History and Heritage: The mining industry and the national economy of Australia
The following Presidential Address is an edited excerpt from the Proceedings of the AusIMM No 133, 1944. The address was delivered in Melbourne on 11 December 1943.
I suppose, that as the primary reason for our assembly today is to celebrate the fiftieth year of the Institute's existence, I should properly on this occasion give an account of its history and development.
However, as this subject was ably covered by Mr LV Waterhouse in his Presidential Address in 1938, I trust I may be excused for selecting some other subject. I shall, therefore, exercise my privilege as President and give you a short history of the mining and metallurgical industry of this country with special reference to its effect on the development of the Commonwealth, and on the national economy. I apologise in advance for any statistics which I inflict upon you; some of these will be three, or four years out of date, because of censorship restrictions. I shall as far as possible refer firstly to the industry prior to and including 1893, the Institute's foundation year, and then to subsequent development.
Australia is pre-eminently a pastoral and agricultural country and it leads the world in the production of wool. Nevertheless, it has an international reputation as a producer of gold and various metals and of mineral products.
The development of gold mining in the decade 1840-50 was an epoch making event in Australia's history, because to quote one writer's apt phrase, 'it precipitated Australia into nationhood.' It was certainly responsible for a rapid increase in population. During the period 1841-1861 the population of Australia increased fourfold, from 221,000 to 1,170,000. The effect of the discovery of gold in Western Australia was even more striking. In 1890 the population of that state was 49,000 and in 1900 it was 180,000.
Statistics in respect of gold are reasonably complete, even for the years prior to Federation, and it is interesting to note that the gold declared as recovered in the Commonwealth up to, and including, the year 1893 had an aggregate value of about £310 million sterling. Gold was then valued at £4/4/- per ounce, and the output was approximately 74,000,000 ounces, which at today's Australian price would be worth about £750 million.
During the period up to and including 1893, seventy-five per cent of all the gold recovered in the Commonwealth was from Victoria, and only about 0.3 per cent from Western Australia.
It is noteworthy that several of the gold mining areas, particularly Ballarat, Bendigo, Ararat, Castlemaine and Maryborough in Victoria, and Bathurst and Orange in New South Wales, became cities and towns which today depend almost entirely on pastoral, agricultural and industrial activities for their prosperous existence.
About ten years before the foundation of the Institute, silver was discovered in Broken Hill and several fortunes had already been made. It has been stated that one original fourteenth share in the Broken Hill Syndicate, purchased for £110 about 1882, was worth £30,000 a year later, and with dividends and bonuses added, about £1.25 million by 1890. Silver had also been recovered in Queensland since 1879 and from the Zeehan (Tasmania) field since 1885.
Copper had been produced for several years before 1893, in South Australia and in New South Wales.
The Mount Lyell mine was being developed largely for gold, and copper was not produced there prior to 1896; since that date, however, operations have been continuously maintained, and, as you all know, it has been the main source of supply of copper in Australia for several years.
Tin had been discovered in all states by 1893, and the amount produced was by no means insignificant.
Lead and zinc minerals were, of course, present in the Broken Hill ore and they had also been located in other parts of the Commonwealth, but at that time silver was of more importance than either lead or zinc.
Deposits of iron ore had been located in New South Wales, Tasmania and, later and on a larger scale, near to Whyalla in South Australia. Pig iron was produced as early as 1852, though only on a small scale, and it was not until 1907 that the production of pig iron was established on a proper basis at Lithgow, New South Wales.
As far back as 1881, coal was being produced in Australia to the extent of 1,800,000 tons per annum, and in 1891, two years before the foundation of the Institute, the production in New South Wales alone was over 4,000,000 tons, which is about 35 per cent of the current production rate in that state.
This in itself is remarkable, because at that time, Australia was not in any sense an industrial country. Without doubt, the development of the coal-fields was largely responsible for the decision to construct over 10 000 miles of railways, which were in existence in all states in 1891.
The total value of the mineral production in Australia for the year 1893 is not readily available, but reasonably complete figures have been published for the year 1891; these are:
- Gold – £6.25 million
- Silver and Lead – £3.75 million
- Coal – £2 million
- Other metal ores – £1 million
- Total – £13 million
The number of persons employed in the mining industry in 1891 was about 75,000, representing nearly 2.4 per cent of the total population, or 4.3 per cent of the males in Australia at that time.
For comparison I now refer to the pastoral industry, for which early statistics are incomplete. By a roundabout method I have arrived at an approximate figure of £18-20 million as the value of the wool clip in 1891. As a matter of fact 1891 was nearly a peak year for wool and production thereafter fell away considerably, so that by 1902 the return for wool was very little, if any, more than the value of the mineral production during that year.
These facts illustrate that fifty years ago the mineral industry had an important place in the national economy.
I shall not weary you with a year by year account of the growth of the mining industry during the last fifty years, but there are some important developments which justify passing comment.
First as to gold. From 1893 onwards, following the discovery of gold at Coolgardie and Kalgoorlie, attention was focused on Western Australia, and by the turn of the century it had replaced Victoria as the principal current producer of gold. In the decade 1901-1910 production in the western state was valued at £75.5 million, whereas Victoria's output in the same period was valued at £30 million. The disparity has become much greater since then and for the first forty years of the current century the figures are:
- Western Australia – £217 million
- Victoria – £56 million
- Other states – £72 million
- Total – £345 million
These values are in terms of Australian currency, which has fluctuated in respect to gold over the last several years. The rise of Western Australia as a gold producer has had an effect on the well-being of that state; for example, the population has increased by 160 per cent during the period 1900-1940, as compared with an increase of 87 per cent for the Commonwealth as a whole.
