Lion Court, E.C., Sir Charles A. Innes presiding.
The chairman, in moving the adoption of the report and accounts for the year ended December 31, 1945, said : The results of the year’s working are conveniently summarized in the directors’ report and I do not propose to say much about them.
Shortage both of labour and of materials continued to affect operations and did not permit of a resump
tion of work below the 76th level. 157,819 tons' o"f ore were milled, rather more than in the preceding year, but the current production of gold dropped from 53,406 oz. to 47,408 oz. The reason for the decrease is that, in pursuance of the policy agreed with the Government of Mysore, we worked a lower grade of ore, the average assay value of the ore nulled being only 6-1 dwt., against 7-1 dwt. in 1944. Including the gold obtained by a special clean
up in June, our total production of gold was 49,194 oz. and our sales realized, at an average price of
¿15 4s. 2Jd., ¿748,214. In the previous year, 56,673 oz. of gold realized ¿807,900, but this year our policy of working to a lower grade of ore earned for us a refund of gold duty amounting to ¿107,320, whereas in 1944 the ex gratia payment made to us by the Government of Mysore was only ¿42,039.
On the other hand, there was a further increase of more than ¿17,000 in our working expenses, the increase being due to the higher cost of labour.
The net result of these and other minor factors is that the amount standing at credit of profit and loss is ¿128,860, against ¿140,596 in 1944, but this year we reap the beneht of the action we took last year to square up our Income Tax position and we have had to provide for Income Tax only ¿32,000, against ¿72,000 in 1944. We have made much the same provisions for writing down buildings and shaft sinking and for our Provident Fund. We are paying a dividend of 5% free of tax, instead of 5% less tax as in 1944 ; we are making a provision of ¿27,030 for Special Reserve, the reason for which 1 will explain later, and we are carrying forward
¿11,832 to next year.
I explained to you in some detail, in my speech last year, the scheme devised by the Government of Mysore to give us some relief from the very heavy burden of the Gold Duty. The Scheme was intro
duced in April, 1945. It was an experimental scheme and it was agreed that it should be reviewed and if necessary revised at the end of the year. It was only to be expected, therefore, that initial difficulties should be experienced. The scheme announced by the Government in April did not receive legislative .sanction till August, when the Mysore D uty on Gold (Amendment) Act was passed. One important section of the Act was obscure and the obscurity of ore and this fact explains why the relief received for 1945 was only 38% of the duty paid instead of the 50% admissible under the Amendment Act.
Moreover the Rules prescribed that applications for relief must be made to a Reviewing Committee and this Committee was not appointed until November. Now, as you know, the Gold D uty is a very onerous tax. In 1945, we had to pay by way of duty ¿281,575. The relief scheme contemplated that a considerable part of this levy should be refunded to us, but owing to the delay in setting up the Reviewing Committee, we were compelled to pay over the full amount of the duty for almost the whole of the year. It was not until December that we received our first refund, another instalment was paid in February of the current year and the final instalment was not received till May. At the same time you will remember we were deliberately reducing our output of gold by working to a low- grade policy and moreover we had begun the year in financial embarrassment owing to the calamity of the previous year when the mine was shut down for some weeks owing to an accident to the main Electric Supply Station. The result was that throughout the latter part of the year our cash resources were very seriously depleted—a fact which was a great handicap when in January of this year we were faced by a prolonged strike in the Mine.
Apart, however, from these initial difficulties, our experience of the working of the Relief Scheme in its early stages merely served to confirm the belief which we have always held, that the only real remedy for the situation in which the mines in the Kolar goldfields now find themselves is for the Government to abolish the Gold Duty altogether.
