Australian and Queensland Government greenhouse policies that contributed to this week’s announced devastating closure of the Kwinana alumina refinery in Western Australia are threatening the viability of the crucially important alumina/aluminium industry in Gladstone, according to the Australian Institute of Progress.

“Alcoa indicates that the hike in Western Australia power prices has to bear a lot of the blame as alumina is our most energy intensive product,” said Graham Young, AIP Executive Director.

“Rio Tinto’s alumina refining and aluminium smelting assets in Gladstone face similar threats.

“If you cut fossil fuels without an affordable, dispatchable alternative, then you cut the throat of these energy intensive businesses.

“The value of the Boyne Island alumina refinery at Gladstone has been entirely written-off, and an impairment of over $1 billion has been made against the Yarwun alumina smelter and Queensland Alumina Limited.

“Rio Tinto chief executive Jacob Stausholm has been quoted nominating a deadline of 2030 for a viable decarbonisation solution, saying ‘the fix is not within reach’ but he is ‘committed to working with governments to find one’.”

Mr Young said that unrealistic decarbonisation timelines, devoid of engineering sense, meant that despite Australian and State Government pronouncements, Australia will not be a place that will manufacture things.

“Queensland attracted the alumina/aluminium industry to Gladstone in the first place with cheap thermal coal and is now driving it away because it has fumbled the energy transition,” Mr Young said.

“This will get worse as Queensland’s new Premier has announced even more ambitious decarbonisation targets and intends to mandate them by legislation.”

Mr Young said manufacturing, mostly associated with alumina, constituted 4,500 or 16% of jobs in the Gladstone region and value-adds of over $600 million a year in 2019. QAL on its own contributed $122.6 million to the Gladstone economy in wages and salaries and $279.7 million in goods and services in the same year.

“Closure of the industry will be a severe blow to Gladstone,” he said.

Mr Young said while the present Queensland Government had been in power for nine years it was only now doing something about pumped hydro, but it will not arrive, if it ever does, until next decade, after the 2030 deadline for Gladstone’s alumina/aluminium industry has passed.

“Aluminium smelters and alumina refineries need cheap, reliable power, and this cannot be supplied by wind and solar without enormous amounts of firming because they represent around 12% of state electricity consumption.

“In the short-term gas can be used to fill the gaps, but it is expensive and in increasingly short supply,  now that the State Government has banned exploration in the Lake Eyre basin.

“Nuclear would also be a possibility, but the Australian Government continues to ban nuclear power so that if it ever arrives it will be later than pumped hydro.”

Mr Young said the Queensland Government needed to step back from its headlong energy transition. Storage needs to be in place before renewables, and coal-fired power needs to be maintained until dispatchable alternatives have been deployed, otherwise the cost won’t just be in electricity bills, but in jobs, investment and human misery.