Transcript
11 June 2009
Joint press conference with Queensland Premier Anna Bligh and Erik Schafer, Chairman of Syntech and Director of Directinvest
Bligh: At times of high unemployment and economic downturn, new investment in new jobs is good news for Queensland. As Premier I welcome Syntech Resources and their investment here in our state. In July we will see construction start on a new mine in the Surat Basin between Chinchilla and (inaudible). This will put in place some 100 jobs during constructions and a further 100 jobs when they start exporting this whole ah in the second half of 2010. What we're seeing here today is a long time vote of confidence in the Queensland economy. Syntech Resources will start stage one of their new business here, construction starting in July this year and export the end of next year. Stage two, which could be up to 600 jobs, will start its environmental approval processes next week, with a view to having exports occurring in 2013. But we are particularly pleased to welcome this company because they share our vision in the government to invest and research clean coal and clean energy technology. The third part of their investment is a multimillion dollar investment in a coal to liquid export and domestic program. This is the conversion of coal to a liquid, such as diesel, (inaudible) supply the domestic market and potentially export as well. So all in all a company, an international company, joining the mining sector here in Queensland. In simple terms it means jobs when we need them most, but in the long term it means cleaner energy and a long term investor and partner here in the mining sector for Queensland. So thank you Syntech for coming and being part of what is a great opportunity here in Queensland. The Queensland Government has finalised the environmental approval, the mining approval for stage one of the project. We will now see as I've said construction start in July with export occurring in the second half of 2010. These jobs could not be more welcome. They're also, as I've said, a very strong vote (?) of confidence by this international company in the long term mining opportunities here in Queensland. And that I think is a shot in the arm for everybody who's involved in this sector. I should also make the point that this demand from this company, or this investment from this company increases demand for increased rail capacity through the (inaudible) missing link development and increase export capacity out of Gladstone and further underpins the likely, the go-ahead for Wiggins Island as a new terminal at the Gladstone Port. So this is ah this is a very significant investment that will further secure the infrastructure needed to see the Surat Basin develop as one of the big mining sectors over the next 20 years, not just in Queensland, but in Australia. I'm very pleased to be sharing the platform today with the Federal Minister for Trade Simon Crean. This company has benefitted from assistance by the federal government and it's my pleasure to invite Simon Crean to the podium to outline the federal government's involvement in this very, very important project.
Crean: Thanks very
much Anna and Eric. It's a pleasure to be here today to join in the
announcement of this very important venture. This is one of those examples
that demonstrates why foreign investment and trade means so much to
this country's economic development. It creates jobs, it lifts living
standards, and importantly in this case it's providing an economically
and environmentally sustainable solution. This is the development of
the Surat Basin and the reason its coal has become an attraction is
because as a thermal coal it is a cleaner burning coal than most others...
And even though there has been a significant reduction in prices for
commodities, the recent balance of payments figures demonstrate that
in volume terms we are still heavily in demand in terms of our coal
and in terms of our iron ore because we produce a better quality and
we can extract it more efficiently than any other country. Even though
the prices have come down in terms of thermal coking coal, the recent
contract prices struck in Japan still reflect a huge increase on 2007
prices. They're down on 2008, but 2007 was the peak of its time prior
to that massive surge in 2008. So an international confidence is being
expressed in the resource base that Australia has. The challenge for
us is how we develop it and how we value that comparative advantage.
