Subjects: Mining fatalities at Cobar; future of the Tomago aluminium smelter; industrial future of the Hunter Valley; Australian Government’s manufacturing agenda.

Senator the Hon Tim Ayres, Minister for Industry and Innovation, Minister for Science: Well, I’m here today with Meryl Swanson, who’s the member for Paterson; Dan Repacholi, the Member for Hunter; Pat Conroy; and Sharon Claydon; all of the Hunter Labor members of federal parliament, a united federal Labor team who have been fighting for the industrial future of the Hunter Valley ever since they've been elected to Parliament.

I wanted, just at the outset, on a slightly different topic, I think it’s important to acknowledge that we've received the distressing news here in Canberra, that two mine workers have been killed in Cobar. That will be very distressing news for their families, their coworkers, and what is a tight-knit, small community there in Cobar, in New South Wales’s northwest. Everybody, all of us, including Jamie Chaffey, the new Member for Parkes, is thinking about those families, and what is an unfolding situation in that very old-mining facility there in Cobar. So, I did want to acknowledge that at the outset of this conference.

Of course, I'm here today to confirm the tough news for workers at Tomago. It's an important industrial aluminium processing facility in the Hunter Valley. They have been issued notices this morning and the owners of that facility are beginning a consultation process with all of the staff, about the future of that industrial facility. More than a thousand staff, many firms and workers in that community, of course, are engaged working in and around the Tomago smelter. The facility has operated, I think, since 1984. And it has been an important part of Australia's aluminium production capability.

We have, as a government, been working carefully with the Tomago facility, with the unions who represent staff at that facility, with the NSW Government, working to try and secure a future for that facility. That work will continue over the course of this month.

I am determined to exhaust every opportunity to secure the future of that site for the Hunter Valley, for the New South Wales economy, for Australian aluminium production more broadly, and for Australia's economy.

Of course, it occurs against the backdrop of not just what's been going on across the Australian metal smelting industry, but also the challenges that are being faced by the aluminium sector.

Multiple aluminium smelters around Australia, many of them with Rio Tinto as the principal owner, but not all of them, are all facing challenges that this government is determined to work through in the Australian national interest, with the owners of the facilities and with the state governments in each of those jurisdictions.

That is why at the beginning of this year, the Albanese Government developed the Green Aluminium Production Credit. As all of these facilities engage with new renewable energy contracts to make sure that they secure their industrial future, but also secure their future markets around the world, as the global aluminium customers are demanding lower emissions aluminium from Australia, but also from our competitors, firms like Rio Tinto have made a call to secure new power purchasing agreements that are low or close to zero emissions agreements.

And in the state of Queensland, for example, the owners of the Gladstone facility, Boyne Island, are securing and underwriting gigawatts of capability that's securing the future of the Queensland energy grid as well as securing their own production future. We will come to questions in a moment.

And you know, we are going to continue to work through those issues in Tasmania, Bell Bay, hydro power, 100 per cent green power for that facility. But there are still challenges. There are still challenges to work through in Tasmania, we'll get Meryl Swanson, who's the local member, to make a few comments.

We will continue with that work. But at the Tomago facility, of course, you think about those workers who work hard every day. You know, whose shift starts at 6am who work through the night, through the day, hard every day, some of them have been working there since the 1980s this will be very challenging news for them.

Our process from now on will really be on two tracks, working with the New South Wales Government, Rio Tinto and the other owners of this facility. On track one, I am very focused, despite this being challenging news today, on exhausting every opportunity to secure new power purchasing agreements for that facility, and of course, we will also be engaged with the government of New South Wales and the owners of that facility about the broader future of that site. We are, we are absolutely determined to exhaust every opportunity, because it's the right thing to do for those workers. It's the right thing to do for the Hunter Valley, and it's the right thing to do for Australia's economy. I'll hand it over to Meryl Swanson. Then very happy to take questions.

Meryl Swanson, Member for Paterson: Thanks Minister Ayres. For over 100 years, the Hunter region has powered and produced for not only the New South Wales economy, but for the national economy, whether it be coal out of the ground or aluminium or heavy manufacturing companies, state governments and federal governments have benefited from the blood, sweat, tears, wherewithal and support of families and workers across our region.

So today, I do want to think about those over 1000 workers at Tomago, that at quarter to six this morning got the news that there'll be consultation about the future of the smelter as we're coming into Christmas. It does create uncertainty for those families, and I want to acknowledge that that is difficult for them from the get go this morning, but I also want to say that we are engaged in a three-way negotiation, and we are committed, as Minister Ayres has just said, to creatively and consistently put our shoulder to the wheel to keep this smelter going.

And I would respectfully remind the state government that they have racked up royalties for many years off coal. Our region has continued to deliver. And I would respectfully encourage Premier Minns to stay engaged in the negotiation. We need this negotiation to be successful. Quite frankly, we need the state government to come to the party on this and also to Rio, to Hydro and Gove, the owners of the smelter. We need them actively engaged in this as well.

