Document EdZB5j5gVz1RyMmdER3oOo8xj

BKC'9I 'fMU If To ooc* e tv 1 MC m . e ww 29th eopwiher. 9W. ' xsmws tfli tsg. ainamii Jft 29i dsvaicpmsats st Wiltcnoom through 9Cy, ltd. ue eeisscnecd 1ft order to produce croevdolUc asbestos to provide row nitiriil for the asbestos te^nt iRdureri' if> Auserrlle end 1ft the expectation that fsbra surplus tr> Australia*# n4 could be field abroad, m thu4 tire erectscaliy ell asboetoo fibre required by AunuoU?" Industry vs* inverted and iiipertence wee attached w tho project because oi the difficulty of importation Under ur. tire* condition* in addition to the saving in overseas exchange. As fee 2 am aware no thorough investlgavion oi the deposit et wiefcanoore wee mode* the decision to proceed being mode on outcrop reedInga end on Mine bepartiuvnc ivrvr/. which indicated wniiwta valve* of 3- of fibre over ehout j'-6" of ere In the general Wittenocm area, end indi>;ot)ef according to Mine* Dopartaeftt report* of excellent coacinu- tiOft of tho deposit over e vast tree of the Hanottlt'j tow* a* judged by outcrop# In the venous gorges along the c Harter#ley Range, After operationa vote commenced end when results were not as good sa anticipated, reassessment war mads sox'. it ues discovered that the fibre in the UlttcneeiB eres waft unlikely to average sore than about JV. nevertheless opet- stiens w*re continued. The company struggled on. with Government assistance in the way of roods. provision et water end general fcpwnahlp houses end facilities* but by tic company had cccu&uUtefi losses of approximately u.dttf.oC'G, investigations in the meantime had tndseated that e better ore body existed in colonial Gorge some two relics froe Wittencore mine. Xi5*ut.<j drilling was carried out to eubsl'sntlet* outcrop rfodinpu end. de67vj.se thn difficult! of diamond drilling tt that fclwa, sufficient drill my m.s carried out to confirm thee fairly large deposit of fihfv valve# sbjvs 3"'M2std, A decision was made to opn up urea, tn <ho -first piece usiog the old'wittenooa mill to process the ore. A little later in isde, end fallowing' fibre contracts ires* Jehaa-Benviila, s decision '># i-Mjo-a to in*t*I Sn irprevod mill at Colonial Gorge te treat the ere from that area end the wittenoom operations were shut down completely. Trots 1957 to 1961 v were mining in colonial ootgr in err everegleg about fibre* and aa s result ltd. operated profitably, reducing the eceuBviatod loss to almost tero. a dividend (the only one) of 836.3oo wo* pw, in IPdo. frost iPdl pjwerd#, boierwer, a* tbt> mine axtrjvKd n> from the gorge, ore values began te deteriorate gradually ' * the present j,8" approximately and once again a,5.a. led. epurcec* s < lest each year. The Ml Appropriation Account now ahows n e.ccutwlated loss of approximately 92,500.000, By the tdrea decreasing ore values were i we had ottripped tbs bx?A#rJe# of the diamond drilling .m. .outcrop readings tor the eyes end it was decided tv again diamond drill ahead et the working* to establish what value:, ley etotd. This further disnoad drilling bed been avaidr'i previously e# It vas known that It would be difficult oftd costly as the asbestos seam vae dipping further below the. cwfsd, Ae efc*S tM9 tto onolopUits and the HtU boHovvd that twwropo in flOrye u* wwa rtoj Colonial Gorge indiceted without doubt that ths deposit .i < ,t .. . fCClitfCS *t* s WV4W549 V-D8C-9? thu t0 saclrY 6uST :mc / a. a, t least for that distance. Hcuavori when vo eon*!iceov 4i*j#T& 4riii*9 it beeaao afferent that the Colonies <yscge deposit petered out rapidly tmd It is new believed, as a result of this and ether prospecting in the HwwtaUys, th'<r the eshestos deposits ere net continuous, but eon* sad go, enrichments UMng piece in ion# ellSpticcl erees just as they do in the south African esmtoa deposits, The position now at colonic! Gorge is that fibre v&luea of ebevt current v*iuc, j,t, can be wined for perhaps o further threv to four years end then the deposit virtually cuts our. Following the discovery that the colonial Gorge deposit did not Hvo on, further prospecting was donn in tto general Wittenoore area by diamond drilling. We also sought