So not only is this an investment in the immediate terms in jobs –
100 immediately in the construction phase moving quickly to another
100 – the investment proposal over the coming years is into all of
those forms of energy conversion that Eric has spoken about. This has
to be done somewhere in the world and the demand for it will be driven
even more strongly as the globe searches for environmentally friendly
solutions to its energy supply. So the fact that we've got a vote
of confidence by a leading German investor in that being done here,
rather than converted elsewhere, is also a sign of the times as to how
in the challenge of addressing climate change there is important opportunity
for this nation in terms of its economic development. The Federal Government
has been involved in this because through Austrade and Invest Australia
it has been important in facilitating the investment proposal. So working
with the company and with the state government to enable this project
to be permitted and in the knowledge of the vision going forward. Invest
Australia was rolled in to Austrade's functions when we became the
government because we understand the importance of the changing nature
of trade. Trade isn't just about producing or extracting goods and
shipping them anymore, it's how well we convert and value add the
commodity based. And if we're going to develop it, quite frankly we
do need foreign investment. And we have to trade on that comparative
advantage. More than 1 in 5 Australian jobs is due to trade and not
just exports, imports as well. And it's the flows of trade and the
tapping of the comparative advantage for this nation that holds huge
opportunity for us. The other important announcement we made in the
recent budget was to commit money to develop a clean energy unit within
Australia to really look at the strategic opportunities all around the
globe, both in terms of attractive investment and selling the service
as well as the commodity to the rest of the world. That's why we're
delighted to be associated with this venture. I congratulate the Queensland
Government and Anna for all of the fantastic work they've done in
facilitating those things that matter here – the approvals processes
– but also understanding the importance of the infrastructure to take
this project forward. We look forward Eric to working very closely with
you. It's an ambitious, hugely ambitious agenda going forward. This
is the start, but its significance over confidence in Australia's
future and we're delighted to be part of it.
Journalist: Premier
is Syntech receiving any financial assistance from the Queensland Government?
Bligh: No Syntech
has been working with the state Coordinator-General to ensure that approvals
have been facilitated across government. They've satisfied all of
the environmental approvals and now have approvals in mines, which is
the final hurdle if you like to the project going ahead. So with the
(inaudible) approval going through all of the normal processes, but
here in Queensland we have a Coordinator-General process that facilitates
these projects in a way that is much, much more coordinated and even
faster than the other states in Australia.
Journalist: Where are we with the (inaudible) project?
Bligh: The southern missing link is the subject of an exclusive (inaudible) consortium, which I think we have ATEC and Queensland miner Xstrata involved in it. They've been negotiating with companies ah sorry. They've been working with coal companies to determine when they expect the significant demand out of the Surat Basin and there have been, and there have been other major export company projects (inaudible) might need the infrastructure. This project actually helps secure that, the likelihood of (inaudible) coming in sooner rather than later.
Journalist: If the
coal to liquid conversion project does go ahead, how many people could
(inaudible) employ and what investment would that (inaudible).
Schafer: The investment is around…
Journalist: (inaudible)
Bligh: Eric these are the TV mics (inaudible).
Schafer: The investment would be around $1.5-2 billion and the amount of people (inaudible) employed would be roughly 500 on the plant, but between 500-1000 with all supporting and coordinating.
Journalist: The (inaudible) would that be in Gladstone?
Schafer: No it would be in the Surat Basin. (inaudible) locations for it and I please ask for your understanding that we can not disclose at this time the whereabouts (inaudible).
Journalist: When will the project be finalised?
Schafer: We plan
for the commission (?) of 2013 and by 2015 it could be up and running.
Bligh: So this is a multibillion dollar investment over the next 4 to 5 years that could see anywhere up to 1,000 people employed in the south-west corner of our state. Our vision for the Surat Basin is that not only that we will see significant new mining opportunities, but that it will become the energy powerhouse of Queensland. So (inaudible) which means gas-fired power stations under construction right now. If this project, the coal to liquid project, is realised then that will be a very significant source of fuel for a growing Queensland economy and coming all down the south-west region of Queensland.
Journalist: Can I ask one more question Eric sorry – (inaudible) coal and diesel or is that (inaudible)
Schafer: The technology
that exists (inaudible) in international consortium. There is the UK
engineering (inaudible). It's a German technology. We are (inaudible)
quite advanced in all these conversion technologies. That is the core
of the technology and there is an American company involved as well.
So it does exist already, but certainly in every new project you want
to advance technology and then come to research.
Journalist: Would
it be, this scale, would that be a world first (inaudible).
