House of Assembly: Thursday, May 19, 2016

Contents

Electricity Prices

Mr VAN HOLST PELLEKAAN (Stuart) (14:27): My question is to the Minister for Mineral Resources and Energy. Is the minister aware that four out of five of the industry speakers at the government's magnetite forum held on 12 May said that many mining operations will not commence or not expand based on expected future electricity prices? If so, what is his response to them? Speakers from Iron Road, Braemar and Havilah Resources all raised electricity prices as a significant barrier, and speakers from Carpentaria said that they are okay because they are connected to the New South Wales grid and they have much cheaper electricity.

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:28): I think it is not a generalisation to say that a lot of people in South Australian industry are concerned about future power prices, but the predicted power prices versus actual power prices are a very different outcome. A lot of South Australian industries are on the spot market. The greatest concern for a lot of those developments is not just power price, although it is a very large and important aspect of their operations, it is access to land, multiple land-use frameworks, negotiating with landowners to gain access.

There is a whole series of issues that concern the Braemar province, Iron Road and a lot of the proponents for these large-scale mining operations. Are they concerned about costs and wages? Yes, they are. Are they concerned about the Australian dollar? Yes, they are. Are they concerned about power prices? Yes, they are. It is not just one aspect holding them back. There is a whole series of things that they have to deal with.

Of course, a lot of these proponents do not actually own the land that they wish to mine. A lot of them don't have mining leases as yet, and they are working on projected outcomes. What I would have told them if I had still been there is that of course by the time a lot of these mines are set to be operating, even with the AER figures the opposition is quoting, you see wholesale power prices dropping to below the current prices today through the AER's own predictions that the opposition are quoting.

For example, OZ Minerals' processing plant at Whyalla is probably not due for operation until late 2018, early 2019, or even later. Things get pushed back the way things occur. The AER's predictions, given that the member for Stuart is so fond of quoting them, shows wholesale power prices are predicted to drop below $80 to about $60 a megawatt hour.

What is happening here is that the opposition is attempting to frighten people, scare people, say you can't invest in South Australia, but the reality is 10,000 new jobs in 12 months. Rather than take the 20 per cent loading, as the shadow minister just complained, how about coming up with an alternative policy. What is the alternative? What is the alternative policy? What are we going to compare and contrast it with?

Mr GARDNER: Point of order: standing order 98, the member is entering debate.

The SPEAKER: Debate? Yes, I uphold that point of order. Member for Ashford.