ONEKAKA

Otago Daily Times, Issue 24406, 18 September 1940, Page 6

ONEKAKA

Those members of the public who were justifiably concerned about the proposal of the Government, to establish State iron and steel works will be relieved in mind by the accumulation of evidence which suggests that a project that would have involved a blunder of the first magnitude has been abandoned. It may be regarded as certain that when the Minister of Industries and Commerce visited Australia several weeks-ago his eyes were opened to the importance of the steel industry in the Commonwealth, and to its capacity for development, to a degree that would meet all the needs of both Australia and New Zealand. It must have been with no clear appreciation of the potentialities of the output in Australia as well as with, as was subsequently admitted, imperfect information concerning the extent of the deposits at Onekaka and a mistaken conception of the economics of the industry that the Government embarked on its grandiose scheme. Its plan was one in which the practical impossibility of successfully maintaining iron and steel works in a country like New Zealand in which the demand for the finished product would necessarily be limited was completely ignored. As steadily ignored, also, was the fact that in an open market the New Zealand product would be placed at a grave disadvantage in competition with that of Australia. The considerations that would have deterred prudent business men from incurring a very heavy outlay on the establishment of works at Onekaka were brushed aside by a Government which includes no men of business experience. It had allowed itself to be persuaded that

the existence of iron and steel works in the Dominion—preferably, no doubt, works controlled by the State—was essential to the balanced development of the secondary industries of the country and it was, as it always is, impatient of criticism of its plan. It would fortunately seem that the knowledge which has now come to it and which it should have sought and acquired before it committed itself to its scheme has convinced it that there is no room for the construction of costly works of the proposed description in New Zealand. It is unlikely that it will make any frank announcement that it has abandoned its design. But it should not be difficult to read between the lines of a statement by Mr Pascoe, Commissioner of the Iron and Steel Department, which indicates that the existing mill at Onekaka is not to be re-opened for the production of pig-iron. The Government is apparently beginning to count the cost of the production of steel and iron, and this encourages the belief that it will, as quietly and as discreetly as it can, drop its whole wild scheme for converting Onekaka into, as it hoped, a second Newcastle or a second Port Kembla.