Goldfields Ltd.

Baffling Problem of New Guinea Goldfields Ltd.

THE most serious public problem in New Guinea, as a matter of fact, is not the road, nor the future of copra, nor the Ger man steamers—but the problem of what should be done with New Guinea Goldfields Ltd. so as to compel that bloated concern either to make use of its leases, or get out of the way, so that the development of this rich new country may proceed.

The history of N.G.G. is well known. A powerful London group entered the field in the early stages and induced scores of the original leaseholders to come into one big company, receiving—for the most part—the Co.’s shares in return for their titles. The process continued over years; and the Co. naturally became, on paper, a gigantic concern, with an issued capital of over £5,000,000.

The general plan had merits, and the in dividual leaseholders were justified in sub scribing to it. Much more could be done, from their point of view, by co-operative effort, in securing large-scale operations and production. If the original plan had been carried out N.G.G. to-day would be producing huge quantities of gold, and would be enjoying the present gold boom and paying worth-while dividends. In

stead, to-day’s production and prospects are on so miserable a scale that the current market quotation for N.G.G. £1 shares is around 7/-.

But there came a period of appalling muddle —so characteristic of London con trol —bad planning, footling, uncertain

operations by stiff-necked unteachable men. Things have changed now; but hard-bitten engineers there still entertain each other with stories of the fatheaded things the Co. did in the beginning.

A volume could be written about Golden Ridges, for instance. The plant was designed and constructed in England, on tests made in England and America; and the whole job had to be rearranged, at enormous cost. If Australian mining practice had been followed, a pilot plant would have been operated at Golden Ridges, under competent metallurgists, and on the data thus gained the correct outfit would have

been installed. As it is there is a mass of costly machinery at Golden Ridges that is practically useless, except on two or three days a month. At Golden Ridges they use vats of iron or mild steel plates, brought in by air at frightful cost, for the storage of ore: practical men declare that exactly the same thing could have been achieved with corrugated iron.

An outstanding example of fatuousness is the steam plant which was installed at Golden Ridges for the generation of electricity. This is a wood-burning concern, and it consumes 20 cords of wood per week, at a cost of 35/- per cord. Month by month the wood supply has been receding and the

cost of transporting the fuel becoming higher. Yet in that region every valley carries a permanent stream of rushing water —it is the very home of hydro-electric possibilities. To-day a transmission line is being built to Golden Ridges, bringing power from the Bulolo hydro-electric station, and the steam power-plant is about to be abandoned.

The other centre of N.G.G. activity is at Edie Creek, where 30 Europeans and an army of native labourers are engaged in deep tunnelling, exploring the vein system.

There is no doubt about the richness of these lodes. The Co. has an electricity supply from the steam-mill for the winches and pumps; and, over a period of about four years, it has dug out huge quantities of gold-bearing ore. This has been simply dumped—when I saw it, in August, no one had the least idea of what was to be done with it. I hate to think of how many dividends are locked up there.

Mining men were savagely critical of N.G.G. shaft-sinking operations at Edie.

A three-compartment shaft, 350 feet deep, timbered from the surface down, known as Edie Creek No. 3, caved in, and had to be abandoned; and a new shaft was started nearby. The sinking of No. 1 shaft was delayed repeatedly by flooding—inefficient, yet very expensive pumps were used, with a miserable little power-plant, unworthy of a concern like N.G.G.

“There was fumbling and footling on a horrible scale,” said one engineer, to the writer. “Mining companies at Broken Hill, or Mt. Lyell, or in W.A., would not have tolerated such conditions for five minutes.

The development of the vein system has proceeded in a slow and primitive fashion, quite unworthy of a big company like this.

However, they have got sufficient ground opened up along the lodes now to justify metallurgical treatment: but there is no sign of anything of the kind.”

This Company holds very large areas of proved valuable alluvial country along the Bulolo Valley, northwards of Wau —country rich enough, according to one competent observer, “to keep hundreds of miners busy, three shifts a day.” Wau should be the centre of a large, busy, and expanding alluvial industry. Instead, except for a few men on tribute, nothing is being done with those leases.

