The South Australian Mining Association and the marketing of copper and copper ores, 1845-1877

tJ. l f

TIIE SOUTH AUSTRALIAN MINING ASSOCIATION AND ^THE MARKETING OF ^COPPER AND ^{COPPER ORES} L845

-

^LB77

A

thesis

presented

for

the degree

of

^Master

of

Arts

Mel Davies BA(Hons.) ^Kent Department

of

Economlcs The

Universíty of

^Adel-aide

March, 1977 .

{t

Summary

Statement

Acknowledgements

CHAPTER

1 -

^FORMATION

CONTENTS

ORGANISATION GOALS AND PRODUCTION

Pages

i iv

v 1-51

1 4 6 L6 19 27 31 35 38 42 44 48 49 52-101

57 73 87 91 94 99

103-116

103 107 109 LLz

LLl-L37

118 L23 Economic

Mllíeu

Copper DiscoverY

The South

Australían

Míning AssocíaÈíon _' The Cost-Book and

No-Liabílity

^System

Board

of

^Dlrectors

Aíms and

Objectíves

^. Productíon and DeveloPment

Period

I,

September, 1845

to

March, f850 Períod

II, April,

¹⁸⁵⁰

to

^{March, 1855}

Period

III, Apr1l,

1855

to

^{March, 1861}

Period

IV, April,

¹⁸⁶¹

to

^{March, 1869}

Períod

v, Apr1l,

1869

to

^LB74/75

Period VI-, L874175

to

September, ^IB77

CHAPTER

2 -

^{FOREIGN MARKXTING}

Direct

Foreign Marketfng

Remittances

-

Banks and ^Agents RemíÈtances

-

^{Exchange RaËes .}

Remíttances

-

^SuPPIY

of

^Goods

Private

DrafÈs

Conclusíon

CHAPTER3-DOMESTICMARKETING Sales Èo Home Merchants Inter-Co

loníal

^Purchasers

Local Manufacturers Methods

of

^Sale

CHAPTER

4 -

^SMELTING

Smeltíng on Otrm Account

Contracts ^{and Sales}

to

SmelÈing ^Companles

CHAPTER

5 -

^{LAND TRANSPORT}

Bullock

and

Rail

Transport Contemporary Comment

Road Transport

-

^Returns

to

^Teamsters

General Road

Costs

^.

Supply

of

^{Road Transport}

Haullers

and

Conflict

Deurand

for

^Cartage

1845-1849 1850-1851 1852-1856

1B5 7-1869 Raflway Charges

Land Transport Costs

-

^{Summary and Cornrnent.}

Short Haul Transport

Bullock

Drays

-

^{Services and} Preventlon

of

CHAPTER

6 -

^SEA TRANSPORT AT{D COMMUNICATION

Abuses

L38-L77

139 L4L ].44 L48 L5l_

155 L57 L57 158 159 160 164 L7L L73 L74

L78-203 180 185 L87 188 191 L93 L94 L99

204-2L6

205 206 206 207 207 208 208 208

2t0

2L2

II

Freíght

Rates and Shippfng Arrangements Contractíng and Shippíng AgenËs

BallasÈ and Dead tr^Ielght Cargoes

DirecE Shípments

Transhípments and Shipment.s

via

^{OÈher Ports}

Port

Charges

Insurance

Time DísÈance and CommunícaÈion

CHAPTER 7

-

I4ARKETING COSTS

-

^A COUNTERFACTUAL APPROACH

Returns on Copper and Ores

Marketing Costs

a)

^Road Transport Costs

b) Freíght

Charges

c)

PorË Charges

d)

Insurance Costs

e)

