News Alert: Smelting and Refining of Mount Isa copper in Queensland to cease.
Guest post by Viv Forbes
The first industries of Australia were farming and mining and these two have been the backbone of the nation ever since. Both are threatened by the taxaholics in Canberra.
Shorthorn and Brahman cattle arrived with the first fleet and coal was discovered by convicts at Newcastle in 1791, just three years after the First Fleet arrived. The first Merino sheep arrived in 1797 and coal mining started in 1798. Since then mining and farming have earned the majority of Australia’s income.
Wool and wheat, gold and silver, butter and cheese, copper and lead-zinc, leather and tallow, iron and steel, sugar and wine, coal and hydro-carbons, meat and mutton, aluminium and uranium, timber and fish, nickel and titanium – these comprise Australia’s Magic Pudding.
But the Gillard/Green/Garnaut Carbon Tax Coalition hate our primary industries because they all depend on carbon fuels and produce the carbon dioxide that feeds our crops. Our backbone industries are seen as dreaded “polluters” and treated like noxious weeds and serpents to be removed from the green Garden of Eden.
Our pioneering squatters and prospectors blazed the trails which Cobb and Co turned into the roads of Australia. Wool from the merinos, almost alone, carried the nation until the 1850’s when metals started to create wealth – lead, copper and gold were discovered in the 1840’s and 1850’s. Mining started soon after and then cattle raising became profitable to feed the miners. Better roads, towns and then railways were built to move our primary products to the smelters, spinners, millers and tanners in Europe. Ever since, our great primary industries and the industries dependent on them have supported all Australians.
Mining is largely a materials handling operation, and it needs a lot of energy for mining, crushing, grinding, smelting, refining and transport.
The first copper mines extracted only high grade surface ore. They mined it selectively using human muscle power, packed it to the coast using camels, donkeys, horses and bullocks, and shipped it on sailing clippers to smelters in Europe. All stages used politically correct “green” energy.
But “green” transport moves slowly. Some loads of ore that looked profitable when they left the Peak Downs Copper Mine in central Queensland on donkeys, were sold at a loss, months later, when they landed at the copper smelter in Wales. Mining was thus an intermittent business – booming when metal prices were high, closing when prices fell.
But the high grade surface ores never last long, and the deeper primary ore is generally much lower grade. It was OK to send 40% copper ore from Cloncurry to the coast using horses and drays, but ore containing just 2% copper would not cover the costs.
So the first metal processing started with primitive on-site smelters (often using wood and charcoal, both “green” energy). Smelters removed most of the impurities leaving crude metal with +95% copper which was exported to overseas refineries. Later, Australians developed the flotation process to produce metal concentrates to feed the smelters. And trucks and trains started to carry value-added products to the coast.
The great Mount Isa Mine was discovered in 1923 – lead smelting started in 1931 and metal smelting at Mount Isa has continued ever since – 80 years of value adding in Australia.
Early in World War II, Australia found itself short of copper and Mount Isa was asked if it could produce copper. A crash program took place to convert the lead smelter to producing copper and the first blister copper was poured at Mount Isa in1942. Refining of blister copper started in Townsville in 1959.
Mines can only be where the deposits are found. But smelters and refineries can be located anywhere between the mine and the ultimate customer for the metals. And just three factors dictate where metal processing is located – political costs, processing costs and transport costs. The political cost (tax burden) depends on the common sense of the electorate and their knowledge of where the real wealth is created. The processing and transport costs depend mainly on the local costs of wages and energy.
The first trains and power stations all used steam engines burning low cost local coal. Then came cheap diesel transport for trucks and trains. Now electric trains are again running on cheap Australian coal. This low cost carbon energy supported our high wages and ensured that mineral processing became a big business in Australia – iron and steel, lead-zinc-silver, copper, nickel, aluminium, gold, uranium, limestone, coal, oil and gas are all processed to some extent in Australia.
There is no point introducing a carbon tax that does not increase the cost and thus reduce the use of coal and diesel energy. Mining and mineral processing and transport probably consume over 50% of Australia’s electricity, which is mainly coal powered with minor gas. And they are huge users of diesel for utes, trucks, shovels, dozers, scrapers, mobile power and drilling rigs. Therefore, no matter what they say, all of Australia’s mineral processing advantages are threatened by their carbon tax.
The recent Xstrata decision to phase out their world class copper smelting and refining operations in Australia tells us that the taxes, processing, transport and energy costs that Xstrata expects in Australia are already uncompetitive.
