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Foreign investment in coal development projects at Hail Creek, Queensland and Birds Rock and Mount Arthur, New South Wales



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TREASURER

EMBARGO I m m e d i a t e R e l e a s e

' · ' . Τ Λ

STATEMENT BY THE TREASURER, THE HON JOHN HOWARD, MP

FOREIGN INVESTMENT H COAL DEVELOPMENT PROJECTS AT HAIL CREEK, QUEENSLAND AND BIRDS ROCK AND MOUNT ARTHUR SOUTH, NEW SOUTH WALES

The Governm ent h a s g iv e n a p p r o v a l u n d e r f o r e i g n in v e s tm e n t p o l i c y

t o th e j o i n t v e n tu r e a rra n g e m e n ts f o r t h e d ev elo p m en t o f t h e H a il

C reek c o k in g c o a l p r o j e c t i n th e Bowen B a s in , Q u een slan d and f o r .

t h e B ir d s Rock s te a m in g c o a l p r o j e c t l o c a t e d n e a r L ith g o w f New

S o u th W ales. ·

T h ese a p p r o v a ls c l o s e l y f o llo w t h e a p p r o v a l g iv e n r e c e n t l y f o r a

s te a m in g /c c k in g c o a l p r o j e c t a t Mount A r th u r S o u th i n th e H u n te r

V a lle y , New S o u th W ales. , .

The c a p i t a l c o s t s o f t h e j o i n t v e n t u r e s a t H a i l C reek , B ir d s Rock

and Mount A r th u r S o u th a r e e x p e c te d t o a g g r e g a te $800 m i l l i o n and

t h e j o i n t p r o d u c tio n c a p a c i t y .of t h e t h r e e v e n t u r e s w ould b e a b o u t

-12 m i l l i o n to n n e s o f c o a l p e r annum.

T hese a p p r o v a ls ta k e t h e num ber o f m a jo r c o a l p r o j e c t s a p p ro v e d u n d e r

th e f o r e i g n in v e s tm e n t p o l i c y d u r in g t h e p a s t s i x m onths t o f i v e .

The f i v e p r o j e c t s w ould t a p some 1 .6 b i l l i o n to n n e s o f c o k in g and

s te a m in g c o a l r e s e r v e s a t t h e r a t e o f a b o u t 1 5 -7 5 m i l l i o n to n n e s a .

y e a r when f u l l p r o d u c tio n h a s b een re a c h e d b y t h e l a t t e r p a r t o f th e

1980*8. The t o t a l c a p i t a l in v e s tm e n t i s e x p e c te d t o b e a b o u t

$900 m i l l i o n . . . .

■ ' $ ' '

2

T h ese p r o j e c t s w i l l b r i n g many s u b s t a n t i a l econom ic b e n e f i t s t o th e

S t a t e s o f Q u een slan d and New S o u th W ales and a l s o t o A u s t r a l i a i n

t h e fo rm o f new em ploym ent o p p o r t u n i t i e s , in c r e a s e d e x p o r t e a r n i n g s ,

a n c i l l a r y i n d u s t r i a l d ev elo p m en t and t h e p r o v i s i o n o f a s s o c i a t e d

i n f r a s t r u c t u r e . .

The new m a jo r d ev e lo p m e n ts i n t h e c o a l i n d u s t r y a r e i n d i c a t i v e o f

t h e s ta n d i n g A u s t r a l i a h a s i n t h e w o rld e n e rg y s c e n e and th e h ig h

r e g a r d t h a t f o r e i g n i n v e s t o r s h av e f o r A u s t r a l i a a s a s t a b l e and

w o rth w h ile p la c e f o r in v e s tm e n t. They a l s o i n d i c a t e t h a t A u s t r a l i a n s

a r e g ro w in g i n t h e i r c a p a c i t y and w i l l i n g n e s s t o p a r t i c i p a t e i n a v e r y

s i g n i f i c a n t way i n t h e d ev elo p m en t o f A u s t r a l i a * s n a t u r a l r e s o u r c e s .

A ll o f th e . t h r e e p r o j e c t s m e n tio n e d m eet t h e G o v e rn m e n t's f o r e i g n

in v e s tm e n t p o l i c y g u i d e l i n e s . '

The j o i n t v e n tu r e s t r u c t u r e a p p ro v e d by t h e G overnm ent t o u n d e r ta k e

t h e H a il C reek p r o j e c t c o m p ris e s AAR L td (4 4 p e r c e n t ) - a s u b s i d i a r y

o f CSR, E sso E x p l o r a tio n and P r o d u c tio n A u s t r a l i a In c (25 p e r c e n t .) ,

IOL P e tro le u m L td (25 p e r c e n t ) - a s u b s i d i a r y o f CRA, M arubeni C oal

P ty L td (4 p e r c e n t ) and Sum isho C oal D evelopm ent P ty L td (2 p e r c e n t )

A f t e r a llo w in g f o r t h e n a t u r a l i s i n g s t a t u s o f CRA, t h e l e v e l o f

A u s t r a l i a n e q u i t y i n H a il C reek w i l l be 5 6 .8 p e r c e n t .

