of the ailing Emperor goldmine

Business

Fiji Government comes to the aid of the ailing Emperor goldmine

Vatukoula, the gold-mining town of Fiji, will continue its precarious ex istence. Emperor Mines Ltd has decided to keep the mine going for the ■time being as a “calculated risk”. The [directors’ report, issued with the ac counts to June 30, 1976, indicated [that the board was considering the [possibility of closing the mine.

Unless the price of gold rises dramatically, the mining operation will be heavily subsidised. The Fiji Government, unwilling to see more than 7,000 people suddenly having to find a livelihood elsewhere, has made an interest-free cash loan of $F272,- 876, repayable over three years. The government has also agreed to waive unpaid company tax of $84,432, and the remaining balance of a govern ment loan made under a 1971 agree

ment.

The government has given further assistance by removing, from June 30, 1976, a 2% tax on gold revenue. Inter nally, Emperor can help itself by us ing its profitable subsidiaries, in cluding a timber enterprise, to keep its mine operational.

In the last 20 years the Fiji Govern ment has stepped in several times to keep the mine going. Assistance has included subsidies and tax-free loans.

The Emperor chairman, Mr J.L.

Reid, obviously has more than pass ing confidence in Vatukoula. Imone week in January he bought 10,000 Emperor shares, 9,000 for himself and 1,000 for a nephew. In the annual report he was shown as holding 109,- 240 Emperor shares in his own name, and 10,800 shares in his own and the names of others.

In the year ended June 30, 1976, Emperor’s loss on its gold operation was $F750,606. In the next five months, to November 30, there was a further loss on gold of $F630,000. Mr Reid said at the annual meeting that most of the loss of $F630,000 was in the first three months (July- September) when the gold price fell to SUSI3O per fine oz.

But in the same five months the

group’s other operations earned an operating profit of $F400,000 before tax and royalties, but after deprecia tion.

The annual report suggested that a price between SUSI4O and SUSISO a fine oz was required to put the mine on a profitable level. In the last three years Emperor has spent about $4 million on development, and expects to spend another $832,000 by the end of the financial year.

Mr Reid, in his address to shareholders at the annual meeting, said if the mine closed, considerable expertise would be lost, there would be large scale unemployment at Vatukoula, and it'would be impossi ble for shareholders to take advantage of any moderate increase in the price of gold.

“We estimate that after closure, and because of water problems it would require a gold price of around SUS2OO an oz before it would be economically viable to reopen the mine at present day costs. On the other hand, if we continue to operate and the gold price rises some 10 to 15% then the gold mining operation becomes a soundly pro/itable concern.

“While it is no longer possible, because of international politics, to

predict the future price of gold in the short term, we remain convinced that long-term, the price will rise. Conse quently, any company that can sur vive the present, stands to gain as other gold mines close down.

“Strenuous efforts continue to be made to combat costs. Happily, our non-mining activities are poised for further expansion. With our heavy in volvement in gold, the future must re main somewhat unpredictable. Our efforts are being directed towards reducing costs, improving grade and recovery, while all the while expan ding the profitability and scope of our non-mining subsidiaries”.

Oil search, dearer

petrol, in PNG

A massive oil search costing millions of kina got underway in Papua New Guinea’s Fly River Delta, Western Province, in February.

It followed a seismic survey in volving some 500 men.

The oil search is being undertaken by ESSO Papua New Guinea Inc, on behalf of the PNG Government.

A spokesman for ESSO said that more than KlO million would be in-

One of the late Rob Wright's best pictures Vatukoula at dusk.

vested in the project. The search would later be extended to Gulf Province where test wells would also be drilled offshore.

Oil exploration has been going on for several years covering 80 areas of PNG and involving 15 companies.

But so far neither gas nor oil has been found in economic quantities.

The ESSO spokesman said that about Kl5O million had already been spent on the oil search in PNG.

High prices of oil on the world market are forcing the government to undertake a full survey of the country in a bid to make the nation self sufficient. At present most oil con sumed in PNG is imported from South-east Asia. • PNG motorists were told in January that petrol prices would rise by 4.9 toea per gallon to 91.4 toea.

The rise was announced by the Oil In dustry Prices Committee. Service stations in all major centres would also charge 68 toea for a gallon of kerosine, a rise of 0.3 toea; and 69 toea for a gallon of distillate, a rise of 3.8 toea. Committee secretary, Mr I.

Freer, said the Price Controller had approved the increases after a detailed study report had been submitted by management consultants, W.D.

Scott, for the oil industry. Mr Freer said the increases had been recommended by the oil industry but had been deferred since June, 1976.

Co-operative cocoa

growing in Fiji

A promising co-operative effort ir cocoa production is under way in Fi ji’s Bau district.

Seventeen farmers joined togethei in June, 1976, to form the Bau Tikim Cocoa Growers’ Association.

From Mondays to Thursdays al members work on one member's farm, and on Fridays and Saturdays they are left to work on their own mainly preparing cash crops for the markets.

The association’s president, Mi Lenaitasi Ranuku, 67, said: “Thu system has worked successfully Everyone abides by the rules and w( have obviously achieved more than w( did by working individually. I am sun the end result will be very rewarding i; this trend continues.’’

He said a $F 1,500 cocoa fermen tary built under New Zealand govern ment grant was nearing completior and would enable the association tc dry members’ own beans. The curreni price of SF74O per ton of dried beans would be an added incentive tc members.