Senate Economics Legislation Committee, , 7:37:06 to 8:41:26
Discussion centers on the sales process for Whyalla Steelworks and the viability of the Liberty Bell Bay project.
Topics: Manufacturing, Procurement, Infrastructure
Speakers: Meghan Quinn PSM, Hon Tim Ayres, Hon Richard Colbeck, Troy Sloan, Hon Matthew Canavan, Lisa Darmanin, Louise Talbot, Speaker 33, Speaker 36, Speaker 37, Steph Hodgins-May
>> Uh Mike do you want to keep you want to go back to Senator
>> Col? Yep. Sorry. keep moving up and down the table. >> Um I I'll just go back to the industry grow growth program. We've got a couple quick questions to follow on with that. Um we've looked at what or discussed what might happen to the existing or can you tell us where the money went to? What other programs the funding was rep prioritized into?
Uh so it it the the overall savings measures in myo went to other priorities of government. There was not a a direct line link between the savings and individual measures. It was uh there were a set of savings measures and a set of expenditure measures uh and they go together as a package but there wasn't a direct link between uh savings A and But broadly the additional funding uh that was in my Epho uh went to the delivery of the National Reconstruction Fund economic resilience program, support for the Boyer Paper Mill, strengthening anti-dumping uh for key sectors, uh a master plan for Hunter mine sites, uh things to do with renewable energy infrastructure, uh and supporting Australia's clothing and >> Yes. Uh that was in the Mayifo 24 million over three years uh to stabilize operations and support the transition to renewable energy and diversify production at the boy paper mill.
>> That was for an energy transformation project. Is that right?
>> Trans transform energy renewable energy and diversify production is the description of the measure in myo.
If you could table for us the list that you've just given, that would be um helpful. Thanks. So, it's it's all retained within the portfolio, the $102 million.
>> Uh the the savings all uh Yes.
>> Okay. Um, I want to go to Liberty at Bell Bay and get a sense of where things are at with that project. You, as I understand, undertook a rapid assessment process which started in May last year. That's
that's right, Senator. And we have some colleagues joining us at the table who are leading on Liberty Bel.
So is is the rapid assessment process finalized and what did that find with respect to the viability of the or commercially viability of the site?
>> Uh Senator Troy Sloan, head of t head of the steel works task force. Um the as the secretary said the um a rapid assessment has been finalized. Uh the findings of that um assessment uh informed the cabinet process. So we are not at liberty to um disclose that.
>> Well the Tasmanian government I understand believe that Liberty Bell Bay could be commercially viable. Does the federal government agree with that perspective? And there I mean they're maintaining that asset. It's the only manganese smelter in the country. I mean what what impact does that have on the supply chains if we lose access to sovereign capacity in manganesees?
Uh, Senator, I'd answer that by saying uh the vast majority of the product out of Liberty Bell is exported uh and mainly to the United States,
but it's still one of the critical min minerals mentioned in the uh overall critical mineral strategy and we've just signed a critical min relationship with the United States. Wouldn't it form an important part of
answer it this way of saying there's um two types of magnes is my understanding and my colleagues may correct me if I get this wrong. Uh, one is on the uh, critical minerals list as you pointed out. Uh, but that is not current or hasn't been in the past is my understanding produced at Liberty Bell.
has the government received a specific request for assistance from the Tasmanian government, from the premier?
>> Uh, Senator, we are in constant uh conversation with our Tasmanian colleagues and I don't think it would be appropriate to disclose those um confidential conversations.
>> Senator, I think I'll let the official continue on the detail. Can I just make a couple of comments about this? I mean,
>> and can I say before you do, I understand the difficulties around the company >> and so I'm
>> Yeah,
>> we're on the same page on that side of
things. >> And I just Yes. And I I mean, as I understand it, um uh um workers received their pays um today um in accordance with the regular run. They shouldn't have to worry about whether they're going to arrive. uh put put aside the rapid assessment uh and officials can talk you through that and the state of discussions um and consideration of this set of issues. Um this this company um recently you know in some years ago but but in the recent history was well capitalized. you know it it it was uh it it was uh uh efficiently producing uh exported including to the United uh uh um certainty of supply chain in terms of its um the product it received. Um the responsibility for uh resolving these issues lies squarely with the owner of the facility. Um we are obviously keeping a very close eye on it and and at my level uh been engaged with the Tasmanian government at the official level that that engagement has been uh constant. Um I have watched uh and the the efforts that the Tasmanian government has made um uh including uh recently in >> um you know extraordinary steps of
stockpile.
>> Yeah. All of that all of those measures we are we we talk about those. Uh but I just make the point the responsibility for this um is is is for the owner to capitalize this facility properly. Uh and that should happen um and it should have happened yesterday and it ought to
So I'll um note your comments with respect to the fact that it was running well, running viably, had solid supply chains with supply of material and delivery of material into its export um it is an important employer in that neck of the woods and and the fact that the workforce is still there >> um is important and the fact that you as you've indicated that they're still paid um not just for the business itself but for also its tentacles out into that
>> I mean I I don't say this to do anything else but to indicate that I understand I've met with workers there offsite. Um I've I've heard about the um of course the experience of suppliers and contractors in the region. You know it is a very significant employer in the region um plays an outsiz role in the in terms of you know maintenance contractors and other suppliers uh in uh the department officials have been uh uh very diligent in terms of the way that you know we've worked through the assessments uh and the engagement with the Tasmanian government but the core issue here you know we there's a range of facilities um that we've we've worked through some challenges with the challenge here is that the owner um has to do their and and
>> act responsibly.
