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COPPER MINES OF TASMANIA PTY. LTD. (AGREEMENT) BILL 1999 (No. 43)

Second Reading

Mr JIM BACON (Denison - Minister for State Development - 2R) - Mr Deputy Speaker, I move -

That the bill be now read the second time.

This bill is to ratify an agreement recently signed by the Crown with Copper Mines of Tasmania Pty Ltd. That agreement updates and replaces an agreement that was in the Copper Mines of Tasmania Pty Ltd (Agreement) Act 1994. This bill will repeal that 1994 act.

Mr Deputy Speaker, this bill is an essential element of the arrangements for the rescue of Mount Lyell by a subsidiary of Twin Star Holdings Limited, the major shareholder in the Sterlite group. I recently described the successful search for a new owner of the Mount Lyell copper mine as a stunning coup for Tasmania. As we all know, Mount Lyell has been rescued from difficult situations in the past. Renison Goldfields Consolidated closed the operation in December 1994. Gold Mines of Australia was introduced as the new owner through its subsidiary Copper Mines of Tasmania. However, there were also other parties interested in taking over the mine at the time and copper prices were comparatively high.

CMT took over the lease in late 1994 and invested more than $10 million in a huge tailings dam, ending the discharge of tailings into the nearby river system. CMT also made some significant environmental improvements around the mine site. However, by the end of 1998 in the context of very low copper prices, and despite having made considerable efficiency improvements, CMT found that they could no longer continue. An administrator was appointed to CMT in December 1998.

Mount Lyell's operation of more than 100 years very nearly ended. If the Sterlite purchase had not proceeded, it is highly likely that the mine would have closed permanently and the company's assets would have been liquidated. The final closure of Mount Lyell has been predicted for many years and the people of Queenstown may have become accustomed to the insecurity that such expectations create. Indeed, the mine was substantially closed for much of 1995 while Copper Mines of Tasmania took over operations from Renison Goldfields Consolidated.

The number of people employed in mining in the district has fallen significantly over the years and there has been a winding-down of HEC construction activity. This has resulted in a long-term decline in the population of the Queenstown district. The community has, therefore, needed to adjust and to look to tourism, mining heritage and other activities to diversify its economy. However, despite adjustments already made, there is no doubting that the final closure of the Mount Lyell mine would have been a major blow to the west coast. It was likely that there would have been a further loss of population and closures of businesses and services in Queenstown, had the mine shut. Mount Lyell has for more than a century been the backbone of the Queenstown economy. The Government was, thus, determined to make every possible effort to secure a new operator.

Mr Deputy Speaker, the Government worked closely with the Administrator of CMT in the search for a new operator for the Mount Lyell mine. This effort eventually resulted in the acquisition of CMT on 31 March 1999 by a company associated with the Sterlite group, thereby ending the threat of closure. Negotiation of the terms of the bill and the agreement took place between the Government and Sterlite Industries during March this year. Sterlite owns India's largest private-sector copper smelter. It also has aluminium smelters, and manufactures and distributes copper cables and rods, telecommunication cables and optical fibre. It has annual sales of around $800 million.

Mount Lyell's high-quality copper concentrates will be shipped to India for use in Sterlite's downstream processing operations, providing Sterlite with a greater certainty of supply. This certainty of sales means that Queenstown's fortunes will not be as susceptible as in the past to fluctuations in commodity prices. The new owners will take the Mount Lyell copper mine well into its second century of operations. While the company has an initial ten-year mining plan, the Chairman of the Sterlite group, Mr Anil Agarwal, believes there is potential for operations to continue to the middle of next century.

In agreeing to acquire the mine, the new owners undertook to endeavour to provide employment security for the 200 workers at the mine and re-establish a deep drilling program to prove up additional reserves. The agreement contained in the bill has opened the way for the new owners to keep the mine operational, recommence underground development that had been suspended for six months, and develop the capacity of the mine and plant to 3 million tonnes per annum in a phased manner. Expenditure over the first twelve months will amount to approximately $7.5 million on mine development and $2.5 million on plant and equipment. The new owners will contribute to the cost of raising the tailings dam wall, a task that had to be undertaken urgently while negotiations were under way.

In negotiating with CMT in 1994 for the company's takeover of the mine, the Government of the day introduced legislation to enable CMT to take over the mining leases without assuming liability for environmental damage caused by previous operations. This legislation was essential because no rational new operator would have contemplated walking into the severely environmentally degraded mining leases to be exposed to liabilities associated with ongoing acid drainage, metal pollution in waterways and other degradation of the environment caused by past operations. It was certainly preferable environmentally, economically and socially to have CMT in place to keep the mine running. There can be no questioning the value of the Copper Mines of Tasmania Pty. Ltd. (Agreement) Act 1994 in allowing that to occur.

