giving at the seam

There is a very important feature of the Mt Davy coalfield in the West Coast, about to be mined for export by a foreign consortium, which has been glossed over in the press It is that this field represents New Zealand's last significant deposit of high-quality coking coal - that is, coal suitable for the steel industry. With the present energy situation it should be regarded as a priceless power resource. Instead it's being sold off in a hurry to a Japanese aligned consortium who plan to use it to smelt South Australian Iron ore to make steel for export. And as with the infamous Comalco deal, it's quite likely that New Zealand will not benefit economically from the exchange.

West Coast Resources Ltd is currently seeking approval from the government to start mining at Mt Davy. It is a consortium 50% owned by Ataka and Co (a member of the Sumitomo Zaibatsu, the largest conglomerate in Japan). Foreign control is also expressed through New Zealand Forest Products, a 25% partner which has up to 30% of its shares owned overseas. With foreign interest as high as this the whole enterprise can be expected to run for maximum foreign gain.

The price figure for this coal is quoted as $40 a tonne. Most probably this means freight on board at Lyttelton, since that way the price turns out highest, and conceals transport costs. Yet it's still an absurdly low price, since West Coast Resources will still be selling the coal at $40 a tonne in 1990, when the seams finally run out. By that time, $40 a tonne for coal of this quality may well amount to giving it away.

By exporting raw materials and importing finished products (the classic colonial economy), New Zealand is continually losing out to inflation. We have to sell the coal at a price which is fixed for 15 years, but we must buy our Japanese cars at constantly inflating prices over that time.

In a recent statement, Mr Colman said 'the government was doing its homework on the price carefully.' It will need more information than this to convince us that New Zealanders will eventually profit from the sale.

The two New Zealand companies in the venture can afford to operate the mine at a loss, since they stand to gain huge tax rebates on their investment in the area under Labour's regional development provisions. These tax losses may amount to a considerable expense to be borne by the New Zealand taxpayer.

In addition, the type of development this scheme will bring to the Coast has not been properly considered. The government proudly announces that 200 men will be employed, but what happens to them in 15 years, when all the coal runs out? Until all these points are clarified, no contract should be made.

Projects like Mt Davy and the Clutha hydro-electric schemes are continually pushing the country towards the dangerous technology of nuclear power. Apart from the inevitable harmful pollution, a nuclear powered plant requires minerals and know-how which are completely controlled by the Western capitalist powers. New Zealand would be totally dependent on these countries if the present development policy forced us to go nuclear.

In New Zealand terms, the Mt Davy field is a big potential power source. But Japan can consume every ounce of coal in the country and just grow a little more overdeveloped. Surely it's preferable to build a national industry, consuming our own resources.