The object of the Government, as indeed it is of the Companies themselves, is to prolong the life of the mines. The Relief Scheme does enable us to work a lower grade of ore and thereby ensures a better exploitation of available ore supplies. But it makes no provision for the substantial amounts of capital expenditure that are required for searching for fresh ore and for deepening the mine. In the past it has usually been possible to find the cost of work of this kind out of profits, but even under the Relief Scheme profits are so restricted that nothing is available from this source. It is already a m atter of urgent importance that new supplies of ore should be found. Our reserves of payable ore have declined from 453,000 tons in 1940 to 282,000 tons at the end of 1945 and proper mining practice requires that we should resume without delay a programme of vigorous development. We have a number of
schemes in mind. We ought to deepen the mine with the object of discovering a new ore-shoot.
From the mining point of view the prospect of making such a discovery w arrants a thorough programme of exploration. Moreover the large area of reef round Edgar’s shaft pillar is known to contain valuable ore in quantity. The, ground is difficult, but the great advance that has been made in mining methods enables us to work it. But company. And secondly, our profits are so restricted even under the Relief Scheme that we are unable to finance the capital expenditure involved.
Accordingly it was decided th at Mr. Sydney Taylor should pay another visit to the Fields in the beginning of this year when, as 1 have just told you, the Relief Scheme was due for review. We thought it im portant that he should himself submit to the Government the conclusions we had arrived at as the result of our experience of the working of the scheme between April and December. Part of his duty was to establish our claim for Relief for 1945 and to suggest practical improvements in the detailed working of the scheme and these tasks were successfully accomplished. In particular, arrange
ments have now been made for periodical payments of Relief, subject to final adjustm ent at the end of recently been removed on the strong recommenda
tion of a Commission appointed to inquire into the Gold Mining Industry in that country. In Mysore we were not so fortunate and the Government found themselves unable to agree to either request.
No doubt they have their own difficulties, but I confess that their decision came as a disappointment to us.Mr. Taylor, however, was able to bring home to the Government the urgent need for the initiation of a vigorous programme of development with the object of discovering fresh supplies of ore and I am authorized to make the following announcement :—
“ Conversations have been in progress for some time with the Government of H.H. The Maharaja of Mysore regarding financial ways and means for the post-war rehabilitation of the Industry in harmony with a policy of longevity, which is being
examined sympathetically by the Government of Mysore. Negotiations have reached an advanced stage for the obtaining of a loan at a low rate of interest for financing the Capital Expenditure for the current year according to an approved programme.
It is hoped to be able to make a fuller and more detailed announcement on the subject in the near future when the negotiations have been finally concluded, but it can now be said th at the informa
tion contained in this notice is published with the in January of this year. On the advice of Mr. Sydney Taylor, who fortunately was in the Fields, and of our committee there we offered further concessions.
These terms were accepted and the men returned to work on March 22.
I am afraid that there is no doubt th at the strike was a great misfortune. All production of gold at the mine ceased for more than two months just when building up of a special reserve fund.
Mr. Taylor will tell you of mining developments during the year 1945. 1 will merely say that though we must wait till the reef has been proved in more detail before we can estimate the full significance of the discovery, we do seem to have discovered a rich ore-shoot in the 43rd level. Our prospects for the current year have of course been adversely affected by the strike, but the price of gold in India remains high and if these high prices continue, I am hopeful th at the financial results will approxim ate to those of 1945. I need not remind you that the Mine is a high cost mine and that future prospects depend very largely on the maintenance of a high price of gold in India.
Mr. .Sydney E. Taylor, in reviewing the mining developments, said : Progress in the year 1945 would undoubtedly have shown a marked improve
ment over 1944 had it not been for the strike which caused a complete stoppage of all work for a month.
The development work accomplished during 1945 totalled 8,273 ft., only 109 ft. more than in 1944.
As labour has continued to be in short supply throughout the year it was not possible to resume development of the bottom levels of the mine, work was therefore confined to the middle and upper levels. The discovery of rich ore in the 43rd level
THE MINING MAGAZINE
INDIAN COPPER CORPORATION, LTD.
