The Broken Hill Proprietary Company – BHP or “The Big Australian” as it was known – was formed two years after the mining industry commenced in Broken Hill in 1883. BHP would go on to become the world’s biggest mining company but its relationship with the city where it was born was a turbulent, at times love-hate arrangement, which ended in 1939.
BHP owes its foundation to boundary rider Charles Rasp who discovered the “broken hill” – a narrow coat hanger-shaped body of ore that runs for some eight kilometres through the centre of Broken Hill.
With the support of Mount Gipps Station manager George McCulloch, Rasp formed the famed Syndicate of Seven to test the low broken-backed ridge, but when the first shaft sunk provided disappointing results some original syndicate members sold out.
The core members decided to raise the capital necessary for further investigation by floating a public company and BHP issued its first prospectus in 1885.
Easily accessible high-grade ores, low labour and equipment costs, and high silver, lead and zinc prices made the first 15-year period to the end of the 19th century extremely profitable for BHP.
Broken Hill’s Line of Lode would change Australia from an agricultural to an industrial nation – but it came at a cost. The dangerous conditions in which the miners worked and the squalid circumstances which their families had to live put BHP on a collision course with unions.
In 1892, BHP’s contempt for the union movement was illustrated by its decision to scrap a work-practice agreement because of slumping world ore prices and this prompted a series of bitter and violent strikes.
During the 1909 industrial dispute BHP locked-out its workers and brought in “scab” labour. This time BHP stood alone, its intransigence and stubborn refusal to deal with the union having alienated it from the other mining companies in Broken Hill.
When Australia’s Arbitration Court ruled against the company and the ensuing High Court appeal was dismissed, BHP’s reaction was to delay the opening of the mine for two years and then reduce the number of workers employed.
In this increasingly untenable backdrop and coupled with the unreliable nature of commodity prices, it was no surprise BHP was looking for other options and management decided the company’s future lay in steel manufacturing.
BHP chose Newcastle on the NSW coast as the site of its first steelworks and production commenced in 1915. Wartime demand for armaments and sheet metal guaranteed the steel mill’s early years while, in contrast, the Broken Hill operations fell victim to inflation and worsening industrial relations.
The Great Strike of 1919 lasted 18 months before the unions prevailed and workers won improved conditions, including a 35-hour week and this result prompted BHP to focus on its expanding steel business and the “Big Mine” played a progressively smaller role in the company’s calculations.
BHP closed its Broken Hill operations altogether in 1939 and an unremarkable stone chimney, which was part of as hut built on the mining lease in 1885 to house the first manager of BHP (William Jamison), now stands as a lonely monument to mark the site of the birthplace of BHP.
It was only in the 1970s that Broken Hill ceased to be Australia’s greatest single producer of mineral wealth and it is unlikely that any single mining field of the future will exert as much influence as did Broken Hill on Australian life.
All up, Broken Hill has produced 200 million tonnes of ore. Based on today’s metal prices there has been approximately $300 billion taken out of Broken Hill.