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Stateline (Tas) -

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(generated from captions) CC Tonight on Stateline -

the prospects of a Tasmanian

pulp mill is surer pulp mill is surer than ever

but what fls hurdles do Gunns

now face? They will be putting

up some equity towards the

project but the bulk of the

cost is going to be financed

through debt. Tasmanian wine

makers growing in confidence.

And grass roots creations in he subu bs. the suburbs.

Hello,

Hello, I'm Airlie Ward.

Gunns' planned pulp mill on the

banks of the Tamar river might

have State and now conditional

approval but opponent are

adamant the mill is no

certainty. The Labor and

Liberal Parties are trumpeting

yesterday's Commonwealth

go-ahead as a victory for

science over politics but the

champagne shouldn't be popped

just yet. There's a legal

challenge to be heard, the Gunns board is yet Gunns board is yet to approve

it and foons be obtained for

the massive $1.7 million

project -- finance. This

decision on the pulp mill is

based on science and science

alone. I have put science that

very centre of this

environmental assessment. The

pulp mill proposed to be built

on the Tamar river in Tasmania

will set a new benchmark for pulp mills and environmental performance pulp mills and their

around the world. Not exactly.

Mills in Sweden have to abide

by tougher emission limit

guidelines. A fact since

conceded by Federal Environment

Minister Malcolm Turnbull. I

think you and the chief

scientist said today there are

Swedish plants operating below

that one. Yes, the problem is

when you get down to that level

knment The they don't bother measuring itm

knment The Commonwealth

assessment was limited to the

environment, protection and

biodiversity conservation act.

He chose to look at one very

narrow issue and he's chosen to

stay with the very narrow

recommendations. He should have

rejected this and he knows that

and he squibed the

issue. Sydney businesspen

Geoffrey Cousins could fruve be Geoffrey Cousins could fruve be Malcolm Turnbull's nemesis.

He's vowed to continue the

fight against the mill. I

think he's now a lost cause and

weather the people of Wentworth

will think he's a lost cause is

a matter for them. The Federal

greenhouse gas emissions, air assessment did not examine

quality or the impact on

forests, tourism or other

industries. Chief Commonwealth

proposed mill could scientist Jim Peacock says the

proposed mill could be world's

best practice for a mill of its

type If it the environmental

impact management plan

conditions are met in their

entirety, we feel there's a

very strong prospect that the

mill will operate with an environmentally neutral

footprint. Opponents of the

mill are questioning how Dr

Peacock can make such an Peacock can make such an

assessment when his own

analysis of the proposal was

strictly limited but the forest

industry and Chamber of

Commerce are heralding the

Commonwealth approval oz a

victory for science and jobs.

Tasmania is clearly open for

investment. Commonwealth

approval is conditional upon

Gunns adhering to 48

conditions, some of which have

to be adopted before any

including construction can begin

including an environmental

impact management plan,

baseline studies from fur seal

and little penguin colonies and

new studies on threats to

endangered species. The

Commonwealth scientist agree

Planning and Development would the former Resource,

Commission that the company's

hydrodynamic modelling was

inadequate and has ordered

extensive modelling of effluent extensive modelling of effluent

and ocean movements before the

mill can begin operating. Gunns

chief John Gay is confident.

The guidelines have been

tightened but we'll have to

live with that. He's back away

from threats to abandon the

project if tougher limits were

imposed and the reason for

assessment, the September withdrawing from the RPDC

start, a no longer an issue for

the company. But the Gunns

board has yet to decide whether

to give the project the tick

and financial backing is also

yet to be sourced. Gunns has

been a client of the ANZ bank

for over a decade but the

branch yet to decide if it will

finance the mill. As a

signatory to the equator

principle, the bank will only finance projects according to sound social and environmental

standards. In the shadow of a federal election, Malcolm Turnbull's approval could also