All gold declared as recovered in Australia up to and including 1940 had a value of £733 million. This again is the sum of each year's production in the ruling Australian currency, and therefore the monetary figure cannot be readily converted into weight of gold. During the year ended June 1940, gold valued at £17.5 million was recovered and was substantially all exported to meet our overseas commitments. Incidentally, the all-time production of gold in Victoria up to 1940 still exceeded in value the corresponding figure for Western Australia by £73 million.
There have, however, been some lean years during the current century; for example, in each of the years 1928, 1929 and 1930 the value of the gold production failed to reach £2 million. The depreciation of our currency, followed by a fall in the gold value of sterling, is responsible for the revival of Australian gold mining, which reached a peak in 1940, although production in that year was only about 41 per cent of the world's production, as compared with 26 per cent in 1901.
I have already referred to the discovery of silver at Broken Hill. Today the mines located on that field are probably the most extensive high-grade lead-zinc mines in the world. Silver is still an important constituent, but the ore is pre-eminently a lead-zinc one. The field has been a centre of intense metallurgical experiment, and operations there have been partly responsible for the development of several of the modern processes for separating metallic minerals from one another; in this case, lead sulfide from zinc sulfide, and both from the hitherto worthless non-metallic material.
The establishment of the world's largest lead smelter at Port Pirie, South Australia, and the electrolytic zinc works in Tasmania, are due entirely to the development of the Broken Hill mining field.
Over five million tons of lead and 350 million ounces of silver have already been recovered from the Broken Hill ore.
The Mount Isa field, in Queensland, was on a production basis in 1931, and in the year 1938 the value of its output was 26 per cent that of New South Wales – the respective figures for that year being £900 000 and £3.5 million. Some lead-zinc-silver ore is also mined in Tasmania.
In 1939 Australia was placed second after the USA amongst the lead metal producing countries of the world, and sixth in respect to silver. The production of zinc in the form of concentrate placed Australia third after the United States of America and Canada. A little less than half of Australia's zinc concentrate is converted to metal in this country.
The production of copper has varied from time to time, but in the period just before the present war output had settled down to about 18,000 tons per annum, with an annual value varying between three-quarters and one million pounds.
Tin, tungsten, tantalum, osmiridium and sundry other non-ferrous minerals or metals are mined in Australia and their value has made a substantial contribution to the national income.
Probably the most spectacular development in Australian mining industry during the current century has been in connection with the production of iron and steel, not so much for the value of the pig iron and steel produced, but because so many dependent manufacturing industries have also been established. In 1939 the Australian production of pig iron was just over one million tons, which was, however, but 1.25 per cent of the world's output. The current production rate is higher.
Black coal is mined in all States, other than South Australia, but of the 1939 total of 13.5 million tons 11 million tons were mined in New South Wales. Some 3.5 million tons of brown coal were also mined in Victoria. The value of mineral production from all sources in the Commonwealth during each of the fiscal years ended June 1939 and June 1940, was:
The total production of gold and other minerals for all time up to June 1940 was valued at £1.464 million, of which, as already stated, £733 million was paid for gold. These values refer to the products of the mines and, with the exception of gold, do not include any increment in value due to conversion to metal or subsequent treatment of the metals.
The total number of persons employed in the mining industry in 1939 was 65,789, or just under 1 per cent of the total population, as compared with the probable peak figure of 113,462 in 1901 – 2.3 per cent of the population. The decrease is due in part to the larger scale on which the average mine is operated today, thereby facilitating the use of mechanical equipment.
The present relative value of mining as a primary industry can best be illustrated by comparison with pastoral statistics, particularly those relating to wool.
The market value of all Australia's pastoral products during the fiscal year 1939-40 was approximately £81 million, of which about £62 million was received for 1115 million pounds weight of wool, which, incidentally, was 28 per cent of the world's production.
Thus, the return for Australia's mineral products in 1940 (£40 million, including coal, but excluding any increment due to reduction and refining) was nearly 65 per cent of the amount received for the wool clip and about 50 per cent of the value of all pastoral products during that year.
That, I think, is a very brief historical and economic picture of mining as a primary industry. Values of production, of exports and of employment in the industry are facts which have been officially recorded and which can be compared with similar statistics for other primary industries, but there is another important, if less concrete, phase of the industry. I refer to the recovery of metals in Australia from domestic minerals, and also to the utilisation of coal.
For some time now Australia has produced considerably more metallic lead and zinc than it needs, and has made a worthwhile contribution to the Empire's requirements. The Commonwealth was substantially self-supporting in respect to copper under pre-war conditions, but until recently had insufficient to meet the sudden war demand. Tin has been in rather short supply. Australia has an extensive iron and steel industry and is well equipped for producing most of the ferrous alloys. It has no nickel, nor has aluminium been produced here, although deposits of bauxite of reasonable grade do exist. All the magnesium used here now is of Australian origin. Tungsten is, or will be, produced in sufficient quantity to meet all likely demands. Metallic cadmium is produced in amount surplus to the country's needs and a small amount of very pure cobalt is being recovered from Broken Hill zinc concentrate.