Emissions trading scheme could kill zinc, lead operations
theaustralian.news.com.au
Nicola Berkovic | November 13, 2008
Article from: The Australian
AUSTRALIA will lose its zinc and lead industries unless major changes are made to the Rudd Government's emissions trading scheme, smelter operators have warned.
The nation's largest zinc and lead producer, Nyrstar, warned yesterday that its smelters in South Australia and Tasmania would no longer be viable unless the Government changed its formula for determining who was eligible for compensation.
Nyrstar chief operating officer Greg McMillan said modelling prepared for the company showed the scheme would cost the company $70 million a year, assuming a carbon price of $40 a tonne.
"That would completely wipe out our profits from both of those two operations, and that is just not sustainable," Mr McMillan said.
He said the company would have to consider closing its smelters at Port Pirie, in South Australia, and Hobart, which together generated more than $2 billion a year in export revenue and employed 3250 people directly and indirectly. The business, which has operations in the US, Europe and China, was unable to pass on any additional costs of the scheme because the price of zinc and lead was set on the London Metals Exchange.
Mr McMillan urged the Government to change its compensation formula, predicting the industry would otherwise be forced offshore to countries with lower environmental standards, such as China or India.
China's zinc smelters emitted more than 2 1/2 times as much carbon per tonne of zinc produced than smelters in Australia, he said.
"The issue here is carbon leakage," he said.
"If our production is going to be taken up in countries with less efficient industries and lower environmental standards, you will actually increase carbon emissions rather than reduce them."
Sun Metals, which operates a zinc refinery in Townsville that employs 450 people directly and indirectly, said it shared Nyrstar's concerns about the ETS.
Sun Metals chief executive SBLee said: "It depends on how much the price of power increases, but it could threaten the future of our operations in Australia." He added the industry was also taking a battering because of falling commodity prices.
Climate Change Minister Penny Wong said the Government would continue to consult with industry on the design of the scheme. |
