J.F. Moyes, Hancock and Wright (self-published, 1973), pp. 15-23, ch. 3.
With thanks to Gina Rinehart of ANDEV.
More info at LangHancock.info and GinaRinehart.info.
In 1959 the Hawke Labor government was defeated and the Brand government assumed office on April 2. One of the Liberal Party’s pre-election proposals was a “North-West Charter” and Hancock and Wright believed that it might mean a new deal for the Pilbara.
Hancock has had, for many years, a copy of the Liberal Party’s Broad Highway — a statement of Liberal values today. Its preface states:
Broad Highway is the first of a series of statements on liberal principles and values we honour …
The statements were prepared by the Policy-Research Group which was set up by the Federal Council of the Liberal Party of Australia at its annual meeting in February 1956.
The chairman of the Policy-Research Group was William McMahon M.P.
Hancock has underlined the opening paragraphs in his copy — the paragraphs under the heading “The Liberal Party — What it stands for”. The paragraphs read:
We are apt to take liberty in Australia for granted. Yet it is under constant challenge, and chiefly by those who yearn for the all-powerful State.
Liberalism IS Liberty.
It rejects the notion of the State as the Supreme Master.
It places the highest value upon human personality, which it is the duty of the State to encourage, not to suppress, to strengthen, not to weaken.
Liberalism, because of this, is a positive faith. It believes in the individual. It aims at helping him. It restricts his freedom only to the extent that the proper needs of the nation and community are to be served …
In 1959 Hancock was prepared to believe that these were the things the Liberal Party stood for. It’s not surprising that, after about a dozen years of State Liberal government, he’s become cynical. He’s seen preferment for big companies. He has seen government intimidation of overseas companies who wanted to negotiate with Hancock and Wright. He has seen some of his discoveries — not only iron ore — taken from him and given to powerful interests. And he knows that, had Labor not won the last election, the Liberal Government planned to give two more major discoveries to “friends”.
The Broad Highway, in fact, was a devious route and full of pot-holes.
In April of 1959, though, Hancock and Wright were full of hope.
They had deposits of manganese, blue asbestos and white asbestos. And, seven years earlier, Hancock had discovered what later proved to be a deposit of more than 1000 million tones of iron ore — and which led to the discovery of thousands of millions of tons more.
In the early summer of 1952 Hancock, and his wife, Hope, decided to leave their headquarters at the Nunyerry Asbestos mine and to go south for the summer. Nunyerry was in a gorge, about 35 miles long, in the Chichester Ranges about 80 miles east of Roebourne.
He had built an airstrip in the floor of the gorge so he could fly his Auster in and out — from Mulga Downs or from the Hancock and Wright mineral interests elsewhere in the Pilbara. Without an aircraft the Nunyerry mine was almost inaccessible. At one stage it seemed that packhorses would be the only means of getting the fibre out of the gorge and when the Wet game around November each year even packhorses couldn’t move. The mine would close down.
But it was still dry in the first few days of November 1952. The Sherlock River, which passes through the gorge, didn’t have enough water in it to make a cup of tea. The miners had gone south, and Lang and Hope Hancock climbed into the plane almost too late. As they took off they could see the rain coming — torrents of it. And over the Hamersley Ranges, across which he usually flew “at a fairly substantial altitude in the interests of safety”, there was a barrier of towering cumulus. The Auster could never have got through it.
Hancock could not go back to Nunyerry — the rain and low clouds were building up on all sides. He had to fly below the cloud … skimming lower and lower as they forced him down closer and closer to the steaming red cliffs and the boulder-strewn flat tops of the Hamersleys.
He had flown over this country many times before, but never as low as this. This was the Turner River country and he was somewhere over the source. The water running south in the gorges must join the Turner, so he groped through the gorges following the growing torrent.
Sometimes he was just over the tops of the trees, with the cliffs of the gorges perilously close. The neck of the gorge at the headwaters of the Turner is not more than a dozen wingspans wide, but he flew through it, and, as he did so, he saw that the walls of the gorge were different.
Perhaps it was the rain on them. They were red, but a red he hadn’t seen before. A deep ochre red.
As he flew out into the comparative safety of the Ashburton Valley he was convinced that the walls he had seen were walls of iron.
“At that time I thought it was low-grade,” he recalls.
There was no way of going back while the Wet was on. It wasn’t until April of 1953 that Hancock flew back over the area. He crossed and recrossed the deposit, tracing it for about sixty miles. Convinced that it was a major discovery, but still believing the ore to be lowgrade, he was impatient to get on the ground. He found a place to land in the spinifex and took his first samples.
