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Thursday, 18 August 1960


Mr CHANEY (Perth) .- Mr. Deputy Speaker,I support the motion submitted to the House by the honorable member for Kalgoorlie (Mr. Browne). Only two weeks ago, I was privileged to be with him in Kalgoorlie, which, I suppose, could be described as the centre of his electorate. Although it may not be the geographic centre, it is the principal centre of population. My visit to the city was most interesting. I think that any one would find great interest in visiting the gold mines in the district and seeing how the gold is won from the earth and treated, and doubtless would have dispelled a lot of wrong ideas about the production of gold. The thing that would impress most honorable members if they could visit Kalgoorlie would probably be the fact that, although it has sprung from the desert, it is a city of green lawns, gardens and swimming pools, with a population of many thousands. We should realize that unless action is taken as suggested by the honorable member for Kalgoorlie, there is a considerable probability that all this will disappear and the area will return to desert, because there is nothing else but gold mining to support population there.


Mr Whitlam - The fate of Coolgardie, which is next door as it were, shows that.


Mr CHANEY - That is true. As a matter of fact, the ghost towns all round the area prove this. When you realize the number of people in employment there, as was pointed out by the honorable member for Kalgoorlie, directly and indirectly as the result of the existence of the mines, there comes a full realization that action by the Government is necessary to avert a tragedy that could occur in that part of Australia.

I was most interested to hear the honorable member for Fremantle (Mr. Beazley) devote most of his time to the subject of the sale of premium gold in Hong Kong and Macao. I think that the honorable member for Chisholm (Sir Wilfrid Kent Hughes) referred to that either last year or the year before, and I have an idea that the sale of gold in that area is not so great now as it was. It seemed to me, if I may comment on what he said, that he was putting forward the theory that you are playing into the hands of the Communists by the sale of this gold, because they would then have the hard currency necessary to finance their propaganda efforts abroad. I agree that if that is the case it is a dangerous situation. I have no time to go deeply into this, but I cannot see how the position can be as the honorable member says, because it is laid down, according to the Australian Year Book No. 45, that this premium gold can be sold only against payments in United States dollars. The year book then goes on to state the prices as quoted by the honorable member for Fremantle. Anybody who has United States dollars to-day does not, I think, have a great deal of difficulty in financing anything, and since the gold is saleable only against United States dollars I cannot see how the sale of that gold can make the situation any worse for anybody.

Let us look now at the situation in the gold-mining industry to-day. Of course it can be, and will be, pointed out by some members that because a gold-mining company, or a company which has an associated gold-mining section, makes a profit and returns a dividend to its shareholders, there is no need for any one to do anything about it. I should like to see the proposer of that argument go before an audience of miners in Kalgoorlie and see what kind of reception he would get, even if he started off by reading the balance-sheet of a gold-mining company. You have to realize that to-day gold mining is a scientific process, involving the winning of the gold from the rock, and can be undertaken only as a result of intensive capital development by a mining company. If you took a mine in the Kalgoorlie area as an example you would probably find that a capital investment of between £5,000,000 and £7,000,000 was necessary under present conditions. I am guessing at that figure. If a company finds that gold mining is not a profitable business and closes a mine down, it is certain that nobody else would open it up again, and so the industry would just die there.

The "West Australian" of 12th August carried a report regarding the Great Western Consolidated (N.L.) mine at Yilgarn. This showed that the . audited net loss for the year to 31st March, 1960, was £285,940, as against an audited net loss in the previous year of £119,520. The comment made in the annual report was that the major causes of the net loss were lower production - the weekly tonnage treated was about 5 per cent, below that treated each week for the previous year - the average lower grade, and an increase in costs. It said that disappointing development results, difficult mining conditions with returns below expectations, and continued increasing costs had made it necessary to limit development work mainly to opening up known blocks of ore for stoping That will clearly show the situation to-day in the gold-mining industry.

