In the early 1920s, having acquired land at Port Kembla, the Hoskins iron and steel company based at Lithgow, about 110 kilometres west of Sydney, planned the transfer of operations to Port Kembla. It was attracted by the cost advantages of a deepwater harbour, largely developed and maintained by the NSW government, for shipping raw materials and finished products, and by the proximity of high quality steaming and coking coal. Hoskins and other sources of Australian capital were insufficient to complete the transfer and expand the Port Kembla works. The company turned to Australia’s traditional source of investment capital, London. In 1928 a new company, Australian Iron and Steel Pty Ltd (AIS) took over the Port Kembla steelworks. It was created and controlled by two Australian and two English firms: Hoskins Iron and Steel, based in Sydney; Howard Smith, a Melbourne shipping company; Dorman Long, an English iron and steel manufacturer, and Baldwins, an English iron, steel and coal company.
In its 1928 prospectus AIS proposed a board of nine directors, including one yet to be appointed. The Hoskins brothers, Cecil and Arthur, occupied two seats, with Cecil as board chairman. The chairman of Howard Smith, Harry Howard-Smith, and Edwin Flack one of its directors, both Melbourne-based, also took two seats. Dorman Long was represented by its English chairman Sir Arthur Dorman and by Lawrence Ennis, a director of Dorman Long in Sydney. Baldwins was represented by its English chairman, Sir W. Charles Wright. The eighth director was Arnold Taylor, Sydney-based chairman of the Southern Portland Cement Company – financed by Hoskins and Howard Smith – with its factory in Berrima, NSW; Southern Portland became a subsidiary of AIS.
The prospectus authorised a total capital of £5 million (or $10 million which, adjusted for inflation, was equivalent to almost $390 million in 2016) in five million £1 shares. Initially, 3,100,000 shares were offered. The other 1,900,000 remained in reserve for future capital raisings. Over two-thirds (68%) of the shares issued were taken already by the four companies forming AIS: Hoskins, one million; Dorman Long, 600,000; Howard Smith, 400,000, and Baldwins, 100,000.
The arrival of Hoskins and AIS transformed Wollongong. Buttressed by English capital, as coal mining had been in the 1880s when it pushed dairy farming to the fringe of the local economy, Port Kembla became a major industrial centre. A smelting works and other industries had been established there by the early 1920s but the steelworks would dwarf them all. Battered by the Great Depression of the 1930s, in 1935 AIS itself became a subsidiary of the Broken Hill Proprietary (BHP), the giant Australian mining and metal manufacturer. BHP-AIS grew rapidly during and after World War II. It acquired almost all of Wollongong’s mines and associated coke works, and at its peak in the early 1970s the steelworks alone employed some 20,000 people.
The 1928 AIS prospectus emphasised the importance to Australia, rich in raw materials, of a large and strong iron and steel industry. If it wanted to keep its White Australia Policy it could not afford, as “an isolated . . . member of the Great Commonwealth of British Nations”, to be without its own heavy industry to provide for defence. Otherwise, the prospectus warned, “the country must pass eventually into other than British hands.”
When deindustrialisation swept through Western economies in the 1980s, Australia’s economic and defence interests and arrangements had long since shifted from the defunct British Empire to Asia and America, and its governments had abandoned what was now an irrelevant and damaging White Australia Policy. As competition from new and more efficient manufacturers in Asia tore through Australian tariffs, the emerging post World War II international order arrived in Wollongong. Having embraced dependence on a single industry, the massive job-shedding at Port Kembla and the mines inflicted on Wollongong the greatest economic and social crisis since the Depression of the 1930s, and sparked a quest for a new, post-industrial, economy and identity.