ConunÍssion Payments ^. Net-Receipts

-

^{Copper and Ores}

Interest

Rat,es

Counterfactual Arguments

APPENDICES BIBLIOGRAPHY

TABLES

South

Australian

Balance

of

Trade, lB40

-

^L850

South

Australian

Exports

of Minerals,

T^Ioo1, I^lheat

& Fl-our 1843

-

^51-

Decennlal

PrÍces, Britain,

^L82L

-

¹⁹⁰⁰

Productíon

of

tr'íne Copper 1840

-

^{1880 Ctons)}

SA}4Ats Returns from September, ¹⁸⁴⁵ (30 months)

to April-,

¹⁸⁴⁸

SAMA

-

^{Fixed Assets as}

at

3l- March, ¹⁸⁵³ Numbers Ernployed aÈ

the

Burra Burra Mines, 1851

-

¹⁸⁵⁶

Productlon

at the

Burra Burra Mines, 1851

-

¹⁸⁵⁶

(ín

tons)

Prices of

^SAì,IA

shares,

^1859-1870 Dívldend Payments, SAI{4, L845

-

^LB77

Dispersion

of

^{SAI4A Produce Amongst Various Agencies}

in

Terms

of

^{Copper Units}

S.A. Ïfheat Acreage and Productíon

wíth

^Number of

Cultívators

1848

-

¹⁸⁵⁵

Statistícs

on

Brítish

^&

f'oreign

Vessel-s

Arríving at

PorÈ Adelalde 1-845

-

¹⁸⁷⁰

ShÍpping Rates, Copper & Copper Ore from Adelaide,

I

Year Average

(Shill-Íngs per

ton)

Insurance Preniums

per

ÉfOO

to the U.K.

(excludl-ng stamp

duty)

Paid

by

SA]{4, EACC' and Moonta

(ln

shíl-l-ings)

Insurance Premiums

p.t

.$ tOO (excluding stamp duty) Paid

by

EACC 1856

-

^l-858

(ín shll-lings)

Estimated Range

of

^Receipts & Expenses on _{L75 1522} Ëons

of

Copper Ore

Estimated Receipts & Road Charges on 24,285 tons

Copper

Páges

Table 1.1 Table 1.2 Table 1.3 Table 1.4 Table l-.5 Table l-.6 Table 1.7 Table 1.8 Table 1.9 Table l-.10 Table 2.1 Table 5.1 Table 6.1 TabLe 6.2 Table 6.3

Table 6.4 Table 7.l-

3

3

32 32

36

40

40

4L 41 50

54

ls9

l-80

183

195

19s

209

209 TabLe 7.2

ILLUSTRATIONS

FIGUR.ES

Figure 5.1 Percentage

of fi.100 capital outlay

^on

bullock

team and

dray (3 ton loads)

recovered per

journey,

Koorlnga

-

Adelaf<le

at various

^carÈage

Figure 5.2

rates.

Ra1l

Freight Pricing.

MAPS AI\ID ILLUSTRATIONS

Burra Burra

Mlne,

1850, From

Paínting by S.T.

G111'

Burra Burra

Mine, clrca

^1870.

The Burra Burra ^Mine

in

L875.

PCC Smel-ting Ï,Iorks, Kooringa,

1850.

^From

pafnting by S.T.

^G111.

EACC

Snelting Ïforks,

PorÈ

Adelaide,

cLrca 1880' Adelaide

to the Burra

[uap].

Mails to the

AusÈralian Colonles, ^1855-56 [Map].

1

2

3

4

Pages

L46-L47

]-66

37-38 44-4s 49-50

126-L27

r-33-134

153-154 200-20L

5

6

7

Appendix

¹

Appendix

²

Appendix

³

Appendix

^3A Appendíx ⁴ Appendíx ⁵

Appendix

⁶

Appendix

6A

Appendix

⁷

Appendíx I

Appendix

⁹ Appendix 10

Appendíx 11

Appendix ¹² Appendix 134

Appendix 138

Appendíx 14

Appendíx ¹⁵ Appendix ¹⁶ Appendlx 164

Appendíx 17

Appendix 18

Appendix 19

Appendix 20

Appendix ^21- Appendlx ²² Appendix ²³

APPENDICES

SAMA

-

^Receipts

fon

^{Copper 6nd Coppen )v'e 1845-78,}

SAltLA

-

^Coppey Ionnage Receiued

øtd Dístz'ibuted'

J-845'L87B.