Anybody who studies the statistical record of gold prices will find that it is the only statistical record whose graph follows a straight line between 1945 and 1960. That could be said of the graph of no other commodity price in the world. If you take costs, wages, the average earnings of the Australian population - if you take anything at all - you find that the graph for these goes up at varying angles, but is always a rising graph. Let us look, however, at the comparative lack' of upward movement in the price of gold. In 1938-39, the price was £9 2s. 9d. per fine oz.; in 1953-54, it was £15 10s. 4d.; in 1954-55, £15 12s. 6d.; in 1955-56, £15 12s. 6d.; in 1956-57, £15 12s. 6d.; and in 1957-58, £15 12s. 6d. So, the price has not changed since 1954-55. That shows that the gold-mining industry itself has met the challenge of rising costs by an increase of efficiency in the mines. This increase of efficiency, this attitude by the mining companies, and their efforts to maintain the industry and maintain in employment the workers engaged in it, have met with results; but I believe that to-day the industry has reached a situation where efficiency cannot further be increased. The maximum has been done in that field. Methods of production cannot be changed, and the only solution to the problem of the gold mines is an increase in the price of gold. Western Australia, of course, is vitally interested in this, because of the high percentage of Australia's gold that it produces. I know that the former Federal Treasurer, Sir Arthur Fadden, and the present Treasurer (Mr. Harold Holt) made efforts to get America to agree to an increase. That seems to me an extremely hopeless task, since America is the main purchaser, and in granting an increase in price would obviously be penalizing itself. So, I think that in the meanwhile we have to consider the subsidy as a means of helping the industry. It has to be decided whether the Commonwealth Government can take action, by means of increased subsidy to the mining industry, in order to ensure employment in the industry in future, to ensure the future production of gold, and also to ensure the continued livelihood, not of an individual, but of a city in Western Australia.

I believe that most members of this House will agree that it is essential that some action be taken. During 1957, Western Australia produced 849,751 fine oz. of gold. This was an increase in production over 1956 of 36,000 fine oz. I think it will be found that about that time the industry was becoming increasingly efficient. There were better methods of handling production, so enabling an increase of production which offset a rise in costs at that time, when there was no increase in the price of gold. The main producers were, of course, the Murchison, Dundas, Yilgarn and Mount Margaret gold-fields, and a gold mine which is well known all over the world - the Lake View and Star, near Fimiston, which maintained its leading place in gold production.

Some things never change, even though lots of people consider that they should be changed. The gold produced from the Kalgoorlie gold-field, and I think all gold produced in Australia, eventually finds its way to the Perth Royal Mint. Before the mint will accept gold it has to be assayed at a certain level of silver content. I do not know what it is called technically, but in layman's language that means that for every ounce of gold there has to be so much of silver. The gold being produced to-day at the Lake View and Star mine is as pure as can be got. It was assayed at the Perth Royal Mint, which found that it has not sufficient silver content, so the mint will not accept it. The producers, therefore, have to purchase silver to put into their gold so that it will be purchased by the mint. The mint buys the silver content of that amalgam for less than the price that the producers pay for the silver in the first place. I believe that this procedure goes back to the early days when there was some necessity for it; but technical experts say that there is no necessity for it to-day, and they cannot understand why the system is continued. Yet it is continued.


Mr Duthie - Is that a State law?


Mr CHANEY - No. I am reminded by the honorable member for Wentworth (Mr. Bury) that it is the Royal Mint which sets this standard. I suggest that when the matter of assistance to the gold-mining industry raised by the honorable member for Kalgoorlie is being considered, this question of the silver content of gold could also be looked at. It seems to me that this is the sort of thing that makes efficient people in an industry extremely frustrated and annoyed, and there is no need for them to feel that way.

I commend this resolution to the House and ask for every support for the honorable member for Kalgoorlie. With all due respect to him, I think it is impossible for us, with our technical limitations, to speak about gold without giving a thought to Victor Johnson, who graced this chamber for so long. The present member for Kalgoorlie is continuing with the work he started. We often heard him present a case for the protection of an industry in which he was well loved and respected. I should imagine that honorable members opposite would, in their hearts, be yearning for Vic. Johnson rather than an increase in the price of gold.