The Company seems to have attacked everything from the wrong end. It should have installed a hydro-electric power station somewhere near Wau, at the very beginning, and gone after the rich, access ible alluvial gold on the Bulolo Valley and slopes; then the Golden Ridges enterprise might have followed —though on a less wasteful basis; and, finally, with solid

revenues and sound organisation in sup port, the development of the Bonanza at Edie Creek might have been undertaken.

We find, instead, that the Co. has wasted its energy and its capital on large-scale, non-revenue-producing operations at Edie Creek, at the end of one of the most ex pensive transport lines in the world. Every thing needed there has had to be brought in by aeroplane to Wau, and thence carried in by natives or mules, or on a special lorry, over 14 miles of incredible track. A new road is now being built, which should greatly reduce those costs; but, meanwhile, the Co. has frittered away huge sums and untold energy, which might have been far more profitably employed elsewhere.

It is to be conceded that the Co., in the beginning, was confronted by a stupendous pioneering job, in an absolutely raw coun try. But an Edie Creek old-timer put the answer in a nutshell; “What about Kal goorlie? There they had a similar trans port problem; but they had no wood, no water, no local labour —nothing but desert.

And they brought Kalgoorlie into profit without one quarter of this mucking about.

Here they have water, timber, cheap labour, a fairly good climate —everything except transport—and Bulolo solved the transport problem for them.”

From one end of Morobe to the other, I did not find one man with a good word to say for the early history and present policy of the Co. Some of them concede that the management now is efficient and vigorous: but they argue that the whole concern is still running around in a circle, chasing its apparently hopeless tail.

In the beginning, much of this probably was the result of muddling and incompet ence. But, as the years have passed, and the Co. has continued to show so pitifully little return to shareholders, and has squatted so stubbornly and uselessly on good alluvial country, there has been specu lation concerning the policy of the Co.

Whether rightly or wrongly, very many people now believe that it is the deliberate plan of the Co. to refrain from large-scale developmental activity until such time as financial reconstruction becomes possible, and the capital of the Co. can be written down to something approaching the public valuation of its shares.

“The big fellows are trying to squeeze out the little fellows!” say the quidnunes.

And, the more often that it is said, the

more determined are the little fellows that they will not be squeezed out.

The N.G.G. may quite fairly reply to all this by requesting- us to mind our own business, and reminding us that directors are competent to make their own policy

and are responsible only to shareholders. i n ordinary circumstances, that is true.

But, in this special case, national considera tions far outweigh the interests of any private financial group. The Co. was per mitted to take over a property of stupen

dous value, the development of which would have enriched the whole Territory, and encouraged the establishment and growth of other industries of greater national importance.

The Co. has not taken advantage of its opportunities, and now is regarded as an insufferable barrier to the progress of the Morobe goldfield. It is believed that if there had been no New Guinea Goldfields

Ltd. there would to-day have been scores of busy mining concerns between Edie Creek and Wau, and between Wau and Bulolo, giving employment to large num bers of Europeans, and producing gold for the benefit of all concerned.

The writing is very clearly on the wall.

Public opinion in New Guinea is seething: and the Administration is restless. The full development of the Morobe field is the necessary first step in the establishment of a new Anglo-Australian Colony in the rich new tablelands of Central New Guinea.

The Administration, with good reason, en visages here a field for European tropical enterprise, fully comparable with what has been achieved on the uplands of Java and Ceylon. New Guinea Goldfields Ltd. will not be allowed to stand in the way. It must get busy or get out.

Really, it is a matter for the Adminis tration; and the latter can adjust matters very simply. If it is not satisfied that the Co. is doing the best thing for the Terri tory, it can withdraw the Ordinance it passed some 2½ years ago, whereby the Co. was permitted to lump together all its annual expenditure as a set-off against that important mining law which says that the holder of a lease may not hold same indefinitely unless he spends at least 17 per hectare per annum on its development.

That special Ordinance is held in much public distaste in Wau. They say there that the Co. charges against lease develop ment under this law even such things as the directors’ travelling expenses between London and New Guinea.

“London,” as a matter of fact, is the keyword of the N.G.G. puzzle. “The disability of remote control” —complacent guinea-pigs in a London board room trying to manage, from that dis tance a concern with technical and lo cal difficulties of a very peculiar kind.