CHAPTER VII.--PROSPECTS FOR THE IMMEDIATE FUTURE.
1. THE BELL ISLAND MINE. (continued)
444. Reference to this
question was made in the negotiations which took place during the Imperial
Economic Conference, Ottawa, 1932, for a trade agreement between the United
Kingdom and Newfoundland. In the agreement that was concluded* no
mention was made of Wabana ore but scheduled to the Agreement was an exchange
of letters between the Prime Minister and the Leader of the United Kingdom
Delegation, of which the terms were as follows:--
1. From Mr. Baldwin to Mr. Alderdice.
OTTAWA, August 18, 1932.
"Dear PRIME MINISTER,
"My colleagues and I recognise that an arrangement between
the interests concerned for the importation into the United Kingdom of a
substantial quantity of Wabana iron-ore is of paramount importance to the
economic life of Newfoundland.
"We therefore give you our assurance, on behalf of our
Government, that we shall regard the last paragraph of Article 9 of the
Agreement which is being concluded between His Majesty's Government in
the United Kingdom and His Majesty's Government in Newfoundland as entitling
the Government of Newfoundland to give us notice that they are unable to
implement the Agreement, other than Articles 4, 7 and 8 and Schedule E, on
the ground that a satisfactory arrangement between the interests concerned
as regards the importation of such ore into the United Kingdom has not been
"In that event it is understood between us that the
Agreement, other than Articles 4, 7 and 8 and Schedule E, will be regarded
as at an end.
"I shall be glad to learn from you at your early
convenience whether you concur that this correctly represents our
"(Signed) STANLEY BALDWIN."
1. From Mr. Alderdice to Mr. Baldwin.
OTTAWA, August 18, 1932.
"Dear LORD PRESIDENT,
"I have received your letter of to-day's date regarding
the Agreement between our respective Governments, and I agree with you that
your letter represents the understanding between us.
"(Signed) F.C. ALDERDICE."
445. It is understood
that Your Majesty's Government in the United Kingdom have since taken up
the question with the steel masters in the United Kingdom and, now that
the Agreement concluded at Ottawa is in force, it is hoped that arrangements
may be made whereby the importation of Wabana ore into the United Kingdom
may be encouraged. In the meantime, some small shipments of ore have
been consigned, on a barter basis, to Cardiff, South Wales, in return
for Welsh coal. Pending the conclusion of a permanent arrangement, the
extension of this practice could not fail, we suggest, to prove of mutual
benefit to the two countries.
2. THE MINE AT BUCHANS.
446. In 1907-08 the
Anglo-Newfoundland Development Company, in prospecting for sulphur for
newsprint production on land leased from the Newfoundland Government,
discovered an outcropping of lead-zinc ore at a point on Buchans River,
some five miles north of Red Indian Lake (see Map No. 1). A shaft was
driven and the ore was found to be a fine-grained intimate mixture of
the sulphides of zinc, lead and copper, with traces also of silver and
gold. But it transpired after exhaustive enquiry that there was then no
known method by which the ore could be satisfactory treated, and the
workings had perforce to be temporarily abandoned. Fortunately, however,
experimental work, undertaken during and after the War in the laboratories
of the well-known American Smelting and Refining Company, finally resulted,
in 1925, in the elaboration of a process by means of which the lead and
zinc sulphides could be extracted and crushed into marketable products.
An agreement was then entered into between the American Smelting and
Refining Company and the Anglo-Newfoundland Development Company providing
for the operation and development of the deposits by the former Company,
the net profits being divided equally between the two Companies. (The
interests of the Anglo-Newfoundland Development Company owns over 98 per
cent. of the issued share capital.)
447. As a result of
electrical prospecting and diamond drilling, a further body of ore was
located in the immediate vicinity, the estimated yield of the two bodies
together being placed at 8,000,000 tons. Analyses of the ore gave the
following average results:--
448. The Buchans Mining
Company was formed and construction operations were begun in 1927. A railway
was built connecting the mine with the Anglo-Newfoundland Development Company's
line at Millertown Junction. A site was cleared for settlement, and a town
called Buchans laid out. The mine itself was equipped with the most modern
machinery, including a crushing plant of 2,000 tons capacity per 24 hours, a
concentrating mill with a daily capacity of 600 tons, and a hydro-electric
installation of 2,500 horse-power. Storage sheds were erected at Buchans and
the port of Botwood, and the wharf at the latter place was extended and
specially equipped with suitable cranes.
449. Production was
started in 1928, but within three years those responsible for the operation
of the mine were faced with a crisis, the world-wide slump in prices having
reached such a low level as to make operation no longer profitable. In these
circumstances, the mine had either to be closed or its production doubled.
The latter course was chosen and in 1931 new plant was installed at the cost
of $1,500,000, giving the concentrating mill a daily capacity of 1,200 tons
of ore. The total capital cost of the enterprise was thus brought to approximately
450. In spite, therefore,
of the low prices at present obtainable in the world markets, the mine at
Buchans has continued to work full time. We made a detailed inspection of the
operations there and were highly impressed at the efficient manner in which
they were conducted. The life of the mine on the present scale of output is
estimated at 14 years, but it is thought improbable that the two deposits so
far found are isolated ones, and further prospecting is being undertaken by the
American Smelting and Refining Company as opportunity offers.
451. During the four years
1929-32 the tonnages mined and milled and concentrates produced by the Buchans
Mining Company, Limited, and the production costs per ton of ore, were
respectively as follows:--
Tons Mined and Milled
Tons of Concentrates produced.
Tons of Concentrates produced.
Production costs per ton of ore. $
At 31st December, 1932,
the estimated ore reserves at Buchans were 6,967,500 tons.
452. The town of
Buchans is remarkable as being one of the few settlements in the interior
of Newfoundland. So far removed from the sea and from other towns, the
people are thrown to a large extent upon their own resources. The Company
has provided them with facilities for education, recreation and amusement,
and we were struck by the progressive spirit which prevailed. The town has
been attractively laid out and is equipped with an excellent water supply,
modern drainage and electric light. The Company maintains a school, and there
is also a night-school for workers in the mine. A cinema theatre serves also
as a town hall. There is a flourishing athletic club. A hospital, with a
resident medical officer and two nurses, is maintained by the Company.
453. The population of
Buchans is about 1,000, of whom about 300 are employed in the mine. Wages
are good and relations between the employees and the management are excellent.
Prices in the stores are high, owing to the distance of the town from the
coast and to discriminatory railway freight-rates.
454. As at Grand Falls,
the high birth-rate at Buchans gives rise to some anxiety. Indeed, the future
of the town itself may be said to hang in the balance, since, if no further
bodies of ore can be discovered, the mine will be exhausted in 1947. The
problem of providing for the coming generation of Newfoundlanders is one to
which we have referred elsewhere; the solution of the special problem of
Buchans will, it hoped, be found in the discovery of other workable deposits.
Reference is made in paragraphs 459-464 to the Company's shipping
arrangements at Botwood.
* See Chapter IV, paragraph 160. The full text of the Agreement is reproduced in Appendix K.