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Tuesday, 9 May 1989
Page: 2055

Senator RICHARDSON —Senator Boswell has asked a number of questions concerning phosphate mining operations in Christmas Island. I have examined the issues raised by Senator Boswell and can assure honourable senators that none of the statements I have made are inaccurate in so far as they go. When discussing the Elders Resources Ltd royalty payment during last Friday's debate on the Arts, Territories and Environment Legislation Amendment Bill and in referring to a comparison of percentages I included, on the advice of my Department, the $1 per tonne to be used for rehabilitation, which gave a $2.70 per tonne total royalty for the Elders offer. I am informed by my Department that this is the figure as it now stands as a result of the further negotiations envisaged in the liquidator's recommendations to the then Minister. It is not relevant, however, in the context of the liquidator's assessment and should not have been used in commenting on the original proposal.

I also quoted from the liquidator's report the fact that the Booth proposal offered slightly higher royalty payments. I have since spoken to the liquidator and to departmental officers. The liquidator has taken me through the calculations on which he based his finding that Mr Booth offered a slightly higher royalty payment. I understand how he says he reached that conclusion. I also said on Friday that the liquidator noted in his conclusions that the Elders proposal maximises the return to the Commonwealth both through net payments for assets and for royalties. In making that statement I was referring to the overall assessment made by the liquidator. I went on to refer to the slight difference in favour of the Booth proposal, and quoted from the liquidator's report.

The liquidator concluded that Elders was superior both to Century Metals and Mining and Booth in respect of financial resources, production and technical expertise, mainland support bases, research and development, and quality of submission. In effect he concluded that Elders was a major Australian public resources company and it had the expertise and back-up to deliver on its tender. That conclusion was consistent with the advice of the Attorney-General's Department as to the liquidator's responsibilities. In short, the liquidator identified those factors as being sufficient to offset what, in his opinion, was a slight difference in royalty payments. On this basis the then Minister had no reason not to accept the recommendations of the liquidator and I see no reason to change the current course of action as it has maximised the opportunity for the Commonwealth to obtain the greatest available return.

In his question on 3 May, Senator Boswell asked whether I was aware that, at current market prices, the Booth proposal could result in the Government's obtaining approximately 30 per cent more in royalties than in Elders' best case and at least 200 per cent more than in Elders' worst case. I must say that I am not really aware of the basis for these figures, but I am aware that the figures provided by Mr Booth in his proposal produced a result only slightly higher than the Elders proposal. I can say that the liquidator has informed me that the figure was closer to 3 per cent than 30 per cent on the basis of the information before him when he did his assessment. However, in an attempt to settle the differences in understanding, I have arranged for Mr Booth to meet my colleague the Minister for the Arts and Territories, the liquidator and departmental officers to discuss the matter in full. Until these discussions are completed, no contracts or leases with Elders will be finalised. I will inform the Senate of the outcome of the discussions and bring anything of substance to the attention of the Senate.