SAMA

-

^{Coppen }v'e} Produetion ond

Dístribution'

^1845-7878.

Copper, }r,e Produetíon

at the Burra Buz'z'a lÍínes qrtd Retuvms of Copper from SmeLters to SAMA L845-1878,

Estinaied

^Returrts

from

^{Ouez'seas Agents} J-845-7878-

íAMA

-

^{Retuzws, Costs,}

Profits

^{qnd Numbers} ErrrpLoaed J.845-7878.

Ore Pz,odttction, Proceeds & Eæpen&Lture Burz'a Buz'lø Mines 7845-7877 (craph)

Buyna Bury,a Mines J.845-LB?7 Pz,oduct ScheduLe

fon

^{Laboun (Graph)}

IeanLy Pz,ofits

"

^{Díuidends and RentaL Receipts}

-

^SAluiA

1B45-1-877 (craph)

PvLce

Distribution of AdeLaide øtd Intet-CoLoniaL Coppez' SaLes, SAMA L849-1B69 (Based on Príees of 12,238 tons SoLd &. as Recorded. ín SAA, BRG 22' 957 e 960) (Graph)

Auez,age

Price of Copper at AdeLaide 1849-1890,

AdeLaide Purehasers

of

^{SAMA Coppen qrtd )v'e 1847-1B72}

(Puz,ehasens

of

ÅL,000

plus per

_Aear).

Pz"Lee ffi.d usage

of

^{Wood-EueL ætd CoaL bg SA-14A, PCC øtd}

EACC 7849-1876.

Dnafts SoLd by SAMA

to

ShavehoLdevs Øtd Bank

of

Austz'aLasia LB45-1-872

(At

Premium

øtd

Díscount Rates).

South Austv'aLíút Erpoz'ts ^L 840-18 80,

PopuLation

of

South AustvaLía 1840-1881-.

SAluiA Shaz,ehoLders.

SAI4A

-

^Boards

of

Direetoz's.

Euidence

of

Dou,bLe-Entry Bookkeeping by ^SAMA

A Breakdot'tn

of

Eæpend'Lture a.s Contained

in

^{SAMAts Accounts,}

Appended

to

^{SAA, BRG}

22,

^959,

for

^{yeaz's ending 30 Septenbez'}

tB5o,

L85L & 7852.

Containing Tonnage qnd Cartage

Price (fn

pence pez' ton- _ryil,e,)

of

Copper- ØLd Or¿ Transported from ^Kooringa

to

Poz't ^AdeLaide (by

Snul) øtd

Cost

of

^{Hàg, Fiz'euood and Logs}

Gn

shiLlí,ngs) 1B45-1875.

Shipping Rates

fot'

^Copper

úld

^Copper

}te

fnom AdeLaide, 1845-1B69.

Suggested Reasons

for

Non-Adoptíon

of the Poz't lnlakefieLd Route by SIWA.

SAI4A ætd Monopsony.

Percentage

of

^Copper

in

Burra Burra ^)v'es.

Price of Coppez, )res.

Copper Pz,iees.

Appendix ²⁴ Appendix ²⁵ Appendix ²⁶ Appendíx ²⁷ Appendix ²⁸

Freight

Rates.

Port

^Chaz,ges.

fnsurance Costs.

Costs

of

^{Dz,essing SA)LA|s}

)res.

DetaiLs

of

Shípments

of

^Copper'

øtd )re nade by SAI4A

1845-1_877.

SITMMARY

The South

Australlan

^Mining AssocÍatÍon üIas invoJ.ved

ín

copper miníng

activiÈíes

from 1845

to

1877

(after

1877

the

Assocfation !ùas concerned only

wíth

l-and and

property

hol-díngs

until

^{wound up}

in

_{1914) '}

The Associationr

s

Burra Burra ì,IÍne was considered ^Èhe

richest

^copPer

mine

ín

^the

world during the early

^years

of production

and

the

procllgious dividends and

profits,

as

well as

^Èhe extremel-y

high

average

yietd of

ores over

a period of

30

years,

bears

witness to the clafm.