The dreamers in the Canberra cocoon always drool about “value adding”. Their carbon tax will surely cause all mineral processing plants in Australia to lose value, and some will surely close. Low cost coal and diesel power will no longer support our high wages. The value adding will take place in Asia.
We are watching a slow tragedy unfold – the end of an era. Once the mineral processing plants leave, they will never come back. We will be back to the pioneering era of mining – dig it out and ship it off.
And the final tragic irony of the Isa story is this – sending partly processed copper concentrate overseas, instead of smelting it at Mount Isa, will about triple the transport burden and do the same to carbon dioxide emissions.
Viv Forbes
May 2011
Reference – Xstrata to phase out copper smelting and refining:
http://au.ibtimes.com/articles/147308/20110518/xstrata-to-phase-out-copper-smelting.htm
Viv Forbes is a geologist, mineral economist and farmer. He has spent a lifetime working in government, mining and farming in Queensland and NT, from field geologist in the Bowen Basin, to uranium exploration at Rum Jungle, to mill clerk at Mount Isa, to mining investment analyst in Sydney and Brisbane and to company director of gas, oil and coal companies. He should be retired but refuses to. He and his wife Judy live at Rosevale harvesting solar energy from natural pasture using beef cattle and meat sheep.
oldseadog,
You are correct, Sydney Harbor is a sunken valley so the city side wouldn’t flood, but on the south side around Botany Bay it’s fairly flat.
House prices in the area have continued to rise, which indicates the people are taking this news of increased 1m sea level with a grain of salt.
Henry Chance:
The vast bulk of Qld coal exports are carried on electric hauled trains- the ones with overhead wires.
A very well written article Viv; I have sent your email on to friends and relatives.
Patrick Davis @ur momisugly May 23, 2011 at 3:00 am:
You are thinking of Lynas who shall be mining REOs (Rare Earth Oxides) at Mt Weld in Western Australia and shipping them to a sister company plant in Malaysia. There have been small protests in Malaysia over radiation fears from the processing plant (from thorium in the REO ores).
http://www.abc.net.au/am/content/2011/s3223106.htm
Patrick Davis says:
May 23, 2011 at 3:00 am
From the article…
“We are watching a slow tragedy unfold – the end of an era. Once the mineral processing plants leave, they will never come back. We will be back to the pioneering era of mining – dig it out and ship it off.”
It has already started. I forget the company details, but they have gone offshore to Indonesia to process rare earth ores because;
1. Energy is too expensive and will get more so.
2. Wages are too expensive.
3. Environmental compliance costs are too expesive.
4. Taxes too high.
5. Larger capacity plants already located offshore.
6. Larger sources of water (I guess that means cheaper).
To name a few of “reasons” why the company went offshore for that operation. However, there is local opposition to the plant due to fears of radioactive Thorium waste.
The problem with this is that the assumption is being made that this entire action is about CO2 emissions. It is not.
The intent of all this legislation is to remove industry from Australia.
Precisely the same intent is seen in Obama’s happy acceptance that if he continues with his current intent ‘energy prices will skyrocket’ – the only thing faster moving than energy prices will be the jobs going overseas.
The same with Chris Huhne and David Cameron- they _intend_ for these nasty messy industries to be moved ‘off-shore’ it is the one area in which they seem to be succeeding ask the steelworkers in Teeside.
These people are not _that_ stupid. They are deliberately deinsdustrializing their own countries while at the same time they send large quantities of monetary ‘aid’ to the same offshore countries that are taking the jobs.
As said above there will be no soft landing from this – the politicians would do well to study how the once revered Mussolini was treated when his ‘supporters’ woke up.
Good article Viv – seems you haven’t lost the touch from our old anti-ID card days.
Just a “minor” example of “unintended consequences” that can be expected from all this.
About 120km south-east of Mt Isa is Phosphate Hill where large quantities of cheap Ammonium Phosphate (MAP and DAP) fertilisers are produced. Principle ingredients are:
Phosphate – which is mined locally,
Natural Gas – which is piped there, and
Sulphuric Acid which is manufactured from sulphur gases scrubbed from the refining emissions at Mt Isa and railed down to Phosphate Hill.
Virtually all the fertiliser from Phosphate Hill is exported and the facility is a multi-million dollar export earner for the country..
Presumably this, too, will disappear with the end of smelting operations at Isa.
Yes, well structured article.