Similar legislation was introduced in 1996 to protect Australian Bulk Minerals in the takeover of the Savage River mine, again where a new operator was coming into a situation of significant existing environmental damage. As would be expected, the new owners of CMT want the protection contained in the 1994 act to continue. The bill before the House updates and replaces that legislation, while maintaining the same principles of protecting CMT from responsibility for any damage caused prior to the date that the new owners acquired the operation.

While CMT existed prior to 31 March 1999, it is now a new operation and it was essential for the new owners that they be released from CMT's previous liabilities. This is perfectly reasonable for a company that was under administration when acquired. The purchase was completed after a Deed of Company Arrangement was entered into by the creditors of CMT that allowed the company to be relieved of certain of its debts. While the name of CMT lives on, it is essentially a new operation.

The key purposes of the agreement are:

to provide to CMT and associated persons an indemnity from the Crown against any costs associated with contamination and pollution caused or contributed to by past operations, meaning operations before 31 March 1999;
to release CMT from any responsibility or liability associated with pollution caused by past operations;
to provide a method for determining the amount of acid drainage for which CMT is to be deemed responsible, and terms relating to the co-treatment with tailings of acid drainage for which CMT is not responsible;
to clarify responsibility for the tailings dam and for any water pumped from the Iron Blow open cut;
to provide for a contribution to costs by the Crown for any treatment of water in an initial pump-out of the Iron Blow; it will also allow CMT to release into the Linda Valley on a continuing basis an amount of pollution no greater than the current load escaping from the open cut via an old adit;
to provide a mechanism whereby the Crown and/or CMT may in future establish a plant to extract copper from acid drainage and treat acid drainage coming from the lease site; and
to require the Government to use its best endeavours to have the ratifying act for the agreement enacted promptly.

As with previous legislation of this nature, the provisions of the agreement are given the force of law by the ratifying act, and the laws of the State are modified, so far as may be necessary, to give full effect to the agreement.

The 1994 act declared the CMT project to be a project of State significance under the State Policies and Projects Act. The bill now before the House clarifies that the project of State significance status no longer applies. That status was effectively exhausted, in any event, once the Sustainable Development Advisory Council had finished its approval process in 1995. The bill also confirms the validity of the existing environment protection notice EPN 308/1 which sets the licence conditions under which CMT is operating.
The continuation of mining at Mount Lyell is positive for the environment. The acid drainage emanating from the mining leases contains significant levels of copper and other metal pollution. With continued mining, a proportion of this pollution will continue to be treated and neutralised with the mine's tailings, while investigations continue into the possibility of establishing a plant to recover copper from the acid drainage. Importantly, the bill makes provision for the future recovery of metal from acid drainage for environmental remediation purposes.

The alternative, if Mount Lyell had closed, was that waterways downstream of Queenstown would have been more polluted. Fixing the historic acid drainage problems at Mount Lyell, and the environmental and economic problems that stem from this, would be far less feasible without an operating mine.

Mr Deputy Speaker, this bill and the acquisition of the Mount Lyell mine represent a major win for the mine's employees and suppliers; for the community of Queenstown and the west coast; and for the Tasmanian economy and the environment. The reprieve for Mount Lyell brings in a company of substance that can offer the people of Queenstown confidence for a longer-term future, less exposed to the risks of commodity price cycles. The Mount Lyell leases are part of the very rich mineralised belt running down the west coast. There is every prospect that further exploration will uncover new or extended ore bodies which can keep mining at Queenstown alive for many years to come. My Government is proud to have played its part in ensuring that Queenstown's mining heritage lives on with renewed hope.

I commend the bill to the House.

Mr HIDDING (Lyons) - Mr Deputy Speaker, I am pleased to say that on this side of the House we will be supporting this bill and add a few comments to the second reading portion of this debate.

Mr Deputy Speaker, the Mount Lyell mine has had a chequered history and a very rich and colourful history. Not long after being elected to this position, I read The Peaks of Lyell by Geoffrey Blainey simply because it seemed that most people in Tasmania would have read the thing and I had not and it really is an extraordinary read and in fact has opened up an interest of mine as to mining generally on the west coast and in Tasmania.

It has been a boom town in the past, on the back not necessarily of good mining or even good outcomes in recoveries from that mine, but it is also I think well recognised that back in the days when it was a very young mine it took a month or two for results and letters and things to reach London where of course the sharemarket had the Mount Lyell mine on it and there were spectacular differences between the news that eventually reached London and what was actually happening in Queenstown from time to time. And the interesting mining techniques where one leaseholder would be drilling down and mining down into the leases of others and because without the good surveying equipment they never really knew where the other was.

Brave people, brave miners, brave investors - thankfully it all turned out well - and of course it has been a terrific part of the industrial family in Tasmania and a money earner and exporter for this State.

