CHAPTER 4 RAW MATERIALS : STEEL' TER the Formation of The
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CHAPTER 4 RAW MATERIALS : STEEL' TER the formation of the Department of Munitions in June 1940 , Acontrol of the supply of raw materials—principally metals and heavy chemicals—consumed by all the industries engaged in making munitions , was in the hands of the Directorate of Materials Supply headed by Si r Colin Fraser. This directorate arranged for the rationing of these materials where necessary and for ensuring that the needs of defence were give n their appropriate priority . The comparatively small number of suppliers of base metals and heavy chemicals in Australia allowed effective control of these raw materials to be imposed at the source of supply . 2 The Broke n Hill Proprietary Company Ltd had a monopoly of the iron and stee l industry and the "Collins House Group" dominated the production of non - ferrous metals; heavy chemical industry was almost entirely in the hand s of Imperial Chemical Industries of Australia and New Zealand Lt d (I.C.I.A.N.Z.) . The conventions in regard to the use of the terms production and suppl y in the civil series of this history require some explanation . Hasluck3 says : Production, in its simplest sense, covers the growing of crops, the winning of ores , timber and fuel, the generation of power, the processing of materials, the manufac- ture of commodities, implements, machines, weapons and munitions. It also means the bringing together of the men and materials, the machines and power in the right place in order that they may produce. Supply, in its simplest sense, covers the arrangements by which any kind of product is obtained and delivered at the poin t where it is to be used. It covers both the products of the nation's own industry an d the products of other nations . It involves the placing of orders, arrangement s for delivery, storage and paying of bills . Although the terms supply and production are used to describe a grea t number of inter-related activities, the emphasis in this volume will be o n production and the way in which it was influenced by science and tech- nology. It is not intended to give a detailed account of the activities of all the directorates in the Department of Munitions, since a number wer e concerned with questions of finance, control and supply which are full y described in the other volumes of this series . 4 Only so much of the story of supply and administration will be told as is necessary to see production in relation to defence. The degree of industrialisation of which a country was capable and upon which its defensive strength so greatly depended, was to a larg e For help in writing this chapter I am particularly grateful to Mr Neville Wills, the B .H .P. Company's historian, and to Mr George Bishop . 2 Essential materials controlled were : (a) ferrous metals—iron and steel sheets, plates, strips, etc ; (b) non-ferrous metals—copper alloys (angles, bars, pipes, etc) ; (c) alloys of molybdenum, tungsten, nickel, platinum, etc ; (d) a large range of industrial chemicals. Control was exercise d by licence, and the use of a material could be prohibited either for all purposes or for state d purposes . 3 P . Hasluck, The Government and the People 1939-41, in this series, p. 449 . "See Hasluck, and also S. J. Butlin, War Economy (in two volumes) . RAW MATERIALS : STEEL 67 extent determined by the abundance of its supplies of raw materials, amon g which none stood higher in importance than metals, fuels and heavy chemicals. Of the forty-odd metals 5 in commercial use iron and steel easil y overshadowed all others, making up about 90 per cent of the total con- sumption. This was the reason for the statement sometimes made that the ability of a country to make war was roughly proportional to it s capacity to produce steel. In the years 1939-45 about 90 per cent o f Australia' s total output of iron and steel, amounting to 7,559,000 tons of pig iron and 8,477,000 tons of steel ingots respectively, was used for purposes of war . Efforts to set up an iron industry had been made at Mittagong, Ne w South Wales, as early as 1848, but nothing had come of them. The first steel industry of any significance was developed at Lithgow, and by 191 2 it had, as already related, grown sufficiently to induce the Commonwealt h Government to erect a Small Arms Factory in its neighbourhood. In 1911 the B .H.P. brought to Australia an American steel expert, Mr David Baker, to give advice about establishing a new steel industry . Baker reported that adequate supplies of suitable raw materials were availabl e but in three widely separated regions : unusually rich iron ore at Iron Knob near the port of Hummock Hill s on the western shore of Spencer ' s Gulf, South Australia, suitable coking coal in Newcastle, New South Wales , and a sufficiently pure limestone at Wardang Island (S .A.) . Providentially, all three were conveniently close to tide water, a circumstance which di d much to ensure the economic well-being of the future industry . 7 Since in those days it required about three tons and a half of coal and one ton an d a half of iron ore to make a ton of steel, it was clearly advantageous t o bring ore to coal, and it was mainly for this reason that Baker recom- mended the industry be established at Port Waratah, Newcastle . Swamp lands in this vicinity were reclaimed, and when, on 9th March 1915, th e first blast furnace was blown in by a small team of skilled American steel - workers assisted by Australians they had trained, and directed by Baker , who was now manager of the steelworks, the foundations were laid of an industry destined to have a profound influence on Australia's genera l development and her powers of defence . From the beginning, the organisa- tion and technological practices of the Newcastle steelworks bore the im- print of American influence . Greatly stimulated by the first world war—though it did not contribute much by way of munitions—the Newcastle industry attained an outpu t from its two blast furnaces and seven open-hearth furnaces of abou t 200,000 tons of steel a year, which enabled it to provide rails for the East - West Transcontinental Railway in Australia and for the Western Fron t in France, plates for the Australian shipbuilding industry, and steel fo r 6 There were about 8,000 alloys in commercial use . "Later known as Whyalla . Leases covering this deposit had been taken out by the B .H .P. some years before when they began exploring the deposit for ironstone fluxes needed for smeltin g operations at Port Pirie . 7 Neville Wills, "Economic Development of the Australian Iron and Steel Industry" . 68 THE ROLE OF SCIENCE AND INDUSTR Y the United Kingdom, all under conditions which, in so far as they involve d freedom from oversea competition, were economically favourable . This breathing space for the industry did not long outlast the war. The next few years saw a determined struggle on the part of the Newcastl e steel industry to meet the rising flood of oversea competition . In spite of government encouragement in the form of a protective tariff, and of step s to improve efficiency and increase local consumption by encouraging th e development of associated fabricating industries such as those based on black iron sheets, corrugated galvanised sheets, wire, wire rope, nettin g and nails, the Australian steel industry came close to economic disaste r more than once during the next ten years. Its salvation on those occasion s lay in the fact that B .H.P. had other assets upon which to draw. 8 In spite of many adverse circumstances, B .H.P. steadily pursued it s policy of expansion and technical improvement, extending its ownershi p backwards to raw materials by acquiring three large collieries and a flee t of freighters for shipping ore, and forwards by reaching agreements wit h the fabricating industries . Keeping well ahead of Australia 's demand for steel, the company concentrated during the twenties on making the unit s of the industry as large as possible with bigger-than-average blast furnace s and open hearths . Modern electrical generators, providing power to operat e rolling mills and other machinery throughout the plant, were installed . The Newcastle steel industry gradually became one of the most highly integrate d and self-contained in the world . The company's wisdom in controlling its own sources of coal suppl y may be seen in the fact that the Newcastle works at that time used more than 750,000 tons a year, the greater part of which went into the produc- tion of metallurgical coke. Efficient use of coal and recovery of the by - products of coking was a crucial factor in the economy of a steel plant . Replacement of the original Semet Solvay by-product ovens in 1930 b y the much more efficient Willputte regenerative coke ovens was an im- portant step in bringing the industry up to date . The weekly output of these ovens (at a time when they were consuming 17,000 tons of coal a week) was : 11,000 tons of metallurgical coke ; 190,000,000 cubic feet of coal gas (enough to supply a city of 1,000,00 0 inhabitants for a week) ; 190 tons of ammonium sulphate; 40,000 gallons of benzol, toluol, solvent naphtha ; 120,000 gallons of tar.