Interview with ABC North West Queensland Breakfast

ZARA MARGOLIS, HOST: The Federal and Queensland Governments have announced a $160 million loan facility to help secure the future of Phosphate Hill south of Mount Isa. It's Australia's only domestic producer of ammonium phosphate fertiliser but it's also a key part of the region's heavy industry supply chain, linked to things like the Mount Isa copper melter, the Townsville refinery. Government say the support will help protect hundreds of jobs following the sale of the site to Mayfair, but it is still a major taxpayer-funded lifeline for a private company, and it comes after a separate $600 million support package for the Mount Isa copper smelter last year.

So, where is the line between backing regional jobs and sovereign capability and propping up heavy industry? It's a fair question and one of many that we're going to chat about now with Federal Industry Minister Tim Ayres, who's made time for Breakfast this morning.

Minister, where do you think that line is?

SENATOR TIM AYRES, MINISTER FOR INDUSTRY AND INNOVATION AND MINISTER FOR SCIENCE: Well, I certainly know that in this case backing heavy industry for North West Queensland is the right thing to do for the region that you're broadcasting to, but it's also the right thing for Australia. Having sovereign ammonia fertiliser capability is absolutely crucial for our farmers, you know, for our ag sector more broadly, for Australian food security.

This facility, Phosphate Hill, employs 100 or so Queenslanders, but it's also a crucial part of an industrial system that employs many, many thousands of Australians right across Northern Queensland, whether it's in Townsville or there in Mount Isa in the copper smelter, all of the copper industry that surrounds Mount Isa. But also making sure, you know, this region of Australia should be the Silicon Valley of future critical minerals production.

HOST: Minister, what ‑‑

AYRES: It should have a proud industrial future and we're – the Albanese Government, we've got the biggest pro‑manufacturing package in Australian history. A Future Made in Australia is all about backing blue-collar jobs in the regions.

HOST: Minister, what does this $160 million actually secure?

AYRES: Well, what it does is provide capital now to secure –

HOST: In the form of cash?

AYRES: So, there's a series of loans there that are supported by the Queensland and Commonwealth Governments, and there's also a facility there to make sure that we keep sulphur affordable for Phosphate Hill.

If I can just explain. Phosphate Hill's there because it's got the phosphate, but also it relies upon the copper smelter to provide sulphuric acid. There's the acid plant there in Mount Isa, which takes met gas and converts it into sulphuric acid. You know, that is not the only source of sulphur. And the war in the Strait of Hormuz has meant that sulphur prices have climbed steeply just at the very moment that this facility has been going through its sale process.

So, this is an important intervention here, it's well‑weighted. We’re very careful about taxpayers' money being invested. Both Queensland and the Commonwealth we've worked together really closely to make sure this is a good deal with public money. But it's also crucial that we're backing that Future Made in Australia.

You know, this is the moment where supply chain security, you know, future industrial capability really matters for our future economic resilience.

My job here is charged with leading these kind of industrial interventions to make sure that we're building a future economy that's stronger and safer and smarter for Australia. And that does mean in the end backing jobs in regional Australia.

So, we are careful with these kind of interventions, very conscious this is a public – this is a government intervention here but it's in the interests of Australia, in the interests of Australian manufacturing.

HOST: Minister Ayres, so do these loans essentially, is it fair to say, help Mayfair buy this asset off Dyno Nobel?

AYRES: Well, it's part of making sure that in particular, there's an upcoming big maintenance upgrade and capital effort there that's required to occur next year. So, this makes sure that that's adequately funded, that it's able to be executed properly and that that maintenance turnaround sets the facility up for years and years of productive operation.

We've seen too many ‑ around Australia we've seen firms undercapitalise these kind of maintenance turnarounds and it just leads to lower efficiency, less competitiveness and you're on the down slope instead of the up slope.

So, this is an important investment. It secures that maintenance turnaround; it makes the sale credible and delivers the sale. But, you know, crucially this is all about securing, yes, all of the jobs at that facility but also the whole, you know, there are many, many thousands of Queenslanders employed in this big industrial system that exists around the copper smelter at the Townsville refinery. All of the mines and all of the system, everything stands together or falls together, and we're determined to make sure everything's working together in North Queensland to back industry there.

HOST: You're hearing from Federal Industry Minister Tim Ayres this morning on Breakfast, speaking about the Federal and Queensland Governments' announcement yesterday, a $160 million loan facility to help secure the future of Phosphate Hill south of Mount Isa. Minister, you spoke about Mayfair doing some upgrades to those facilities. We're actually going to speak with them on the program tomorrow to get some more details about that. This does come though after the $600 million support package for the Mount Isa copper smelter facility last year. Are governments now effectively underwriting the northwest's heavy industry supply chain?

AYRES: Well, the Government here, the Albanese Government is playing a foundational role in securing a heavy industry in North Queensland. Working very closely with the State Government, with the Crisafulli Government. All of these investments proceed with everybody working together; the Commonwealth, the State, the firms themselves investing in capability, and the community working together.

You know, the role that local community leaders have played, that the trade unions have played, in making sure that these investments happen, is absolutely crucial. We'll only make progress here on reindustrialising our economy and securing current industrial capability if Australians are working together in the national interest. And that's what's happened here.  

I'm really pleased with the progress we've made, but it's not job done. You know, we will have to work closely together with the community and with industry to make sure that every step is undertaken to secure the future competitiveness of the region.

HOST: Are you confident Phosphate Hill can stand on its own long‑term?

AYRES: I am confident that the long‑term future and the medium-term future for fertiliser production in Australia. This is the only facility, the only ammonia fertiliser production facility in Australia at the moment. The recent Strait of Hormuz crisis just underscores how vulnerable Australia is in supply chain terms. And that facility has been important, not just for its own fertiliser production but as part of the Albanese Government's effort here to secure urea supplies, urea fertiliser supplies for Australia. This facility's played, you know, a key role bolstering our position here in Australia and our international outreach to secure urea for Australian farmers.

There is a urea production facility being built right now in Western Australia. It will be a massive facility. So, we're restoring Australian fertiliser production capability, sovereign production capability here for Australians. So, we're rebuilding fertiliser production facilities around the country. It will go into operation in the back half of next year, that is a very good development.

But I want to make sure, the Albanese Government wants to make sure, that we've got these kind of capabilities for our economic resilience, for our food security, to back our agriculture sector and to back blue-collar jobs in Mount Isa and Phosphate Hill and Townsville and right across the system.

HOST: Minister, thanks so much for your time this morning.

AYRES: Thanks very much, see you later.

HOST: That's Federal Industry Minister Tim Ayres speaking about the joint Federal and Queensland Government announcement of a $160 million loan facility to secure the future of Phosphate Hill, Australia's only domestic producer of ammonium phosphate fertiliser. The Minister there saying that the Government’s support will protect the hundreds of jobs involved in the site facility, also in the supply chain, which takes in the Mount Isa copper smelter, the Townsville refinery. All following the sale of the site from Dyno Nobel to Mayfair.