Directors : Sir Godfrey B. H. Fell (Chairman and Managing), Robert Annan, Capt, Hugh Vivian, H. R.
Mackilligin^ D. s. Warren. Consulting Engineers and Technical Managers : New Consolidated Gold Fields, Ltd. General Manager in India : E. R. Dempster. Secretary : A. Shelley. Office : 49, Moorgate,
London, E.C. 2. Formed 1924. Capital issued : ¿900,000 in 2s. shares.
Business : Operates copper-mining properties The twenty-second ordinary general meeting of Indian Copper Corporation, Ltd., was held on September 11 at the Institute of Chartered Account
ants, London, E.C.
The following are extracts from the statem ent by the chairman, which was circulated with the report and accounts for the year ended December 31,
1945.
Accounts.—The net proceeds of sales and adjust
ment of stocks on hand amounted to ¿945,036,
Capital Expenditure.—You will note from the balance sheet that there was an overdraft at the bank of ¿52,000 at December 31, 1945. As fore
shadowed in my address last year we have embarked on a large expansion programme. We have ordered a 4,000-kW. turbo-alternator electric generating set and a 4-high cold rolling mill, together with accessories and spares, for which payments have been made on account, necessitating recourse to the bank. It is estimated th at a sum of ¿250,000 in all will be required for these items, including the sinking of the new vertical shaft recommended by the finance required for this programme.
Development.—Good development results are reported at Mosaboni, chiefly on the North Badia Section, in which some 50% of the development during the year was carried out. At Badia, however, we are entering a poor zone, but it is reasonable to milling operations at their existing level of 350,000 tons per annum for five years.
V e n tila tio n p ro b le m s w ill so o n b e c o m e a c u te a n d e m p h a s iz e th e n e c e s s ity o f u n d e r ta k in g , a s so o n a s p r a c tic a b le , th e s in k in g of th e n e w v e r tic a l s h a ft.
New Refinery.—A new refinery-cum-foundry has been successfully brought into operation since the close of the year. The whole layout was designed by our works manager, Mr. H' C. Robson. It consists of two refining furnaces, so arranged for tilting that molten refined copper can be poured into a ladle rotating on a pivoted arm serving two electric furnaces, into which the refined copper
in the Singhbhum district, Chota Nagpur, India.
can then be transferred in its molten state, thus eliminating solidification and re-melting. Handling is reduced to a minimum, resulting in a considerable saving in the costs for copper refining and brass which their copper is won is much higher than ours.
For the present, with the high world price of copper, we can still compete ; but if and when the world price falls this may cease to be possible. We might even be forced to close down our mines, resulting in throwing some 3,700 men out of employment and confine our future activities to the treatm ent of imported blister copper, unless the Government of India afford us assistance, either by re-imposing the duty or by granting a subsidy. We have recently approached the Government of India with the request that they will give us an indication of their probable attitude towards our application for assistance, should this necessity unfortunately arise, and we gratefully acknowledge the sympathetic hearing which they have given us.
\Ve have also been fortunate in securing a relaxation of the controls exercised throughout the war, which inter alia limited the price at which our products might be sold, either to the Government, the principal buyer, or to the market, to a figure which would enable us to earn only an agreed profit on the capital employed.
A maximum figure has now been agreed and within this limit we may sell our products without having to subm it our operating costs to the scrutiny of Government accountants and to refund, as hitherto, any sum by which the ascertained profits exceeded a certain figure.
Shareholders will no doubt be anxious to know what effect the proposed grant of complete indepen
dence to India may have upon the fortunes of this its goal—namely, to become a great and prosperous country with industries so developed as to provide additional employment for its rapidly increasing population. I believe that British co-operation can contribute materially towards this end, and I know that it will be readily forthcoming. We for our part will do our best to ensure that our under
taking—the only one of its kind in India—will continue to operate at maximum efficiency and thus be in a position to meet, for many years to come, a large part of India's demand for Y.M.
brass and copper producers.