SALLY SARA, HOST: Well, North Queensland copper processing plants will remain open at least for another three years thanks to a $600 million injection from the state and federal governments. It ends months of negotiations with the Swiss mining giant Glencore, which had threatened to end its operations this year.
Tim Ayres is the Minister for Industry, Innovation and Science and joins me in our Parliament House studio. Minister, welcome to Radio National Breakfast.
SENATOR TIM AYRES, MINISTER FOR INDUSTRY AND INNOVATION AND MINISTER FOR SCIENCE: G’day, Sally. It’s good to be with you in the studio this time.
SARA: Is it a bailout?
AYRES: Well, it’s a package that secures the future operations of that facility. But the work starts here. So it secures those jobs – thousands and thousands of jobs – in North Queensland.
SARA: For now.
AYRES: For now. Over the course of the next three years. And the work that has to be undertaken over the next three years – a partnership between Queensland and the commonwealth, Glencore, the other industrial operators and miners in that region – that is work that we start from yesterday. And that is what is going to determine the long-term future of that region. This is a really important strategic national industry for Australia. And the Albanese government is determined to make sure we capture the value of that and the industrial capability in North Queensland.
SARA: So we’re talking about $600 million in taxpayer money from Queensland and from the federal government as well. How do you justify that? Why should we keep Australia in industries in which at the moment we’re not competitive?
AYRES: It’s a substantial investment. That is right. And it’s being deployed for a really important public policy set of reasons. Firstly, this is a critical industrial capability for Australia. We have vast reserves of copper ore, and there is global trade imbalances, subsidies in some markets, volatility that is making it an unfair playing field for Australian copper producers in global markets. We need to see that through and back Australia’s industries’ capability. They are only struggling on the global market because of those unfair trade practices. And the Albanese Government is determined to back Australian industry because it is in our national interest.
Now, of course, there’s lots of jobs that flow from this – thousands of jobs in Mount Isa and Townsville, the surrounding towns that have, you know, big footprints in industry and in mining. But we are coming at this from a national strategic viewpoint about what’s in the national interest.
SARA: Are we talking about China here?
AYRES: Well, it’s certainly not only that market where there is subsidies. We are – there is overcapacity in a range of industries. It is a challenge right around the world now. We’ve seen the responses of economies around the world that have made global trade unpredictable, and we’re making sure that Australia – you know, with a clear-eyed assessment of what’s in the Australian national interest we’re making sure that blue-collar industry isn’t unfairly treated.
SARA: Are you expecting further funding packages like this for other facilities around the country?
AYRES: Well, we’re working through this in a very disciplined way. You saw the commonwealth government’s package with the South Australian and Tasmania governments to support the Nyrstar facilities in Port Pirie and Hobart and the intervention in the steel industry. The former owner of the Whyalla steelworks wasn’t acting consistent with what South Australians and Australians would expect the national interest is. It is now in administration being prepared for future industrial capabilities.
We have intervened previously. Of course we are watching the situation in these smelters and heavy industry closely, but, you know, we’re acting carefully in a disciplined way and consistent with the national interest.
SARA: Let’s talk about gas. BlueScope CEO Mark Vassella was on Breakfast yesterday. He had this to say.
[Excerpt]
MARK VASSELLA: We’re seeing manufacturing close down in Australia, and it’s largely because of the dysfunction in the gas market. We’re facing gas prices in Australia in a country where we have ample supplies of gas that are three or four times those of other major gas-producing nations. And as a company like BlueScope, where we have major investments in North America, we see real time the cost of energy. So energy, unfortunately, has got to a point where the cost of energy for manufacturing in Australia has risen to unsustainable levels.
[End excerpt]
SARA: That’s BlueScope boss Mark Vassella on Radio National Breakfast yesterday, who addressed the Press Club. Is the government any step closer to implementing an east coast gas reservation policy?
AYRES: Well, as you know, Chris Bowen is leading a review of the gas market arrangements. There has been a lot of discussion publicly about the right arrangements in Australia’s national interest. I welcome Mark’s contribution to the debate. He’s a really important corporate and industrial leader in Australia. It’s good to see the way that industry is working with the government, you know, putting out a public position, arguing the case for it. That’s what we want to see. We want to see industry making the case for what’s in Australia’s interest. We are going to go through a proper cabinet-style process over these questions. Chris Bowen will be leading that.
SARA: When will that be resolved?
AYRES: That will be over the coming months. And we will do a careful piece of work here. In the last term of government we intervened on gas prices following Russia’s illegal invasion of Ukraine and the impact that had in global energy markets in order to support, of course, households but also industry. Gas is absolutely critical for sections of Australian industry that use gas as a feedstock and gas as an energy source. It’s a critical transition fuel to lower Australia’s industrial emissions. We’ve got $5 billion in the National Reconstruction Fund targeted at precisely that task of making sure that we’re securing the investments that Australian industry needs for the future. But the gas market is critical as well for Australian manufacturing and our competitiveness, and we are very focused on that set of questions now.
SARA: You’re listen to Radio National Breakfast, and my guest is the Industry Minister Tim Ayres.
Are you looking at any other steps to stop Asian countries such as Japan onselling Australian gas? This has been a long-term problem. In May we spoke to the Australian CEO of the Institute for Energy, Economics and Financial Analysis. Let’s take a listen.
[Excerpt]
AMANDINE DENIS-RYAN: Japanese companies probably earn between $11 and $14 billion a year in revenue on those resales. So it’s difficult to estimate how much profit they make, but it’s probably north of a billion in profits annually. You know, Japan, based on Japanese government data, it’s estimated that Japan resells more than 2,000 petajoules of gas overseas. That’s about double our domestic gas use.
[End excerpt]
SARA: That’s Amandine Denis-Ryan there talking about the situation. Your predecessor, Ed Husic, has gone public about this issue this week saying Australia should not be sacrificed in the interests of Japan onselling gas. What’s the government doing to address this?
AYRES: Well, I don’t want to speculate about individual elements of the government’s approach because, as I say, we’re engaged in a process now –
SARA: Will you take action on this problem?
AYRES: Well, we will work through a whole-of-government approach that delivers the certainty that is required for industry and is in Australia’s interest. We’re are big exporter of gas and it’s reasonable that, I think, for Australian industry and for Australians to say we need to make sure there is sufficient gas for Australian industry.
SARA: Tim Ayres, good to have you in the studio this morning. Thank you again.
AYRES: Thanks very much.
SARA: Tim Ayres is the Minister for Industry, Innovation and Science.
ENDS.
