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House of Assembly - Fifty-First Parliament, Second Session (51-2)
2008-04-30 Daily Xml
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BHP BILLITON

Mr HAMILTON-SMITH (Waite—Leader of the Opposition) (14:25): My question is again to the Premier. Can he assure taxpayers that the ore removed from the expanded Roxby Downs mine will be refined here in South Australia, or is it now likely that most of the concentrate will be transported by rail and sea to China for value-adding and thus jobs creation and investment outside South Australia?

An honourable member interjecting:

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations) (14:25): No, I am the minister responsible for the BHP Billiton interaction with government.

Ms Chapman: And Victoria Park.

The Hon. K.O. FOLEY: What is your position on Victoria Park, Vickie? Mr Speaker, my understanding is that the opposition has been briefed by BHP Billiton on this matter. Is that correct?

Mr Hamilton-Smith: Some time ago.

The Hon. K.O. FOLEY: Some time ago!

Mr Hamilton-Smith: I want to know the state of play now. If you want to ask questions, come over here.

The Hon. K.O. FOLEY: You want me to come over there and ask you that question? Sir, my understanding is that BHP Billiton has briefed the opposition and, where appropriate, continues to keep the opposition informed. I would encourage the Leader of the Opposition to have discussions with BHP Billiton, and I am sure they will provide him with advice to the extent that they are able.

Mr Hamilton-Smith interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: My answer is their answer.

Mr Hamilton-Smith: What is the answer, then?

The SPEAKER: Order!

Ms Chapman interjecting:

The Hon. K.O. FOLEY: What a smart alec answer that is. I have not finished my answer.

Ms Chapman: Our answer is their answer?

The SPEAKER: Order!

The Hon. K.O. FOLEY: It is their project.

Ms Chapman: For goodness sake, have you got an answer yet?

The Hon. K.O. FOLEY: Mr Speaker, as the opposition has been briefed—and, as I said, I think the opposition should seek further briefings—BHP Billiton is currently undertaking a wide-ranging analysis of how it will extract, process and ship its product. What has surprised me is that it is proving to be a very difficult project, in the sense that it is the world's largest mine expansion—indeed, the world's largest mine, by a long way. They currently have an underground process whereby that ore is smelted on site. They are developing the world's largest open pit mine, and they have already said publicly that they have investigated, and are investigating, the possibility of exporting some of that product in a semi-processed form overseas.

We have made it very clear to BHP that it is the state government's position that we should maximise as much as possible in terms of value-adding and processing here in South Australia. Ultimately, the government and BHP Billiton will reach an agreed position in consultation with the national government, but it is an absolute condition of this government that the maximum possible processing should occur here. Whether or not that is 100 per cent is to be determined. We are not at that point, because the very significant capital requirement of this project is a matter with which BHP itself is still coming to grips. The cost of—

An honourable member interjecting:

The Hon. K.O. FOLEY: Sorry, who owns the what?

Ms Chapman: Water.

The Hon. K.O. FOLEY: We are negotiating with—

The Hon. P.F. Conlon: We should put them in a headlock.

The Hon. K.O. FOLEY: Yes, we can put them in a headlock.

Ms Chapman interjecting:

The Hon. K.O. FOLEY: The experts over the other side, of course! I accept I am not as clever as you lot and you would be the experts at it, but I am just trying to do the best we can do. Of course, we have engaged the services of Mr Bruce Carter to chair—

An honourable member interjecting:

The Hon. K.O. FOLEY: That's funny, is it?

Mr Hamilton-Smith interjecting:

The Hon. K.O. FOLEY: How much is Bruce earning from government?

Mr Hamilton-Smith interjecting:

The SPEAKER: Order!

Members interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: He is probably earning less than Dean Brown, actually, but I will check.

The SPEAKER: The Leader of the Opposition will come to order! If the leader has another question to ask, there is plenty of time for him to get up and ask it. He does not need to call out while the minister is attempting to answer the question. The Treasurer.

The Hon. K.O. FOLEY: That was an outrageous slur on one of the state's leading business people. We pay Dean Brown a lot of money to do work for us. Do you want to know how much Dean Brown gets paid, because I think it is good value?

