'Catastrophic for the Tasmanian economy': Bower's dire warning for state
A spokesperson for businesses around Tasmania's north has issued a dire warning on what would happen if a second smelter shut down. Subscribe now for unlimited access. or signup to continue readingSave 30%All. . .
A spokesperson for businesses around Tasmania's north has issued a dire warning on what would happen if a second smelter shut down. Subscribe now for unlimited access. or signup to continue readingSave 30%All articles from our website& appThe digital version ofToday'sPaperAll otherin your areaSusie Bower CEO BBAMZ, Premier Jeremy Rockliff, George Town Mayor Greg Kieser, Picture by Paul ScamblerBell Bay Advanced Manufacturing Zone (BBAMZ) chief executive Susie Bower has warned that if the Tasmanian government is unable to reach a power agreement with Rio Tinto's Bell Bay Aluminium (BBA), the region wouldn't be able to support the increase in unemployed workers. She said that the closure of the smelter would have a dire impact on the broader supply chain, and jeopardise major industrial companies Kymera and Nyrstar. Energy Minister Nick Duigan said negotiations were progressing well and he was confident the state could reach an agreement. Ms Bower's grim look into a reality without BBA follows the manganese smelter Liberty Bell Bay closing and entering into liquidation after administrators were unable to find a buyer. That resulted in an ongoing back-and-forth between the Tasmanian and federal governments over who should pick up the bill. When the federal government originally pitched the Green Aluminium Production Credit scheme, they said Northern Tasmania would be included, however, they have since said the state would be ineligible since the smelters already run on hydro. The Tasmanian government has continually urged the federal government to include the state in the scheme, as originally promised. Mr Duigan has now said the state doesn't care where the money comes from, as long as there is parity between Tasmania and the rest of the country. The state and the smelter eventually agreed to a 12-month power agreement set to end in December 2026, and with Liberty Bell Bay's closure, all eyes are on BBA. Bell Bay Aluminium site. File pictureWhat would happen if the smelter closed?Both Ms Bower and former Liberty Bell Bay workers warned of a grim reality if BBA were to close. "I think it's catastrophic for the Tasmanian economy if we don't get a power deal with Bell Bay Aluminium," Ms Bower said. "Having the hit with Liberty Bell Bay was bad enough. "Ms Bower said the smelter contributes $80 million in wages and $260 million into the local supply chain. She said the reasons the closure would be devastating were twofold. Given that 200 workers recently became unemployed after Liberty Bell Bay closed, the region could not support a further 500 people becoming unemployed. Ms Bower also said that if the smelter were to close, it would affect other Tasmanian industrial companies: Kymera, located next to BBA, and Nyrstar in Hobart. "The aluminium comes straight over to Kymera, and they turn it into an aluminium powder," Ms Bower said. "They are the only aluminium powder factory in Australia, and they supply it to Nyrstar. "If they can't get the aluminium from BBA and they have to import it, I don't know what that means for their costs. "If, for some reason, they can't meet those costs and we lose another business, then they can't supply to Nyrstar. "There's been $150 million pumped into Nyrstar recently. Why would the government want to waste that money by risking the whole supply chain?"Former Liberty Bell Bay worker Greg Dawson said George Town would "go back to being a fishing village" like it was 70 years ago. Another ex-Liberty Bell Bay worker, Steven Tripp, said: "You may as well turn the lights out. "Energy Minister Nick Duigan. Picture by Paul ScamblerDeal progressing, state saysMr Duigan said discussions between the state and Rio Tinto were progressing well and he was "very confident" a deal could be reached. "We're working constructively and collaboratively to get a power deal done," he said. It isn't clear what that deal will look like, or what the current proposal is, because the proposed power price cannot be disclosed due to commercial confidentiality. However, Ms Bower said the smelter is willing to pay more. "Bell Bay Aluminium has always said, and continues to say, that it is willing to pay more for its contract than it currently pays. I just don't understand why a deal can't be done. "Ms Bower said the region was on the cusp of falling apart and a second closure would make it hard to attract new businesses to the state. "We've had one go; if we have two of them go, we'll lose all business confidence in Tasmania. "It signals to the market that it's difficult to do business in Tasmania. "More from Business and FinanceAs it happensBreaking news alertBe the first to know when news breaks.