Topics: Hazelwood; Arrium; meeting with POSCO;
And Greg, many thanks for your time. Those workers at Hazelwood, they can be supported, but of course it doesn’t bring their actual craft, their industry back, does it?
That’s exactly right, nothing replaces a job, unless you have a job. And it is going to be hard.
These workers will be devastated. I know that the community is deeply affected. And I’ve watched as we’ve seen attempts to force them out.
Many people in the Labor Party think it’s just fine, it’ll all be okay, there’ll be energy security, we don’t have to worry about prices going up and the workers will take care of themselves.
Well that’s not the real world. These things matter. And these are real lives and they are affected deeply.
We saw only three weeks ago, the Shorten ALP passed a motion through the Senate, calling for the closure of some of these most significant power stations, which had Hazelwood right at the top of the list.
So they got what they wanted. But I’ve got to say it comes at an enormous real world cost to people and to communities, which is why we put together an immediate response package.
Fortunately the workers will be paid in full. I believe there’s $150 billion in the company. And our support is aimed at the workers, but in particular at the broader Latrobe Valley community.
Are you worried about the electricity supplies to Victoria? Is it a situation where it could potentially compromise the electricity security of a state, having seen what took place in South Australia?
And I do recognise that there are other coal fired generators out there. This is obviously a very large one.
If it’s taken off the grid, and that’s the plan, then does that compromise the potential security of Victoria’s electricity supply?
So the best advice that Josh Frydenberg, who’s our Energy and Environment Minister, has from the energy market operator, is that there’s likely to still be about 2,000 megawatts, which is the equivalent of another Hazelwood and a little bit more, of spare capacity in the whole of the national electricity market.
However, you wouldn’t want to lose much more and you wouldn’t want to have an issue such as an inter-connector going down.
So I think you’re always exceptionally mindful. And we are on energy security and I warned about the South Australian risk only a few weeks before it occurred.
But what is clearly a risk over and above the impact on jobs in the Latrobe Valley, is that electricity prices will rise.
And that has an impact on families and businesses and workers elsewhere.
And I keep saying to the Victorian Government, this is the very thing you wanted, but be careful what you wish for, because this is going to affect businesses right across, not just Victoria, but it’ll play out in New South Wales and South Australia across the grid.
Okay I want to take you to another thing because I do know you’re in Beijing for the G20 Science, Technology and Innovation Ministers’ meeting trying to promote investment in Australia.
However you have just recently come from Korea where you’ve seen POSCO, the largest steelmaker in South Korea.
Trying to find a way to be able to have Arrium, the Whyalla Steelworks survive and to see what can be done to you know, make certain that there is security for those jobs and that town going forward, do you think you’ve been able to strike a deal with them or not?
Well I came away very confident that there’s a long term future for Whyalla, and this was an example where you have an Australian Government, a state government in this case being a South Australian government and the union working together.
We took the Treasurer of South Australia from the ALP, Tom Koutsantonis and we took the head of the AWU, Scott McDine, and we went as a team where that makes a big difference.
And the outcome was that POSCO confirmed that they will bid for the Whyalla Steelworks, they actually want to not just keep it but to expand it by 50 per cent in terms of its production by making a major investment to install the world’s most innovative steel technology.
Lower imports, higher grade, lower cost and that long term security for the plant, the community and the workers, it’s a process called FINEX.
We saw where it was being used and perhaps most significantly not only does it use less in the way of both iron ore and energy on the input side, it creates a waste gas which they will use for generating a new 220 megawatt power station which would help both plan and provide energy security for much of South Australia.
It’s the most heartening thing I’ve seen. It’s not our decision to make because Arrium is in the hands of administrator who acts on behalf of the creditors but I am very hopeful that there is a long term future for Arrium.
And that’s what you get when you have people looking to save a plant rather than as Victorian government did in relation to Hazelwood just wanting to drive them out of town.
Okay a couple of things here, I notice that the South Australia Government had pledged $50 million cash to any new buyer of the Whyalla Steelworks and Bill Shorten at the last election or pre-election promised $150 million injection to help save the Whyalla plant.
The Government I know has offered nothing because it doesn’t believe that that’s what you should do, subsidise buyers to come into it, is it going to cost the Federal Government in either direct cash or in kind?
So we put a letter of support on the table and that is that we have already provided a $49 million loan for an upgrade to the iron ore processing facility there.
That’s made a big difference, and we’ve already provided contracts for steel, for the Adelaide to Tarcoola Railway.
They’ve actually employed over 40 new people because of that contract. Going forwards, we’ve offered discussions around a line of credit under the Clean Energy Finance Corporation and the Export Finance Insurance Corporation.
So our focus has been to provide support for investment in real upgrades to the plant and in particular if they were to put in a base load power station that would help the plant and South Australia.
So that’s the way we’ve approached it and they were very appreciative, again it’s not our decision because it’s in the hands of an administrator, it’s a private asset being sold to another private company but we’re doing the practical things to work and help to get it done.
I’ve got to say the South Australia Government, as opposed to the Vic Government was incredibly constructive and helpful and that’s the right way to deal with these things, they were looking at ways of reducing the costs for the plant by reducing government charges.
Which is not a bad thing. Greg Hunt in Beijing.
And as I say that is at least heartening for those people in Whyalla in South Australia because do bear in mind that Arrium, the steelworks there is the town.
You kill the steelworks, you kill the town and there’d be many thousands of jobs potentially that would go which would be a line to those steelworks and you simple can’t have that happening in the communities, there’s no doubt about that.
So it is Important for South Australia but it’s important for Australia as well and remember this all comes back to the security of electricity, the price of electricity and the willingness of companies and government to be able to cooperate to try and make certain that these things are commercially viable.
Greg Hunt, our industry minister, I appreciate your time.