An honourable member interjecting:

The Hon. K.O. FOLEY: Yes, and we pay him a lot of money—whether it is as much as Bruce Carter, I will have a look.

Ms Chapman interjecting:

The Hon. K.O. FOLEY: Why this opposition has to attack business people who are making a real effort to assist this state go forward is beyond me. To ensure that we have the best level of expertise and to assist us in negotiations with BHP, we have enlisted the support and the work of Bruce Carter. We have a dedicated team of public officials. Indeed, last night the Premier and I had dinner with SAMPEG which is a South Australian mineral expert advisory panel and which includes the likes of Dr Ian Gould, Hugh Morgan (the former managing director), Keith Yates and Paul Dowd. We have got leading mining magnates, leading mining CEOs, from around the world. In fact, I had detailed discussions last night with Hugh Morgan, for example. I was asking some advice from Mr Morgan on the way forward.

These are complex negotiations. We are doing what any diligent government should do, that is, maximising the benefit for this state. We currently have under investigation, from memory, at least 50 individual projects involving the interaction between government and BHP.

Ms Chapman interjecting:

The Hon. K.O. FOLEY: Sorry?

Ms Chapman interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: I had dinner with Hugh Morgan, and what?

Ms Chapman interjecting:

The Hon. K.O. FOLEY: Ask him what?

Ms Chapman interjecting:

The Hon. K.O. FOLEY: Hugh Morgan does not work for them anymore. He has retired. He has sold the company. The deputy leader just said, 'Are they going to process it here or not?' Hugh Morgan sold the company. Actually, no, it was Russell Michelmore. He retired eight years ago. What colour is red, Vickie? About the same colour as your jacket!

Ms Chapman interjecting:

The Hon. K.O. FOLEY: Hugh Morgan?

Ms Chapman interjecting:

The Hon. K.O. FOLEY: He retired eight years ago, Vickie. I don't think he is up to date exactly with BHP's inner thinking.

Ms Chapman interjecting:

The Hon. K.O. FOLEY: Have you ever spoken to Hugh Morgan? Have you?

Ms Chapman interjecting:

The Hon. K.O. FOLEY: When was the last time you spoke to Hugh Morgan?

The SPEAKER: Order!

Ms Chapman interjecting:

The SPEAKER: The deputy leader will come to order! I am on my feet. Question time will just get out of control if we have this ridiculous practice of questions, follow-up questions, or whatever, being asked of the minister while the minister is on his feet and the minister attempting to answer and respond with his own questions. The minister was making a fairly straightforward answer, and I urge him to stick to it. The Treasurer.

The Hon. K.O. FOLEY: Thank you, sir. The process is that we are working towards a release of the EIS from BHP, we hope sometime mid or during the latter part of this year. In that will be a full outline of the project and the various processes that BHP Billiton will be undertaking. We have not resolved, nor has BHP resolved, on my latest briefing, as to what extent processing will occur here and/or off site. I said at the very beginning of this answer: my answer is their answer. Until BHP is able to come to the government and say, 'This is what we are now firming and finalising in terms of our operation,' I cannot be in a position to say whether or not that is acceptable.

It has certainly given us detailed briefings on what it is likely to do but, as I have found in this project, there can be rapid changes, and that is driven by the sheer enormity of this project. I think this is a project that requires bipartisan support, because, as yet, we do not know whether or not we will need to amend the indenture or whether perhaps there will even be a new indenture. Our hope is the existing indenture will cover it. However, this is a project which will last for 100 years, and I would hope that we can bring the opposition into confidential negotiations and discussions at the appropriate time to ensure that we eliminate issues of sovereign risk and that BHP can be confident that what we are doing has the support of both sides of the parliament.

I would encourage the Leader of the Opposition to get in contact with Richard Yeeles, the former chief of staff to premiers Olsen and Brown. I think contacting Hugh would be a good idea, but I think before you do, you had better remember that he does not work there anymore and has not for eight years—and it was with Western Mining, not BHP. That is extraordinary, isn't it? I have no idea, she reckons; crikey. I would encourage the opposition to do that because this is a project that must be above politics because it is in the interest of not just the immediate future of this state but also for a decade, for a century to come.

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