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Thursday, 7 May 1987
Page: 2492

Senator REYNOLDS —Can the Minister for Resources and Energy confirm that a major mining company, MIM Holdings Ltd, has decided not to establish a new zinc processing plant, which would employ up to 500 people, in Townsville? Has that decision been taken because of the high cost of freight and electricity to Queensland industry, particularly in isolated areas? What steps can the Minister take to have Mount Isa Mines and the Queensland Government reconsider this important project?

Senator GARETH EVANS —I am aware that Mount Isa Mines Ltd has considered the feasibility of establishing a zinc refinery at Townsville on several occasions from the mid-1970s, and most recently within the past six months. At present, most zinc concentrates are sold in unprocessed form from Mount Isa, which is one of the major world producers of zinc. It would be manifestly very much in the national interest if further evaluated processing were carried out in Australia. As Senator Reynolds intimated, the company has made it clear that the return on capital required to establish a refinery is just not available, not simply because of energy costs but, more particularly, because of rail freight charges in Queensland. It is of great concern that a major potential investment is apparently being prevented by the extraordinarily high State charges being exacted from industry in Queensland-that allegedly low tax and free enterprise State that is now being touted so implausibly as a model for national government.

This Government is certainly giving, and will continue to give, a very high priority to the further processing of Australia's raw materials before they are exported. We believe that the devaluation of the Australian dollar and the restructuring of industry that is currently under way in Japan present a number of increased opportunities for secondary industry in Australia. The Bureau of Resource Economics within my Department has recently completed and published a major study, entitled `Further Minerals Processing: Opportunities in Australia'. The Government has also requested a detailed study on how to maximise the opportunities presented by the currently favourable general environment for processing. That report from the Basic Metals Industry Council-a tripartite body of State, Commonwealth and business representatives-should be available to the Government in June.

I repeat that there is no point whatsoever in our exploring these opportunities on the current scale if we and our major industries are to be stymied by pig-headed, obdurate, economically absurd and inconsistent-certainly in terms of the internal ideology involved-taxation imposts of the sort for which the Queensland Government has become so justly notorious. It has made a mess of the Mount Isa Mines zinc project in Townsville. It is making a mess of rail freight policy for the coal industry, which is hard pressed, as is the coal industry generally, in the current world environment. The notion that the greedy, economic illiterate running Queensland should have any larger field in which to display his capacities and his economic sensitivities is one that fills all but a handful of honourable senators in this chamber with disgust.