Safe Coal Supply For Power Board

Sun (Auckland), Volume IV, Issue 1032, 24 July 1930, Page 12

Safe Coal Supply For Power Board

STATE MINE LEASED COLLIERY’S AGREEMENT THE SUN’S Parliamentary Reporter PARLIAMENT BLDGS., Wednesday. By the lease of the McDonald State mine, Glen Afton, to tho Glen Afton Collieries, Btd., the Government today, through the Minister of Mines, the Hon. A. J. Murdoch, has turned an idle mine to a financial purpose, and has assured the Auckland Power Board of a suppl3 r of coal for its generating plant at a reasonable cost during the time Arapuni is out of action. Also, tho Glen Afton collieries will supply the Government steam-generating plant that may be erected in the Waikato.

The lease is for 40 years, and the Auckland Power Board has a contract to receive within six months 3,000 to 4,000 tons of coal a •week. The Glen Afton authorities have to pay a royalty to the Government of eightpence a ton on every ton mined. Work for 200 men will be furnished by the new arrangement.

Mr. W. Bee Martin (Labour —Raglan) asked the Minister of Mines in the House this afternoon whether it was correct that the Government proposed to lease the McDonald mine to the Glen Afton Collieries. The Minister said the Government had concluded an agreement to that effect. The Deader of the Dab our Party, Mr. H. E. Holland; On what terms is the lease based? Mr. Murdoch: On satisfactory terms. Mr. Martin: How long have negotiations been going on? Were they started before you took office? The Minister: A long time before. Mr. W. K. Parry (Labour —Auckland Central): We will want a further answer than that. In an interview afterward, the Minister said the State acquired the McDonald mine in 1919 for £51,000. Incidental charges totalled from £3,000 to £4,000, and accrued interest on the capital invested amounted to £27,000. Tho State had £BO,OOO “dead money” in the mine. Some prospecting had been done, but the mine had been idle since 1919. POWER BOARD’S AGREEMENT Before tho Arapuni breakdown the Glen Afton collieries had been negotiating for the property, but nothing had been done. Early in June, when Arapuni broko down, the Auckland Power Boasd was faced with the position of having to generate power at the King’s Wharf station for the dairying industry of the province. The Power Board and the Glen Afton Collieries had come to an agreement, contingent on the Government leasing the McDonald mine to the company, by which the company was to guarantee to supply the board within six mbnths of taking over the mine, with between 3,000 and 4,000 tons of coal. The prices fixed were 8s a ton for slack, and 15s 6d a ton for crushed coal on the railhead at Glen Afton. Also, if the Public Works Department erected a steam generating plant, it should l>e supplied with up to 300 tons of coal a day at the same prices as those charged the Power Board. The Glen Afton company would pay to the Government a royalty of eightpence a ton on all coal from tho McDonald mine. TWO HUNDRED TO BE EMPLOYED It was estimated that 200 extra men could be put on at the McDonald mine, and the Minister said he had been advised that day that 100 men were already on the job. The Glen Afton company would have the lease of the mine for 40 years, and the agreement between the company and the Power Board for the supply of coal was for 10 years, the board having the right to terminate the agreement at the end of three years if necessary. If the arrangement broke down within 10 years, tho Government had the right to revise the royalty, the company paying not less than eightpence and not more than Is a ton. The Minister said one of the difficulties of the Power Board was the cost of coal. Already, he understood, the board had paid £B,OOO to Australia for coal, and was about to pay out a similar additional amount. The company would have to pay a minimum ot £SOO a year in royalties even if the mine was not worked, but with the agreement for the supply of coal to the Power Board, and the prospect of the State plant to be erected, it was anticipated that the Government would obtain much moro than £SOO from royalties. The proceeds from the royalty would go toward paying interest and sinking fund on the money invested in the property by the Government.