>> And act responsibly um and fulfill their obligations.
>> I'll walk around the corner from Liberty Bell. >> To uh Belly Aluminium. th this is a re well I think a bit of a weird one really because um when you released your green aluminium support fund what some time ago now was January 2025 so a year ago the green aluminium production credit scheme as as has been discussed here a lot of um in this committee energy energy cost is a is a big deal. The reason that BBY Aluminium is in Tazzy where it is is because it's had access to um a reliable source of energy from hydrotaz for a long time at very competitive rates. Um and I think it's something of the order of 20% of the Tasmanian grid. So it's an important but it seems to me it seems to me very perverse that a company that is producing aluminium using green energy um it is it has reduced its CO2 emissions over the last 30 years by probably 50% because reducing energy utilization is an efficiency that it gains because aluminium is basically solid energy pretty much. Um and yet um it faces genuine difficulty in accessing the scheme that's set up to green aluminium production because of I just find that really perverse that you potentially lose one of the cleanest producers of aluminium globally in terms of its CO2 outputs. but it's facing exactly the same pressures as everybody else. I mean, how do we make that not happen? Can I
just make a couple of headline comments about that and then go to officials on the um on it? And really there's there's a limited amount I can say because of the the status of the
>> and and so Tazzy's got a 12-month extension on the deal with hydro for so they've done their bit but Tasmanian government has said we can do so much but we need help from the Commonwealth and that's the underlying element that sits here.
>> Yeah. So um green aluminium production credit still under design. Um so there's a limited amount that I can say about that. That's the first thing. Um second thing is it's um you know there are um there are smelters that are um uh uh lower cost renewable energy contracts uh and um we're working through that process. Third thing is you're absolutely right that facility is there in Tasmania because it's uh had access to uh lowcost hydro power from a publiclyowned um hydrotaz.
>> Yep.
>> You know it's not next to a giant bulk site facility. It's there because of the um it's there because of uh lowcost electricity. um hydroaz and the owners of the bell bay facility are engaged in discussions. Um uh it is u it is important that they resolve those discussions and I don't want to say very much about it because that is a you know they have to uh they have to get there uh on those questions that's the that is the competitive basis for the future of that facility. It is it is a um it's a facility that's been there for a long time. >> you know we want to see it we want to see it succeed and we're watching the watching the progress of this very
closely. So on my final point, having wound up by the chair, I I know that the Tasmanian minister, Minister Digen, has said he his view is that it should qualify for production credit scheme. You've said that that program is still under design. Um, I will add my advocacy to Minister Digen and the Premier in respect of that scheme because as I said before, I can't see how you could lose a facility that's producing competitively green aluminium for other sites that might still be using other >> I don't know if there's energy officials want to add, but >> I look I accept I'm making a comment. I get that minister but >> I'm delivering my message to add to minister Digens. >> Thank you chair.
>> Thank you Senator Hod may chair some questions about major project status. Can I confirm that this is the right part of the program? >> Terrific. Thank you. Um on 3rd July 2025 Minister Ayres announced the major project status of Bonapart CCS in a media release in which it was labeled a large-scale renewable energy venture. Um did the department provide advice to the minister or his office on how Bonapart a CCS project can be labeled as a renewable energy project in the context of this announcement?
>> Uh so while I wait for officials to join um at a very high level we the labor project facilitation agency does assess uh proponents against um set criteria uh to whether they meet the uh required um uh status uh to be passed through to the minister for decision. So we do provide advice against the criteria. It is the minister's decision at the end. So we would have looked at the criteria as identified but as to the specifics your question I'll pass to my colleague.
>> Thank you Senator Bridget Gannon head of division for whole of industry division. I'm sorry Senator could you repeat that last bit of the question?
>> Yes. Did you provide did the department provide advice to the minister on how Bonapart uh a CCS project can be labeled as a renewable energy project in the context of the announcement?
>> Um as to the specifics of your question Senator I' I'd have to take that on notice and go back to what advice was provided at the time. But as the secretary said, the criteria against which we provide advice to the minister on whether a project should or shouldn't be um designated as a major project and have major project status is set out on the website um on the department's website and it looks at um the strategic significance of the investment, whether it faces complex regulatory challenges and the financial viability of the project.
>> Thank you. Is it possible to table that advice that you would have provided as well?
>> Um, Senator, I again I'll I'll look into that. One of the barriers we have to providing that advice is that it contains typically a great deal of commercially sensitive information. And the other is that um through the course of the advice we it demonstrates our methodology in assessing the um the applications that we receive and we're reluctant to release information that might allow future proponents to kind of um anticipate our methodology and game
it look I'm probably less interested in the methodology but anything that speaks to it as being a renewable energy project and I suppose then that follows into my next question is um large scale renewable renewable energy venture a formal category under major project status or was that just the communications used for that particular?