I realised the size and importance of my discovery, but nothing could be done about it at that moment because all iron ore was under complete export embargo by the Commonwealth Government.
Before this discovery the total known Australian resources of iron ore were 368 million tons. According to official calculations the nation supplies would be exhausted in 70 years — sooner if Australia’s rate of development stepped up.
This figure still stood in 1959 when the Western Australian Government issued a special publication called Bulletin No. 7 listing all the known iron deposits in WA.
It was about the time this bulletin was issued, and soon after the Liberal Government came to power in Western Australia, than Hancock and Wright interested Rio Tinto in looking at their deposits of asbestos (blue and white) and manganese. Hancock and Wright hoped for a massive injection of capital which would lead to the development of the North-West.
The preliminary talks with Rio Tinto were the beginning of a kind of “love-hate” relationship on both sides. There were to be many recriminations, many blunt words, many jealousies. But the long-term result was Hamersley Iron.
By August 1959 Heads of Agreement had been signed between Rio Tinto Australian Exploration Pty Litd and Hancock and Wright were to receive a royalty of 2.5 percent, except in the case of manganese. There Rio Tinto had the option to form a company and Hancock and Wright were to have a 33.33 percent interest with Rio Tinto having the right to buy back a quarter of the partners’ interest within six months of the formation of the company.
In the event none of these things came to fruition.
Rio Tinto decided that the white asbestos at Nunyerry was not a viable proposition and withdrew.
The iron ore mentioned in the Heads of Agreement was not, of course, the ore Hancock had discovered in 1952. It was in the Mt Goldsworthy deposits and the Deepdale limonite areas.
Before the final agreement was signed (in December 1959) Rio Tinto asked that iron ore should be excluded, and this was done. The reason seemed to be that, while Hancock and Wright were confident that their tender for development of Mt Goldsworthy would be accepted, the Government had told Rio Tinto that Hancock and Wright would not necessarily get titles to the iron — these would go to the successful tender.
Rio Tinto decided not the tender jointly with Hancock and Wright. Both parties put in separate tenders — and neither of them were successful.
The manganese venture was no more successful. On December 2, 1959, the West Australia reported:
Rio Tinto expencts to have spent $125,000 by the end of this year on the exploration of manganese deposits in the Pilbara field.
Representatives of the group said in Perth yesterday that the company had options over manganese areas from Northern Minerals Syndicate, D.F.D. Rhodes, Bell Bros. and Hancock and Wright.
A camp is being established at Ripon Hills.
On December 10 Lloyd Marshall of the Daily News visited the Ripon Hills camp where 30 men were working. But less than two months later reported:
Rio Tinto intends to leave its air-conditioned assay village at Ripon Hills temporarily.
They were waiting for the Minister for Mines to give a final decision on the granting of another major mineral lease in the Pilbara. It is understood that the area in question was open when pegged and not covered by the existing Government blanket.
It is certain, however, that if the titles sought by the company are not forthcoming, then Rio Tinto will have no option but to pull out of this state immediately.
Marshall estimated that in exploration and in building the camp Rio Tinto had spent $600,000.
But Rio Tinto did not go back to Ripon Hills. Six months later, in a letter to Wright, Hancock asked: “Why did they waste all the money and not look at the guts of the manganese?”
Why indeed? Proved deposits of ferruginous manganese at Ripon Hills are 60 million tons.
There was now only one major mineral remaining in the original agreement — blue asbestos. And Rio Tinto were never to be allowed to have a proper look at it. C.S.R. had a monopoly, and the Western Australian Government kept it that way.
Blue asbestos had been Hancock and Wright’s first mining venture when their partnership begin in 1938. It wasn’t a mammoth enterprise by any means and its success dependend largely on Hancock’s mechanical expertise and ability to get things done efficiently.
Hancock had first noticed the blue asbestos “floaters” among rocks of the creek bed of Wittenoom Gorge, about 20 miles from his station homestead. Hancock says:
I was out hunting dingoes or playing bushrangers — the kind of things most kids did in the north-west. I was only a youngster at the time and I didn’t know what the fibre was so I told my father and his partner Frank Wittenoom. They told me it was blue asbestos.
Some years later — around 1930 — I began to think about it again and I asked the local Mines Department people what blue asbestos was worth. They told me the price was around 18 pounds ($36) a ton.
