202 Mr J. A. Lyons, Prime Minister, to Sir Earle Page, Minister for Commerce

Cablegram unnumbered 18 May 1938,

Following statement is to be made by the Prime Minister, in the House of Representatives on Thursday 19th May, 1938:-

After exhaustive consideration of the question, the Government has decided to prohibit the export of iron ore from Australia as from 1st July next, and a proclamation to this effect will be issued forthwith.

During the year 1936 the question arose as to the extent of iron ore deposits in Australia suitable for utilisation by the iron and steel industries. Up to this date there was a general impression that Australia was so well endowed with iron ore that there was no cause for anxiety as to the adequacy of future supplies. When the matter came before it, the Government came to the conclusion that on the available evidence it would not be justified in taking action to curtail exports. But, since there appeared to be some ground for doubt, it decided to have the whole matter investigated in order that it might possess the fullest possible data before coming to a final decision.

To clarify the position, the Government instructed the Commonwealth Geological Adviser to go thoroughly into the matter and to make a report. In the light of the report which Dr Woolnough has now made, the Government is satisfied that the accessible iron ore deposits which are capable of economical development are so limited as to compel their conservation for Australian industrial requirements.

Careful consideration has been given to the proposal that licences should be granted to export limited quantities of iron ore, but the Commonwealth Government has come to the conclusion that such action would be inconsistent with the necessity to conserve Australia's limited iron ore resources.

Although the Government has accepted the advice contained in the report of the Geological Adviser, it is its intention to proceed, in collaboration with the technical officers of the States, with a complete detailed survey of Australia's iron ore resources.

Preliminary steps with this end in view have already been taken, and will be followed up with the utmost expedition. It is the sincere hope of the Government that this survey will result in the appearance of some reassuring features. If so, the Government would be prepared to reconsider the decision which has been reached. The advice to the Government at present, however, is of such a definite character that it is felt that there is no option but to impose an immediate embargo.

In reaching its decision full cognisance was taken of recent developments in Australia.

Eighteen months ago, when this matter of iron ore resources first came to be discussed, no doubt existed as to the adequacy of our iron ore resources and the Commonwealth Government saw no reason to place limitations on their exploitation. It has been only as a result of investigations which have taken place in the past eighteen months, and which were initiated owing to apprehension expressed by experts, that doubt increasing into anxiety has arisen which has resulted in the decision to prohibit exports.

The Government will be prepared to examine and consider equitable claims for reimbursement of expenditure which has up to this date actually taken place in connection with development operations directed towards the exploitation of our iron ore resources for export.

[AA : A1608, C47/1/4, iii]