have an impact on his colleague

in Bass. The decision, which

ever way it goes, could cut

short my career. That's just

facing facts. I don't like to

contemplate it too much but the

fact is we throw ourselves at

the mercy of the the mercy of the public every

three years. Ben Quin has

previously been outspoken over

his opposition to the

proposal. As a business owner

in it area, he could have done

a broader assessment. He did

have the ability to look at the

consequences of this essentially and economic

project. While opponents are

yet to decide whether to take legal action over yesterday's

decision, a previous challenge

against the rigour of Malcolm Turnbull's assessment is set

down for hearing in the Federal

Court later this month. The

Premier Paul Lennon says he now

wants to heal divisions created

over the pulp mill debate, but

with protests already under

mill! way, that's unlikely. No pulp

mill! One of the next steps

for Gunns is to secure finance

for the massive project. Its

banker, the ANZ , has

commissioned its own technical

review of the mill and says it will base its decision on the

outcome of that as well as

Gunns' ability to comply with

Commonwealth approval

conditions. I spoke to analyst

Toby Grimm from Adelaide this

afternoon. Thanks very much for

your time. Gunns has your time. Gunns has been

buying up big lately with

Auspine and Carter Holt. Have

they overspent? Can they

afford this mill? I certainly

believe Gunns can afford it. I

think the important point to

make is Gunns won't be funding

this project out of their own

hip pocket. They will be

putting up some equity towards

the project but the bulk of the

through debt. They will cost is going to be financed

through debt. They will go out

there and borrow a substantial

portion, the lion's share of

the cost of the project. So the

funds will actually come from

other sources so, yes, I think

they will be able to fund

it. You say the lion's share is

going to come from organise

sources, the ANZ bank is yet to

decide whether it will finance

the mill. If they don't, what

other options do Gunns have? I think apart think apart from the other major banking institutions

around Australia and indeed

globally being potential rivals

for that loan, the commercial

realities is that it would be

quite lucrative as long as it

obviously didn't create an

image for any of the banks that

was counterproductive for their

other business. Beyond banking

finance, it's possible Gunns

could look at issuing some sort could look at issuing some sort

of bond or debt security to

effectively raise the funds

from third party investors,

hedge funds, those sorts of

bodies. Although, I'm sure that

and the end of this process I

would be very, very surprise

fed the ANZ didn't stay in that

deal. The son of former

Premier and can Gunns board

member Robin gay gay, Ben gay

gay, is

gay, is -- Robin Gray, Ben Gray

is running a large equity firm.

Could he fund the project? I

don't know whether they're

enough to fund the project.

They could be part of a sinledicate or group of lenders

for the project. I certainly don't think the relationship

would have anything to do with the deal. It would the deal. It would essentially

come down to the profitability

or commercial aspects of that

arrangement and obviously it

would be done on an arm's

length commercial basis. Gunns

chief John Gay is confident the

economics of the mill will

stack umbut there are fears

large volumes of South American

pulp will come on to the market,

market, make the Tasmanian mill

less competitive. Is that a

concern? Would be a concern,

it would be something Gunns

would have to look at very

closely indeed and of course

all the analysts looking at

what it means for Gunns share

price with doing the same.

You're absolutely right. Those

critical inputs to a valuation

model, they are pulp prices and

the exchange rate, indeed the exchange rate, indeed the

capital expenditure or cost of

building the project are all

very significant in the outcome

in terms of what the value is

for Gunns. I think importantly,

despite the increased

production of hard wood pulp

coming out othe South American

region, somewhere around 4

million tons perannum extra was

exporteded out of that region exporteded out of that region

in 2006. You look at the price

of that commodity, hard wood

pulp has increase by 22% in

2006 and that obviously is a

result of the demand

outstripping that supply

increase. We've got very large

increases in buyers from our

Asian neighbours and that is

override the increase in

supply. The final and very

important assumption is the important assumption is the

exchange rate. The pulp is sold

on US dollar terms so a stronger Australian dollar is

not particularly good for the

project economics. It's very

sense toove that. The long-term

estimate for the Australian

dollar - when I say long-term,

we are talking decades, not a

matter of years, is around 70

cents US. It is currently

pushing 90. If the dollar was to stay to stay around that range for

the next decade or two t would seriously impact the

profitability of the project.

