Interview with Leon Compton, ABC Hobart
Website search Interviewer Leon Compton Bell Bay Aluminium LEON COMPTON, HOST: At about 7 o' clock this morning I caught up with the Federal Industry Minister Tim Ayres because Tasmanians are asking – a lot of enthusiasm in NSW, will the Federal Government also help out here? You'd be aware that there is a long standing gap between what Rio want to accept as a new power deal and what Tasmania wants to offer.
As I said, I caught up with Tim Ayres a little earlier this morning and I started by asking, well, NSW gets a deal to keep its smelter running. Tasmania doesn't yet. Why not?
SENATOR TIM AYRES, MINISTER FOR INDUSTRY AND INNOVATION AND MINISTER FOR SCIENCE: Well, it's very important to focus here on the real challenge around the Bell Bay Aluminium facility. It is of course welcome news for Australia that the Tomago facility deal has been finalised. It's a large deal that moves them from unaffordable coal fired electricity and delivers investments in the electricity system that will put downward pressure on prices for households and businesses in the national electricity market.
That is a good deal for Australia, the Bell Bay Aluminium facility, it's important to focus on what the competitive issues are for that facility and what's going to determine a sustainable pathway forward for that facility. And the focus today, and it has been for the last few months, is on the power purchasing agreement between Hydro Tas and the owners of the Bell Bay Aluminium facility. : Isn't that as simple as the issue was in NSW, Minister? : No, it's a very different situation.
As the former CEO of Bell Bay Aluminium said, Bell Bay Aluminium sources its electricity from Hydro Tas. Tasmania has a remarkable competitive advantage here. Its power is sourced from rain that goes into dams that is turned into electricity and has been for decade after decade.
It's a publicly owned hydroelectricity facility and choices are being made in negotiations between the facility and Hydro Tas, a publicly owned facility, and the Tasmanian government about whether or not competitive electricity power purchasing agreement can be struck. I'm encouraging and have been encouraging all the way through those negotiations to reach a conclusion in the interest of Tasmanian workers and Tasmanians generally. : The question is, will you intervene?
The Tasmanian Government say there is, if you like, an existential gap in terms of the future existence of Rio, between what Rio want to pay for power and what Hydro Tasmania owned by the state want to get for it. They say it's $60 million a year over 10 years and unless somebody, and they're looking at you, chips in to help cover that gap the plant will close. : Can I just make two points about that set of claims, Leon?
Firstly, it’s in my experience unhelpful to canvas publicly commercial-in-confidence numbers that are engaged in the process of the negotiation. I mean I'm not aware but I've heard that claims being made publicly. There are a set of negotiations between, as I say, the government owned facility Hydro Tas and Rio Tinto, the owner of the facility.
Those negotiations should continue. It's within the gift of the government and Hydro Tas to determine their negotiating position. They should do that and they should do that in the interest of Tasmanians.
That's the focus of the discussions here. It's a negotiation straight out between a publicly owned facility and Bell Bay Aluminium. These are tough negotiations.
I understand why the Tasmanian Government has taken the public position that it has. I just say – let's focus on those negotiations as the source of future competitiveness for the facility. : Sure, but Tasmanians are asking the question are you going to stand by on that basis? Does that argument hold all the way through to an unsuccessful negotiation not being concluded?
And Rio and the 550 direct jobs and the other jobs that go through the supply chain, does that argument hold right up until the day Rio says we're not producing aluminium in Tasmania anymore? : Well, we will keep engaging with the Tasmanian Government and with the owners and we are engaging with them – : At what level does that involve federal support? Are you prepared to get in here and commit taxpayer money as you have in NSW to ensure Rio's jobs stay in Northern Tasmania? : All I say, Leon, and to your listeners, is that there is a negotiation between the publicly owned electricity generator run effectively by the government of Tasmania and Rio Tinto.
That is squarely the focus of these discussions. Now we will keep engaging, we will keep focused. This is an important facility.
We will focus and assist where we can. I mean, I've been to that facility a number of times – : But what does that mean, Minister, in terms of a commitment to keep Rio Tinto's operations going, should Tasmanians prepare? If the state, which is in financially straitened times for the most part of its own making, if the state can't get a deal done with Rio on power the consequence could be that the facility there closes.
Is that a fair appraisal of your view from Canberra? : Well, it's a state-owned facility. It's a facility that, where it is not in the private market. It's not a negotiation between two private operators.
It's a negotiation effectively between the Government of Tasmania through its agency - Hydro Tas and Rio Tinto. That's the fact of it. . So, it's not one for the Feds? : Well, I don't want to say that either, Leon.
There are real issues there for that facility. It's a small facility by global standards. It's got unique advantages.
It's got a capacity to innovate. What I want to see is a commercial pathway forward for that facility. Key ingredient in that is getting the electricity contract between the state and the facility right and we will keep working away just as we have on a range of other Tasmanian and Australian facilities.
We're taking the same approach with Bell Bay Aluminium that we've taken with a range of these facilities. We'll keep working with Jeremy Rockliff and the Government of Tasmania carefully on these questions. If there's an answer, it's about everybody working together and not taking shots at each other, but working together in the interests of Tasmania and Tasmanians. : Okay, I'll try again on this one more time Minister and my guest this morning.
You're on 936, ABC Hobart and ABC Northern Tasmania. Tim Ayres, Federal Industry Minister. So, if it comes to arguing over a split, who covers what in the $60 million a year gap between what Hydro want to get and what Rio want to pay, you're not particularly interested in getting involved in covering what the Tasmanian Minister says is that gap? : Well, it's a negotiation between Hydro Tas and Rio Tinto. : That was Tim Ayres, the Federal Industry Minister talked to him earlier this morning.
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