❓ The Premier is questioned about his comments on iron ore production increases and their impact on smaller producers, given the government's approval of expansion projects and budget forecasts. The Premier defends his position, stating he has no control over companies' production decisions and aims to maintain a competitive iron ore market.
AnsweredQoN 807Legislative Assembly
QuestionView source ↗
IRON ORE
EXPORT VOLUMES — PREMIER'S COMMENTS
807. Mr M. McGOWAN to the
Premier:
I refer the Premier to comments by Rio Tinto chief executive
officer, Sam Walsh, about the Premier's recent remarks to which Sam
Walsh responded —
''I'm not sure
where Colin is coming from given that we've been very clear in our
plans,''
''... some of the people
who were criticising that were cheering from the sideline when we were bringing
on projects and making major investments.''
(1) Is Mr
Walsh correct?
(2) If the
Premier is so concerned about increases in production, why did he give approval
to these expansion projects?
(3) Why is the
Premier's budget predicated on big increases in iron ore volumes if he
is so opposed to them?
EXPORT VOLUMES — PREMIER'S COMMENTS
807. Mr M. McGOWAN to the
Premier:
I refer the Premier to comments by Rio Tinto chief executive
officer, Sam Walsh, about the Premier's recent remarks to which Sam
Walsh responded —
''I'm not sure
where Colin is coming from given that we've been very clear in our
plans,''
''... some of the people
who were criticising that were cheering from the sideline when we were bringing
on projects and making major investments.''
(1) Is Mr
Walsh correct?
(2) If the
Premier is so concerned about increases in production, why did he give approval
to these expansion projects?
(3) Why is the
Premier's budget predicated on big increases in iron ore volumes if he
is so opposed to them?
AnswerView source ↗
(1)–(3) It is not a good question. How long does it
take to develop an iron ore mine—two to three years?
Several members interjected.
The SPEAKER :
Members!
Mr C.J. BARNETT :
As I have said now for the third day in a row, iron ore production in Western
Australia will double over the course of this decade. Yes, the government has
approved major expansions in capacity. Does Sam Walsh or Jimmy Wilson at BHP
Billiton ring me up every morning and ask, ''Colin, how much can we ship
today''? No, they do not. I have no control or influence over their
day-to-day, week-to-week or month-to-month targeting of iron ore. That is their
decision. What we agree to is capacity under state agreements, and capacity
will continue to grow. It is their decision to flood production into the market
at a time of low price. That is what is happening. Can I read to members —
Ms R. Saffioti :
They're losing money!
Mr C.J. BARNETT :
They are not losing money, but some of the small producers may well, and may
well close with the loss of hundreds, if not thousands, of jobs. That is a
concern that members opposite should worry about.
The first comment I ever made on this issue was a week ago on
Thursday.
Several members interjected.
The SPEAKER :
Members!
Mr W.J. Johnston :
In 1999—forgotten it?
Mr C.J. BARNETT :
Mr Speaker, had I not acted in 1999 there would be only one iron ore producer
in Western Australia.
Mr M. McGowan interjected.
The SPEAKER :
Members!
Mr C.J. BARNETT : I
will just read a quote from two days before I made any comment. My comments
about this matter were in response to a question. I have answered questions in
this place and outside this place, but two days prior to my comment, BHP said
that it is a tough old world out there. It said that if a player in the market
had a cost point above the price point into the future, that is a very
uncomfortable position for them to be in. It said that it is what it is, and
that it is driving more volume through the equipment that it has put in place
over 10 years now. It said that to the extent that impacts on others, such is
life.
So this flooding of the market was well underway and
commented on by the major companies, journalists and international commodity
traders.
Several members interjected.
The SPEAKER :
Member for Victoria Park!
Mr C.J. BARNETT :
This was not an issue I raised first. There had been much media commentary
about it —
Mrs M.H. Roberts :
They had it coming, did they?
Mr C.J. BARNETT :
No. I responded to a question about an issue that was being reported nationally
and internationally prior to that.