>> So it's not there's not there's not a split uh between different activities and we've got a the list of activities of projects that have been identified as major projects covers renewable energy hub nickel project hydrogen project um and various other things. um the the crit the broad criteria were as uh my colleague outlined which is relating to sign you know significant project regulatory complexity and the like um so there's it's not um targeted at specific areas of the economy.
>> Okay. So that's not a specific bucket. So would it do you know who would have labeled it then that given it that label as a large scale renewable energy project would that have been
>> in in all likelihood it was the the characterization of the project we would take from the company itself uh because it's they're the ones that understand what their project is uh but it would have been backed up by the material that they provided to verify what it is that they're undertaking.
>> Okay. If there is any more information about that that can be provided, whether it did actually come from the company or whether it was comm's department or somewhere else um that could be provided, I'd be grateful for that.
>> I'm happy to look into it.
in January of this year, Impex announced it had withdrawn Bonapart CCS from environmental assessment. Uh does this change or alter its major project
Um, no Senator, it's those regulatory processes that the companies are working through is something that we we provide support as they navigate those processes, but um I'm not aware of anything that's that's happened that's resulted in that um that status being withdrawn.
Um the the process of the major projects authority is though to go back and look at projects over time and some projects have lost their status as a result of how long they've been in the program and what they're um the how far they're going through the steps. Uh because we do try and focus on our resources on those that are more prospective. So there are review points um and I'm not sure whether the timing has worked out such that anything that's happened in the project has hit a review point yet.
>> Yeah. Okay. Well, um, impex has signaled it will resubmit its environmental assessment once changes to the regulations of the EPBC act come into place. Um, does DISA have an understanding or have you sought advice from DQ colleagues or even maybe from INPEX itself about what changes impex
are waiting for? So this is a matter that we are working with our uh department of uh environment colleagues on because there were some changes in the EPZ act legislation that went through the house that has implications for the way um aspects of the offshore regulation uh for gas projects works. Uh and we are working through that. Um my resource colleagues will be here a bit later and they can provide more information on it. But at a at a high level, the reg the regulation changes mean that we need to change some of the offshore regulation which will affect the way uh NOPSA deals with various aspects of their environmental
>> And would it be could you please um table any correspondence between Impex and Daer um regarding its major project status um approval last year? Is that
>> so we were taken on notice noting the caveats that my colleague talked about about commercial confidence and the
Um and so sorry does it flow to say that impex will automatically retain major project status upon resubmission of its environmental assessment?
>> So it depends on whether they meet our criteria when we review the process. So they're not necessarily it it's not linked in such a direct way. Uh but the major project facilitation agency reviews the projects in a in a steady and sensible way. Um and at that time you know it'll there'll be an assessment of what assistance it needs uh what uh the likelihood of the project is and does it continue to meet the criteria for major project status.
>> Okay. So you don't have any further information you can provide now about why it withdrew um something that was touted as a large scale renewable venture. Um
>> other than what you've stated which is it's waiting for regulatory clarification post legislative change. um which it seems eminently sensible because there are links between the offshore gas uh regulatory environment and the environmental uh regulations and we need to make sure that they work together. That is work that the government is working through. Um and there are other proponents who are also waiting for uh clarity on how those obligations be met under the new
department know what percentage of storage at Bonapart is proposed to be CO2 from hard to abate industries like metal and chemical refining um as touted by the government versus CO2 from fossil fuel production? Do you have
>> uh so I think we actually had a question on this last time winning the hand side. Um we we can I'm not sure if my colleague I'm not sure if that was part of their application for major project status. Um we can we can
>> yeah last time I think I was directed to this part of the program to ask this question. So
>> yeah it so the question is is it in the um was it as part of their application for the major project status uh that level of detail might not have been
>> what percentage of um is proposed to be to be from CO2 from hard to abate industries like metal and chemical refining versus CO2 from fossil fuel
production. Senator, we had a question on notice that went to this question um uh from the last estimates and we understand the project will initially focus on the storage of CO2 for impex owned uh projects with the potential to see sequester CO2 from third parties. That's that's the extent of the information I have on.
>> So just see CO2 from from their own project
>> which is which is predominantly related
So would would you still then if that is the case consider this a renewable energy project? Does that
>> I'm not sure that's something we've assessed anything against. So
>> but it was it was labeled as a what was it? A large scale renewable energy uh in a in an announcement by the minister in July of this year.
