50 tons should be lifted. It is all very well for the Government to say, " But compare this bounty with the bounty paid on gold production ", and so on. That has nothing to do with it. We are dealing with the production of copper alone.

I come now to the cost of producing a ton of refined copper. The small man naturally has to meet certain charges. They include the cost of explosives and the freight on them, steel that he will use, dieselene for his various machines, insurance, pay-roll tax, and depreciation on compressors, hoists and other mining equipment. He also has other overhead expenses. In addition, he must meet cartage costs which are pretty savage in that area because the carriers have to pay heavily for the petrol or diesel oil that they use in the lorries to cart the ore to the refinery or to the treatment plant. So, cartage represents a considerable cost. Superimposed on these costs are the smelting, the converting, refining and realization charges. It is all very well to say that 50 tons at £320 a ton amounts to £16,000 a year. It sounds very good; but it means the production of about two tons of ore a day. One man cannot do that alone, because, in addition to the production of copper ore to be sent to the refinery, he must engage in development work, and that is dead work. The men forming the party may do this work themselves or they may employ a man to do it. However, they would be fortunate if they could could get a man to do that class of work for £4 a day. All these costs must be taken into consideration.

The point I make is that the limit of 50 tons is too low. I would not say definitely what it should be, but I suggest that it should be about 150 tons. I know that the Government will advance various reasons for not raising the limit, so I shall carry my argument a step further. In the course of his second-reading speech the Minister said - the copper bounty is designed not so much to encourage expansion . . . 1 have heard the Prime Minister (Mr. Menzies) say in this House that the only way we can fight inflation is by expansion. He has said, " We want production; we must have production and more production." Yet in this industry, if a man produces more than 50 tons, he will not receive the copper bounty! I do not suggest that Mount Isa Mines Limited wants to participate in the bounty or that it wants to sell on the Australian market. I understand that the whole of its copper production is sold overseas and that its production of lead and zinc is sold on the United Kingdom and European markets. Mount Isa Mines Limited must now meet the drop in its income which will inevitably follow the restriction of imports of lead and zinc by the United States of America, because this will lead to a fall in prices on the United Kingdom and European markets, and a further drop in world prices generally. Mount Isa Mines Limited employs about 3,500 men, and half its income in the past has come from copper production. 1 make these comments on the question of expansion. In discussions on our overseas balances, honorable members have said that we must increase production of everything that we can export for the purpose of building up overseas reserves, if we are going to maintain the living standards of people in this country. I have here an extract from the " Sydney Morning Herald " of 27th September last, which reads -


Australia is losing valuable orders in Communist China to Britain because Australia bans more exports to Communist countries than Britain does.

Because of this, Britain recently concluded with Communist China a £750,000 sterling copper deal which exporters claim Australia could have had.

If we are to continue our development at a time like the present, when there is a world recession, we should be encouraging expansion. We should not have restrictions placed here and there. It may be as well, with regard to this matter of copper, to follow the accepted practice. It is true that the copper producers' association has stipulated how the domestic market shall be distributed between the copper producers. I do suggest, however, that restrictions should not be so severe as to prevent us from achieving the production that has been thought desirable. If there is a small party of two or three men operating a mine, or if a mine is owned by one man who employs two or three others, the production in such mines will have to be kept below 50 tons, in which case some of the men will have to be dismissed, or else the mine operator will be penalized by not receiving the bounty of £45 a ton on production because his production is over 50 tons. That is my objection to the measure.

Honorable members may be interested in the following extract from yesterday's Brisbane " Courier Mail ": -


Mr IsaMines copper and lead production soared in the four weeks' period ended September 21. The mine pushed total ore treated to a new peak of 158,030 tons- more than 5,643 tons a day. Mr Isa treated 84,900 tons of copper ore for 3,480 tons of blister copper - 715 tons more than in the previous period. Lead ore treated was 73,130 tons which yielded 5,560 tons of lead bullion - 1,260 tons more than in the period ended August 24. Zinc concentrates production fell slightly to 2,288 tons from 2,458 tons.

In other words, Mount Isa is pushing on and achieving the production that we have talked about. But let us have a little more production, anyhow, and let us assist those men who go out into these isolated places, over rough bush tracks, to search for minerals. It is true that the State government renders great assistance by hiring equipment to the small operators. It is true that the 50 tons limit may suit a gouger, and, after all, the very foundations of the copper industry were laid by the gougers, as they are called, or the prospectors. It is not the large companies that find great mineral deposits; it is the prospectors, or the gougers. Incidentally, I might tell honorable members that officers of Mount Isa Mines, in association with Consolidated Zinc and the Bureau of Mineral Resources, have been prospecting in and around the Cloncurry area. As to these gougers, it is true that the 50 tons limit may suit them. I am concerned, however, with the man who employs two or three others, or the party of two or three who work together. They may produce up to the limit of 50 tons, but their costs are so high that if they are to carry on the limit must be increased considerably, and I suggest that it be made 150 tons.

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