and obtained the eaaistance of the western Australian state Geological Service to carry out a geological survey in the Ha^rrlej' Peng*#, with s view to endeavour ing to daterrain what factors caused tnrlewasuts of fibre, so giving a Uad on hov to find such enriched areas- Also, of course, it wn hoped that the geological toere night locate sene enriched pocket#. To dace the only success is that in the witlcno'* area generally ve have located and delineated an area of reasonable values at 8*stern creek, about two mile# from present *ine. Diamond drilling is not at&tistienJly on accurate way of assealing overall fibre values, becaute the cost of drilling holea closely enough to obtain se-ctftot in formation is to high* However, on the information *re have Sphered on the eastern Creek area from outcrops end from rilling, it appeara that the area, viewed optimistically, mty rootelm above *vccc tea# of fibre averaging 9.4" of fibre, or parheps a total of 1W,00 tons averaging 3" of fibre, *f on* took 2,5" as the ihinlreure mineable value,, then perhaps the area contains 300,000 tens, but it is not possible to st at present thee scything Joes then 9" could, la fact, be mined economically, Qn the outcrop and diamond drill readings this area does not look as good aa the Colonial Gorge area did at the asst* phase of operations. Oft the other hand, with rising costs an eras considerably better then Colonial Gorge would be needed for profitable operation* The Vastern Australian Geological Survey hae net come up wish efty firm indications of tow fibre een be locate*), except teem ofretwa ctttevopa, in the ur**-ef their work they did discover promising outcrop readings at Junction Gorge, W miles from vstteneoev bur this area has net been drilled. The outcrop does net indicate an area any butter than the Colonial Gorge area and It would, in fact, have to bo considerably better then this to justify a new establish ment do relic# *ey frw* tfietofwMe ere ebeut to drill on this Junction Gorge area. Kitting Mfch$df. The improvement In performenee for a few years frtn 193? onwards v* not only because of better fibre values, *m also because of improved mining techniques which were sdoptoi? when the Colonial Gorge rein was tonmencod, This settofi consisted essentially of lining largo stopes to height of only ta 49, Xsiin? email pillar* at stout 30 it. spacing. (The height hea cbept up to 44" lately.) With got* econooio conditions in Australia new end with ample work available in the Serthwoat of Australia, it la now difficult indeed to get men to work in 4Za High atopcsi irrerpooti v* of pay. A tyvlm aialfitf, Uiinp full hugtowi for >"on has been evolved and reasonably proven in our present verkinc* eccr:v8& *e ** . THU lVi*t A S B e SJT o S Q C l g Tv ft ti 8T UC P.19 3. sn limited seals 11 method. it a n*v> area -as opened vp it is Mlieved that this method would hav* to be eh so adopted in order to remove the disability of ocher- io working in 42 heights, indications Sr* that the eytM> could poaalbly be cheaper then the present ana, apart fteia the advantages of being able to nan it feet* ccdly. The variation an netted la long-wall system < mining, It has the disability thee It require# s great deal 8 costly pre liminary deveXopmant before one begins to nine ore on t tcewotcsel scale, end this, in tom, f cooteo, means con siderable'utiay of capital expenditure Before mining f ore con ctenonce. hithough the method has bean reasonably proven in or present workings on a small seel, it is probnbly beyond doubt that whan developed on a largo scale many dSCCi- vlUe* min still #s*rgt> >g>ert mining opinion is- however, that it should be peas ibid to vetcowa any sueh difficultly. It must he rmafe*red, however, that this method was care- fully considered soma yeara ago vften the it" high stupe *# ado?tad end on expert edneo at the time ve rejected because of possible difficulties with the roof caving end because of possible lass of fibre bearing era. aoxiaa-Jmsos&ja&ss. When vs started mining at wutenoom. the type of asbestos that occurs they* - erooldollte, or `blua" aeweto* wee suspect aa a fibre to use for the