If pull prices stayed the same.

If they are going up at about

the same rate as the Australian

dollar, those two cancel each

other out and it remains

profitable. How much has it

recent controversy surround the

environmental issues of this

project - is that something that investors are also going to

to be weighing up? Absolutely.

I thing firstly the pulp mill

project is a very important

step for the company and its

shareholders to see their value

realised. Unsrnt in the first

instance is never good for any

stock -- uncertainty. We have

seen Gunns shares perform poor seen Gunns shares perform poor

ly as a result of the

announcement of this project.

They are holding steady today.

The importance is to that

valuation. We think the pulp

mill will add around 80 cents

to a dollar in value to the

share price and the consensus

analyst valuations lie between

3.45 at the low end up to 4.30.

So increasingly, we will find shareholders are pulling

strings in terms of company

decision-making and management

and as those powers, the socially responsible funds and

the shareleders who do take an

interest into a company's day-to-day activities and what

they mean for society, it's

possible that any negative or

adverse response from those

groups could be a negative for

the share price of the share price of Gunns or any

company seen to be doing

something that isn't necessarily socially

responsible. I'm sure the wul

be a lot more talk about this

project. Toby Grimm, thanks

very much for your time.

Thanks, Airlie.

Tasmania's wine industry has

had a bumpy year. Frost and

drought have led tolow yields

but on the up side, but on the up side, the overall

quality has been high. The

ability to sustain yields year

in, year out, is crucial if it

Tasmanian growers are to double

production in the next five

years. That's the aim and it's

got serious research dollars

behind it as Lucy Shannon

reports. Steve Lubiana has been

growing wine on the bankes of

the River Derwent just outside

Hobart for 17 years. In 1990, Hobart for 17 years. In 1990,

with a desire to make cool

climate wine, he left his

father's South Australian

vineyard and embarked on a

major search across the country

for a suitable location, ended

up on his gan gan property.

You're one of Tasmania's most successful wine makers. Would

you say it's that site

selection that has helped you a

lot? It is very important.

Number one thing is to make

good wine and to make good wine and to make a wine

you have to have good grapes.

You can't make good wine if you

haven't got good grapes.

Secondly, just make sure

nothing goes wrong and it turns

out OK. The wine maker has a

real care taker role and the

vineyard site is pretty much

everything. Last season's

frost proved just how critical

site selection is. Unlike many

others, Steve Lubiana was protected.

protected. The lessons in site

assessment for frost are

particularly acute at the

moment and they're at the

forefront of people's minds.

Despite more planting, last

year's yield was down by 500

tons on the previous year.

There's less of it but it's a

better quality vintage,

demanding higher demanding higher prices.

Science is now playing its part

in helping to alleviate the

effects of spring weather on

wine yields. Tasmania's

Institute of Agricultural

Science has a dedicated

viticulture research body. The

yield drop last year, or in

this current season, was probably mostly associated with

the frost we had in October

last year and that really

decimated crops on some properties.

properties. We are very

conscious that yields,

particularly from pinot noir,

are very variable across properties and from year to

year. We would like to be able

to stabilise those at a level which is economic for growers

to be able to produce good

quality wine. Just how much to

prune off a vine is a much

debated issue in the industry.

Most wine growers pick leave in Most wine growers pick leave in

late summer and autumn to allow

more sun on the grapes but

researchers now say excessive

leaf-picking may lead to lower

yields. Wine growers thing it

improves culler and quality.

How do they bans that up? It

is something we're try to find.

