Ramsey PMB Adani
Posted on Monday, 19 June, 2017
Mr RAMSEY (Grey—Government Whip) (10:47): I move:
That this House:
(1) expresses its support of Adani's decision to purchase $74 million worth of steel rail from Arrium's Whyalla steel works;
(2) recognises that the:
(a) order will help sustain jobs in South Australia and particularly in Whyalla;
(b) extra work comes at a vital time in the process of selling the Arrium business; and
(c) Arrium business in Whyalla is vital to the city's future and loss of this order would have a material impact on its future;
(3) rejects any further:
(a) attempts to delay the Adani project which was taken by both the Queensland and Commonwealth governments to their respective constituencies prior to their last elections; and
(b) delays which threaten the jobs of workers in Whyalla; and
(4) condemns actions that threaten Australian manufacturing jobs.
I rise to speak on this motion and to celebrate the fact that Adani has placed an order for $74 million worth of steel rail to come out of Whyalla for its Carmichael project. Whyalla has been sitting on the edge of a precipice for the last 15 months—since the day that Arrium announced that they were going into administration. Whyalla is a town of 23,000 people and there is only one predominant industry there. It employs and provides the knock-on employment for virtually the whole population of Whyalla. I estimate that if the mines and the steelworks were to close, we would see more than 5,000 people in the city of Whyalla on Newstart within 12 months. The rich history of steel making and iron-ore mining in Australia cannot run the risk of evaporating.
Since that time, the federal government has worked very hard to supply some kind of sustenance to Whyalla. In particular, we lent $49 million to the Arrium administrators to install to new beneficiation plants on the Middleback Ranges, which opens up the possibility of exporting ores that were previously not seen to be of high-enough quality; in fact, these ores are already mined and sitting in stockpiles. We also sent the order, through the Australian Rail Track Corporation, to re-rail the Adelaide to Tarcoola line, which is 600 kilometres long—that is, 1,200 kilometres of linear rail. That was an order worth around $80 million. And it makes such a difference to have the steelworks at capacity. It is a bit like running a motel: if your motel is running at 50 per cent, you are in trouble. If your nursing home is running at 90 per cent instead of 98 per cent, your finances are in trouble. And so it is with a steel plant. If the steel plant is running at close to 100 per cent, that is the best opportunity to derive a profit.
So this extra work has made a significant difference to Arrium in this time when we are looking for a new buyer. I hope to get onto that in a moment, because it looks exceedingly close at the moment. In this mix, there had been the pre-existing announcement by Adani that they were going to open up the Carmichael mine in Queensland and that they would need a significant amount of rail to deliver that project. I would particularly like to thank Mr Raj Guruswamy and Jeyakumar Janakaraj, commonly called Jay Jay, who is the CEO of Adani in Australia. When I spoke to them around about 12 months ago, I said, 'You need to show us that you want to invest in Australia, that you are interested in the people of Australia and the industries of Australia, and a very good signal of that would be for you to buy Whyalla rail.' And, of course, they have said that is exactly what they will do.
It looks now as though the Carmichael mine has cleared the last of the obstacles, and that order will go ahead. This is rolled gold, good news for Whyalla. It is jobs in Whyalla. And the knock-on of that is just last week we had the announcement by the creditors that their preferred bidder for the Arrium group of businesses, including the Whyalla steelworks and the Middleback iron ore deposits, is Newlake, a South Korean company which has ties back to Posco. They will build a new steel plant in Whyalla worth more than $1 billion. This will be an enormous investment for Whyalla. They will bring new technology. The Finex steel technology will produce more gases, and that will in turn give the opportunity for cogeneration to provide baseload electricity. It is a win-win-win on every level.
Of course, a very important signal in all this has been that the order books for Arrium have been full, and that has come about by dint of a renewed interest in Australian business, because they understand that it is in the national interest to keep these steelworks open. It has come about by the interest from the federal government in delivering the Adelaide to Tarcoola line and in the moves that it has made in antidumping legislation, an inquiry that I led in this place in the last parliament. It has also come about from the order that has now come from Adani. It is jobs for Whyalla, and it good news for South Australia and good news for Australia. (Time expired)