manufacture of aaboacos cemMt. Today it la ceotgnlscd ss being as satisfactory b tha normally used cheysotue end how sails for thu purpoce at about the same price, grade for grade, as chryaotUe. it Is now recognised as being worth about twice the price, grndo tor grade, as eeaiia fibre- tier* done by C.g.fi. to prove that ozu fibre was s*tiaiactxy helped oatenally to bring about this situation and augmented work by Johns-nenvuie. Sr, recent yatta bardie'a also hove proven the efficiency of blue fibte for we in ecbeaWa cement pcodocta, particoUcJy in pressure piping. Xn 1954, however, Herdla's would not recognise thtfC bltte.AUw was vorth note than emosits fibre end conse^utntly vs could not obtain a maeXftt dm wetrelie tor-ih fibre we were producing at a resaoneblo price. e asked (*: and obtained a Tariff Ward hearing with the object f cccii*-. a form of protection which would Cocoa the ua* of blue fibso in Autcrsfre be w>we w# believed to be the correct price for its quality. e ware turned down by the Tariff Board who ac cepted scdie's view that th% fibre was only as good as amosit* and so worth only $l> par ton approximately as cor,persft to $200 per ton which we assessed as its proper vsluo. later, in 1953, we entered into an arrangement with Hardla'* whereby we agreed to Wsp ous f the asbestos ca*r.*ni industry as manufacturer# and they/ in turn, would purchase bjvo fiW* *F9* us St prices hsytd to the price of chrysotil fibra, This meant e price of approximately 5200 per ten. It dig ffieenty however, that C.6.*. ceased to have a reason for mining fibre unless it was profitable. Over the w#t ten years fibre prices have fallen by acme 7* deep!to the fact that the quality of fibre has im proved, ovr besi coot* at Kittenwis, however, have men sharply, vagus and stores having risen some do# to ?9fC. for sxvrple, in 1955 e tsadosman received a total of 135-50 per usek. Ha new receives $$9-Ztf par week, and m addition uc hev to ensure 6-dey week to keep such &an. Hardlo's hnyo cJwtiwjgd W psy ua iwro to gtif (ibrt CliCtfl va *;taih on iho wrtfi wVot, dojipito t'no.Suet that our grading he# not been good fibre available from elsewhere {be*vase *e cewis aot afford to it*^ it soJ Hwdie's consider that they have been paying v* aw* 9io ?.er tan more than V* fitteo ie ectwaUt' ww tapes on whet tv-y could otherwise obtain an the vw-ld market %ui it is diffi cult not w sgm wsth this. we have been selling about half our output to UseSis'# in recent years. At the beginning oi this year we invited /aiue* Keedie Asbestos ptyM btd. to study per*ei<M* as njW( vith c view to then taking interest in this prelect as they were the largest user of the fibre produced there. They expressed interest end said that they 4to consider thee it vss desirable to obtain oabestoa frea AuateeUeft sources >5 possible, and confirmed that if the fibre could be upptedso so woeid standard thee they woidd be content to go on using coo 'UStfewble tewnsge* of Hittenoem fibre at about the price thr/ wars then paying, After soma fbftMf bonsSdeeectc* of she *stttr they csked if Cepe Asbestos Co. could join with the* in an ssacsrwt of the prospect* of ttittetvoem vith the in- tention that if ths prospeot* wore satisfactory Hsrdje's a-m Cipe would join in the project, cape possibiy evpplyi.tf *0R" tachnltal know-how for operations, ana in any ease marketing arty fibre that had to be soli ehfosd. agreed to this approach, The ssaesstnsnt by Cope Asbestos end by Hex-die's has now been cewpieted and e# a result both Cap* end Hards** sty aha ehey runsov *os how they can interest thesnaoive* in the vesture. They cannot sea that the eras can be mined economically. They betiove that the values of fibre are jum too low and, in any oeee, they &*2Xsv* that on present indi cations the Isfa ef the xopun r deposits it short U n**4*u.oi about five years in their judgment! based on presently available infometiaa, that they certnot coo thet it 1 worthwhile trying to keep M*** flSve. Tltey x?rt" that baaed on Couth Airless experience, other pockets of 4fi#isM fib/* may be found, but by the sans token con*i<*v that all the evi4ar.ee to date is that even if