^Such

wealth

^and

returns

^proved

beneficíal to the

l-ocal economy.

In the

l-840rs

the

success

of

Ëhe Mine

attracted

^{much needed}

capital

and

labour to the

Colony and sub- sequent smeltíng acÈiviÈÍes brought ^importanÈ

línkage benefits

which allowed South

Australía to

sÈrengthen

its

economic

base. Also

^ímportant

to

^Èhe

local

^{economy were Ëhe}

mulÈiplier effects of

^wages

paid to

mineworkers, cartgFS, wood cuËters and

others

employed

by

Èhe

Association, for at its

peak

the organisation directly

employed over ^Lr000

workers,

^{so making}

it' in aLl probabilíty, the largest

singl-e employer

of labour in Australia.

In

exporÈ earning

capacity,

coPPer and copper

ore

were

often

more

imporËant Ln

the

South

Australian

contexË ^Èhan wheat and wool- combíned, ^and

untí1 the

mid 1860ts

it

was

the

Burra Burra Mine

that

^produced

the bulk

of

this

^important

mineral. In

^terms

of world

productíon

iÈ

was

also

^markedly

signifÍ-cant,

^described

by a

contemporary

in

l-855

as

ttthe most extraordínary mÍne

of

modern

tfmes"

(See, John

Leífchild, CotnuaLL: Itts

^{ltlines cnd l[ínevs}

uíth

Sketehes

of

Seenezy... p.226).

Despite Èhe importance

of the

^Mine

ín the story of the

development

of the

Colony,

little of

^{academic depËh has been wriEÈen on}

the subject' the only notable

exception beíng an unpublíshed study

by

Henry Brown (fhe Copper Inútstzn¿

in

South

AustraLia.

^{An EeononrLe}

Study). In

^{Èhe study,}

Brown deals rnainly

with

producÈion and

profítabl1ity of all

copper miníng and smelÈíng

activities

^{1n South}

Australia

between 1842 ^{and 1923}

but

because

r-1

only

one chapEer could be devoted

to the

Burra

Mine,

coverage ^lías l-imited.

On

the

marketlng

of

copper and ores nothíng ^{has been} srriËten ^(indeed

it

can

be

claimed

that the

marketíng

of

any

kínd of mineral

1n

the

wider

Australian

context has been

largely

negl-ecËed). Brown

restricted his

observations when discussfng

the

Associat.Lon

to the

cournenÈ

that

^{ttthe hígh}

standard

of efflciency

achieved on

the

corunercÍal

side

was

not

parall-eLl-ed on

the

mining

side" (Ibí.d.,

^p.40).

Neither

has any attempÈ been made

to identlfy

^{and study}

the

^business

organísation

or legal status of

^Èhe AssociaÈ1on. The success

of

any organisa-

tion

^depends

to a

l-arge degree on

the zeal

and

skills of

Èhe p1-anners and

decislon makers and

ín

Èurn they

wil-l

be gulded and

controlled by

the

liuriËations

and por^rers exÈended

to

them

by the

corporate

body.

Thus

iÈ ís

important

to identify

Ëhe Èype

of organisation

and Èhe

quality of

Èhe execuÈive when

the

^buslness

activiÈy (lncluding

urarketing)

of a firm ís investigated.

The

followíng thesis will-

attempt

to

^examfne

the

organísat,íon under whlch

the policy

makers worked and

the liurítatlons

whfch

thís

^{imposed upon}

them.

AtÈention

wí1l also

be draron

to

^{those who} determined

policy.

^The

maln emphasis

ín the thesís wíll

be on

the various

^modes

of

marketfng adopted

by the Associatíon, the

problems invol-ved and how these \,rere

re- solved.

Both domestic and

foreign

marketing w111 be

dealt wíth. In

addítlon

special

emphasis ¡^¡i11

be given to

arrangemenÈs

wíth

South

Australian

smelËers.

