Report backs industry concerns

A NEW  report by a firm of international market analysts is the latest in a series of claims backing up concerns that the aluminium industry could move “non essential operations” offshore as a result of the carbon tax, according to Federal Member for Flynn Ken O’Dowd.

 He was commenting on the report by independent market analysts, IBISWorld, which has warned that the aluminium industry could be depleted.

“We have seen similar claims from the Gillard Government’s own climate change advisor Professor Ross Garnaut as well as by such sources as Russal, which is a major investor in Queensland Alumina Ltd at Gladstone, “ Mr O’Dowd said.

The report claimed that, “To avoid the increasing costs of power and the higher price of raw materials, the larger industry participants potentially burdened by the emissions trading scheme through multiple industries, would move any non-essential operations out of Australia over the next three years while there is still a degree of protection”.

Meanwhile, the coal industry claims the tax would cost up to $10 billion in Queensland alone and lead to thousands of jobs losses.

The IBISWorld report admits there will be challenges for the industry, but there would also be opportunities for coal seam gas.

"While some energy-extraction industries may grow more slowly than expected as input costs (fuel and electricity) rise and domestic demand weakens over time, the main determinant of investment is expected to be commodity prices - which are largely determined by global supply and demand," the report said.

It continued: "While some mineral processors may lose, others will benefit…

"The coal industries in Queensland and New South Wales mine black coal but are also expected to be challenged by the carbon tax.

"The higher costs due to a carbon price may result in some of the small proposed mines being shelved or delayed.

"The most significant impact will not come from digging holes in the ground, but from mineral processing. The majority of Australia's gas reserves are located far from major cities.

"It takes massive amounts of energy to cool and compress natural gas to be ready for transport, thus attracting the carbon tax.

"A positive for producers of LNG and compressed natural gas will be increased domestic demand.

"Gas-fired power stations release significantly lower greenhouse gas emissions than coal-fired power stations and, although there may be a focus on renewable energy, there will be increased demand for base load power," the report said.