In the years just before the war, annual coal production in New Zealand had been increasing, and in 1939 was over two and a third million tons. In addition, over one hundred thousand tons, mainly of high-grade bituminous coal, for industrial purposes, was being imported from Australia. Coal exports, including overseas ships’ bunkers, were averaging about fifty thousand tons, leaving some 2,400,000 tons a year available for use in New Zealand. The Railways Department was using about 500,000 tons of this coal. Coastal shipping took 100,000 tons, gasworks 250,000 tons, factories 700,000 tons and households 850,000 tons.
The coal-mining industry was influenced very considerably by the special circumstances of war. The increased incidence of state ownership of mines, and the rapid extension of open-cast mining, were both part of the effort to step up production of a commodity which became more vital to the economy as demand increased and the inflow of imported coal and oil fuels declined.
The New Zealand output of coal increased year by year throughout the whole of the war period. This result was assisted materially in the last two years of war by the expansion in open-cast mining, but coal mining was also one of the few industries where the number of persons engaged was consistently higher than before page 410 the war. The industry was one of the first to be declared essential1 and intensive efforts were made to secure extra labour to bring coal supplies nearer to the high wartime demand.
From May 1940, the Government paid a subsidy of 1s. 6d. a ton to coal owners to meet increased wages and other costs and to avoid an increase in the price of coal. The rate of subsidy was increased several times during the war.
In spite of increased output, there was an unsatisfied demand for coal in most war years. Considerable extra work fell on the Railways Department, which was a major coal user and, in other industries, shortages of oil fuel for various purposes and of electric power tended to emphasise the need for coal as a means of producing power and heat. Again, the electricity shortages caused unprecedented consumption of coal at the two steam generating stations in Auckland and Wellington.2
1 In January 1942, but the industry had a measure of protection before this. In 1946 the National Service Department wrote: ‘… the production of coal has remained a first priority throughout the war.’—Parliamentary Paper H–11A, p. 41.
2 King's Wharf and Evans Bay, respectively. New Zealand's power generation is predominantly hydro-electric. The normal function of the two steam generating stations was to handle exceptional peak loads.