Schafer: This sort of project are at the moment worked in several parts of the world. Some are even much larger. (inaudible) first of these sorts of project that started in production in 2007-2008. So it's not a first-timer but certainly all of these projects demand a lot of detailed analysis and planning so that we've already spent $5 million into that current what we call (inaudible) study. So the next (inaudible) study will be (inaudible) just to get some of the engineering right. (inaudible)
Journalist: (inaudible)
Schafer: Yes.
Journalist: Very confident?
Schafer: Yes.
Journalist: (inaudible) in Australia?
Schafer: We would know of such a development as of yet.
Journalist: Premier, the sale of Queensland Rail's coal (inaudible)
Bligh: No it wasn't. The significant piece of infrastructure that will be needed for the second phase and the third part of this investment is the southern missing link. It is already being developed by part of… it is being developed by a consortium that is (inaudible) Queensland Rail (inaudible) infrastructure firms. So much of the early, pre-feasibility work has already been done. It is really a question of when demand drives the investment and this announcement today certainly increases the demand. So we would expect to see the investment secured perhaps more readily than it might have otherwise been.
Journalist: But QR
will remain involved in projects like the (inaudible)
Bligh: Oh well that
would be a question of timing. They'll certainly stay in it for as
long as they are in (inaudible) system. If the project is realise how
close to the asset sale then they'll (inaudible).
Journalist: Are you answering other questions Premier?
Bligh: Ah I could do a couple of general questions. We might leave these people here and talk about things (inaudible) I'm not sure.
Journalist: (inaudible)
Bligh: Do you (inaudible)
Journalist: Premier in your (inaudible)
Crean: No we will not join the downward spiral rush that mandates countries purchasing only products produced in their countries. That's what we've attacked in the United States in terms of their Buy America campaign and we won't be hypocrites by supporting it ourselves here. I do not have a problem with a branding exercise that promotes as a marketing tool why Australian product is good quality, value for money, all of those sorts of things. Because there's plenty of things that we can promote in that regard. We should be confident in our ability to complete with the rest of the world. The challenge for us is that there's lots of markets we can't get into and that's why we have to spend so much effort breaking down those markets and getting access. We won't do it if we join the downward spiral to protectionism, and mandating that purchase within a country is protectionism pure and simple.
Journalist: (inaudible)
Crean: This
is a matter of course for the Queensland Government. I think that the
important thing from our perspective is the creation of not just the
sustainability, the alternate fuels, the development going forward of
alternative energy that's the major bonus for us.
Journalist: On the Chinalco deal (inaudible)
Crean: No
it didn't fall over because of that, even though some of those views
were expressed and they were wrong. This investment today shows why
foreign investment matters in this country. This is German investment.
European investment I think has been responsible the last time I looked
at the figures for something like ¾ of a million jobs in this country.
Germany and the US by far are the biggest foreign investors in this
country and it is what has helped develop this country. So we shouldn't
be frightened of foreign investment. But what we've got to do is to
try and ensure what that investment does is expand our productive capacity
and expand our comparative advantage. We've welcomed it from Europe,
we've welcomed it from the US, we've welcomed it from Japan, we're
welcomed it from Korea, and we will welcome it from China. The fact
of the matter is that the Chinalco deal fell over because Rio proposed
a different option and secured an agreement with BHP. The shareholders
have accepted that offer and Chinalco have withdrawn. There is no decision
in terms of the foreign investment review board to make. So it wasn't
a government-induced decision in any event. But what I'm keen to do
is to develop a better framework of understanding between us and China.
Because investment is a two way street. It's not just foreign investment
by Europe into Australia. We invest into Europe, we invest into the
US, we invest into all of these other countries. Direct investment by
Australian firms overseas now equals direct investment into this country.
Australia has caught up. It understands this new dynamic that the new
form of trade is investment. And why do you invest in other countries?
Because you either get closer to their comparative advantage, closer
to their markets, or you participate in global supply chains. That's
why investment matters. And if our relationship with China is understood
to be an important factor driving exports, it's clearly been an important
factor in terms of it contributing to us keeping out of recession. If
that's the case we've also got to understand the importance of that
interdependency not just being about trading goods and services, but
also a two way street in investment.
ENDS
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