Bonanza Down Under

On Barrow Island, a cyclone-swept wasteland off Western Australia that until now has supported only kangaroos, lizards and one lonely tree, an international team of roustabouts is drilling with intensity and anticipation. The Western Australian government last month declared Barrow to be an economically viable oilfield, expects that by 1968 it will be producing 20,000 bbl. daily for a group made up of Shell, Texaco, Standard Oil of California and Ampol, an Australian firm.

The bonanza at Barrow will treble Australia's production of crude, reduce the amount of foreign exchange that it uses to import oil (now $280 million annually), and guarantee its future as one of the world's fastest-growing new oil sources. Together with the fairly new 10,000-bbl. wells at Moonie and Alton in the east, the find is probably the most important economic development in Australia since Merino sheep were introduced in 1797.

Welcome Dollars. Oil is only one part of a boom in minerals that has lured foreign companies into a rush for riches and revamped the economy of a continent. Ten years ago, Australia had to import all of its aluminum; until six years ago, iron-ore exports were forbidden because the government believed there was only enough to supply domestic needs for a generation. All that negative thinking has been swept away by recent discoveries of natural gas, bauxite, copper, manganese, silver, uranium, tin, nickel, zinc and lead. Coal exports have jumped from $26 million in 1962 to $68 million in 1965.

Australia has become the world's largest producer of lead, the third largest of zinc. It exported $377 million worth of minerals last year and expects to double the figure by 1970. Says an Australian Treasury survey: "No compendium of prospects as they can be seen now can comprehend all the mineral exports likely to be recorded in five or ten years' time."

Foreign companies are urgently interested and are investing at record rates. One magnet for capital is Western Australia, which has 15 billion tons of high-grade iron ore, about one-eighth of the world's known reserves. Great consortiums of companies, including the U.S.'s Kaiser Steel and American Metal Climax, have contracted to sell $3.5 billion worth of iron ore and pellets to Japanese steelmakers over the next 25 years. In the north, bauxite reserves amount to 3.5 billion tons, about half of global reserves, or enough to fill all the Western world's needs for a hundred years. Canada's Alcan Aluminium Ltd., France's Pechiney and others are helping Australia gear up to export an estimated $6.7 million of bauxite and refined aluminum by 1970, largely to Japan.

American Emigrants. Though Australia plows a tremendous 25% of its gross national product into investment, it courts foreign capital to supplement the limited local supply. Foreign investment during the nine months ending March 31 amounted to $708 million, an increase of 38% over the preceding twelve months. North American investment has doubled in the past five years, now amounts to $2 billion. With the investment has come a growing flow of U.S. emigrants looking for new frontiers. Last year 2,280 Americans settled Down Under.

Profits are not quite so palmy as they once were--average earnings on investment have cooled down from 15% in the 1950s to 6% now--but the great volume and potential of business keeps entrepreneurs coming. "We are going through one of the most interesting and exciting periods in the whole history of Australia," says Development Minister David Fairbairn. "It is far more exciting than even the gold-rush days."

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