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Thursday, 28 October 1993
Page: 2750

Senator JONES —My question is directed to the Minister representing the Minister for Trade. Could the minister inform the Senate of the progress of Australia's negotiations to have magnesium car parts manufactured in Australia? What expectations does he have for the development of the magnesium and light metal smelting industry? What role does he expect the proposed Gladstone smelter to have in the future of this industry?

Senator GARETH EVANS —I have been given some information about what is a very full answer. It is thoroughly fascinating.

  Opposition senators interjecting—

Senator GARETH EVANS —I can understand those opposite not being interested in this because this is basically a good news story about a wholly new Australian industry. Let me tell them a little about it. The global market for light metal components for cars is already substantial and it does hold very great prospects for the future. The search for improved fuel consumption flowing from reduction in vehicle weight and greater recyclability of materials are key factors giving rise to this market opportunity. Several private sector and government agencies have been working to ensure that Australia is well placed to capitalise on this opportunity.

  Australia contains, in fact, one of the world's richest magnesite deposits at Kunwarara in Central Queensland—

Senator Ian Macdonald —Are you going to tax it?

Senator GARETH EVANS —I would have thought Senator Macdonald might have just stopped talking for once in order to listen to something that is of enormous significance both to his constituents and to the Australian economy as a whole. Proposals to develop this deposit are well advanced. Downstream processing capability for this site is planned to be based at Gladstone in Queensland.

  In 1991, the Commonwealth and Queensland governments agreed to contribute $20 million and $5 million respectively to the Australian magnesium research and development project to develop a process and to construct a pilot plant to process the high grade magnesite deposit I have referred to, to turn it into magnesium metal.

  Last July, in Gladstone, my colleague Mr Griffiths launched a report entitled Magnesium opportunities for Australian industry, which spelt out in loving and elaborate and considerable detail precisely the scale of the opportunity that is involved here whereby Australia can become a very major player in the world marketplace.

  Action is being taken on a number of fronts to capitalise on this prospect. Minister Griffiths and his Queensland state counterpart, Mr Elder, have announced that the two governments will jointly provide $300,000 to assist a pre-feasibility study for a major die-casting facility in Gladstone. We are also funding a study by the Australian Automotive Technology Centre to determine which components are most suitable for conversion to magnesium. Minister Griffiths has also written to the chief executives of the world's automotive companies advising them of our potential as a supplier of magnesium vehicle components.

  Austrade is implementing a marketing strategy which promotes Australia as a future source for light metal automotive components, including from magnesium. That marketing strategy is being implemented in partnership with the Department of Industry, Technology and Regional Development, the CSIRO and the Queensland government. DITARD is also holding discussions with the die-casting industry, the Queensland government and other stakeholders to ensure that a comprehensive development strategy is in place to help position Australian industry to capture a significant share of the expanding market for magnesium components.

  The future processing of magnesite from the Kunwarara deposit, whether Senator Ian Macdonald is interested in it or not, will add value to a very significant natural resource. Installation of the greater value adding capability in Australia will be critical to the Australian automotive light metals component manufacturing industry becoming a major world player. It will provide substantial markets for Australian metal and add further value to that resource.