such prehute are found they will be no better the the ooes already Ks...u, The position In couth Africa is softetfftek different the Ce?.s peep)a believe, because although the couth Afneisv deposit' My not be as widespread as ours, they do gee wry good Icon pockets or %ntie>n%Rts. even up to IS" of fibre. It is the presence of these very gd leeel anricVwent* in South A2n<- thee aflefels them to sine the ganersi run of country Mcafl'rw.l.v They cenftot see eny hope of striking such rich local #mV scents at rtlvttrroow ot in the WeasreXeye generally. Vto abstrsot end'conntufliona section of Mr. Kuyf r' tdport Is attached, yho foil report u sveiKbU. Kr. conclude i by saying "l cannot recotrawnd thee Jim* Wardjo u Co., pty., ted. interest thensaXwe in sMttsnc* in any way'. Me, ?.J. Adamson in letter to Be which occembvnurd the report says "l suppose I should confirm in writing vhst l said to you last week v with the utmost tseta\ oy company has decided that ;c cannot accept your hind invitation te be in the VietartaaM |ma Creek preposition", A* pert of his report Mr. Wyper reapers* wittewo* (Colonial gorge) vith the jowte grsdo Bins they have m douth Africa, rhi* is tbsir Xeegas nins. This nin is lb 9 2 Thu its *a s a B a -r f3 SOCIBTV lUST * Hs ia nils* from railhead to post cohered to roed trtnsport of ISO riilee for Wittenoom. Sams figure* ere* fiRWUBftl HrfiOUCttOP. 4Vf*.4.i to 20.<**>_&.a .. Deposit - inehes of fibre {*v. lest yr.) 4.01 3.93 3.93 Direct costs - 9 per ton fibre ns 184 143 cost including transportf depreci ation and overheads i&epreciatsea at *feegas it only J7,S$ compared to 913.47 *t Mtttnoam due to Wlttenoom'e high osyttel cost toe tnschenigetibn.) us 234 184 This illustrate* how uneompetitive Wittenoom la eonpered to Capo' lowest grade sine. ^ra Sorting. A# sestloaoS previously we ere mining approximately *4" of rook to obtain, say* j* ot fibre. This itenn* the ore la only it fibre. if ete of thla quality le allied the yield If very low end tlie fibre Quality i* ruined because of the large wtount of rotK ground with it. to avoid this *e hove gang of * manning a picking belt where they endeavour to flc'H otS end discard barren reek. 3t is n$>orect in this operation not to discard rock with fibre in it. By thla scans we ean-Mr* .out .pad reject enough barren sock US',4 cf the total feed) to bring the grade of ore to about UX. We have now developed at Roseville sorting device which should oneble menpowar for sorting to be eifnlnstc^ er.A sSauld ensble us to reject safely JO* of the mill feed. thus increasing the grade of ore nillad to about iOtt. jt is be lieved in feet that by installing two such sorters et different locutions in the mill circuit we may be able to lift the amount of rX rejected safely without significant loss of fibre to almost 40# of the total feed, ao enriching Che ore to about ik. Advantages which should flow from the use of these sorters would be< j, x*uctien of men and reduction therefore in housing and township facilities. I, Less wear end tear on the milling equipment. , i S, Better quality fifeef. 4. Setter yield of fibre per ton ot rock mined.t -The poeuble economic advantage for installation of these sorters et Wttanoem on the basis of producing 2o,oco tons of fibre per annum has been assessed as follows) s r r hw i v * - j.s duto tiO_ciET_y auu t j nc_j* . i s "*. ~ i.j 6. le) capital cost for cwo sorters installed 5150,000 <b> possible overall savings tn cost and value of extra fibre raeovery $300,000 p.a. It swst be omphs*l*ed that these figures ere still to be confirmed fey experience end that the electronic sortie device is still only In o development stage. At lower production rates the 9am vold ba roughly pro rate to production, t.a. at cur peasant production level of about 13,OW tens p.a..tbe gain would probably be about SI50,000 p,e. Iba_Putaga Secant losses have beam tear ended Pecerrber, 1962 " - 1963 15 Booths eaded March; 296$ 12 month* ended Kerch, 1$56 Current rate of lose 1235,000 p.a. $226,000 f31$,000 $*20,000 $89o,ooO p.s. f the above rasults era efter charging about $400, cce p.a. for dapreeifition of plant. Capital expenditure (so called but It is essential expenditure to keep Wittonoem join?), tv*. aver, has been averaging ebovt $400,000 p.., so that current*> our cash outgoings, neglecting chenge in stocks, are at thr> rata of approximately $650,050 p.a. We have been forced to increase wages wistance* in order to connate with tfea icon ore veoAecee. *4t. V.vitv'j dono this we arc not experiencing great trouble in getting enough men to sen the trades sections, tlie Rill section and ether surface sections of our operations, w* cannot hold cur, . ----in the vital underground sections, however, and the opinion has 11need at Witteneo* that almost Irrespective of earn,xnya and living conditions we cenoob get and train and hold *.n ;o 1 verb in 4 2"-M" o heedroom. Sven our efforts throughout tin, Ear to bring workmen in from abroad, particularly fro* benon, hove bean quite unsuccessful ee alaost ail of ihro have now left Wietenoom deepits the fact that some of the:" reached the stage where they were earning very high rrontv underground vorkar*. if the present opinion on labour u correct { t believe it is), then ve cannot expect to 9 any better at WSttenoom in the present mine end may aaiUy do worse. Kith rising costa wo now need to produco 40$ tens asbestos par week at Wiitenepa to Just break even, wham.-. * year ago we considered that at 30$ tens per week we could Uot) even. The sins staff hold out no prospect of being able to obtain labour to produce 200 tone per week, let alone 400 ton* per week. We could change over bus mining to full headroom long wall pining, This would probably take us close to t',o years to complete and in the meantim# there would be uttle imp*overrent to costs. At the srtd of that two years we would then hsve at Boat two ybars life left in the nine, it must be emphasised too, that we do not know whet our loss of fibre say be with this aew system. Assuming we 1natal electronic sorting end that it lives up to Ita present promise, end do change the mine over to a-long vail system, then the position ever the next two years could be guessed at, something fellows1 $ -93 I'M 4 T * 9 @ DE 8TO SDC tSTV * u S T INC P . 1 4 7, 6 tenths operating as now (it will taka 6 month* Co instal the sorter*) 16 senth* change-over period but with electronic sorting (losses continuing at $800,00* p,a. hut leg* the saving ot SI50,000 from sorting) Caa'h Lott CO,COO $?S.OCQ 1,175,000 hiter that we could operate for two years end en the essuitption tide that we could wvtn get enough labour to enable us to produce 20,000 tons p.s., wo could Just about operate ei> a bresx-even cash basis. It'Is attractive to inatel the sorting equipment to prove ;oit uhst it may save and the effect it has on milUr', operations and to convince others in the mining field that s:* Vtave valuable invention. On these estimates, however. ie cannot possibly save enough to warrant us doing this because its presence make* no difserenes to the vital feetor which limit* production - i.e. getting men to work underground. feistern creek fcr*. To open up the eastern Creek area, erect new plant there end carry out t?te vary considerable mine development which is necessary if we adopt the long-wall system of mining would be vary difficult if we attempt it whilst still trying to operete our present mine. Saoh operation would interfere with the other, we would noed note men, more ececRnsdeeicn end so on. per the purpose of this particular estimate 2 swing, therefor*/ that eur present operations are shut do-n and that wo treat Ssstem Creek as a new venture carrying none of the burden of depreciation of plant or of write-off of development iron the existing operations, but on the ether hand, taking free advantage of any assets that are at present at wittenooro. Crushing plant, ere sorting, sundry other equipment, roads, etc. Alterations to existing mill K#v mine equipment for complete neehaniss tion Hina development ($500,000 before mining operation# can cemreRea rising to s peek f $X,000,00) n $600,000 $00,000 260,OCO 1.900,000 $2,150,000 Xn addition the township would need to ba upgraded. This could cost $i h. if don* properly, but at least probably $500,000 expenditure would be essential. This new capital has not been taken into consideration in the figure* feel'" tt has been assumed for the present purpose that severnctnt would bavo w provlda this it m we to decide w go ahead, depreciating the assets involved in this eastern T HU T * STO^C*|TY.