LEON COMPTON, HOST: So how long is Nyrstar going to survive now they’ve received a bailout from state and federal governments? What guarantees are there that the money given by the feds, by the state government here and in South Australia will be invested to improve, to modernise, to make more efficient their facilities in ways that might see them on the banks of the Derwent for another century to come? 

Tim Ayres is federal Minister for Industry and Innovation, joins us on the program this morning. Senator Tim Ayres and Minister, good morning to you. 

SENATOR TIM AYRES, MINISTER FOR INDUSTRY AND INNOVATION AND MINISTER FOR SCIENCE: G’day, Leon. Good to be on the show. 

COMPTON: Can you explain exactly, please, what’s been offered to Nyrstar in Tasmania under the bailout announced yesterday? 

AYRES: It’s a $135 million package for these two facilities – one in Hobart, one in Port Pirie in South Australia. The two facilities, lead and zinc smelters, really have the same owner, the same parent company, the working assumption is that each’s survival is dependent upon the other. All of that will be directed towards two purposes: one – the one that you referred to in your introduction – that is, upgrading the processes and the technology in the facilities to make sure that they are the most efficient, most productive, most capable facilities. And, secondly, building a pathway to critical minerals production in both Hobart and Port Pirie. 

In both of these facilities there’s critical minerals that are produced in the waste products from lead smelting and zinc smelting, and these – this plan from Nyrstar supported by Tasmania and the commonwealth government and South Australia is to build the capacity to turn that waste product into critical metals products for the world. 

COMPTON: Have you secured a guarantee that they will actually do that? We’ve seen it before – money gets offered from the feds, it’s pocketed by the parent company overseas and on we go. What guarantees have you received, Minister, that this efficiency improvement, investment, new processing will actually happen? 

AYRES: Well, this funding component takes us well into next year in a two-year feasibility program for all of that effort that you and I have just described. It is tightly managed and accountable to the federal government and to the state governments. So that is, we will be there you know, on an almost daily basis engaged with the firm as this work is undertaken. 

Nyrstar is making a contribution, too, both in capital terms but also, you know, in terms of the recurrent expenditure. They will continue, if the market stays the same, to sustain some losses over this period. So this is everybody making a contribution – Nyrstar and their parent company, commonwealth government, the Albanese government here, and the Tasmanian government and the South Australian government and the trade unions and the community – everybody working together to secure this vital industrial capacity for the future. It matters in jobs terms but in the broader context of the Albanese government’s Future Made in Australia ambitions, we want Australia to be a country that makes critical metals products here for all of the jobs reasons and the economic reasons, but also the strategic reasons as well. 

COMPTON: The argument goes, Tim Ayres, that the Chinese government through state subsidies is deliberately trying to sink our capacity to mine critical minerals and to process them along with special metals. Do you buy that? Is that what is going on here? 

AYRES: Well, certainly overcapacity driven by subsidies in China is one of the principal drivers of, you know, global market instability and oversupply and non-market practices. It’s not as if Nyrstar Hobart or Nyrstar Port Pirie are on a level playing field or selling into a market where, you know, their success is dependent upon cost and their productivity. It is a market that is absolutely destabilised. If not for those features, both of these facilities would be profitable now. So the choice that we have in front of us is to secure this capability for the future in terms of the lead and zinc refining capacity and smelting capacity, I should say, but also to – you know, Nyrstar has come to the two governments with a plan to turn their current capability into something much more that matters in national interest terms. And that’s the reason that we’ve proceeded so quickly to deliver this first phase of this two-year feasibility program in Hobart and Port Pirie. In matters in jobs terms, of course – 500 jobs, direct jobs, locally. It matters in economic resilience and strategic terms as well. 

COMPTON: One of the issues – my guest this morning is Tim Ayres, federal Minister for Industry and Innovation – one of the issues is that energy costs in China are significantly cheaper for producers than they are in Tasmania, in Australia. And now with Marinus Link being signed off on as a deal, the projections are that our power prices here will only rise for major industrials. Is there a risk that Marinus could be end of major industry in Tasmania? 

AYRES: No, I don’t believe so. And I just make the point, firstly, that, of course we’re operating in an environment where, yes, you’re right, now there are significant energy cost advantages in other jurisdictions because there are significant subsidies. That’s the truth of it. Our job is to build an electricity system for Australia that’s modern and that delivers Australia a low-cost energy advantage into the future. 