This bill seeks ratification and approval of a deal done by the Premier and Minister for State Development. It is very similar to the 1994 agreement that was undertaken by the former Government with the former owners. There has been substantial public support for this mine, one way or another, through the government processes. There was significant assistance put in place in both payroll tax and packages and you would have to say that it is a lucky mine and long may it continue to be so. It was probably beyond anybody's comprehension as to where a result for this was going to be. To consider that somebody from a country such as India, where there are large manufacturers of copper products, who had never before shown an interest in mining but who by all accounts wanted to drop out of the London Mineral Exchange's clutches and have some certainty of supply would, like a white knight, come charging around the hills of Queenstown and say, 'We're here to talk to you'.

It was a lucky day for Tasmania. I will say clearly on this side of the House, we believe the Government handled it appropriately and well and it has resulted in an agreement that is before us today. There are a number of points we want to make on that agreement and I would ask the Premier - the minister in this case - to explain to the House what the situation actually is with bringing an agreement into this House that has already been signed, whether it was contemplated by the Government - and I am not sure what previous governments did, mind you - as it requires the agreement of both Houses of Parliament whether any key points of this agreement ought to have been checked with both Houses of the Parliament or some representatives of that to ensure that there would not be an embarrassing problem with the actual agreement.

Now that is not to say that we would not trust the Government not to put Tasmania into an embarrassing position with something in a contract such as this, but it does seem to be a bit back to front. The deal is done, you bring the done deal to us, ask for ratification and I would ask the minister to explain what would happen if Parliament actually sought to amend this legislation. Would you go back to Sterlite and ask them to agree to this change because the contract itself requires parliamentary ratification? So on the basis that we think it is a bit important to risk such an important contract and agreement in this process, I would be interested in the Government's answer as to why the process took place this way.

But we do support the deal, I need to say that. There is indemnity for the new owner from past things and that is appropriate. You cannot expect somebody to come in and take the whole grab bag of pre-existing conditions on board. It clarifies responsibilities to a degree for acid drainage and I know that our shadow spokesman for the environment has a number of matters that he wants to raise and I thank him for his interest in this bill and his help with it and he will raise those matters shortly.

It also provides for the new owner to accept rehabilitation proposals, and moves things forward in the management of the environment of this mine. It provides that the new owners cannot cease dewatering without three months' notice, and that of course puts clearly in people's minds the issue that you need to keep the dewatering. If that mine were to flood it would probably be a terminal situation. To get on top of the pumping and dewatering again, and on top of the issues related to acid mine drainage if the thing were to flood, I think would be some nightmare that we probably should not contemplate. I suspect that would be probably its death knell and it could well be closed forever. I understand that we looked into this carefully once before with the previous mine managers, that care and maintenance on a mine such as that would be a cost to somebody of about $120 000 a month. Now if the previous owners have gone belly-up and have no assets, then there is no question that the people of Tasmania are going to be stung with $120 000 a month to maintain a mine such as this.

So obviously everybody has a very keen interest in things such as dewatering and what may or may not happen down the track. I prefer to see this not so much in terms of a reprieve of a prisoner sitting on death row, the temporary reprieve that the governor might change his mind on shortly. I take it that the Premier means, and I am sure he does, that this is a permanent reprieve, and that is the way we see it, from a little scare that it had. We believe it is a good thing that Sterlite are obviously intending to be here for the long haul. We would like to place on the record our welcome to Twin Star Holdings and their investment in Tasmania via their company Sterlite. Long may you be involved in Tasmania. Thank you.

Mr HODGMAN (Franklin) - Mr Deputy Speaker, we do commend the Government and we do see the importance of the mine continuing in Queenstown for the sake of the community at large on the west coast and Tasmania at large for the benefits that this mine has clearly generated over decades, and it is in everyone's interests to see it continue. I thank the Government for the briefing that I had the other day in regard to the environmental areas, and that is particularly the area about which I wanted to register some concerns that I have. They are not going to inhibit the passage of the bill, and I am just really recording them for the Government's awareness. Certainly the last thing I want to be able to say, if ever my concerns are realised, is that I told you so, but there is a concern that I have had for quite some time. I had it when I was Minister for Environment and I have it continuing as shadow minister for the environment, that with Copper Mines of Tasmania and the Abt Railway, with all the goodwill that is being generated, I think they ar e not going to always be harmonious neighbours. I think there will be activities in the rehabilitation of the mine that could well have a negative or detrimental effect on the development of the Abt Railway. Similarly, with the abundance of tourists going down the Abt Railway and visiting for the first time - these being mainland visitors, I guess - the pollution problems at the mouth of the King River, I think there is going to be an avalanche of criticism to the governments, this one and previous governments, in regard to the environmental holocaust that exists there, and I am concerned that the Government have not provided funding for the strategy of alerting tourists to what has occurred over a hundred years. It is not just a problem overnight, but a problem over a hundred years, and I think there does need to be written into that and whatever we have in regard to tourists, it must not for one moment be a negating effect on CMT-2 in regard to its continuation of the rehabilitation of the mine.