>> Senator, I'm not sure that I [clears throat] mean I I it's a long time ago. I don't don't know about the sort of um the the labels that were attached to the project. I just make the >> um gas um particularly in the context that I work in in terms of its industrial use is um a a very important um feature of our industrial energy mix. Um the uh particularly in areas where uh coal is um is currently being utilized. Uh there are opportunities to lower emissions profiles very significantly by using gas. There's some obstacles to that because it's very expensive.
renewable energy project. That seems
like a bit of a stretch. seems to I'm just going to the ver you know the virtue of these these kind of propositions gas is going to be an important part of um our um switch to lowcost wind and solar like it's not possible to do that without without um some element of gas um I think I got in somebody scoffed at me for saying the goldilocks amount of gas you don't want too much you don't want too little uh in the electricity system you want just the right amount because it's very expensive
>> yeah we've got to stop exporting as much
uh But you need that that peaking capacity um for um stability in our system and gas will continue to play an important role where there are opportunities for um carbon capture and storage technology uh whether it's in the gas sector I think you also referred to some of those hard to abate particularly where gas is a feed stock you know it's part of a chemical process rather than just providing heat uh where there are opportunities in those hard to abate sectors or in the gas sector to do CCS. Well, that is going to assist. Um I think the IAA projects um a billion tons um of um of uh CCS as part of the uh net zero by 2050 effort. Um it's by no means the main game. Uh but um where there are opportunities um for a sort of fair income effort from industry here um that that meet a series of other objectives that seems to me to be something that people shouldn't be hostile to.
>> You're coming. >> Oh yeah, I'll just I'll wrap up quite quickly. Um so we can table the media release. It was a very big announcement um celebrated by INPEX. If you were to announce it again today with the knowledge that you've got, would you label it a large scale renewable energy project knowing that it's essentially enabling the production and combustion of fossil fuels?
>> Well, as I say, um the the the gas industry and you saw the announcement that the gas that that the um the government made in relation to the gas sector just before Christmas about gas reservation for Australia. These are this is an important national resource that should be used in the interests of Australians.
>> Yeah. I'm not debating gas. I'm debating the the the terminology and the the >> I'm not worried about I'm not worried
about the slogans. I'll I'll I'll
>> slogan to people who are following the energy
>> some time ago. Um if there's anything, we'll go back and have a look at it. If there's anything >> additional we can provide you, we will.
>> Yeah, I would appreciate if you did that. and um >> given time
>> I think um secretaries just reminded me um that release wasn't only about that project. Um there were a number of projects uh that were referred to them. One of them of course was Suncable uh which is a very significant solar project. >> Yeah, I suppose it's it's the bundling even together. Well, you know, it's all part of the industrial effort for a future made in Australia to um secure our future competitive advantage in the interests of blueco collar jobs.
>> But it's not all clean and it's not all
renewable energy. That's the point. >> I'm not too worried about that. I'm worried about making progress, industrial progress for Australia, securing good jobs in our regions. That suncable project, >> climate change energy is >> you're not worried about greenwashing
because it is greenwashing essentially.
That's what it is. If you are bundling no
>> that project a CCS project.
>> No, absolutely not. Well, it is it is all about >> securing our industrial future. Our industrial future is going to be based on uh lower emissions energy. Um we are going to require vast amounts of >> I'm not I'm not disputing that we're vast amounts of electricity. I'm talking about uncertainty around gas. >> Uh we're going to require investment and action from the government and that's
just prefer if it wasn't masquerading as renewable energy, but thank you,
>> Um, just trying to finish off uh this bit about the heavy industry package. Uh so just quickly when we went through that Glen Core agreement just trying to check so that first stop point you were saying that we read out before uh about having to comply with the financial something agreement assistance agreement I think uh that that agreement has links to Glenor's profitability. I just want to be clear. So the more profitable Glen Core is the less taxpayer assistance there will be. Is that correct? So the
the precise details of that component is commercial and confidence. Um the require the requirement for um the the the general proposition of why the governments both governments have worked with Glenor to support the smelting operation in Mount Aiza. uh is the need to support them given the geostrategic uh background the international prices um the the the state state of the market and the need to transform and have sustainability over time related to capital expenditures and the like. So the overarching objective is to support uh the develop the continued operation and transformation of those facilities. Um, we have worked with the com with the Commonwealth and the and the state government to ensure that we're protecting taxpayers money. Um, the precise mechanisms are are commercial
>> I'm just not getting a lot of confidence though cuz I >> I'm trying to move on and do this >> I just want to know is there a link between Glenor's profitability and how much the taxpayer has to throw in? Uh so
there is a link between the commercial availability and the financial operations of the of the company and the amount of money they get through stage gates etc. Um but I'm not going to rule in rule out which measure it is and what component it is. >> I'm not exactly sure what the
sensitivity is because just seems I mean I get there's a commercial conference element but that's >> that would only be if I was asking exactly what the thresholds were or some such not the general concept. It's an
agreement that covers a relatively short amount of time in investment terms. Um I I I I want the company to be profitable. Um I want other industrial firms in the region to be profitable and to see a long-term investment horizon. Uh this agreement acts to secure um those short and medium-term issues while we get a um uh a stable um uh commonwealth, state, private sector effort to secure the industrial future of that region. That's what it's about.
>> Okay. Uh just moving on, uh I did raise this earlier in corporate. Uh some of this package this heavy industry package comes from uh redirected funds from the sporting supporting Australian industry uh package uh announced in the budget in 2022 23 the October budget. I particularly wanted to know how much of the 50 million in that measure in the 2223 measure that were was going to Near the the zinc smelter uh in Hobart uh how much of that has been spent.