C a p i t a l e x p e n d itu r e on th e H a il C reek p r o j e c t by th e v e n t u r e r s i s

e x p e c te d t o a g g r e g a te a b o u t $600 m i l l i o n ( e s c a l a t e d b a s i s ) . The

v e n t u r e w i l l h av e a n a n n u a l p r o d u c tio n c a p a c i t y o f 4 ·5 m i l l i o n

t o n n e s . C a p i ta l in f lo w f o r t h e i n i t i a l d ev elo p m en t i s l i k e l y t o be

s u b s t a n t i a l , a s a r e e x p o r t e a r n i n g s . T here, w i l l b e new em ployment

3

o p p o r t u n i t i e s f o r 1 , 5 0 0 p e o p le d u r in g t h e c o n s t r u c t i o n p h a se and

f o r a b o u t 800 p e o p le d u r in g p r o d u c ti o n . I n a d d i t i o n t h e v e n t u r e r s

w i l l c o n s t r u c t a new to w n s h ip to .h o u s e a b o u t 3 , 0 0 0 p e o p le and w i l l

p r o v id e new r a i l f a c i l i t i e s a s w e ll a s a d u p l i c a t i o n o f p a r t o f th e

G o o h y ella-H ay P o in t r a i l l i n k . The p r o j e c t w i l l a l s o make a

c o n t r i b u t i o n t o new p o r t f a c i l i t i e s a t Hay P o i n t .

The j o i n t v e n t u r e a p p ro v e d by t h e G overnm ent t o d e v e lo p t h e B ir d s

Rock d e p o s it c o m p ris e s t h e E l e c t r i c i t y Commission· o f New S o u th

W ales - th ro u g h i t s w h o lly -o w n ed s u b s i d i a i y E ic o n C o l l i e r i e s P ty

L td (51 p e r c e n t ) , T a ih e iy o C oal D evelopm ent P ty L td (3 4 p e r c e n t )

an d two J a p a n e s e t r a d i n g co m p an ies, M its u i C o al D evelopm ent (A u st)

P ty L td (7 . 5 p e r c e n t ) and C. I t o h and Co L td ( 7 .5 p e r c e n t ) . The

l e v e l o f A u s t r a l i a n e q u i ty i n th e p r o j e c t w i l l b e 51 p e r c e n t . .

The B ir d s Rock v e n tu r e w i l l have a c a p i t a l c o s t o f a b o u t $90 m i l l i o n

an d w i l l b e c a p a b le o f p ro d u c in g b etw een 2 a n d 3 m i l l i o n to n n e s o f

c o a l p e r annum.

The p r o j e c t w i l l c r e a t e em ploym ent f o r 400 p e o p le i n t h e d i r e c t .

o p e r a t io n o f th e m in e. T h ere w i l l b e s u b s t a n t i a l c a p i t a l in flo w

t o fu n d c o n s t r u c t i o n c o s t s and i n i t i a l o p e r a t i n g e x p e n s e s . T here

w i l l a l s o b e s i g n i f i c a n t e x p o r t e a r n i n g s .

The s t r u c t u r e o f th e Mount A r th u r S o u th j o i n t v e n t u r e w i l l be E ic o n

C o l l i e r i e s P ty L td (50 p e r c e n t ) , Ampol M in in g P ty L td ( l 7 - 5 p e r c e n t )

P ic o n E x p lo r a tio n P ty L td (1 7 ·5 p e r c e n t ) , The E l e c t r i c Power

D evelopm ent Co L td , Ja p a n ( 1 2 .5 p e r c e n t ) an d M its u i C oal D evelopm ent

(A u s t) P ty L td , 2 .5 p e r c e n t . A u s t r a l i a n e q u i t y i n th e j o i n t v e n tu r e

w i l l b e 85 p e r c e n t . .

The Mount A r th u r S o u th s te a m in g and c o k in g c o a l v e n tu r e w i l l h av e

a c a p i t a l , c o s t o f a b o u t $100 m i l l i o n and an a n n u a l o u tp u t o f a b o u t

5 m i l l i o n to n n e s . The p r o j e c t w i l l s i g n i f i c a n t l y i n c r e a s e employment

o p p o r t u n i t i e s -in t h e H u n te r V a lle y and w ill, make a s u b s t a n t i a l

c o n t r i b u t i o n t o A u s t r a l i a ^ e x p o r ts .

CANBERRA. ACT 29 J u n 1980