CO129-468 - Governor Sir Stubbs - 1921 [6-8] — Page 332

ECONOMIC RESOURCES COMMITTEE.

REPORT OF SUB-COMMITTEE ON MINING AND MINERALS.

It may be taken as an accepted fact that the Island of Hong- kong is devoid of minerals of economic value, but such an assertion is by no means true of the New Territories.

In the Territories the following minerals have been discovered, viz.: Copper, Silver-Lead, Tin, Wolfram and Iron, and a large amount of money has been spent in efforts to develop them. It is to be regretted that developments have not been satisfactory with the possi- ble exception of an Iron Ore deposit. This deposit is of large extent and excellent quality, and may one day prove to be of inestimable beneft to the Colony. Its exploitation has been and is now being retarded by the absence of a suitable coke-making coal deposit. It is extremely doubtful if a suitable coal deposit exists within the Colony or within reasonable distance of the Iron, and the chances of the Colony ever being supplied with Iron made from local iron-stone and melted with coke produced from local coal are extremely remote.

Regarding the other minerals, the fact that previous attempts at development have not been encouraging does not necessarily postu- late the absence of workable deposits. On the contrary, the know- ledge of the existence of so many minerals prompts the belief that vigorous, intelligent and systematic prospecting might reveal ore occurrences of economic value. Such being the case, it appears to us that prospecting should be stimulated whenever and wherever possible.

Unfortunately, however, it is our opinion that the Mining Ordinances of the Colony, as at present constituted, tend to hinder prospecting rather than to encourage it. Here a Prospecting License costs $1,000 per year, Compare this with the Malay States where a similar license costs $25, or with Australia where a Miners' Right, which costs 58. per year, allows the holder to

(a). Take possession of and exclusively occupy any Crown

Lands for mining purposes and mine therein. (b). Have and possess any Gold or other Minerals found in

such land whilst so occupied.

(c). Erect any building, structure, or machinery upon land so occupied and remove same at any time during such occupation.

(d). Occupy Crown Lands and construct and use thereon races, dams, reservoirs, roads and tramways for mining

purposes.

(e). Take or divert water from any lake, pool, spring or stream situate in or flowing through Crown Lands not exempted from occupation under a Miners Right, and use such water for mining and domestic purposes.

(f). Procure and remove for mining, smelting, building, or other purposes, any bark or live or dead timber, or any stone or growth from any Crown Lands not exempted from occupation under a Miners' Right.

Again, the rent on a Mining Lease in this Colony amounts to $2 per acre per year, plus $50 per acre per year for all lands occupied by mine buildings, plant, etc. In Malay States the annual sum on a Mining Lease is $1 per acre; in Australia it is 5s. per acre for minerals other than Gold.

Then, too, all Minerals produced within the Colony are subject to a Royalty not exceeding 5 per cent. of the estimated market value of the metal or mineral at the mine, when ready for exportation or for smelting or reducing. Five per cent. is a very high rate indeed. Even in China the Mineral Products Tax is assessed at 11⁄2 per cent, of the value of the mineral at the point of production. But setting eside the question of the rate, we are of the opinion that the principle of taxing minerals at the mine is entirely wrong and consider that if a Production Tax is to be levied at all it should be levied on the net value of the ore; that is, the value after mining, transportation and treatment charges have been deducted.

We recommend, therefore:-

(1). That no charge be made for the right to prospect.

(2). That the rental on Mining Leases be reduced.

(3). That the payment of Royalty on ore mined be abolished, or, failing complete abolition, that the basis on which it is at present calculated be radically altered. Whilst believing that the adoption of these recommendations will encourage prospecting and mining development, we are also of the opinion that any activity in this direction would be more likely to succeed if plans were based on known geological data. This data can only be ascertained and recorded by a trained geologist. We there- fore recommend the Government to engage a geologist of repute to undertake a geological survey of the Colony without delay. The area to be examined is small and the investigation will not call for the expenditure of much time or money, but the results will justify the expenditure from the scientific stand point alone,

C. P. CHATER,

Chairman.

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