>> So Senator I can answer that question for you. Um so of the $50 million awarded in 2022 um that was mutually terminated and all grant funds were repaid to NISTA that that grant to um it was for the installation and upgrade of an electrolysis plant at the that the zinc smelter in Hobart. So this grant was that $50 million grant was replaced by the $130 million package uh with South Australia and Tasmanian governments to maintain operations at nearstar facilities in both Hobart and Port Perryi while early feasibility studies for major facility upgrades and critical minerals processing facilities are progressed.
>> Right. So um that package uh of that 130 I think you said is is that the 57.5 million is a comworth
>> That's correct Senator.
>> Right. Okay. >> So in comparison to what we were doing for Near uh over 3 years ago now um we've gone from offering them 50 million to 57 and
That's the current package. Senator Tara Oliver, acting deputy secretary uh industry and commercialization group. Uh that is the total of the commonwealth contribution as part of this package.
>> But the package or the the assistance provided in 22 offered in 22 was only to the Tasmanian smelter whereas the one in Mifo was for both Taz Hobart and Port Piri. So in effect, haven't we reduced the GL's assistance to Near? Senator,
I'll let the officials go to the details, but um in relation to both of those facilities, uh Near and their owners um came to the three governments, uh Tasmania, um South Australia and the Commonwealth, uh with a new strategy that that in particular engaged critical minerals production at both of those facilities to bolster the competitiveness of the facilities and also to attracting investment uh and um and so they are to in shorthand to do different things uh that go to in a different kind of way uh we believe and the company believes a more enduring kind of way to the um to the future of that facility that's
>> well let's hope it's second time lucky because obviously the first time was a failure what was the extra
>> well no I don't
>> what was the terminated
the grant that kind of sort of offhand negativity is is the kind [laughter] of thing uh which is which is the reason which is the reason why for the 9 years that you were in government
>> facts things are really tough
>> facilities like these closed hand over fist negativity >> that that that leads to closures >> that leads to closures
>> we just went through another one that closed today
>> we've we've had an approach from the company uh this is uh that they have been uh in a steady way delivering upon uh the commitments that they've made. We're going to continue to work with them. They are to do different things. It is not uh it is not I I it is a smear on the workers and the management have been engaged in there to say that was a failure. It's a kind of camber kind of thing on your government. kind of camber kind of thing that I've come to expect which is that sort of doesn't hit the mark hasn't hit the mark criticism of blue collar work he gets
go defensive so the the $50 million that was awarded in 22 you mentioned that was for electrolysis what was that was that hydrogen
>> I don't believe it was and Senator can I just clarify The $50 million grant was mutually terminated,
>> right? So, yeah, it was mutually accepted that it failed. But so, what [laughter]
>> why can't you just act like an adult? Why why can't you just act like an adult and like you care about the national interest? Why don't you pretend for a minute to care about Australian manufacturing and actually back in Aussie work manufacturing policy? You got to change. >> Why are you not capable of doing that? Why can't you why can't you ask questions? in a civil kind of way that actually backs Australia. Why don't you the same as actually doing it. Ask it. Ask it like you actually care about
>> Minister. All right, Minister, I think you've made your point.
>> Touched a sore point here. Uh cuz their manufacturing policies keep failing. Uh but uh so take me through what my simple question was before the minister lost his mind. Uh was here we go. Here we go again.
>> If you prove my point, if you want to smear Australian effort, keep it up. Keep it up. It's not done you any good.
>> Okay.
>> Uh it's it's it's why it's why nobody believes you.
>> Okay.
>> Uh when it comes to these industrial questions, >> yeah, it's just, you know, just turn that frown upside down and try and adopt a sunny Australian attitude to these
>> Just like yourself. Um so, uh so sorry, what was the electrolysis?
My colleague will answer on what the electrolysis plant was.
>> That was my question. Yes.
>> Mark Bowmont, general manager. So the electrol electrolysis plant is part of the existing Hobart facility. At the time nearstar had contemplated upgrading that it's approximately 100 years old,
>> right?
>> Still operational, but um hardly up to date.
>> So not upgrading that anymore.
>> So um as part of that, they've the zinc prices were depressed and the economics of that case didn't stack up at the time. Hence, as the minister said before, they're taking a consorted view across both assets and reviewing the whole feasibility study across both of
>> Right. Okay. Um Okay. All right. Um >> Ah, yeah. Well, I think the minister is at about four and I'm probably five, man. >> I don't >> I wanted to so is the my next question >> uh was of the 522 million uh in this heavy industry measure is any reserved
are you referring to
>> the the myo measure the heavy industry transformation measure that was 522.2 2 million. Is any of that reserved for the Tomago situation?
>> Uh, no.
>> No. Okay. Okay. So, that's still to come. There's nothing in the budget so far for Tomago.
>> Uh, so the discussions with Tomago are ongoing. No decisions have been taken.