It is worthy of placing on record that I think Copper Mines of Tasmania have been an outstanding company in their refurbishment and rehabilitation of the mine site. They have gone to great lengths to clean up their mine, and I think the original agreement from I think it was Goldfields - you get confused with the previous owners of these mines, but in the original agreement where Copper Mines took over, the department did a magnificent job, with the cooperation of the company, in writing in stringent environmental safeguards and rehabilitation programs. I have tried to work with the department, the briefing the other day, to make sure that what was achieved some three or four years ago has been maintained by this new company coming on side. We will get into the details of that. I have a gut feeling that we are slipping back a bit, but that will come out in the cut and thrust of debate.
One of the areas CMT addressed was the creation of the tailing dams and removing the waste going into the river, into those tailing dams. Something that previous companies for as long as I have been in this Parliament said could not be done, CMT did it, and they really do deserve to be congratulated for that. It was a major exercise, a multimillion dollar outlay, and it proved the point that previous companies were wrong and this company was right.

The question of the acid drainage was whether the mine is operating; in fact it is a better solution to the problem than if it is not operating with that acid drainage becoming a major problem in the King River. One area in the discussion the other day that troubled me was an arrangement that was made in fact after the original CMT bill went through. With the cooperation of the company we announced on 6 May when I was then minister - I will just read to the Premier, the second page of my press release: 'At present not only the Queen River is regarded as biologically dead but acid drainage leaving Mount Lyell lease is limiting the aquaculture and tourism industries in the region. If we can effectively treat 100 per cent of the acid drainage leaving Mount Lyell lease the aquaculture industry in Macquarie Harbour could expand by a further $9 million in annual production. This is therefore not the only issue of addressing a major environmental problem but in so doing we have the potential to greatly improve the economy of the region and that augurs well for the much needed employment on the west coast. It is pleasing to see these projects being undertaken as a joint venture between the State Government and Copper Mines of Tasmania and will demonstrate what can be achieved through a cooperative effort. With the company's much needed assistance we can manage the impact caused by the historical mining practices of Mount Lyell and the centrepiece of the project being announced today is the pilot trialing of a new innovative technology utilising the sulphur-reducing bacteria'.

I think I had the right paragraph there, but it was a cooperative arrangement between the company and Government to extract the copper and there was sufficient revenue to be generated from the royalties of the copper to pay for the trial program, thus eliminating a pollution problem in the King River and being self-funded by the royalties collected.

Now I understand in the briefings the other day - and I do not want it to breach confidence - that that was a written agreement with CMT-1 that has not necessarily been negotiated with CMT-2 and that would cause me some concern in that if we saw any delay of the company's contribution to that pilot program then obviously the environmental benefits of that program are going to be further delayed.

I would ask the Premier to negotiate again with the new company that we would expect them to contribute financially to that pilot program as would the previous company which will then match - I am not sure whether it was dollar for dollars, but for the purpose of debate we will say it is - with your contribution so that that can be an environmental clean-up that can be brought on course.

If the new company say no then your Government and I guess the Federal Government will bear the full brunt of that pilot program and I guess in tough budget times you could argue because the company are not participating, if that is to be the case, then this pilot program will be further delayed. That would have, I think, an ongoing environmental problem not being addressed and causing concern not only to the environment but to its near neighbours.
I finish where I started - new neighbours being the Abt Railway and the environmental impact in the area of Mount Lyell. Mr Speaker, I think a lot of my discussions would be better served in the Committee stage -

Mr DEPUTY SPEAKER - You wish to go into Committee?

Mr HODGMAN - Sorry. No, no Sir, I will address the issues in Committee. I was simply going to conclude. I will raise these in Committee. It would be churlish of us not to say well done to the Government and for the sake of Tasmania it is a good outcome. We want to see it go through but my concerns are, as I say, of an environmental nature and I leave the Premier with a message: I think we have slipped back in these new negotiations in regard to the environment.

Ms PUTT (Denison) - Well, we have a history in this State of enacting special enabling legislation to waive the provisions of our current environmental laws and we are doing it again. We have a sub-category of special enabling legislation which is now starting to read like a long list which is special enabling legislation to facilitate new ownership and operation of old mines, and this is not the first time that I have been here in this Parliament faced with Parliament being presented with an agreement with a mining company to ratify through the legislative process in order to exempt them from provisions of the normal environmental laws that apply in this State.

