Interview with Greg Jennett, ABC News 24 Afternoon Briefing

Greg Jennett
Ballarat mining incident, Arafura Rare Earths Nolans Project, Nickel industry.

GREG JENNETT: Just moving on now. After months of talks and high-level agreements being signed with governments around the world, a substantial federal investment is now on the table for a rare earth's venture in the Northern Territory. This project would give financial support to a mining and refining facility, extracting ores for making highly specialised magnets that are then used for batteries and other high-tech applications. 

Resources Minister Madeleine King has helped pull that together. She joined us from our Darwin studios. Madeleine King, good to have you back with us on Afternoon Briefing. We will get momentarily to some significant announcements that you've made there in the Northern Territory, but it's probably appropriate to get some reflections, first of all, on the unfortunate death of a 37-year-old underground miner at Ballarat gold mine. I know there's been some safety concerns raised around that by the Australian Workers Union. Do you think that might warrant further examination? Claims of some safety laxness?

MINISTER MADELEINE KING: Thanks, Greg. Look, those investigations, of course, will progress, and I acknowledge the comments of the AWU before. My thoughts are with the family and the workmates of the young man who has died mining. We must always remember this is a dangerous job. The prosperity of our nation is the resources sector, and it is built off the hard work of young men and women, like the young man that has sadly died in this accident. So, I expect a full investigation. I know that's what will be underway. And again, my thoughts are with his workmates and his family at this very, very sad time.

GREG JENNETT: Yes, thank you. And I'm sure those details will emerge in the course of an investigation. Now, let's go to the Northern Territory, then. You are announcing that you are underwriting up to $840 million for both mining and refining of rare earths in the top end. Sounds like a lot of money. I am struck, though, by the words up to. What will determine how much the Commonwealth puts on the line here.

MINISTER MADELEINE KING: Yes, sure. Well, it's a very significant project, not least for what it produces, but, of course, the significant amount of federal funding that's going toward it. So, it's made up of $500 million from the Critical Minerals Facility, which is managed by Export Finance Australia, as well as $200 million from, sorry, $115 (million) from the commercial account of Export Finance Australia, and then $200 million from the Northern Australia Infrastructure Facility. And that's on top of a grant from the previous government under the $30 million from the Modern Manufacturing Initiative. So, that's a lot of money, but it is going toward a very important project, the Arafura Rare Earths Nolans Project, which is the first fully integrated mine and processing facility that will produce rare earths oxide that will go into really important and advanced technology for green technology as well as defence applications.

GREG JENNETT: Yeah, that's things like wind turbines, I think, mobile phone batteries, MRI machines and the like. So, at full capacity, Madeleine, how much will this operation supply towards global demand? Give us an idea of its scale.

MINISTER MADELEINE KING: Yeah, well, it's a significant project and it'll supply up to 5 per cent of global mine. It may go beyond that, but that's our estimation at the moment. And that's still a significant chunk of global demand, and its importance is perhaps demonstrated by the fact that the funding of the Federal Government is being matched by international banks as well. And that's a combination of government financial institutions, similar to our export finance Australia, from Canada, from Germany, from the Republic of Korea, as well as some commercial banks as well. So, the whole world really appreciates the value of the Nolans Project, which is just over 100k's north of Alice Springs, right in the heart of the territory.

GREG JENNETT: All right, since you've mentioned nickel, Madeleine King, as a West Australian Resources Minister, the Treasurer has made pretty clear that this is the subject of ongoing work supporting the nickel industry that's really had its sales prospects ground to a halt at present. So, what's the urgency of what you might come up with here? What's industry telling you? And are you really contemplating a full industry bailout at this stage?

MINISTER MADELEINE KING: Well, it is a very cyclical industry. The nickel industry in particular. It has had peaks and troughs over the decades and for many decades. But this is new. There's no doubt about it. There's a structural change in the market because of the extraordinary oversupply coming out of a nickel industry that's been built up in about three years in Indonesia. The nickel industry has to try and cope with that, and it is difficult because prices have plummeted. And as a jurisdiction that has higher expenses because, well, we pay workers well, as we would expect, because we have a high standard of living, it does become difficult to compete. So, as a government, we, of course, are looking at all the options available to us and they are still under consideration as the Treasurer said. What's really important will be our work and that of Ambassador Rudd's in the US. And I was in DC recently about how we can create a market that will reflect the actual cost of this higher grade, sustainable green nickel, if you like.

GREG JENNETT: Just finally, because you are a West Australian, Madeleine king, your state rolling in iron ore royalties and recording a 3 billion plus state surplus on the budget there, how do you justify the ongoing inequity in pumping up the WA budget through the GST floor guarantee, which is obviously causing great angst right now with other states, especially NSW?

MINISTER MADELEINE KING: Yes, there's no doubt the GST arrangements upset many. And to be honest, I can't see of a time when everyone would agree on a GST carve out, so it wouldn't matter what the situation was. But indeed, what has happened in the past to Western Australia is that the predicted payback to Western Australians was going to reach 10 to 12 cents in the dollar and that was clearly unacceptable. So, Western Australians, like everyone around the country, work hard. We do make available those resources and sharing that prosperity for the whole nation. So, I think the deal that's come up with is fair. There will always be critics and I understand that. But as you say, I'm a West Australian, but I'm also the Commonwealth Minister for resources and it is those resources that enable the country to be prosperous. And I can understand the position of sandgropers in respect of their GST.

GREG JENNETT: All right, diplomatic answer. I'm sure it will be observed and noted in Macquarie Street in NSW, Madeleine King, we'll wrap it up there. Thanking you for your time. We'll talk to you again soon.

MINISTER MADELEINE KING: Thank you very much, Greg. It's a pleasure.