We have vast resources of wind and solar. We are modernising the electricity system backed in by hydro, backed in by gas to make sure that there’s more industrial development in Australia. As the world’s industrial processes and our industrial processes must move from carbon-intensive fossil fuels to electrified processes, electricity will be in great demand. That’s our future industrial advantage. That’s our future advantage in high-tech areas like data centres as well, and Tasmania has been leading the way in investment in some categories of data centres. So, I want to see more electricity, more gas for industrial purposes. That’s our job – to keep the shoulder to the wheel, keep building out the system – 

COMPTON: Sure, Minister, but Marinus – the Marinus business case specifically finds the implications in terms of cost increases for major industrials are material and will need careful consideration by the government and stakeholders. Our major industrials came here on the promise of cheap power. It sounds like that is on the way out. Like, are you concerned that the commitment to Marinus is part of the end of major industry in Tasmania as we know it now? 

AYRES: Well, the answer is more supply. Of course I’m concerned about energy questions in Australia. Whether it’s in gas and electricity, this is front and centre with our agenda as the Albanese Labor government is delivering more supply and driving electricity costs down. It’s not without challenge. If it was easy, it would have been done. It’s, of course, an environment where we’ve assumed government three and a bit years ago after 10 years of the system going backwards. We are building up a modern electricity system and we’re going to have to keep fighting for it. 

COMPTON: When you look at all the major industrials in Tasmania – Norske, Nyrstar, Grange, Bell Bay Aluminium – you look around the state, I mean, they’re 70, 80, 90, 100, 110 years old. What is our next major industry in Tasmania, with your Innovation hat on, Tim Ayres? Like, where is the next big industry for Tasmania coming from? 

AYRES: Well, off the top of my head, two areas that we’ve just been talking about – one, critical minerals processing. That is a new sector with very strong markets that adds real value to existing Tasmanian product. It requires advanced manufacturing. It requires investment and a commitment. I’m very pleased to see this proceeding with Nyrstar in Hobart. I want to see more of it. 

Secondly, data centre investment. You know, this is a critical national capability for Australia. You know, I want to see – I want to see – more of that capability in Tasmania. There are enormous options. One of the things that I really have to fight against is pessimism about Australia’s capability. There’s plenty of people who want to talk Tasmania’s capability or Australia’s capability in manufacturing down. Actually, we’re really good at it. We’ve got a government that is determined to back it in at a commonwealth level. We’ve got Australian people themselves who are passionate about making things and our manufacturing sector. We ought to have confidence, but it’s going to require all of us pitching in together. 

Just like Nyrstar – it’s not a bailout; it’s the commonwealth government and the state government and Nyrstar all contributing to deliver something that’s in the national interest. And I want to get on with it right across the economy and build that future made in Australia, which is all about an economy that’s more weighted towards making more things here. 

COMPTON: Tim Ayres is my guest this morning, Federal Minister for Industry and Innovation. The response might be, so, where is it? If we look at an example like the Robbins Island wind farm – and I know that’s divisive for many people listening – it takes years of delays in terms of understanding whether it gets a go or a no-go. It would seem to be sending a message about how hard it is to do business in Tasmania if you have an idea and want to understand if you can get it out of the ground – or not, as the case may be. Data centres, where is it, Tim Ayres? What can we do? What do we need to do to have ideas like this come to fruition, if that’s what the state wants?

AYRES: Well, approvals are, you know, rightly a real focus of activity at the moment. Like, we want to get to important nation-building projects fast approvals. And, indeed, as you said in your question, fast no’s, too. If it’s not going to proceed, let’s – it would be good to see certainty for investors so that they know they move on to the next project. But I don’t want to see delays to our electricity system construction. I do want to see fast approvals for manufacturing proposals or energy system infrastructure proposals that build the future. 

This is a challenging and consequential couple of decades in front of Australia where our industrial build out is really important for our future economic resilience as well as for all the jobs and economy reasons that your listeners would be rightly focused on. It matters in economic resilience terms; it matters in strategic terms. A Future Made in Australia is about all of that, and I’m very keen to get on with it. 

COMPTON: Tim Ayres, appreciate you coming on. Love to get you back at some point to talk more about data centres and the opportunities that you see. I’m told Tasmania in some ways has competitive advantages as a cooler environment for data centres. Maybe some limits on data capacity, but that there are opportunities there. We might talk at another time about what that looks like. Thanks for coming on this morning. 

AYRES: Terrific, Leon. Thanks. 

COMPTON: Tim Ayres, federal Minister for Industry and Innovation. You’re on Mornings around Tasmania.