Rio, particularly, has been able to return to shareholders over many decades off the back of the magnificent Hunter region. We need what they have reaped to be respected, and we need that to be repaid now in them coming to the negotiation in good faith. We want this smelter to continue, not just for the sake of being able to continue to produce just under 40% of Australia's primary aluminium, but because the smelter is essentially a battery for the east coast grid and the interconnected grid. That's very important.

But we will also need this aluminium that that smelter produces to move forward in the transition for our future. This is not just, you know, a whimsical thought. This is actually an important thing. And I know there's been some speculation about this in the media about, you know, us supporting smelters, and whether that's a futile thing; it isn't. Manufacturing, continuing to make things in Australia is actually important to our economy. Aluminium is a very important part of moving into the future, through renewables, through energy, through all the things, all the technology that you held in your hands today, it is a critical part of that.

So again, I say we are engaged in this. We want these negotiations to work. I have a personal interest in aluminium smelters, and I think that they're very important. And I just say to Rio, if you think that closing it down is the quick, cheap and easy way out of this, it isn't. With experience from closure of the Kurri Kurri smelter in 2012 I can tell you, closing down an aluminium smelter is expensive. It is very difficult. The remediation is complicated, and it takes a long time. So closure isn't the easy way out of this.

We need to keep our shoulder to the wheel, and I just want to thank and acknowledge the work of Minister Ayres. He has absolutely put his shoulder to the wheel, and I want to commend him for that. Thank you, Tim. I want to thank the Prime Minister, who's also very committed to this process. We are continuing to work on this. And to the people of the Hunter Valley, we are in this for you. We want this to work, and we are negotiating in full faith. Thanks everyone.

JOURNALIST: The federal government made an offer to the smelter in recent months. Can you give us more information about what that comprised? Was it with the New South Wales Government? It sounds like, perhaps not. It sounds like there's a problem with New South Wales coming to the party there. And I guess secondly, are you willing to let this smelter close at the end of the day?

AYRES: Let me work my way through those. Yes, there have been offers made between the two governments. We are working very closely with the New South Wales Government. There are, of course, challenges in all of these kind of negotiations. I've just, of course, worked through these questions with the government of Queensland over the future of the Mount Isa smelter, with the government of South Australia and Tasmania over Trafigura’s Nyrstar assets in both of those states. And the previous minister and the Prime Minister with the South Australian Government over Whyalla.  

The ingredients that, in my experience, are required to deliver good outcomes for industrial communities here, the state and federal governments must be in lockstep over not just funding, the package of funding, but also the strategy, and of course, the owner of the facility, the managers of the facility have to be invested themselves in the future of the facility.

So yes, there has been an offer made. We will continue to be closely working with New South Wales about the future, particularly focused over the coming months. But then, you know, whatever the outcome here, this set of issues are going to be with us for months and years as we work through the industrial future for that facility.

And so, I'm very confident we'll be working in lockstep with New South Wales. I don't want to disclose the details of each of these offers, because that's not in the interest in my view of commercial negotiation about the future of that facility. My approach to this facility is the same as the other ones that we've been working through and some of the others that are still to come.

This is a government that's absolutely focused on the future of Australian manufacturing, and we see metal smelting and metal production as important for the current Australian manufacturing sector, but also, as you saw most recently in the agreement the Prime Minister signed in the United States last week, it's crucial for our future manufacturing capability as well.

JOURNALIST: What was the response from Rio to that offer? And then separately, you mentioned that Rio have underwritten renewables projects in Queensland with smelters there. Do they think that's an option in New South Wales at Tomago? And why? Or why not?

AYRES: Okay, so certainly it's not, we didn't reach an agreed outcome. Didn't reach an agreed outcome. And I don't want to sort of speculate about why, because we're going to continue that set of discussions. But there are a complex set of issues that are shaping the future of Australian aluminium.

There is, of course, the competition for new energy contracts, and the landscape has changed. Previously state-owned assets in electricity are now commercially owned. So there is a different market that Australian aluminium is fighting for new clean energy contracts in that context, but ageing industrial facilities that require new investment. So it requires owners stepping up and engaging in new investment, not just plans.

What I've observed, of course, is different facilities have different stories. Some of them have stories of constant investment in new plant and equipment, and that makes them more competitive and productive. Some of that you don't see as strongly. Of course, all of these facilities are facing a tougher global trading environment that is more volatile, shaped by overcapacity and subsidization in some markets, tariff responses from, for example, the American administration. These are, these are tough environments. Our job here is to work with the facilities to try and secure the best future possible.

JOURNALIST: Minister Ayres, how sympathetic are you with Rio’s view that it was energy prices that made this facility unviable?

AYRES: All of these issues are going to be a challenge for this facility. They are working through those questions more successfully in some parts of the country than in others, and that's why we're engaged in a different kind of discussion around the future of the Tomago facility.

