Brenda Strong

Carbon tax has big impact on QAL, chief executive says

QUEENSLAND Alumina Ltd has shed 200 jobs since the introduction of the carbon tax.

In an interview in The Australian on Wednesday, Rusal chief executive Oleg Deripaska said the carbon tax would have a significant long term impact on operations at QAL, based in Gladstone. Rusal owns a 20% stake in QAL.

Mr Deripaska said as a consequence of rising costs, including an energy and a carbon tax of about $23 million a year and rising, coupled with a renewable energy charge, the company had shed about 200 jobs since the introduction of the carbon tax.

Federal Member for Flynn Ken O'Dowd highlighted the comments as evidence the carbon tax was threatening the viability of one of Gladstone's core industrial facilities.

"We all know that the carbon tax has had, and will continue to have, a detrimental impact on our aluminium industry here in Gladstone, and these comments are simply more proof of that," Mr O'Dowd said.

"QAL is a facility that operates to a greater level of efficiency than many of its rivals all over the world. Despite that, the company is being punished, whilst the Gillard Government has rewarded other, less efficient facilities in the south with bailouts.

"As the construction phase of the LNG projects will wind down in the coming years, we will rely very heavily on new and traditional core industries, including QAL, to maintain growth and prosperity in the wider Gladstone region."

Mr Deripaska said there had been a big decline in Australia's competitive position since Rusal purchased 20% of QAL  in 2005.

"The key issues have been the large increase in the exchange rate and the continuing erosion of Australia's competitive advantages," he said.

"The mining boom has pushed up the exchange rate and tightened the market for the skills necessary to maintain value-adding industries in regional Australia.

"The unilateral imposition of the carbon tax directly harms the manufacturing and processing industries in Australia."

Mr Deripaska said the rapid expansion of the onshore liquefied natural gas industry had also been poorly managed.

"The price and availability of gas to domestic consumers and industry has been impacted because the owners of the LNG plants presently have an insufficient level of gas to meet the rate of exports approved by the government."

The chief executive's main concern about the carbon tax was that it was designed to shift facilities such as QAL to a higher-cost energy source such as gas, where there was no long-term certainty on supply.

"This could lead to local processing and jobs moving overseas," he said.

Read the full interview here.