The proposed carbon tax may well have been a factor in the the decision to close Mt Isa and Townsville smelters by 2016, but I see this as just another example of ‘the great low wage attractor’, China, enabling Xstrata, a Swiss based company to make a commercial decision to refine the ore at lower cost. A shame for Australia, but our long history of Unionism has kept wages high.
http://www.abc.net.au/news/stories/2011/05/18/3219713.htm
“…the taxes, processing, transport and energy costs that Xstrata expects in Australia are already uncompetitive.”
This is not just about the carbon tax. All nations are currently facing rises in energy costs. A major factor here is the cost of Australian labour, which is set to get worse under Gillard’s draconian IR laws. The gross negligence of the carbon dioxide tax aside, the real, and utterly dismal failure of this government has been the complete destruction of Australia’s hard earned workplace reforms. For this our current prime minister is directly responsible, since they were her policies.
The situation is beyond repair because of the past treatment of Howard’s workplace reforms by the MSM, which has painted itself into a corner and can no longer speak honestly on the issue.
I’m a little skeptical of this article. The author shows the same confidence in his predictions that climate scientist are accused of having. His predictions are possible, but by no means certain. The fact of the matter is, economic policy is always a tradeoff, and increased taxes are no exception. A carbon tax has the advantage that it gives companies economic incentives to lower their carbon footprint. After the pain of the initial tax increase fades away, payers seek to lower their tax bill by engaging in socially beneficial behavior. I say, go for it, Australia!
Bryn Thomas says:
May 23, 2011 at 4:51 am
“The present crop is useless. A pox on both their houses. God help Australia because no-one else will.”
Absolutely. It wouldn’t matter which party was in power, they’ll both bow to the will of the NWO and the mandate of the Club of Rome. If the Libs had gained the upper hand in the last election we would today have Tony Abbott imposing a carbon tax, and the Gillard/Swan/Combet team arguing against it.
We should never forget that Abbott is one of the inner ring of morons of the Howard/Costello abomination that gave us the GST (and tax “
simplicomplification” and “work unchoices”) against our will.“Never never a GST” was the mantra in the beginning, similar to Juliar’s “No carbon tax under a government I lead.” But Howard’s turn-around was imposed by a slightly less abrupt mechanism. His change of mind was put to the vote, and Aussies tried hard not to re-elect him. His Liberal Party gained only 37% of the primary vote, and our silly “preference vote system” did the rest to give them a supposed (i.e. artificial) majority.
Now I don’t know about Yankee Webster’s dictionary, but my Oxford doesn’t seem to award the status of mandate to a mere 37%. But John rabbited on rabidly about his coveted but imaginary “mandate from the Australian people” to introduce the GST.
So yes, a pox on both their houses. It’s sad that Australia del Espiritu Santo (South Land of the Holy Spirit as it was originally named) is well on its way to becoming a God-forsaken hole of a country.
A massive vote of thanks to Anthony and his informed contributors for helping unravel the greatest scientific hoax since the Piltdown Man.
Sadly, Australia is on the verge of environmental collapse.
You cannot destroy 17 billion trees, (yes 17 000 000 000 trees), in the Southwest Land Division of Western Australia and 15 billion trees, (yes 15 000 000 000 trees), in the Murray Darling Basin and not expect REAL climate change.
Carbon dioxide emissions definately do not cause climate change in the Southern Hemisphere, and the climate change evident in the Northern hemisphere probably has a correllation with incomplete combustion, aerosols, old-fashioned air pollution etc.
If increasing levels of carbon dioxide did cause global warming then due to the physical properties of this trace atmospheric gas, and the relative absence of the earth’s most important greenhouse gas, water vapour, we would by now witnessing a roaring inferno in Antartica.
This much was explained to the Federal Member of Parliament and noted climate change sceptic, Dr Dennis Jensen and utilised to destroy the leadership of Malcolm Turnbull, who most foolishly brought into the global warming nonsense.
Fact – Australia’s total annual emissions of carbon dioxide are one quarter of Indonesia’s from deforestation alone.
Fact – the ‘other carbon dioxode problem’, namely ocean acidification is only too real and will damage the Great Barrier Reef.
Prediction –
1. Perth’s dams will effectively run out of water in 2011, (there are only 30 gigaliters of available water left) and rain-dependent Western Australian agriculture is in big trouble;
2. The current La Nina will not go away and will return with avengeance later in the year; and
3. The Indian Southwest Monsoon will not deliver 98% of normal rainfall as predicted by the Indian Meteological Department.
Yeah but one of the main reasons for a carbon tax is because Australia is one of the highest per capita emitters of c02. In other words, whatever the reason for this for this high level of c02 per capita emissions, according to the bureaucrats, tax is needed to address it. We must even it all out with other countries, according to good socialist principles.