>> Right. I thought there was sort of like an announcement before Christmas that a deal had been done, that Tomago was
the the uh announcement before Christmas uh went to uh the decision by uh the owners of Tomago Aluminium. There's three owners uh and uh and uh the government uh to uh work together in a programmatic kind of way to deliver a lowcost uh electricity deal uh that meets Tomago Aluminium's uh competitive requirements uh and uh and involves uh uh a uh long-term power purchasing agreement. What that will lead to uh Senator Canavan is not just um securing that facility's future uh but it will lead to lower cost electricity, more wind farms built in regional centers, more solar uh built-in uh regional Australia, more storage, more transmission, all stuff that I know that you don't like. It will lead to more electricity, more industrial production, more bluecollar jobs. I look forward to your support for it.
>> Well, I I chair I I do have a number of questions on this. I I get the feeling that they may trigger the minister further. So, maybe we should just move on uh and not uh go well past my block. >> On notice, >> I'll come back. No, I'll definitely come back on this. But, um let's uh let's save for another block. Thank you, chair.
>> Okay. So, I think Senator Colbeck
So, it's my job to calm him down. Is it?
I don't know if I can help. >> High intensity little training. [laughter] Goes up, goes down. >> Okay, I'll be quiet. I'll be quiet. So, I know I must trigger you. >> I definitely trigger you, Minister. So, I'll just give you some resp.
uh, let's go to Yella. last year the um the government in partnership with South Australia announced a joint 2.4 billion package can we get an understanding or some information with respect to where the sales process is up to please?
non-binding indicative offer uh so that's to the um to the administrators to um purchase the asset as well as an
governments from that um both the sales agent triple 3 and uh they
bidders based on the proposals that they put forward and the funding bids that they put forward against the objectives that governments are trying to achieve in uh in Walla. uh and we shortlisted uh as well just before Christmas and invited um those bidders to um start engaging in those shortlisted biders that government shortlisted um to start engaging in funding and financing discussions with the common with the commonwealth and the state and those discussions have started.
>> Okay. So we haven't got to a preferred bit of stage yet? >> No, Senator. Uh, do we have um an expected time frame for completion?
>> Uh, I think I'll um I'll think I might uh misquote the minister on this, but we're uh you know, we are moving as quickly as possible. uh we want this sold as soon as we can but sold to to a you know a bidder that will uh support the long-term transformation of WA into a sustainable um uh commercial facility.
So as part of that process you've got court of mentor appointing blue scope to provide technical and operational support for that process. in an advisory capacity was the com consulted prior to that appointment?
>> Uh Senator that as you said it was a decision of corda. Uh certainly Cordentha uh did inform us that they were planning to do that and we made the point that it was a decision of for the for the
>> So did the Commonwealth um approve or note that appointment would you say?
>> Well I I would say that we said to Qumenra it was their decision. So effective say that is noting
>> we note the point.
>> We could understand the reasons why they wanted some technical support to run a a facility such as wher um and they obviously looked at the market and and were looking to ensure they could stabilize the >> existing processes to reduce the amount of administration uh the the cost of the administration. So we fully supported them to undertake measures to be able to run the process uh the facilities in a
part uh of that was work worker health and safety. The plant um was run down as I think it's been well um well recorded and so the need to get someone in there uh quickly who had experience uh of running uh you know a blast furnace and a a a BOS system uh was very important and Blue Scope's the only one in Australia. So be able to get that quickly to ensure that the operations were run safely uh as soon as Camea uh stepped in. That was a another part of the um uh the calculation by Camea.
>> Is there any reason that we're describing it as a special agreement?
>> No, Senator,
>> which agreement are you referring to?
>> The court amend the blue scope.
>> Oh, I mean
>> agreement as a special agreement. I mean
that they're questions you'd have to put to the administrator about what they
>> Well, according to FOI 3065 from the 28th of August, the talking points provided to the minister's office on why called the arrangement between quarter mentha and blue scope a special agreement
>> and we would have taken that advice from quarter menthol.
>> So okay. So that's advice that's been received from the administrator.
>> Yeah, we we seek we we are part of as part of the governance processes we we engage with the administrator jointly with the South Australian government. Um they provide updates on on what they're doing, but we're very clear about the governance arrangements here which is a quartther is uh responsible under the uh insolveny arrangements in Australia to manage this process. Um and the government is both governments are jointly supporting them financially but they have legal obligations that they need to manage and and they take they they enter into agreements um with their legal obligations.
>> So it's their it's called a mentor's description not the department or the government's description.
>> Uh that is what I presume but we can check on notice.
>> I I wouldn't read too much into that senator. Um I think the the point so I'm looking at the I think the same document you're referring to. um that was released under FOI and I think the main points the it's more the the the dot points underneath which um both myself and the secretary have talked about of why that agreement was entered into with um uh with um Camea um it may you know it's just an agreement um special um as I said we will take that on notice where that came from but I wouldn't read too
much into that. Okay. Is the department a aware as to whether Blue Scope was granted any preferential or contingent rights associated with the sale process?
>> Uh I think it's been well documented um that they have a a what's called a roll a right of last refusal.
>> Yes. >> Uh preferential bidding position.
