Nauru phosphate dilemma

NAURU is expecting phosphate

income to fall during the com ing year, placing further strains on its already stretched budget. The main cause of the expected shortfall is a drop in demand for phosphate in Au stralia, Nauru’s main customer, resulting in exports to that country of about 500,000 tonnes half the previous year’s total.

Finance Minister Kinza Clodumar said in a recent economic report that he was

now expecting phosphate royalties to

drop from As3s million (U 5527.28 mil lion) to As2s million. He said this will force the Government to find other ways of financing its budget deficit, as hopes

are not high for increasing phosphate

sales to New Zealand and South Korea.

Nauru’s budget this year provides for total spending of A 571.2 million (U 5556.6 million). Allowing As2s mil lion in the form of phosphate royalties, Nauru could also expect to receive A 534.4 million from Air Nauru and

A 56.2 million from other sources, the report said. This would leave a deficit of about A 55.6 million.

The report said the Government plan ned to invest further money in Air Nauru this year but will not re-open di plomatic missions in Hong Kong, Amer ican Samoa, Japan, Hawaii and the Cook Islands. But it expects to launch a televi sion service on the 21 sq km island.

Meanwhile, The Dominion newspaper in Wellington, reports that the Nauru Government is considering setting up a small processing plant on the island as an alternative to exporting the raw mate rial. The plan includes the shipping from Australia of sulphuric acid part of the processing method in giant rubber bladders. The move towards set ting up the mini-plant is reported to have been considered by the Govern ment’s engineering advisors. The study arose out of frustration on Nauru that the island nation was not receiving a fair price for its rock phosphate exports. □