Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Monday, 25 February 1985
Page: 110

Senator HARRADINE —Is the Minister for Resources and Energy aware that a combination of the devaluation of the Australian dollar, the co-operation of the labour force and Federal and State financial guarantees in 1978 ensured that the mining operations of the Mount Lyell Mining and Railway Co. Ltd have continued until now, and will probably continue for the next few years? In view of the rapid fall of the Australian dollar, which throws fresh light on the viability of the mining operations at Mount Lyell, since the Government refused to provide any guarantees last month, will the Minister enter into further discussions with the Tasmanian Government, the employees at Mount Lyell and the company, for the purpose of ensuring the development of the 50 series? Would not such an initiative taken by the Government be consistent with the absolute promise made by the shadow Treasurer in 1978 that a future Labor government would ensure the continuation of mining operations at Mount Lyell for as long as the ore body existed?

Senator GARETH EVANS —One thing about Mount Lyell is clear and is accepted by just about every party to this unhappily drawn-out saga and that is that the mine really is very close to the end of its viable life. It is a matter of commercial judgment as to just how much more time it has if particular engineering contingencies are weighed and balanced. But certainly all the discussion so far has been premised on the assumption that at most the life of the mine could be extended to 1988-89 without, on almost any commercial assumption on the exchange rate or anything else, it being feasible to go beyond that.

I must confess that the Commonwealth has had a great deal of difficulty in getting clearly from the Tasmanian Government in particular just what kind of financial support is necessary to keep the mining operation alive at least until 1988-89. Initially a proposal was put to us in terms of $15m being necessary in combined Federal-State subsidies to keep the losses of Renison Ltd covered, of which the Commonwealth was asked to put in $5m. That subsequently reduced around Christmas time to $10m, of which the Commonwealth was asked to put in $5m, we being told that the Tasmanian Government was just unable to find more than $5m. The Commonwealth responded to that by offering immediately the whole of the remaining $9m of Gordon below Franklin funding as it had not been possible hitherto, in the course of discussions, to come up with viable projects for the use of the money in question. The Tasmanian Government then told us that it did not want to spend any of that $9m which we gave it essentially without strings but said that it could in fact, after all, find the resources to keep the mine going until 1988-89.

In the context of all this and of very careful consideration of the matter over a long period, and very careful judgments in consultation with the company about the viability of the mine, the Commonwealth and the Cabinet made it clear, as I announced, that there would be no further consideration of any financial assistance to Mount Lyell. Unhappy as that state of affairs may be, mines do come to the end of their useful working lives, and the social and economic dislocation associated with that just has to be confronted. The depreciation in the value of the dollar will of course have some impact on everybody's calculations, as I readily acknowledge. But the Commonwealth Government's position now would have to be that it remains a matter of commercial judgment by the mine in consultation with the Tasmanian Government as to whether the mine can in fact be kept alive for a longer period. It remains open to the Tasmanian Government to devote any proportion it likes of that $9m of Commonwealth funding now in its possession if to do so would in fact be helpful in keeping jobs on the west coast going longer.