>> It only the right of last refusal,
Senator. And this is all information that's provided as part of the process for biders to understand what the legal situation is for the asset. So there's obligations on the administrator to run a process that is fair and equitable across the system. Um and so they they are responsible for providing information into the data room for other bidders.
>> So would they have access to any technical data or plant information that the biders the other biders may not? Uh
I mean the process run by the administrator is is intended to ensure that all biders have equal access to information. Um biders can ask for information. If they if they feel like something's missing, they can request it. There have been requests in the data room for various clarifications either from the administrator um from the governments. Uh and so that process runs just as it does in any other administration process irrespective of any role that Blue Scope may or may not undertake in it. And any
documents and technical documents as you're talking about Senator that uh that Blue Scope have access to is put into those data that data room that the secretary was talking about. So all biders have access to those documents.
>> You're at 9 minutes.
>> Okay. Um so so you're you consider that the arrangement is consistent with maintaining an open and competitive sale Um and is uh are all the other biders comfortable that it's a fair and equitable process if Lusco is both a special adviser and a bidder with last right of refusal.
>> So it's difficult to put ourselves in the mind of other proponents. Um the the legal arrangements that the administrator need to acquit um under the obligations of the insolveny act is to run a fair and equitable process. um they have uh gone through that as we mentioned there was an operational need um to stabilize for WHNS and and uh economic reasons financial reasons to stabilize the business. Um everyone is aware uh of the potential or perceived conflicts uh related to this. There have been quite a bit of discussion between parties on this include and open transparency um with other biders can ask and have been able to ascertain uh what's what as much as available. Um so we are aware of the perceived uh conflicts um and uh the administrator is aware uh and is operating under their obligations. Um whether you know people are comfortable or not it's difficult to kind of call.
>> Yeah. and Senator certainly um Court of Mentha's lawyers have put in a detailed note around the the scope of uh the last right of refusal um and certainly without trying to give up too much details that was important to make sure people understood what was and wasn't in uh and I might just leave it at that.
We we've put billions of dollars into process and potentially depending what the biders come back with we may be required to put don't you think it's really important that we just say it's up to quarter men that run a fair process? We are heavily invested in this >> what measures are we taking to ensure that it's a fair and equitable process?
>> So um first and foremost this is an operation activity uh the administrator needs to take under Australian law. they have legal obligations uh to all credited parties um and they are fully aware of their obligations and were chosen to take undertake this role because of their capability in this space. Um so everyone involved in this is aware of the their legal obligations. Um as funders of the administration, both the Commonwealth and the South Australian government have governance arrangements and uh and rigorous uh government governance regulations on this um with uh quite a lot of oversight uh and um discussion of strategy and mitigation um because both governments are committed to seeing a successful outcome here and everybody understands the importance of the commercial nature of the exercise. Um and so it's not the case that uh cordmenthor is entirely doing things on their own. That would be an unfair characterization. But they have legal obligations to undertake the process in a in a a fair and equitable way. Um and we have obligations as to support um the fair and efficient about spending of government money. Um and we are all working together with a single aim of having a commercial outcome uh from a
So when at what point did the department become aware of the of Blue Scope's dual role in this process >> before or after the February 2025 bailout announcement?
well there I I suppose there's actually two points to that Senator. Um certainly it was after the announcement that we were aware that there was consideration that they would be um advising quarter mentha but it was relatively soon I can't remember it was days I can't remember the exact um difference in time but it we in until they actually bid we weren't sure they were going to bid Sorry, when I say bid, that's poor language. Sorry. Until they put their as as they have they have said publicly and I need to make sure.
>> So you became aware fairly quickly after February 2025 the announcement of the bailout that Blue Scope would be engaged by Came.
>> Correct Senator? Yep.
at that point in time it wasn't apparent that they were likely to bid for
>> it was certainly not confirmed. uh and only you know the sales process I think uh minister you we went you went to Wales I think it was 24 June I want to say last year that was when the data rooms opened and that was when you know people uh you know around that time were signing their NDAs to enter into uh the data room and that's when we you know had you know confirmation that they were were going to bid uh and certainly um I can't remember the exact date but blue scope did put out a um uh an ASX press release saying that they're building a consortium to to go into the process. So that's all again I don't have the exact timing of all those things.
>> Sorry that would be them complying with their obligations if they were going
Yes. Correct.
>> Yes. Everyone in this uh process has obligations under the financial uh regulations. one those announcements um to the equity market to their shareholders if they're not listed uh to other regulators uh etc. So um there are stages in this process. It was quite uh unusual activity for a state government to uh pass legislation to enable uh something to go into administration. There was a um a swift movement of appointing of of an administrator joint arrangements between the commonwealth and state uh to support that process. uh there's been a great deal of work trying to uh working through and designing a process that will uh achieve the outcomes of uh both the existing creditors and also the two governments. Uh and so there's this is a detailed comprehensive uh project with great deal of resources from everyone involved to try and get a good outcome. It is complicated uh and there are different obligations on different parties. Um and uh there is a wraparound for that certainly on our side through property advisers through legal advice uh through appropriate governance mechanisms through appropriate recording of activity through all the usual reg regulatory activities that you'd have in an insolveny through data data room access to information open transparent. um uh everyone has conflict of interest and non-disclosure documents and all the usual arrangements to try and mitigate uh for unexpected events. >> It's complicated and there's
>> I just want to go one point that you just made there with respect to property and legal opinion. Are you have you sought or are you employing um specialist opinion to in to ensure yourselves the uh that this is in fact a fair and
equitable process. So we we have as we as you would expect us to have for a project of this size and complexity have dedicated legal advice that includes property advice. Okay.
