BlueScope exaggerates impact of carbon price

April 16, 2011

Steel manufacturer BlueScope is exaggerating the impact of a carbon price said the April 9 Sydney Morning Herald.

“Last month BlueScope said a carbon price of $25 a tonne would wipe $300 million to $400 million off its bottom line but analysts at Deutsche Bank quickly pointed out that ignored compensation," SMH journalist Paddy Manning said.

“Based on BlueScope's 2009-10 emissions of 12.2 million tonnes, they calculated the company's carbon liability in 2012-13 would be about $30.5 million, or 7.4% of its forecasts for the company's net profit after tax."

Noel Thompson, a physicist and former general superintendent at BlueScope, told the SMH the company will make money "hand over fist" when the business cycle turns.

"With largely depreciated plant and improved productivity — the company has greatly reduced its Australian workforce over the past decade, to about 9000 employees now — BlueScope should be “easily competitive” internationally', he said.

Thompson considered BlueScope's threats to move offshore empty, saying the “cost of capital is a killer for the concept”.

Blaming their $55 million loss for the six months to December 2010, BlueScope has again delayed building a cogeneration plant at its Port Kembla steelworks, technology that could cut emissions by 900,000 tonnes a year.

Thompson said Bluescope’s directors and top executives “lack technical experience and have failed to innovate — to try to use renewable energy to generate heat during the steelmaking process, for example, or to find alternatives to coking coal”.

Chris Williams, Socialist Alliance spokesperson in the Illawarra, said this news highlights the need for the government to force BlueScope to fast track plans to build a cogeneration plant.

"BlueScope has known about the need to reduce emissions for decades. Their plan to build the plant in stages over 10 years is just not good enough,” he said.

"How much money has BlueScope saved over the years from laying off workers? If they persist with arguing they can't afford to reduce emissions, the government should require them to open their books. If they refuse, they should be placed in public hands.

"The Australian people could then decide to immediately start construction on the cogen plant and fast track plans to transition to a cleaner manufacturing process,” Williams said.

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