The trouble with this profoundly stupid logic, is that the reason we are one of the hoghest per capita emitters of c02 is because:
1) we live on the edge of a desert, so there is a very low rural population who would also live on very low wages, and who would lower the average per capita emission.
2) there is a high level of mining activity, which generates high levels of export wealth, and which is fundamental to such an economy that lives on the edge of a desert.
Taxing this high level of c02 per capita also destroys the very things that makes living in such a low-rural population efficient and economical. But of course the bereaucrats never take this into account, just compare us to the billions of poor farmers in Asia with much larger poor rural populaitons, and then compare the c02 emissions.
If it wasnt so stupid if would be funny.
I agree with homo-sapiens..but he forgot to mention the 1500 jobs lost due to a steel company closing a plant due to ‘future climate regulations making the UK un-competitive’ this is only the beginning when will the MSM wake up!
A brilliant article! How sad for Australia – the ‘Lucky Country’ has had awful luck with it’s politics for the last few decades!
Michael Klein, could you please explain, if you can, the advantages of a carbon tax and the good things that come from businesses ‘lowering their carbon footprint’. I would be fascinated to learn this, as the information I have is that all life on earth is carbon-based and that more CO2 in the atmosphere would give us more food from plants.
“Ian W says:
May 23, 2011 at 3:50 pm
The problem with this is that the assumption is being made that this entire action is about CO2 emissions. It is not.”
I never said it was all about CO2 emissions or “carbon pollution” in Gillardspeak. It IS about de-industrialisation, as you state, which, as a by-product, reduces emissions of CO2 by country, but, in effect, exports those emissions as has been highlighted in another thread. It’s all about passing the buck (For an issue that isn’t).
For me, excluding all the studies, books, blogs etc etc, I have read, all my “memory” of the coming iceage in the ’70’s, all of the physics and chemistry I have studied, the main factor in my deciding emissions of CO2 by humans ISN’T driving climate change is the fact politicians are driving this like the world will end if a firey death, tomorrow (Or October as a revised date for the rapture). Simply, it’s a hoax.
Thanks Bulldust. Yes, Malasia it was. And the first point discussed about moving there was energy costs.
Michael Klein says:
May 23, 2011 at 7:55 pm
A carbon tax has the advantage that it gives companies economic incentives to lower their carbon footprint. After the pain of the initial tax increase fades away, payers seek to lower their tax bill by engaging in socially beneficial behavior. I say, go for it, Australia!
Wrong, on several fronts. Firstly, the whole idea of “carbon footprint” is fraudulent, and based on pseudoscience. Secondly, in a global economy, it doesn’t even do what they say it does – decrease “carbon”. If anything, it increases both it, and most likely, actual pollutant levels as well, by forcing industries elsewhere. Thirdly, on what planet is destroying an industry, putting people out of work, and depressing an entire economy “socially beneficial”? Only a complete idiot, or someone who hated Australia (or both) would be in favor of such an insane tax policy.
The original “Cobb and Co” were four Americans (Freeman Cobb among them). They were entrepreneurs, at first bringing with them two Concord Coaches, which were produced by the entrepreneurs Lewis Downing and J. Stephens Abbot, in Concord New Hampshire.
It is that entrepreneurial spirit, as well as the conditions where it was able to thrive which helped make the U.S. economy in particular so robust. It is healthy economies which are able in turn to have cleaner environments, and better living conditions. “Green” policies work against that, and as such are a threat to healthy living conditions of people worldwide. Even the worldwide threat of terrorism pales in comparison.
In an article published on May 17th in the National Geographic News, Doug Struck (Cambridge Massachusetts) reported on the changing views of Robert Socolow (Princeton physics and engineering professor) who had, apparently, previously pronounced that by flat-lining emissions, i.e. by taking a series of parallel steps across a number of emissions reducing technologies termed “”wedges””, we could “‘at least limit global temperature rise'”.
Perhaps faced with the rising tide of criticism of this and other A.G.W. theory-supporting claims from similarly minded scientists , the professor has revised his position. Doug Struck writes that the professor’s views are now that……”‘Scientists and advocates also should admit that minimal goals for greenhouse gas reductions are not enough, and the challenge to humanity now is to reduce emissions of the rich to the level of the poor—not to simply allow the poor to catch up'”.
Exporting Australia’s highly efficient, skillfully operated and managed industry to foreign lands will most certainly achieve the objective of reducing our carbon dioxide emissions, here in Australia, but will fail to reduce the ongoing global contribution to atmospheric carbon dioxide. Minerals processing and smelting will still consume the same amount of energy wherever they are located.