That means that what we are doing here today - and we have to say very clearly on the record - is allowing pollution to continue to flow from that mine into the environment. This is the result, it is the legacy of environmental exemptions of the past. I am not saying that there should not be this agreement and that we should somehow enforce the full environmental laws on this company because they come in and have to try and operate in the situation where the failures of past governments to insist on a proper environmental performance from miners means that now we are stuck with it. We are stuck with ongoing pollution and it has been estimated in the studies that have been done that it could take 200 years or more before we can remedy the pollution that has flowed from and is flowing from the Mount Lyell mine - and we know that it has had an extremely adverse impact in the environment and continues to do so with the Queen and King rivers being essentially dead as a result of the acid mine drainage and of course Macquarie Harbour is full of heavy metal pollutants.

I believe there is actually some concern about whether there is an impact on health of people in the area who eat substantial amounts of fish caught in that harbour and I have previously asked governments whether they would do a health impact study, whether they will actually have someone at least to do the survey of the amount of fish that are caught and eaten by people regularly and the amount of heavy metals that are in there because there was an indication in a study that was done by Alexandra De Blas at the University of Tasmania who is the only person who has done this work. The Premier is nodding. He would be familiar with this case because it was his sister, Wendy Bacon, who eventually enabled that thesis to be published when the old Mount Lyell Company came the heavy with the university and intimidated them out of publishing the report. I must say I very much appreciate the role that Wendy Bacon played in ensuring that people in Tasmania could actually get to the nub of some of the things that have been going on with that mine and that mine site.
But there is that ongoing concern about whether there is a health impact, because of past practices, on people who eat fish from the affected area and previous Liberal governments just turned a deaf ear to my concerns and refused to have any study done to replicate the sort of work that Alexandra De Blass had done where she had found that there were heavy metals contained in some of the bottom-feeding fish and that there were some people who were eating enough fish, taken from the harbour, in their diets to potentially have some cause for concern.

I am pleased to see the Premier making a note. I do hope that we can, in some way, without frightening the wits out of people, conduct some sort of a study just to make sure that they are all right or that if it looks like they are not that we can say, 'Look, it's better if you only eat fish once a week out of the harbour' or whatever the story is rather than just leaving them to suffer any ill effects or hoping that we do not have that problem.

Anyway, back to this legacy of exemptions. Because of the exemptions and the very poor performance of Tasmanian governments, Liberal and Labor, over the years in not requiring environmental standards to be adhered to in instances such as this mine -

Mr Hodgman - There were 80 years when there weren't any environmental laws at all, though.

Ms PUTT - Well, that is true but in circumstances such as this mine, we are now stuck with this problem. In addition, because of the extremely short-sighted provisions contained in the 1985 act with respect to Mount Lyell and its obligations with respect to rehabilitation and clean-up, we are left without a decent kitty to finance a clean-up and so Tasmania is stuck with the problems while that company has waltzed off into the distance a long time ago.

It is extraordinary that in that 1985 agreement and subsequently there were no provisions to deal with acid mine drainage and I remember being briefed by an environment department official on the occasion when we were doing this same thing for Savage River mine, most recently in 1997, where he told me with a straight face that it was unknown to the environment department in Tasmania before 1992 that there was such a thing as acid mine drainage. Now I find that to be the most bizarre and extraordinary statement that I have ever come across and I went on about it at length during that second reading debate. I knew about acid mine drainage well before that. I had papers from the UK on methods that were being developed to treat acid mine drainage arising as a result of the closure of the coalmines that was ongoing in that area.

So we have had really poor performance, I believe, by both governments and the department, historically, in this and we are now left trying to cope with that situation. This legislation exempts the new owners from liability for pollution resulting from previous operations of both the previous operators now - that is, Pickands Mather and more recently Copper Mines of Tasmania in their first incarnation, shall we say.

In 1994 Parliament was called together, especially to vote on a bill like this for CMT-1 in its first incarnation. In 1995 we were actually recalled during the break, if people remember, to vote to get around proper adherence to the planning laws in order to approve commencement of construction of the tailings dam before the project of State significance environmental assessments were completed. And at that time the comment was widespread, including in the Mercury - I might have actually mislaid my copy of that - about how appalling it was that the Government did not tell this company that they had to wait until the project of State significance assessment had been done and it had been determined what was actually going to be appropriate in terms of the tailings dam before they went ahead.

In fact the definition of those preparatory works included virtually all the works that had to be undertaken on the site, so we had again a government giving a new company coming into the State, as late as 1994-95, carte blanche to get around not only the pollution control regulations that they could not meet because of pollution that was no result of their activities, but actually to get around the laws of the day with respect to approval of their new activities. So we have not done very well.