I calculated that was less than the cost of transport to the market, let alone mining, so I left it alone.
About 1934 Islwyn Walters, manager of the Asbestos Molybdenum and Tungsten Co. Ltd, came out from England. We were using a specimen of the asbestos as a doorstop on the Mulga Downs homestead verandah. When we told him there was lots of it around he offered to pay 75 pounds ($150) a ton for it.
News travels fast up there, and it wasn’t long before some 200 men were camped in Yampire Gorge gouging out the fibre from the cliff face.
They were a pretty rough lot as you can probably imagine. They’d gamble and pay their debts in fibre. Booze came in by the truckload.
One day a fellow was almost hanged. Another day a throat-cutting attempt was given up only because the knife was too blunt.
The first man to peg a claim was a knockabout bushman, Leo Snell, who borrowed some horses from me and went through Yampire Gorge. But I thought the fibre in Wittenoom Gorge had better prospects for establishing a mine suitable for full-scale commercial development, so I pegged out my own area there.
This was where I built my own plant — around 1938.
The fibre was in a precipitous wall about 300 feet up from the bottom of the gorge. We used to put it in bags and send it down to the floor of the gorge on a flying-fox to be loaded on to donkeys.
We’d put two bags on each donkey. They’d carry it about two miles to a donkey dray and then it would go to a dump outside the gorge. The present town of Wittenoom has been built where we used to dump the fibre.
We had old 30 cwt Chev trucks to take the fibre the 200 miles to Roebourne so it would be shipped to Europe.
It wasn’t all plain sailing, of course. One day the string of donkeys must have been standing on a bull ants’ nest and they stampeded. We spent two days rounding them up and gathering as much of the fibre as we could from the broken bags. It was spread along the floor of the gorge for miles.
For the mine to be successful Hancock needed plant. So he built it himself in the workshop at Mulga Downs. It was at this time this his former schoolmate, E.A. Wright, arrived to spend holidays. They financed the plant together — and Hancock and Wright was born.
By 1943 the mine was showing a profit of about $1,800 a month and the partners decided that, if it were to achieve a bigger share of the world market, it needed more capacity — and that meant more capital. In 1948 C.S.R. took a 51% interest leaving 49% for Hancock and Wright, and the company was named Australian Blue Asbestos.
C.S.R. was to provide additional money to expand the mining operation. Wright became a director of A.B.A. and Hancock was assistant manager — appointments which proved to mean nothing at all. Hancock soon found he had no say in the management and Wright discovered that Board meeting were always held in Melbourne. No travelling expenses to attend meeting were allowed so the six C.S.R. nominated directors made all the decisions.
Hancock and Wright could see the writing on the wall. In 1948 they got out. Says Hancock:
We put into the partnership a proven mine, a tested method of treatment with plant producing a saleable fibre, and an overseas and local market.
C.S.R. got into difficulties which I believe were of their own making. They ruined the business they got from us and eventually got rid of us for about $8,000. A losing deal for us — a losing deal for Western Australia.
The W.A. Government gave C.S.R. a remission of its three-fifths responsibility to pay for the costs of the town in the event of failure, road and sea freight subsidies, a road to Port Sampson and a road to Hedland.
In addition the government promised Australian Blue Asbestos protection for ten years. To implement this promise it imposed a blanket on all areas known to contain, or suspected of containing, asbestos.
All this government aid, however, was to go for nothing.
On December 1, 1966 C.S.R. announced that the Wittenoom mine would close by December 30. The mine had produced asbestos worth $31 million since 1943, but it had lost something like $2.5 million — including about $850,000 in 1966.
Reporting the closure announcement, the West Australian said on December 2:
The State Government has a big stake in Wittenoom.
The outstanding capital debt on Housing Commission homes there is $687,000.
The Treasury has contributed about $225,000 since 1962-63 to a $500,000 diamond drilling programme carried out by A.B.A.
Coastal Shipping Commission freight concessions on asbestos have been worth $382,270 since 1960.
The announcement of the closure, made by CSR general manager Sir James Vernon, said “it was not a pleasant duty to make such a decision” and that “the closure of the mine would represent a small retreat in the advance of settlement in Australia’s North-West.”
The Minister for the North-West (Charles Court) was much more voluble, and sprang to the defence of C.S.R. as well as the Government. He said the Government “had been kept informed” of the company’s difficulties.
