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Tuesday, 1 May 1984
Page: 1354

Senator CHANEY —My question is addressed to the Minister for Industry and Commerce and the Minister representing the Prime Minister. I refer him to the Prime Minister's rather extravagant promises about steel during his visit to China. When does the Minister expect the Broken Hill Proprietary Co. Ltd's Kwinana blast furnace to reopen?

Senator BUTTON —First of all, with regard to the allegations of extravagant statements by the Prime Minister, I think it is very important to see the context in which statements which might be described as extravagant were made. They were made in the context of both long and short term considerations. I should say for the benefit of those honourable senators who will speak on the Opposition's matter of public importance which is scheduled for later today that very worthwhile negotiations are proceeding in relation to some of the short term anticipations arising from the Prime Minister's visit.

Senator Durack —That is what you were asked about.

Senator BUTTON —I understand that. I do not need any help from Senator Durack. He may have been a Minister for 450 years but I can still answer a question. The point is that in respect of many of those short term predictions very encouraging negotiations are taking place. Of course it is the Government's hope and it is the Government's every effort to encourage the reopening of the Kwinana blast furnace. The Broken Hill Proprietary Co. Ltd is optimistic about that possibility. It remains no more than that at this stage. Negotiations on it are proceeding. But to ask me on what date that will occur is an extraordinary question. I do not think even Senator Chaney would ask me to put a particular date on that because, of course, that is a matter for negotiation between BHP and the Chinese, negotiations which are taking place and which may or may not prove successful.

Senator CHANEY —I ask a supplementary question, Mr President. I note that the Minister said it may or may not take place.

Senator Button —No, it may or may not prove successful, I said.

Senator CHANEY —It may or may not prove successful. Is it a fact that it would require a 15 per cent rise in the world price of steel and increased Chinese demand for the blast furnace's product before the company would be justified in spending more than $10m on reopening the facility? If the Minister agrees with that, when does he think a rise in the world price of steel is likely to occur which would permit the reopening of the blast furnace?

Senator BUTTON —I do not think it is as simple as that question emanating from a sort of chartered accountant's mind would indicate. There are a lot of factors to be taken into account in relation to--

Senator Chaney —Perhaps percentage return.

Senator BUTTON —There are a lot of factors to be taken into account, especially questions such as the duration of any arrangements which might be made with the Chinese. For example, if I might illustrate very simply what I mean by that, it would not necessarily require a 15 per cent increase in the world price of steel if BHP were able to reach a very long term arrangement with the Chinese. That is a matter which is subject to negotiation, so I cannot answer that question. I do not expect a 15 per cent increase in the world price of steel in the foreseeable future. There is excess capacity in the world steel industry, so I do not expect that. As I said earlier, I hope these negotiations will succeed and will be brought to a successful conclusion. The Government will be giving every encouragement it can in relation to those matters.