>> And Senator, can I just go back and clarify something I said earlier? Um when we saw the blue scope agreement with Camea and there was the right last of Rolo in it. Um certainly we knew they obviously were considering or thinking bidding because otherwise they wouldn't have that clause in there. But what I suppose what I'm saying until they actually form their consortium and they put in a proposal we it it wasn't guaranteed that they would they would
And just to be clear, knowing that that was part of the uh arrangements between Camea and Blue Scope for the safe operations of the facility and reducing the call on taxpayers money through the administration, the design of the next process and and all the elements to uh were were taken in that context.
>> So does the advice that you've received so far confirm that the process is fair
and equitable? Uh so just to be clear it is not our responsibility to form that judgment that is a legal obligation on the administrator and ASICH as the corporate regulator
>> if you're if you are purchasing advice
>> so
>> with respect to the property and the legality of the process you I mean how are you in how are you court of meth's got its own obligations I get all that but how are you I mean taxpayers are putting in billions of dollars a year. How are you ensuring that you are comfortable the c the government is comfortable that it's a fair and equitable process? That's the critical question here given the amount of taxpayers money that's going into the process.
>> So I would I would just I'm just being cautious here because this is not the Commonwealth government to step into the regulator shoes. ASICH has obligations in terms of insolveny. No, but you said
to me that you were getting property and legal advice as part of the work that you were doing to ensure >> this is the case. So my question is does that advice confirm that it's the process is being is fair and equitable?
>> So I'm going to be very careful and step this out because of the complexity of this situation. It is not appropriate for the Commonwealth or the department to step into a regulatory role here and assess something that a regulator is set up and empowered to do. uh what we have been doing is using legal and appropriate advice to assure ourselves of the policy advice, the legal processes and providing advice to the government. So I just want to pass it out um because it is not appropriate for um anyone other than ASICH to make a judgment in a regulatory sense. But we certainly have been looking at uh the commercial considerations, the property considerations. Um we we we need a commercial tension in this process. We need a good outcome for the Australian community. Uh and so we're getting commercial advice as well, not just legal advice. Uh so commercial strategic advice, legal advice, all sorts of uh analysis and advice into this process, partly in response to the market conditions uh to help and support the the administrator to be able to get a good outcome. So I'm just sort of separating a little bit uh the precise phrase that you used which is a regulatory action under the act uh which is not an obligation on the department.
So, Senator, maybe if I can add
>> because look, I understand what you're saying, but if I was sitting in the minister's chair, I would want to understand that I'm putting this money in that we're not going to be sitting around this table in 12 or 18 months time with a huge dust up over something that's gone pear-shaped. So, I just want to know, I would want to know as the minister that this was all ticky boo. So I I understand you making the separation, but if I'm sitting in that chair, I'm asking the same question because I don't have want to come back into estimates with a whole heap of phone books down the back of my trousers to try and protect myself from what's coming across the table. So um so in so in respect of that, you talk about the regulatory bodies. Are you aware of any references or have uh to any corruption oversight bodies statebased AC or ASICH in relation to this process
and to the sale process? No, Senator >> and and can I just add to what the secretary was saying is there's two separate processes here and that's really really important to understand. The first one is the sales process that the the secretary outlined that triple 3 and quarter meth have regulatory obligations to do.
>> Yeah, I get that.
>> Then there is the funding process that the governments are running and that's where we are getting property advice to make sure what we are doing and and and legal advice from AGS to make sure we're complying with the relevant uh Commonwealth legislation uh in in the process that we are running. Now yes they join up and there is that there's interest and and certainly we talked to quartermentha and triple 3 about the whole process but it's very very important to understand there's two parallel independent but linked processes running in this in this sales process and that's a prob advice and the legal advice the secretary was talking about and that makes sure the way we are running our side of it meets those
I understand. I understand what you're saying. So, so, so you're not aware of any references to any of any regulatory?
>> Uh, we're not, but some of those bodies that you referenced um don't make public references to them.
>> No, no, I understand.
>> We'll finish. Yeah, maybe you want to finish.
>> Will that be your last and then move to you and then we're done with this
Are we satisfied that we are at the limit of what we might need to tip into the process?
>> Uh the the process is ongoing uh and so uh it's diff it it's ongoing.
>> So it will depend on the bids. It may be that the bids request more resource and then the government will have to make a decision at that point in time.
>> They could ask for less as well.
Good luck with that. Okay. Thanks,
chair. Thank >> Thank you.
>> Thank you, Senator Canavan.