Mr B.S. Wyatt : No.
Mr C.J. BARNETT :
Look at the questions. We want —
Mr W.J. Johnston interjected.
Mr C.J. BARNETT :
Mr Speaker, it is pointless.
The SPEAKER : Thank
you, member for Cannington. I call you to order for the first time.
Mr C.J. BARNETT :
By their own admission the major companies are pushing increasing volumes on a month-to-month
basis into the market very conscious that they are contributing to price falls
in an already depressed market; and very conscious, by those quotes as an
example, of the impact that this will have on smaller iron ore producers. I
want to see a competitive structure for iron ore in Western Australia, which
will include the two big producers, some mid-level producers such as Roy Hill
and Fortescue Metals Group, and a smaller brigade of producers that are by
nature higher cost but finding their way into the market. That is what I want
to do. I do not want to see a duopoly of iron ore production in Western
Australia.
take to develop an iron ore mine—two to three years?
Several members interjected.
The SPEAKER :
Members!
Mr C.J. BARNETT :
As I have said now for the third day in a row, iron ore production in Western
Australia will double over the course of this decade. Yes, the government has
approved major expansions in capacity. Does Sam Walsh or Jimmy Wilson at BHP
Billiton ring me up every morning and ask, ''Colin, how much can we ship
today''? No, they do not. I have no control or influence over their
day-to-day, week-to-week or month-to-month targeting of iron ore. That is their
decision. What we agree to is capacity under state agreements, and capacity
will continue to grow. It is their decision to flood production into the market
at a time of low price. That is what is happening. Can I read to members —
Ms R. Saffioti :
They're losing money!
Mr C.J. BARNETT :
They are not losing money, but some of the small producers may well, and may
well close with the loss of hundreds, if not thousands, of jobs. That is a
concern that members opposite should worry about.
The first comment I ever made on this issue was a week ago on
Thursday.
Several members interjected.
The SPEAKER :
Members!
Mr W.J. Johnston :
In 1999—forgotten it?
Mr C.J. BARNETT :
Mr Speaker, had I not acted in 1999 there would be only one iron ore producer
in Western Australia.
Mr M. McGowan interjected.
The SPEAKER :
Members!
Mr C.J. BARNETT : I
will just read a quote from two days before I made any comment. My comments
about this matter were in response to a question. I have answered questions in
this place and outside this place, but two days prior to my comment, BHP said
that it is a tough old world out there. It said that if a player in the market
had a cost point above the price point into the future, that is a very
uncomfortable position for them to be in. It said that it is what it is, and
that it is driving more volume through the equipment that it has put in place
over 10 years now. It said that to the extent that impacts on others, such is
life.
So this flooding of the market was well underway and
commented on by the major companies, journalists and international commodity
traders.
Several members interjected.
The SPEAKER :
Member for Victoria Park!
Mr C.J. BARNETT :
This was not an issue I raised first. There had been much media commentary
about it —
Mrs M.H. Roberts :
They had it coming, did they?
Mr C.J. BARNETT :
No. I responded to a question about an issue that was being reported nationally
and internationally prior to that.
Mr B.S. Wyatt : No.
Mr C.J. BARNETT :
Look at the questions. We want —
Mr W.J. Johnston interjected.
Mr C.J. BARNETT :
Mr Speaker, it is pointless.
The SPEAKER : Thank
you, member for Cannington. I call you to order for the first time.
Mr C.J. BARNETT :
By their own admission the major companies are pushing increasing volumes on a month-to-month
basis into the market very conscious that they are contributing to price falls
in an already depressed market; and very conscious, by those quotes as an
example, of the impact that this will have on smaller iron ore producers. I
want to see a competitive structure for iron ore in Western Australia, which
will include the two big producers, some mid-level producers such as Roy Hill
and Fortescue Metals Group, and a smaller brigade of producers that are by
nature higher cost but finding their way into the market. That is what I want
to do. I do not want to see a duopoly of iron ore production in Western
Australia.
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