❓ The Premier updates the house on the Sino Iron project, defends CITIC Pacific against Clive Palmer's accusations, and emphasizes the importance of Chinese investment in WA.
AnsweredQoN 578Legislative Assembly
QuestionView source ↗
CITIC
PACIFIC — PILBARA SINO IRON PROJECT
578. Mr I.C. BLAYNEY to the
Premier:
Can the Premier please update the house on the Sino iron
project in the Pilbara following recent commentary on the project?
PACIFIC — PILBARA SINO IRON PROJECT
578. Mr I.C. BLAYNEY to the
Premier:
Can the Premier please update the house on the Sino iron
project in the Pilbara following recent commentary on the project?
AnswerView source ↗
I thank the member for the question, and his interest in this
project. The Sino iron project at Cape Preston in the Pilbara has been
contentious and controversial. The project probably now has a total estimated
cost of around $11 billion, well above what was originally anticipated. The
project has completed two of the production lines, and they are going through a
commissioning and refinement process. To this point, the project has exported
around only 340 000 tonnes of magnetite concentrate. This is a new industry for
Western Australia, and this is an extraordinarily large project. It is high
value-adding and involves complex processing. There has been speculation that
the project may not proceed and that it might be abandoned. I and this
government have spent a great deal of effort both here and in China with the
Chinese political leadership and the leaders of China International Trust and
Investment Corporation and CITIC Pacific Mining to ensure that this project
continues. I am pleased that CITIC Pacific has decided to complete the
remaining four production lines. That will probably be an expenditure of around
$2 billion. Members might be interested to know that the peak workforce on that
completion will be around 4 000 people and the operational workforce when the
project is completed will be about 500 people. Much of the completion work has
been undertaken by Western Australian firms including Monadelphus, Kerman
Contracting, Southern Cross Electrical Engineering and a whole range of others.
This is an Australian workforce on a project that is a major investment by a
Chinese state-owned enterprise.
Given the delicacy of the project and its problems, I was
appalled by Clive Palmer's comments about the project on national
television last night. In my nearly 20 years around the resources industry, I
have never heard such irresponsible comments. For members who are perhaps not
aware of it, in reference to CITIC Pacific, Mr Palmer described them as Chinese
bastards and Chinese mongrels. He accused them of not paying their royalties. I
do not say Clive Palmer is a racist, but they were racist comments—no
doubt about that in the first instance.
With respect to the project, allegations were made by Clive
Palmer that the company CITIC Pacific was not paying its royalties. I want to
place on the public record that CITIC Pacific has paid its royalties in full
and on time, without exception. To this stage, it does not amount to a great
deal of money—around $5 million. The royalty is paid directly to the
Department of Mines and Petroleum, and the royalty is the price at which the
state of Western Australia sells the mineral to the company. CITIC Pacific has
been exemplary in the way in which it has handled that. I assume that when
Clive Palmer talks about royalties, he talks about a financial relationship
between himself or Mineralogy and CITIC Pacific. That is a commercial matter.
He deliberately misrepresented the position and he claimed that that company
was not paying for its resources that belonged to Australia, more specifically
to Western Australia.
I think his comments pose a serious threat to Chinese
investment in Western Australia and Australia. I have written to the Chinese
ambassador, making sure that he and the Chinese government understand that we
totally disassociate ourselves from Clive Palmer's comments. I have
also gone to the extent of actually apologising. It is offensive to the Chinese
government, it is offensive to CITIC Pacific and it is offensive to the Chinese
people whether they are in China or are permanent residents of Australia. I am
not being overly dramatic. If this causes political offence in Beijing, which I
think it will, it places at risk that project and future Chinese investment in
this state. It was totally irresponsible, and from a Chinese perspective, it
would be confusing to have a high-profile person in Australia, a member of the
national Parliament, insulting CITIC Pacific, insulting the Chinese government
and insulting the Chinese people. His conduct is reprehensible and should be
acknowledged so by everyone here.
Members: Hear, hear!
project. The Sino iron project at Cape Preston in the Pilbara has been
contentious and controversial. The project probably now has a total estimated
cost of around $11 billion, well above what was originally anticipated. The
project has completed two of the production lines, and they are going through a
commissioning and refinement process. To this point, the project has exported
around only 340 000 tonnes of magnetite concentrate. This is a new industry for
Western Australia, and this is an extraordinarily large project. It is high
value-adding and involves complex processing. There has been speculation that
the project may not proceed and that it might be abandoned. I and this
government have spent a great deal of effort both here and in China with the
Chinese political leadership and the leaders of China International Trust and
Investment Corporation and CITIC Pacific Mining to ensure that this project
continues. I am pleased that CITIC Pacific has decided to complete the
remaining four production lines. That will probably be an expenditure of around
$2 billion. Members might be interested to know that the peak workforce on that
completion will be around 4 000 people and the operational workforce when the
project is completed will be about 500 people. Much of the completion work has
been undertaken by Western Australian firms including Monadelphus, Kerman
Contracting, Southern Cross Electrical Engineering and a whole range of others.
This is an Australian workforce on a project that is a major investment by a
Chinese state-owned enterprise.
Given the delicacy of the project and its problems, I was
appalled by Clive Palmer's comments about the project on national
television last night. In my nearly 20 years around the resources industry, I
have never heard such irresponsible comments. For members who are perhaps not
aware of it, in reference to CITIC Pacific, Mr Palmer described them as Chinese
bastards and Chinese mongrels. He accused them of not paying their royalties. I
do not say Clive Palmer is a racist, but they were racist comments—no
doubt about that in the first instance.
With respect to the project, allegations were made by Clive
Palmer that the company CITIC Pacific was not paying its royalties. I want to
place on the public record that CITIC Pacific has paid its royalties in full
and on time, without exception. To this stage, it does not amount to a great
deal of money—around $5 million. The royalty is paid directly to the
Department of Mines and Petroleum, and the royalty is the price at which the
state of Western Australia sells the mineral to the company. CITIC Pacific has
been exemplary in the way in which it has handled that. I assume that when
Clive Palmer talks about royalties, he talks about a financial relationship
between himself or Mineralogy and CITIC Pacific. That is a commercial matter.
He deliberately misrepresented the position and he claimed that that company
was not paying for its resources that belonged to Australia, more specifically
to Western Australia.
I think his comments pose a serious threat to Chinese
investment in Western Australia and Australia. I have written to the Chinese
ambassador, making sure that he and the Chinese government understand that we
totally disassociate ourselves from Clive Palmer's comments. I have
also gone to the extent of actually apologising. It is offensive to the Chinese
government, it is offensive to CITIC Pacific and it is offensive to the Chinese
people whether they are in China or are permanent residents of Australia. I am
not being overly dramatic. If this causes political offence in Beijing, which I
think it will, it places at risk that project and future Chinese investment in
this state. It was totally irresponsible, and from a Chinese perspective, it
would be confusing to have a high-profile person in Australia, a member of the
national Parliament, insulting CITIC Pacific, insulting the Chinese government
and insulting the Chinese people. His conduct is reprehensible and should be
acknowledged so by everyone here.
Members: Hear, hear!
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