Royalty

New Guinea Gold

Report That Differential System Is Advocated

ARGUMENTS in favour of a revision of the system of imposing a royalty (now 5 per cent.) on the value of gold ex ported from New Guinea have been placed before the Administration of the Terri tory.

One report says that it has been sug gested that the present royalty on dredge won gold should be maintained (presum ably because it is considered easy to get), while there should be a reduction of the royalty on “boxing gold,” and a further reduction on lode gold, because that is the hardest to win.

A number of cogent arguments against a differential gold royalty can be pre sented, and it is to be hoped, for the pro tection of the future of the Morobe field, that no change of this far-reaching char acter will be made without the most care ful consideration of the issues involved.

The system of imposing a gold royalty has been adopted in many countries; but, so far as is known, not one country has applied a differential system. Moreover, the task of checking the source of the gold presented for royalty assessment, on a big field such as Morobe, would present great practical difficulties.

The introduction of the proposed sys tem would discriminate directly against the Bulolo group—a manifestly unfair thing. It still has to be proved that gold is more easily recovered by dredging. It may look easy, in the case of Bulolo; but that is because the Bulolo group made their plans with remarkable foresight, and carried them through with promptness and great organising ability. The design ing of dredges suitable for Bulolo, their transport by aeroplanes, and their opera tion in this primitive and well-nigh in accessible country, so far from being easy, is one of the most notable feats in the history of goldmining. Large profits are being made, but they were well and truly earned. So far from being penalised, the Bulolo group should be encouraged and assisted.

It is not desirable, at this stage, to make invidious distinctions: but it is possible to argue that, if certain com panies in New Guinea are lode mining more expensive, in proportion to gold recovery, than dredging, the dif ference may be due rather to organisa tion and capitalisation, rather than to the natural difficulties of the terrain.

Put it in another way. If the Admin istrator is to be asked to impose a dif ferential royalty, he should be permitted also to examine the documented history of the different companies, in relation to capitalisation, organisation, and engineer ing efficiency, before deciding that one method of gold recovery is more expensive than another.—R.W.R.