We know the is a number effect We know the is a number effect

on yield. We're less certain

about the positive effect on

quality. Finding how many leave

we need to remove to get

optimum quality without

influencing next season's yield

is an issue we've got a major

study on at the moment. Wine

research in Tasmania is getting

serious. The industry has

received $900,000 in received $900,000 in a

Commonwealth grant and is match

the funding dollar for dollar. Certainly the biggest grant

that we're aware of for cool

climate research. Traditionally

a lot of money has gone towards

what we would call the warmer

or hot varieties so this is very significant for cool

climate production. Pinot noir

is the flagship Tasmanian cool

climate wine, making up 46% of the total crush last the total crush last year. But

the State's growers are

expanding their repertoires,

producing a wider range of cool

climate wines including more

whites. There is an increasing

focus on the white wine other

than chardonnay-gewurtz traminer, savignon blanc and

the pinot gris have all grown

in total volume this vintage.

That's a very exciting thing to see

see the diversity of white

wines which coming to

Tasmania. Part of the features

of our climate is we have this

extended period of frost risk

and on the up side have an

extended period of ripening at

the other end. If we find the

sites that are not frosty, we

can grow grOe quite a wide

range of varieties where it

makes sense in Tasmania to grow

shiraz, cabernet and pinot shiraz, cabernet and pinot noir

and reisling and chardonnay in

the same vineyard, that makes

no sense in Europe. Unlike the

industry's previous body, Wine

Industry Tasmania is focused

heavily on marketing. The main

aims for Wine Industry Tasmania

has been to I guess market

Tasmanian wines as a generic

term. Raising aware ness and term. Raising aware ness and getting the prufile of

Tasmania's wins wines out into the national and hopefully

international marketplace.

Some of the events we've put in

place to date have included a

very successful master class

for the smelliers, the waiters

and those that set the wine

lists in Melbourne restaurants.

We took a group of wine

makers over there recently to

promote our reislings and pinot noir with the aim noir with the aim of hopefully

getting more Tasmanian wines on

to the wine list for Christmas

time. I thing our brand

Tasmania is certainly a strong

one for me. If I - when I do go

overseas to promote our wines,

I say, "I make Tasmanian wine,"

and they say, "Tasmania, yeah,

very good stuff." I say, very good stuff." I say,

"That's part of Australia. The

important point it's Tasmanian.

It's not Australian, it's

Tasmanian. We make very high

quality wine and don't want to

get stuck into the cheaper

price points." In the last few

years, some big players have

entered the Tasmanian market,

companies such as Hardys and

Yalumba have started to make

their mark in the north of the

State and for most in the industry industry they're a welcome

addition. I would like to see

the interest of those companies

broaden even further because

they do bring a weight of

talent and experience in the

wine industry to Tasmania and

they're definitely a big asset to the State. What potential

do you thing the State has to

grow? How much further could

it grow, do you think? it grow, do you think? Huge.

It could triple or quadruple.

We're so tiny, we are hardly

even on the statistical maps.

When I open up the industry

brochures and look at all these

graphs and that, and NSW,

Victoria, SA and can sometimes

Tassie's not even on

there. What does the industry

need to grow that much? What sort of industry support does it need?

it need? Support's important.

I think we could certainly do

with more Government support. The industry hopes production

will double in the next five

years, a bold aim considering

fluctuating yields. Some years

are good years and some years

are not so good. So hopefully

it won't be a problem in the

future. Certainly, the Bureau

of Meteorology, with of Meteorology, with their

severe frost warning system

that's just come into play, is

hopefully going to benefit our

growers enormously. The bureau

began severe frost warnings

last month, giving growers an

opportunity to protect their

crop against the damage.

Traditionally, growers have

used wind machines or spraying

but researchers are encouraging

the use of helicopters to blow

warm air on the warm air on the crops. Even on

the very first day the system

came into place, we received a

frost warning for northern

vineyards so that enabled our

growers to have their fans and

sprinkler systems on alert

ready to go and luckily they

didn't sustain any damage,

which is great. A group of

vineyards at the moment have

got together and I know each

year they have a helicopter on stand-by stand-by for those nights where

there is a severe frost and

that's great if they can all

work together. The Tamar

Valley region continues to

dominate in wine production.