There is clearly a strong correlation between carbon emissions and standard of living.
The way to reduce our “”carbon footprint”” to match those of the “”poor”” inhabitants of the third world is therefore to abandon our industry and sit in bare, unlit homes that have been stripped of air-conditioning and energy consuming white goods.
How can government subsidies acquired from tax burdened – and thereby failing Australian industries – maintain a prevailing standard of living as they, the government, claim? Perhaps the government have already accepted the professor’s advocacy and is commencing the process of reducing our “”rich nation”” status!
Clearly the professor’s apparent “‘Utopia'” – that we all should expect to live like the presently “”poor”” throughout the rest of the world – can be achieved with current GREEN ideologies. But it won’t, I am prepared to gamble, ‘save the planet’ from temperature changes, up or down.
Heartfelt thanks Viv
Makes me want to scream your writings from the rooftops.
May it go viral as they say. May your dorpers and other living things on your property multiply, and your common-sense be magnified by the many good people who are otherwise bereft of good leaders and sound advice.
The forces of darkness are alive and well. Within the last few decades, Pol Pot was allowed to destroy anyone who threatened his leadership, and the ‘free world’ did nothing as he shot his people for reasons so slight as the fact that they wore glasses and could therefore read and challenge his obscene hold on power. Mugabe, Gadaffi … the list goes on (not to mention the really big mass murders of totalitarian government in the last century).
A carbon tax will attract carbon police to enforce indefinable laws, and who knows what the response will be from increasingly desperate people as their livelihoods and lifestyles are stripped away. There is a thin veneer of civilisation protecting our precious society and history is replete with stories of once successfull civilisations collapsing, mostly as the direct rsult of onerous taxation. Our current tax rules are bad enough, but this one promises to be a shocker.
More strength to your writing arm.
Let’s stop pretending that this is a battle that can be won with words. Let’s arm ourselves and start making lists.
I think if Raffaello Carboni was alive today he would recognise that the same Blockheads are in power today as were in the colony of Victoria preceding the Eureka Stockade. Ok so the mines are bigger. 🙂
“I came from old Europe, 16,000 miles across two oceans, and I thought
it a respectable distance from the hated Austrian rule. Why, then,
this monster meeting to-day, at the antipodes? We wrote petitions,
signed memorials, made remonstrances by dozens; no go: we are compelled
to demand, and must prepare for the consequences.
The old style: oppressors and oppressed. A sad reflection, very sad
reflection, for any educated and honest man.
For what did we come into this colony? ‘Chi sta bene non si move,’
is an old Roman proverb. If then in old Europe, we had a bird in hand,
what silly fools we were to venture across two oceans, and try to catch
two jackasses in the bush of Australia!
I had a dream, a happy dream, I dreamed that we had met here together
to render thanks unto our Father in heaven for a plentiful harvest,
such that for the first time in this, our adopted land, we had our own food
for the year; and so each of us holding in our hands a tumbler of Victorian
wine, you called on me for a song. My harp was tuned and in good order:
cheerfully struck up,
‘Oh, let us be happy together.’
Not so, Britons, not so! We must meet as in old Europe–old style–improved
by far in the south–for the redress of grievances inflicted on us,
not by crowned heads, but blockheads, aristocratical incapables,
who never did a day’s work in their life. I hate the oppressor, let him wear
a red, blue, white, or black coat.–And here certainly, I tackled
in right earnest with our silver and gold lace on Ballaarat, and called on all
my fellow-diggers, irrespective of nationality, religion, and colour,
to salute the ‘Southern Cross’ as the refuge of all the oppressed
from all countries on earth.–The applause was universal, and accordingly
I received my full reward:
Prison and Chains! Old style.”
http://www.fullbooks.com/The-Eureka-Stockade2.html
Sad news, more and more events in this country are reminding me of Churchills ‘Finest Hour’ speech and in particular this part –
“But if we fail, then the whole world, including the United States, including all that we have known and cared for, will sink into the abyss of a new Dark Age made more sinister, and perhaps more protracted, by the lights of perverted science”
They survived on the edge of CO2 starvation; the world’s flora have significantly out-performed the fauna, and driven levels down to the point that its availability limits their growth. It’s time for we fauna to pick up our game, carry our load, stop free-riding! With a flat-out effort, it should be possible to return much of the buried and lost CO2 to circulation.
Our new Goal: “2,100 ppm by 2100 AD!”
>:)