An attempt

wíll also

be made

to

det.ermine

the costs

and problems assocfated

wíth physically

marketing

the produce. Thls will entail investigatíon of the varíous transport facil-íties

and agencies

utÍlised by the

AssociaËion.

Road

transport, rallways

and shippíng and oÈher

costs related

Èo exportíng, such as

port

charges, insurance paJrments,

etc.,

^w111 be

dealt with

under

transportation.

^One conclusion

in this

secÈor

ís of partlcular interest,

for Ít highlfghts the fact

thaÈ

before the

míd 1860rs Èhe

raflways

held

iii.

little or

no advantage

to the

Associatlon

over

road

transport

on the

l-ong-haul.

The concluding chapter

of the thesis will

^questlon whether

the

marketing procedures adopted

by the

Association were

in the

best

ffnancial Ínterests of the

sharehol-ders

or

whether

alternative strategles

should have been adopted.

As an

introduction, the claim by

Geoffrey

Blaíney that Australian mineral dlscoveries ln the

ninet.eenËh

century

coínclded

with

depresslons 1n

the Australian

economy

will

be

pursued.

This

will

necessítaËe

a brief

account

of the

^economic

rnllieu fn the period

immediately preceding the discovery

of the

Burra Burra Mine, which

in turn wÍll provlde

^background

to

^expLafn

the type of

business

organisation

ÈhaÈ evolved under

the

South

Australían

Míníng

AssociaÈion.

A case

will

be made

to

^show

that the

^Board

of

Direct.ors sar^r

profit

maximlsatfon

as their

^goal

,

^{and as}

a

^{setÈ1ng and}

framework

for the

chapters on marketíng,

a section

on

produetion,

prÍces and

the factors that

infl-uenced them

will

be presented.

fv.

STATEMENT

This thesis

contains no

material

whfch has been accepËed

for

the award

of

any

other

degree

or

dlploma 1n any

unlverslty,

^and

to

^{Èhe best}

of

^my knowledge and

bel1ef, the thesfs

contafns no maÈeríal prevlously pubJ-ished

or wrítten by

another person, except when due reference has been made

in the text of the

Èhes1s.

March, L977

M.

J.

Davies

v

ACKNOI{LEDGEMENTS

The

Èrials of research,

though

self tnflicted, invarlably

involve others who

are forced to

share

the

unavoidabl-e Ëedium and drudgery ínvolved.

In this ïespect I wish to

^Èhank my

wife,

^Sharon,

for her

forebearance and

understandíng duríng my

long

absences from

hearth

and home and

for

her patience

in typing

rough

drafts, proof

reading and

other

necessary but onerous

tasks.

^My

apprecíation

and thanks

are

extended

to

my supervisor

Dr.

Tom Sheridan whose

crlÈicísms

^proved extremely

valuable

and whose

attentÍon

Èo

detail

has

discíplíned

my approach

to

^research and whose

efforts

have helped cure what he once described as myttcongenítal

prolíxlty".

Thanks

are also

exËended

to Mr. J.H.

Love and

hls staff

aÈ

the

South AusÈralian

Archives,

and

to Mr.

^{Len Marquls}

of the

South

Australfan

StaÊe

Library

Newspaper

sectfon,

who were

at all

times

helpful

and

obliging.

Ihere are a host of

others who deserve my

gratitude.

^Amongst these

I

would

especially

mentlon Professor Geoffrey Blaíney

of

Melbourne

Universfty

and

Dr. F.

Broeze

of the University of

Íüestern

Australia for

suggestl-ng sources

of frefghÈ rate ínformation; Mr.

Geoffrey

Mitchell- of the Universlty of

Adelalde

for verífyíng

my

fíndings

regardíng accounÈing

informatíon

con-

tained in

Èhe South Austral-ian Archives.

Ftnally a

thankyou

to Mrs.

Leonie Col-e

for

drawing

the

graphs contained

in the

Appendices and

to Mrs.

PaÈ Andrews who Ëyped

this flnal script.

Mel Davies