When the time came to close the mine it was impracticable to give long periods of notice, he said. The position would have been chaotic. There would have been an immediate exodus of people who wanted to get into other employment quickly …
But Mr Court did not explain why, if the Government “had been kept informed”, it had, in the previous six months, opened a $300,000 hospital and built a $152,000 police station and $51,200 worth of Housing Commission homes.
Even the West Australian was compelled to publish a “methinks he doth protest too much” kind of editorial.
“In which of his many capacities does Mr Court emerge as spokesman and apologist for C.S.R., which should be big enough to stand up for itself,” the West asked.
As Minister for the North-West and Industrial Development he made it appear that his main concern was to justify the company in a move adverse to W.A. interest in both spheres.
… the notice given to the Wittenoom community was brutally short; the reasons it (C.S.R.) has given, through Mr Court, for confining the notice to a month are entirely selfish …
… with Parliament sitting and the Federal election approaching, the Government sat on the information (about the mine closure) for nearly a month instead of bombarding Canberra for special help …
A few days later Australian newspapers publish The Wall Street Journal story about the Hamersley Iron opening snub to Hancock. And the West Australian, in an article from Peter Ellery in Wittenoom, published this:
All eyes (in Wittenoom) are on the burly figure of Mr L.G. Hancock, the prospector-pastoralist who began mining blue asbestos in the area at a profit in 1938 and whose initiative in drawing attention to the rich iron-ore deposits nearby led to the formation of Hamersley Iron Pty. Ltd. and the establishment of the towns of Mount Tom Price and Dampier.
Mr Hancock visited Wittenoom three times this week, flying over from his North-West headquarters at Hamersley station with his partner, Mr E.A. Wright …
Long-term Wittenoom residents who would like to stay on believe that he is a realist rather than an optimist and this his efforts to keep the blue asbestos industry alive are likely to be more successful than any efforts by the Government.
Less than a week after C.S.R. closed the mine, Hancock and Wright telephoned an offer. That day they had a verbal option to buy the mine, the hotel, story, staff housing, power stations, adminisation block and picture theatre, plus C.S.R.’s assets at Point Sampson, 130 miles away.
The cost to Hancock and Wright was around $1.25 million.
***
None of this, of course, did Rio Tinto any good. They were interested in mining blue asbestos, but there didn’t seem any way round the C.S.R. monopoly. The government’s 10-year protection period had long expired, but the protection continued.
On February 23, 1960 — two months after the final Rio Tinto-Hancock and Wright agreement was signed — Hancock had an appointment with Premier Brand. On February 22 he wrote to the Premier outlining points he wished to make.
After the partners’ break-up with C.S.R., Hancock had gone looking for more blue asbestos and had found a deposit in Bee Gorge, not many miles from Wittenoom. He found other deposits, too — all of them outside the area of “known or suspected deposits” which had been blanketed by the Government to protect C.S.R.
Hancock told the Premier:
The Government promised C.S.R. protection for 10 years. We waited for 16 years and then, with a discovery new to the Mines Department and with the prospect of new capital, we sought to get back to the blue asbestos industry.
And what happened? The Department took all the details of our new discovery and the Government has now offered it to C.S.R.
We found other new deposits outside the areas that was under Government blanket. We pegged them and asked the Department for a temporary reserve and a licence to prospect.
The Department pressed us for details of the area and we gave the details in confidence against the assurance that we would not lose anything by disclosing them.
Our applications were refused. And the blanket to protect C.S.R. was extended to cover all the areas we had indicated — areas the Government had never suspected of containing asbestos.
It is pretty obvious, Mr Premier, that if we show the government where there is manganese outside the manganese blanket, the blanket is going to be extended. If we discovered diamonds — any minerals in large quantities — on would go a blanket.
Before capital will spend money it must have a title, and that title must commence with the man who finds the mineral.
Hancock sought a compromise. His proposal would not only protect C.S.R.’s investment but would give their mine an additional 60 years of life.
Establish a neutral zone, also of 60 years life, on their extended boundary, and then grant us the rest of the ground we have pegged in the Bee Gorge area.
In 60 years the government can give the neutral zone to whichever company has proved it can make best use of it.
The argument must have been persuasive. Hancock and Wright were allowed to prospect in some areas and Rio Tinto began work. By August 1960 Rio Tinto had discounted three areas because they believed the grade of asbestos was too low. One area remained, and they would look at that later.
Hancock and Wright had been unsuccessful with Rio Tinto in manganese and now blue asbestos. Only iron remained.