Mr. NELSON(Northern Territory) ti 2.1]. - I address myself to this subject because I realize, as do other honorable members, the importance of the gold-mining industry to Australia, and particularly to the electorate that I represent. We all know the part that the gold-mining industry has played in the development of Australia.

This, development could have been very slow had not gold been discovered in New South Wales, Victoria and Western Australia. The economy of those States was largely built around the discoveries of gold, and their story would have been a very sorry one if gold had not been discovered.

I support the plea of the honorable member for Kalgoorlie (Mr. Browne) for greater understanding of the industry and greater assistance for it. In the early years of this century and in the latter part of last century, the gold-mining industry supported a considerable number of miners. As a result of their activities, we produced some millions of pounds worth of gold, and they gave the initial boost to the settlement of the Territory. Initially, the discoveries were made and worked by the Chinese, and up to 10,000 of them were engaged in the industry. However, we find that the industry now has been virtually abandoned and we are back where we started. Various authorities estimated that 10,000 Chinese were working on the Pine Creek field alone. The amount of gold they produced is anybody's guess, because official records were not kept in those days. However, we know that gold worth millions of pounds was discovered and found its way into the economy.

The original fields eventually shut down, and the settlements, as is inevitable with mining, became ghost towns. Now we find that mining is again giving a boost to the development and progress of the Northern Territory. If gold had not been discovered at Tennant Creek, there would not have been a town outside the three main towns of Darwin, Katherine and Alice Springs. Tennant Creek, through the discovery of this metal, has become a thriving community of 1,500 people and is still growing. Mining in this area has branched out to include such other metals as copper, and possibly the mining of this metal will provide Tennant Creek with its greatest strength. This shows that what may originally be a gold mine may find its true development in the mining of other metals.

In the north, we also have the mining of uranium at Rum Jungle, Alligator Creek and other centres. This contributes to the over-all wealth and development of the community. Uranium is a glamour metal and has attracted the attention of miners and investors from all over Australia. This type of mining is closely linked with the gold-mining industry, lt may well be that many of the uranium mines of to-day will be the gold mines of to-morrow, The indications are that gold-mining may become, if not one of the major developments, at least a very important sideline of uraniummining. If the time arrives when uranium prices fall below the economic level, goldmining may well provide the assistance needed to enable the industry to continue functioning.

Mr. Deputy Speaker,I would like to make a plea for practical assistance for the mining industry. The mining laws of the Northern Territory provide for assistance for mining after the metal has been discovered, but at present no assistance can be given to prospectors and others who are willing to go out and look for the metal and to bear the hardships involved, including the unproductive months or years that may be involved in the search. The Government should provide not only the plant for approved prospectors but also the finance to keep them in the field and to enable them to purchase rations, fuel, detonators and all the items that go to make up the miner's kit. The rewards that would flow from the adoption of this suggestion would amply repay the Government. At present, the Government receives considerable sums from royalties on minerals, such as gold and copper, produced in the Northern Territory. It would be wise, I feel, to plough back into the industry the royalties earned from the mining and production of these metals. If this assistance were given to prospectors and to legitimate mining ventures, fantastic dividends would be paid into the economy and would further the development of the Northern Territory.

The prospector is faced with an arduous task. Mining fields seem to be situated in desert areas, and the prospector must be prepared to cope with heat and arid conditions. The profession is not a very pleasant one. In earlier times, when the more accessible fields were being worked, mining was not so expensive or so difficult. The miners could get together an inexpensive prospecting plant to do the work, but now we find that the accessible deposits have probably all been discovered and it takes a considerable degree of equipment, experience and plant to search for and locate new deposits, wherever they might be. It is in this direction that I feel the Government could be of assistance to prospectors and to the mining industry. We know that the Government makes provision and renders assistance in the form of scientific advice, geological information and, in some cases, the provision of government batteries on mining fields. I would like to say how pleased I was to see provision made for a new battery in the north of Australia in the very near future. Assistance of that sort by the Government will pay dividends.

I support the motion brought forward by the honorable member for Kalgoorlie. The Government would be wise to take notice of the remarks made by various speakers and recognize the part this industry has played in the development of Australia and its importance to future progress in this part of the world.







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