It took nearly 50 years of exploration, analysis and debate 1 before Onekaka’s rich iron ore resource was to be commercially processed in 1922. While the Onekaka Iron and Steel Company had plenty of potential, a combination of low demand, foreign competitors and an economic Depression saw the works closed by 1935, although it was kept on standby during World War II.
Pipe Dreams at Onekaka
From the earliest days of European settlement in Golden Bay, there were high hopes for an iron industry. Crown agent, Mathew Richmond became aware of the value of the mineral deposits in 1852 and was eager to acquire land before local Maori realised its value.
Various companies were formed to develop the region’s limonite deposits from the 1870s onwards, but inadequate capital hindered most attempts. In 1891, 300 tons of Parapara iron ore, along with coke and coal from Ferntown, were taken to the Onehunga Iron Smelting Company, where they produced good quality iron.
The frustration felt by enthusiasts can be sensed in the Golden Bay Argus of August 1, 1895: “Unlimited iron of first class quality, coal, limestone, easy access, cheap production, deep water for shipping and plenty of foreshore are all provided by nature, and if the venture will pay at all in the colony this locality offers super conditions.”
The Onekaka Iron & Steel Company Ltd was formed in 1920 with capital of £80,000. About 50 men were employed to build the works, which comprised 16 coke ovens, a blast furnace, a water race and an aerial cableway. Iron is produced by smelting (heating) iron ore with coke, with limestone being used to remove impurities. The limonite and lime were on hand at Onekaka, but coking coal was brought in from the West Coast.
The first smelting of good quality pig iron was produced in April 1922. By October 1925, 2670 tons of iron had been produced, but the local market was saturated and prices were falling. About 600 tons of pig iron were shipped to Australia, but, when Australian Customs Duty was tripled to $6 per ton, the future seemed gloomy.
To diversify, a pipe making plant was installed in 1927. Auckland, New Plymouth and Nelson local authorities all bought the pipes for underground use, with some still in use in 1979. Australian pipe makers introduced new, lighter pipes, however, undercutting Onekaka’s prices, and the Onekaka Company went into receivership in 1931. Pipes and pig iron were manufactured until 1935, but competition with the Australians and a lack of local capital during the Depression years, saw the closure of the plant in 1935.
Between 1922 and 1935, a total of 81,499 tons of iron, valued at nearly £210,000 were produced, with up to 180 men being employed.
Ultimately, the company’s hopes were defeated by the economic conditions of the time. Historian Jim McAloon suggests that Onekaka suffered from a credibility problem, with potential customers not believing the company could supply iron to the whole of New Zealand, and continuing to import large quantities. It has been suggested there are still many tons of ore at Onekaka.
A hydro electric dam and plant were built in 1929 to provide power for the pipe-making operation. After the Onekaka works were closed, the plant continued to generate electricity for Golden Bay between 1937 and 1944.
Today, there are scant remains of the iron works and wharf, but the hydro scheme has been reconstructed and generates about 900 kilowatts of electricity for up to 450 Golden Bay homes.