I have a lot more confidence about the state of play in central Queensland, for example, the Boyne Island and related facilities around Gladstone. That is why we've delivered the aluminium production credits, $2 billion worth, which is a market signal to drag through investment. But clearly, Tomago requires more work, and I'm not going to, not going to quit now. We'll keep working on that question.

JOURNALIST: Minister, when it comes to who should foot the bill for ensuring the continued operation of this smelter, do you believe the state government should play a, maybe a greater role than what is potentially – potentially a 50:50 split in funding, given that, as Ms Swanson said, that they do benefit from royalties?

AYRES: Well, we're all at the table. Every government has an interest here, of course, for the state of New South Wales, they have a very close set of interests here, and they are engaged. The Commonwealth has a set of interests here to provide a future for Australian manufacturing. We see that as important.

Of course, it's important in jobs terms and investment terms, but it's also important in economic resilience and strategic terms. 50:50 sounds like about the right approach to me, and that's the approach that's characterised our other interventions.

I am very confident that we'll continue to work very closely with the New South Wales Government. This is not just a today question. For this facility and for the Hunter Valley, we've seen both governments engaged in very significant investments, hundreds of millions of dollars, in industrial investments around Orica, around a series of other investments in TAFE training and building industrial capability. This is Australia's largest industrial region, and it's very important to the government's policy agenda.

JOURNALIST: Just to Jack's point, do you accept, though, that something has to change on energy prices, and is the answer a gas reserve?

AYRES: Well, as you know, led by Minister King and Minister Bowen, there is a review on our approach and the market approach to gas. Of course, we're focused on industrial gas, but also the role that gas plays in setting electricity prices as well.

I don't want to pre-empt the outcomes of that work. Of course, I'm very focused and listening carefully to the heavy industrial gas users who, as you would expect, have been very engaged with my office, but also, appropriately, you know, publicly engaged on these questions. That is important for our industrial future. We'll keep on with that work.

JOURNALIST: There's a lot of people building right now, the other side talking about net zero and the energy transformation, and they’ve been warning that, of course, the deindustrialisation of Australia would ensure. I assume that’s going to be raised today. What’s going to be your response to that?

AYRES: Well, well, you know, I would have thought that they could give it a few minutes, really? Yeah, I'm certain that these characters won't. You know, this is not a Liberal Party branch meeting where, you know, it's all about the politics and the partisanship. Today, there's more than 1000 workers getting some pretty tough news. There's a set of economic and industrial imperatives that we are focused on delivering for the country. It's not an accurate representation of what's really going on here. But I'll leave the argument about energy prices and all the finger pointing, to maybe later.

But I just say, in other states and territories, you know that the facilities have got a different shape, and they are competing for and underwriting green energy investment to secure their own industrial futures.

There are challenges here, Phil. It's not a linear pathway through these questions. We are fighting for the future of a modern electricity system, sufficient industrial gas to make sure that Australian industry is competitive and a pathway through in a tough and volatile global trading environment where, you know, it's very clear to me in working my way around these facilities that not all of them have had the investment that they require to remain competitive. Not all of them are making their decisions that are required to be made, not just every year in the big strategic review, but every week, the sort of small decisions that make these firms competitive.

I know how hard this facility has worked to secure its competitive position. I know the plant manager very well – not as well as Meryl, who's there on a sort of fortnightly basis. We have not been disengaged with the challenges for this facility. And we're going to keep working it through in a disciplined kind of way. I'll leave the sort of loopy partisanship to the other side, who, you know, it'll feed into their internal debate.

JOURNALIST: [Inaudible]

AYRES: Well, they have made the decision to secure future electricity contracts, they have focused on making sure that they've got a green aluminium future, because that's what their markets demand. They're not a bunch of hippies virtue-signalling to the world. This is a hard-edged industrial facility that is making decisions about its competitive future, and we'll keep working with them… last question.

JOURNALIST: Is this a blank check for Rio Tinto now? Or it's not. When you say, exhaust every option, what taxpayers will be asking, you know, struggling to pay their mortgage, etc, what is the upper limit of their money that you're willing to commit now that Rio has the weak hand in negotiation?

AYRES: There is a reason that we're approaching these discussions with some discipline, and exhausting every option means pressure on the owners of the facility to deliver themselves. Of course, these broader support packages in the rest of manufacturing, they are expensive. They are big contributions, but they are weighted to achieve the Australian national interest here, which is, yes, about jobs, but it's also about economic resilience, and it's also about the future of our manufacturing sector.

JOURNALIST: The Glencore deal was a million dollar per worker, is that too much?

AYRES: Well, that's not the calculation that the federal government is making and in the case that you're pointing to, not the calculation that the state government's making, it's about the future industrial capability of that firm and that region.

JOURNALIST: Was 50% about right. The offer that you put forward earlier this year with where New South Wales?

AYRES: What I won’t do is comment on the individual offers put to companies. Thanks very much.