^ST T*C *>.1* t, * s. Creek development over five year# (whseh would be the life of the mine at 20,Cb tens a-a. rate), total eoct of fibre x Witcenoom it estimated by Nr. Broadburst to bo #144 par ton. If an everego eelling price of $155 per ton ex *:i?.<>,'. Sj assumed, then the profit 1* $21 per ten, or ay S^cc.ccc p.a,, c say 2K .*. lewft or. the K. flak ino tw wuU be paid). This i* the Boat optimistic presentation that can be weds, xt assumes a 20.0CC tone p.e. rate which wo hove never achieved and involve* considerable changea end develop, monte in mine mechanical;ion, tha affectluenesa of which bee not been proven at Wlttenoom. It also ignores the probable high coat of building up the labour forte again in order to enable a production level of fcj.oco tone p.a, to bo achieved. If one it mere conservative, assume* an average output of 15.GOO tone p.a. and bees* estimates on the present type of mining equipment now being used, then tha coot of fibre ex Wleeenoom la estisaced to be $17 per ten es eowarsi to th selling price of $165 par ton. Under thase oircunata-cf' the operanon weald result in a loss, that Is w could not v.'-n fully repay tha nw capital ever five year period. it two'* be W&, pf. eerarso. t^tat In Ww next tivo year* other areas worth mining may bo found and that hence the depreciation of all new vsteta over five years is un> raailatle. However, to offset this view, one muac consider - (a) that from our axpericnca to data esteblishmsnt charges at aay new area may be again at least as mien as we are now proposing for the Eastern Creek area* (b> no provision has been mode in assessing tha capital coat above for the continuing capital expenditure which always saom* inevitable whilst operations continual (c) our experience at Wittonooia ha# bean that performance is always worse than estimates. Oovarnment. Kelp which is within the power to give by Government if they wish to do so 1st (a! up-grading tha township, Xt stated efcovo it is ejtj. n*trt Vn* a i-dnlmem el 6S,V would ba required to bring tha township to southing approaching the typo of accomodation end conditions generally which will apply to the iron ere ventures end which people in three localities will no doubt demand mere end mero. (b* Gow'ecNMtfvh could subsidise development aa they do for gold mining, for exarpl*. On the basis of the figures presented, <j would noed subsidy of something like $20 per ten so eneooroge us to go ahead, on 100,COO fens of fibr* end five years opecatiom this i equivalent tt i% H. subsidy by the over*. ent. Sven if one could conceive of the Coverwaenp ograaxng to subsidise to this extant; it would be difficult to dc it on development alone as the total development under tha normal definition of that word at Eastern Creek would not ba awre than 51 H , * It iy cgptulfl frcp:j6 xpoHcnc that nmotiatlw# with the Government for large amounts by w*y of subsidy or nv-d i>n **^y pn>tenM,4, i 4 s-nec rU |T!T ItjttTIJ SOC1STV r _I 14 SttS-VeM_Atb-*to-He sards. w hy* preativ improved the dust collection t UittVflOOA. but l* 48 doubtful U CORdUlOTS * ** flOoM good ea v*2 be requires ead demanded. Gradually through out eho world, os more medical work is done on eabesvososi* and allied complaints. the Wrt opinion appears to be hardenlr>j ss to the loivg torn effect < ev*n sdlft exposure. Z bilteva that s tie* ? or mare and naro or*rip measures *121 fe* 0*113d for to prevent exposure to asbestos dost and short fibres. COBeltt}lcn. e have no option bat to shut dev* as tfuiohly as vo con, having regard to tho need W give r*#eebl notie to various parties, tfe should probably aim to be completely iht down by the end of January newt. c do have en ijrewit nit" MrtUci which call* for three year* notice of cessation of supply of .fibre, bjt r. Adamson has assured me that tt>rUe'; would valve this oondieioti. i \S