It gives me no pleasure to be standing here today and again debating this sort of matter but, as I say, I understand the reasons for it. I understand that these people did not create the situation that leads to the ongoing acid mine drainage, and they cannot be held accountable for actions that were taken in the past by somebody else. But that does leave us carrying the can. I think the problem we have is that this company knows, just as the previous one did, that basically Tasmania is buying a pig in a poke. We are in the weakest possible negotiating position when these people come, and particularly with CMT-1 having gone down the tubes. You only had to pick up a newspaper to read government and commentators saying, 'This is appalling. We'll take someone on virtually any terms at all in order to get someone into that mine site, because, firstly, we want to bolster the west coast with jobs and we can't bear the thought that the mine might close down and we'd be blamed and people wouldn't have jobs', and so on, and the second one, 'We need an operator in there because that would be better for the environment to have some form of treatment occurring of the acid mine drainage in some proportion anyway, than to not have an operator at all'.

So the Government had to approach, making a deal, an agreement with this company, from a bargaining position of absolute weakness. You did not have a single point on your side when you went in to talk to those people. What has happened in the negotiation is you have actually come out backwards of where you were with CMT-1 because there was an agreement that had been made with them since the agreement that came to Parliament for ratification - a second agreement distributing responsibility for funding. CMT-1 had agreed that they would put money in towards some of the environmental remediation or ongoing treatment works for the acid mine drainage, and my understanding is that in your agreement now with CMT-2, they have not wanted to come to the party on that.

So Tasmania is actually now worse off in the sense that we now have to somehow pick up the tab that was previous shared between the State, the Federal Government and CMT-1. My understanding, Premier, is that CMT-2 are now not going to contribute financially in the same way that CMT-1 were, so let us make sure that everybody knows. You went into a negotiating position of extraordinary weakness and you came out of course backwards of where you were with the previous company. I am not saying it is your fault, but I am saying it does not seem to be up front in the second reading speech and I think the world does need to know what is going on here.

There were a number of issues that need to be raised. Madam Deputy Speaker, can I ask how much longer I have?

Madam DEPUTY SPEAKER - You have until 12.55 p.m.

Ms PUTT - Okay, so I have a fair while yet.

I really want to be sure that we have all the matters that need to be discussed on the record.

You will recall the previous occasions where the Greens all stood up and all had a very long say on all these matters, and that has been the case ever since Greens have been in the Parliament and this sort of enabling legislation has come in. I am not just doing it because I like to hark back to an old tradition or something. This is a major problem that Tasmania has, and things are not really getting a lot better in trying to deal with it. We still have to look forward to hundreds of years of pollution out of this mine site, whatever happens here.

What I want to ask the Premier is can he please tell us in his response on the public record whether he has indeed waived all royalty payments from Sterlite, from CMT-2? That is my understanding. I hope that I am wrong. I do remember CMT-1 had a special royalties deal that was concluded as part of their agreement, and it maintained their royalties at a set rate, regardless of what the Government should do in the future. I found it extraordinary when the Mining Industry Council of Tasmania actually trotted CMT-1 out at a hearing of the Subordinate Legislation Committee during the last Government to support their case that they would all be ruined if the royalty regime was changed by the regulations that were then before both Houses of the Parliament, because in fact CMT-1 had a specific exemption from those royalty rate changes, and they knew it, and they tried to pull the wool over the eyes of the committee. Fortunately I remembered that and it was most embarrassing, I think, for the Mining Industry Council who may or may not have been aware. My view of their competence is they probably did not actually know, and I do not know why CMT was going to front this for them when it did not actually affect their royalty payments. But it was revealed of course after they had given this sob story about how the change d regulations would impact their business so badly, it was revealed that they were actually on a special exemption through the agreement with the Government whereby that change in royalty rates would not apply to them. So there are a lot of reasons not to always trust the things you hear out of the mouths of the mining industry, when you have ploys like that being played.

The other question I want to ask is about payroll tax. Can the Premier confirm that payroll tax has also been waived for this operation, and can he tell us whether CMT-1 paid payroll tax? What I am really trying to get to is how far over a barrel did these people manage to get you, and how ever are we going to recover from this situation, because it seems to me that if we are not getting payroll tax or royalties and we are not getting the funding to go into some of the matters to do with clean-up and acid mine drainage that was coming through from CMT-1, then we are certainly in an even less favourable position with respect to getting benefits out of this company.

I would then like the Premier to tell me whether or not the work force that is being employed at the mine by Sterlite comprises the same number of workers as we had under CMT-1, or whether the cutbacks that they initiated in their last days have actually remained with respect to the number of people working on site. And I would also like to know whether that work force is unionised or not, or whether it is in under contract, because I think these are all pretty important issues when we talk about -
Mr Jim Bacon - Could be under contract and union.

Ms PUTT - And unionised, yes, okay. Well, the details of that, because I think these are all important issues when we seek to analyse exactly what benefit we are actually getting out of this. I mean, I suspect we are getting a sort of a 'no-greater-harm but not-much-benefit' situation, and I would like to have some of that information to be able to assess that further.

