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Alumina industry waits on Kyoto Protocol decision

WA’S alumina industry could be hit hard if the Federal Government ratifies the Kyoto Environmental Protocol.

According to new figures released by the Australian Bureau of Agricultural and Resource Economics, the Kyoto Protocol could have a massive effect on the mining industry and regional employment.

Releasing the figures at the CPA Australia resource conference last week, ABARE’s chief executive Dr Brian Fisher said the new projections from his organisation indicated that the mining sector would be hit hard under the Kyoto Protocol.

“It will impinge on the WA economy probably more than any other economy in Australia,” Dr Fisher said.

“You need to keep that in mind when you are thinking about climate change and the way your particular company is going to respond, because it’s going to come and bite you hard, even in a world were there is zero overall effect.”

ABARE forecasts aluminium production could decline by as much as 20 per cent by 2010, as producers move their refineries to developing countries, which would become more attractive under the Protocol.

Alumina production is expected to drop almost 15 per cent while bauxite production will be cut back more than 10 per cent. The coal and iron and steel industries are also expected to shrink.

Developing nations have not been included in the protocol, which seeks to reduce greenhouse gas emissions.

He said the protocol would be good for some industries, in particular for tree growers, it would cause a massive drop in the resource sector.

He said there was no doubt the Federal Government and the Opposition were committed to reducing greenhouse gases.

But the initial consequences of the protocol were politically quite problematic, particularly because many refineries were in marginal regional seats.

Australian Aluminium Council executive director David Coutts said the protocol could spell disaster for the WA alumina industry and its estimated 5,000 employees.

A rise in energy costs stemming from the protocol would increase alumina and aluminium producers’ costs by 30 per cent, he said.

Alcoa World Alumina corporate relations manager Brian Wills-Johnson said the real risk lay not in the future of the companies, but in the future of Australia.

“All of the international companies are not threatened by Kyoto because they can transfer their future elsewhere. Our future is more transportable than what Australia’s is,” Mr Wills-Johnson told Business News.

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