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Tuesday, 12 May 1970

Dr PATTERSON (Dawson) - Before the suspension of the sitting for dinner I was discussing what type of industry might flow from the construction of a major power house at Gladstone. I made the point that the northern part of Australia was blessed with the 4 major criteria essential for large scale industry, namely, the availability of cheap raw material, particuarly in the form of coking and steaming coal, the availability of iron ore, the availability of power - which was the missing link which is now to be provided - and the availability of ample supplies of water, which of course is necessary in any large scale processing works for the provision of steam. These were the main reasons for building at Gladstone a major power house that will have a generating capacity of 1,100 megawatts.

One of the main advantages of a power house at Gladstone, as I said before, is that in association with Weipa, which has the greatest deposit of bauxite in the world, the alumina works at Gladstone has been the springboard which has triggered off a remarkable series of chain reactions of development activity throughout Queensland. We have seen tremendous steps in the development and export of our coal, lt needs only the marriage of Queensland coal and Western Australian iron ore to develop a major steel complex in the north. Ever since the Commonwealth scrapped the plan for a massive multi-purpose hydroelectric power scheme for the Burdekin Valley just after the Second World War the northern and central areas of Queensland have had no chance in the competition for attracting large scale industries. They simply have not been in the race because they have not had access to relatively cheap power, lt seems clear that large scale aluminium works, aluminium being the next stage from alumina, and a chemicals plant will form the economic backbone of the area following the construction of the super power house at Gladstone. In other words, the first stage of development will be based on the processing oi aluminium and chemicals. The next stage could well be the establishment of a major export steel works utilising Western Australian iron ore and Queensland coal.

This does not necessarily mean that Gladstone would be the logical centre for a steel works in Queensland. Many technical studies, such as those carried out by Dr Buchanan, Mr Menzies and others, have shown that Bowen, for example, like Gladstone has excellent environmental physical conditions which would be suitable for the establishment of an export steel complex. One of the requirements for large scale metallurgical and chemical processing is the abundance of water. This is one thing that centra] Queensland and north Queensland have. The largest undeveloped resources of water are contained in the Fitzroy and Burdekin basins which are located close to the coastal ports and coastal towns and are in close proximity to Gladstone in particular. The abundance of water, coking and steaming coal, limestone, iron ore and salt in the northern parts of Australia and the existence of a populated infrastructure in the coastal towns could well justify the establishment of high capacity plants despite the fact that a high cost may be involved. If the plants are of high capacity and their capacity is fully utilised the operating costs could be extremely low. Sufficient technical evidence is now available to suggest that perhaps the best integration of the physical resources of the north - that is coking and steaming coal, and iron ore - would be the production of pig iron in Western Australia and the product:on of steel in Queensland with ships travelling between Western Australia and Queensland carrying coal in one direction and iron ore in the other.

Australia's main competitor in her expanded steel production is Japan which transports its steel mainly to the United States. Japan transports its raw materials such as iron ore from the west coast of Australia and coal from the eastern paris of Queensland. An export steel works in Queensland would have significant freight advantages over Japan, in that the complex would be located on or close to the coal fields and the processed material, steel, could be exported directly from the deep sea ports on the east coast.

One of the charges often levelled against the Opposition is that it is opposed to foreign investment. This is not true. We have always argued that there should be a higher rate of Australian equity where possible in Australian developmental projects, particularly mineral projects. The development of the We:pa-Comalco complex is one example where the Labor Party would agree that there is a case for foreign management in marketing. If one studies the whole complex of the export of aluminium one finds that the free market for aluminium is relatively small, that it is virtually a captive market. If one looks at the trade in aluminium one finds that 5 companies dominate the production and export of aluminium in the Western world. These companies arc Alcoa, Reynolds, Kaiser in the United States. Alcan in Canada and Pechiney in France. I suppose it can be argued to Australia's advantage in this particular case that 3 of the world companies in association with Comalco have been able to establish the Weipa-Comalco bauxitealumina processing works in Australia. This does not mean that the Opposition believes that there should not be more Australian equity. In order to break into the world market, this world cartel, the Labor Party would argue that this is one specific case where foreign management has been justified. It would be extremely difficult for an Australian company to break into the world trade in aluminium in competition with Alcoa, Reynolds, Kaiser, Alcan and Pechiney. Comalco, for example, is achieving major advantages in Gladstone.

It is well recognised that many process industries need electricity in large blocks and they need it cheaply. We have not received any information on this subject, but if the super-powerhouses can provide cheap electricity at less than 0.5c a kilowatt hour then Queensland is on the right road to major development in the chemicalmetallurgical field. As a second stage we hope to see the construction of a steel complex in the north utilising Western Australian iron ore and Queensland coking coal.

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