I am also, I suppose, rather worried that this company has taken on the environmental management plan of CMT-1 and there has not been any upgrading of requirements, that they basically take on the Environment Protection Notice 308/1, and that is all they have to adhere to, because surely since 1995 there have actually been improvements in best practice, and we are being told that they are to meet best practice environmental management. I would have thought that in virtually any industry what was best practice with respect to managing pollution control in 1995 would have moved on in four years and that we would be finding a way to write in those changes, because best practice by its very nature is not a static thing. It has to be a constantly improving thing or else it is not best practice anymore.

I mean unless you use best practice to actually freeze pollution control requirements at a certain stage and have a sort of cosy agreement amongst all players in the industry that nobody will ever do any better and then no-one can ever be said to be doing a better practice so therefore no-one else will ever have to go to that form of best practice. I mean that is the only circumstance under which you could imagine that best practice was not in fact a recipe for something that is constantly improving.

Certainly that is the impression that is given, that it is actually state of the art, the best we can do. So why has it not been tightened up since 1995? Why are they just taking on the same agreement and why is it still called best practice environmental management?

There are some other matters if I can find them. Yes, one of the questions that I did say that I was going to ask and the advisers may have been able to find out about this, is that in the previous agreement there was a section 9 subsection (2), where CMT-1 had to fulfil obligations imposed on them by The Mount Lyell Mining and Railway Company Limited (Continuation of Operations) Act 1992. That obligation has not transferred to CMT-2. I was not entirely sure what it actually related to and I would like to know and I would like to know that it was actually completely discharged by CMT-1 and that that is the reason it does not carry over because otherwise again I think there is a bit of a problem though I am fairly confident that I will be assured on that.

The other issue that I want to go to is one that was raised - and I think it is really important. It is one that was raised by the member for Gordon in the upper House, Mr Schulze, when he spoke at lengths on 21 April about CMT-1 and the fall-out in the community of their insolvency and their exit from the mine and from the Queenstown area. He was very critical of their behaviour and he said that well over $100 million of losses came about with that operation and CMT of course became hopelessly insolvent and that was predicted well in advance of actually coming about.

He says there was a massive amount of debt left around the countryside. He thinks at the end of last year something like $103 million was owed to Citibank and some substantial amount of money to the State Government. I would like clarification as to whether the Government ever did recover their money from CMT-1. I think later on he goes on to say, 'I know there was $5 million just thrown at them which I think the Government never expected to recoup'. That was under Tony Rundle. There was a $5 million rescue package and we are all familiar with these rescue packages; you bundle up a whole lot of money and you throw it down the mine shaft and you know you will never see it again because the proviso is always that it will paid back when the company returns to profitability and they never do. The whole reason that they are getting a rescue package is because they are not profitable so everybody knows that this proviso is actually just a bit of theatrical window-dressing.

So, yes the State Government and Citibank were both secured creditors so I would hope that they did get there money back but a lot of local Tasmanian businesses and particularly west coast businesses as unsecured creditors were left with a lot of damaging debt owing to them. He is very critical that a smooth job was done wherein directors walked away with their pockets full of money and local people were hung out to dry with a massive amount of debt.

Mr Rundle - Who is that - Mr Schulze, saying that?

Ms PUTT - Mr Schulze saying that, and he does also have a critical word for the bacteriological leach process and whether that actually ever was a goer and whether it is a goer yet and also on the block caving method, he claims that had already been ruled out for this mine because of the type of rock and ore body that was there. So I do not know whether the Premier can inform me further on that. But I guess I share his concern when it came out that the top executive was getting somewhere between $620 000 and $629 000 a year, other directors $300 000 a year levels, massive amounts of money given, that they were paid and left with their pockets full of money but these unsecured creditors were left in a really poor and invidious situation. Alpha Electronics, a Tasmanian company, is owed $106 645; Aurora is owed $305 000; Boral is owed $81 000; the Burnie Port Corporation, $40 000; Commonwealth Steel Company, $531 000; Gaspersic Contracting, an earth-moving contractor in Queenstown, $263 000; the local coffee shop is owed $707 - not even paying for their coffee and sandwiches, for crying out loud, and leaving that outfit to have to cover those losses, which is a large amount for a small coffee shop; Morrisons Limited on the west coast, $9 400; KPR Industrial, $1 036 - and that of course was Mr Schulze's brother's firm and he warned him not to book up any debt from these people and that is why his is so small. Monadelphous Engineering, an operating mining company, $541 000; National Mine Management - they are West Australian based - $1.99 million; Queenstown Fitting and Machinery who maintain the mine pumps, $65 000; Schulze Engineering - cousins of the said member upstairs - $124 000; the Rosebery hardware shop, $3 400; Silver Hills Motel, $24 000; Sinclair Knight Merz - the people who are now doing the Abt Railway job - $37 000; Tasmanian Minerals Council, $40 000 - they even ripped off their own representatives; Tasrail, $228 000; the West Coast Council, $128 000; West Coast Transport, $142 000; Wolfe's Menswear, $4 975 - that is a lot of suits, although I suppose it is actually the gear for wearing in the mine; Schulze's Milk Bar - another cousin of the said member - $900-odd; the Australian Taxation Office, $93 000; GHD, $31 000; the Tasmanian Government, $1.04 million. The total of the unsecured creditors, a lot of whom were local people on the west coast, came to $9 325 782.13.