Many growers in the valley fear

Gunns pulp mill will adversely

affect their businesses. For

the industry body, it's been a

difficult time, try to balance

the different views of members.

It's been a very challenging

organisation, less time for us. Being a new

organisation, less than one

year old, our aim has been to

bring the industry together and

work towards that common

marketing goal of promoting

Tasmanian wine so from our

perspebilityive, we've had to

-- from our perspective, we've

had to I guess remain - not

really take a position as such

but work with our members that

do have legitimate do have legitimate concerns,

certainly the ones in the Tamar

Valley. We've work would them

to help them get answers to their questions and their

concerns but we do have members

on both sides of the debate. In February, Stateline brought you

the story of east coast couple Alan and Wendy Cameron and

their fight to build a $15

million ecotourism venture at

Bicheno. The State Government successfully challenged the

development, argue the development, argue the couple's

beachfront land should not be

rezoned. Today the Cameron s

lost their last-ditch attempt

to save the result. The

Camerons say they're shattered

by the ruling and will leave

the State. Hobart artists Penny

Malone and Shaz

Harrison-Williams have been

collaborating for years to

produce quirky fashion and

hoping their homeware designs. They're

hoping their latest community

project will encourage more

people to rediscover their

creative skills. The commercial

strip of Moonah in Hobart's

north has been experiencing an

artistic invasion with a not so

traditional take on some traditional

traditional art forms. The

installations are the

collaborative work of local

textile designer Penny Malone

and fashion and home wears

maker Shaz Harrison-Williams.

They're hoping their displays

will draw more people to the

community arts sister where

they're basing themselves for a

fort night. That's a good

way of advertising the fact

we're here doing the we're here doing the residency

and also let people know the

arts centre is just around the

corner. The pair first met at the Tasmanian school of art in

the 19 70s. Since then, they've

bonded through a love of quirky

objectchise provide inspiration

for their designs. Malone's

colourful patterns have evolved

over the past couple of decades from T-shirt prints to over the past couple of decades

large-scale designs for

interior furnishings. I was

try to gather some money

together to get myself back to Tasmania so I bought white

shirts from the op shop and

then I would hand paint them.

It was during the punk era so I

painted a lot of British flags

on to shirts. When she did get

the art back to Hobart, she discovered

the art of hand paint-making.

I don't actually use screens at

all. With my work, each detail

is individually printed. Say if

there's a pattern that's got

coral or shells, each shell

will be printed one at a time

and I build up the design as I

go along. So, yeah, I it is

time consuming. Shaz

Harrison-Williams has been a dedicated

dedicated buying of Malone's

textiles for years. That

they're the perfect medium for

her favourite design, the 1920s

fold-up sun hat. I wore my sun

hat for years and it fell

apart. I have been sewing since

I was five and I went in and

whipped another one up and

take someone said, "Gee, that didn't

take long." I'd stopped working

by then and they said, "You

could make them for a living."

I thought, "What a good idea."

She's often called upon to

produce commission pieces for

others with a strong sense of

humour and style. Someone who

grows varieties oftimatose at

huon villwanted a that hat

looks like a tomato so Penny looks like a tomato so Penny printed different tomatoes on

the fabric and the crown was

shaped like a tomato and we put

a tomato on top. Members of the

public are invited to visit the

art centre over the next week

to watch the women at work.

They'll also their their

technique at workshops. You're

not worried about giving away

I'm very your technique? Not at. All

I'm very much for sharing

ideas. In fact, they're hoping

to encourage others to discover

or rediscover the joys of

dress-making. I love people

asking me questions because I

really do think today people's

liverise just so empty that you

can buy ready-made stuff from

China and it'svy cheap and

people are so interested in how

things are made these days and to

to get them excited about maybe

they can go home and start

sewing again. That's Stateline

for this week. We'll leave you

tonight with tulips in full

bloom at the royal Tasmanian

botanical gardens in Hobart.

The annual tulip festival kicks

Goodnight. off at the gardens tomorrow.

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