There is not a lot that Peter Schulze and I would agree on - in fact, virtually nothing - but I agree with him on this. This was really, really crook. This is really poor behaviour from CMT-1 and when I hear people saying they were really good about putting extra money into some of the environmental matters and they were great people, I remember the con job they tried to pull in the Subordinate Legislation Committee hearings and I remember those people on the west coast who are struggling. It is a hard place to make a buck anyway these days and what that company has done to them is just appalling behaviour.

Mr Hodgman - Yes, I don't condone those debts.

Ms PUTT - No, and I do not think anybody in the Parliament would but we have to acknowledge that this is what happened here and those people are suffering. When we say we have someone who is going to bring the light back on in mining on the west coast we have to think about what actually happens down the road that is different to the promises that were trotted out. I hope that we do not see a repeat of that sort of behaviour because it is just unconscionable to behave in that manner.

To return to the legislation, I have got real concerns that we have to keep on doing this but I understand the reasons behind it. I hope that there is very strict oversight of what goes on with respect to environmental work on the site, dealing with the acid mine drainage. I hope we can come to a system where the company will allow the State to use the tailings dam and that we can begin to remedy the acid mine drainage problem through processes associated with that and with removing further copper from the leachate from the mine. I understand that there was some sort of an agreement that the copper extracted, although theoretically it would belong to the company incumbent at the site at the time, that could actually be used by the Government to get money to continue that clean-up process. I do hope we can continue with that because we have a legacy that is going to take a long time to get over. I do not like having to circumvent environmental legislation - I want to have that on the record very clearly - but I think it is the lesser of two evils.

Mrs NAPIER (Bass - Deputy Leader of the Opposition) - Madam Deputy Speaker, I rise briefly to be able to welcome this particular bill and I congratulate the Government for the work they did in order to be able to ensure that the people of Queenstown and the environmental maintenance work I suppose that is continuing associated with this mine continues.

Whilst I totally agree with the member who has just commented about the bad or the unscrupulous I think, business practices that were used in the way in which Copper Mines of Tasmania left many local businesses, Tasmanian businesses with debts owing - I do not think anyone can condone that and I think it is very useful to have a report from Mr Schulze, who is able to highlight some of those difficulties associated with that. I certainly do not condone that at all and recognising that some $5 million was put in to be able to ensure that mine might continue.

It is also done in the light of the fact that this mine is a really important aspect of the west coast and in particular the people of Queenstown. The Opposition back in 1993-94 said that they doubted that anyone could save the Mount Lyell mine, they had basically given it up, and it was the Groom Government who in 1994 brought about an agreement that in effect gave the west coast back an important part of this life in their town. But it also opened up some realistic possibilities for looking at managing some of the huge environmental problems that have been accumulated over a period of time.
It is much better to have this mine operating than not if we consider who is actually going to pay for the accumulated environmental damage that has been brought about over the past 100 years or so and whilst we can stand here today, as I heard Ms Putt saying, that you know, she condemned previous governments and said that this pollution that was being allowed to continue to flow from the mine into the Queen River and the King River - and that is not a pretty sight. I must admit the very first time that I saw it I just wondered whether I was still in Tasmania. But Ms Putt was suggesting that this is a legacy of previous governments and that there really has not been an adequate attempt to try and remedy the impacts of pollution.

Let us remember, as my colleague Mr Hodgman indicated, it was not until 1974 that we had an environmental protection act. I mean there was not environmental legislation around. So it was all very well to suggest that governments have not done the right thing over the past 100 years but for 70 of those 100 years we did not have environmental laws. It was not an issue. Survival of the human race was the issue at the time in terms of the work that the pioneers did, the risks that they took, the standard of conditions that they worked under, that no-one would dare work under nowadays. Those pioneers of course, opened up these possibilities within Tasmania, given that Tasmania is one of the richest mining reservoirs that we have within, certainly Australia, but the Southern Hemisphere, and while I think it is appropriate to realise that this is an issue that we need to address as we find some of the answers to be able to deal with the impact of past pollution, let us also realise that this is going to cost a lot of money and you cannot expect one generation to pay up for and deal with pollution that has been generated over the past 100 years in one fell swoop.

Mrs NAPIER - The point I was making just before we broke for lunch was I was making a comment on the fact that I thought it was unrealistic for the Greens to be suggesting that previous governments had not done the right thing in relation to environmental protection, that 1974 was the earliest at which we had an environmental protection act. And in effect the work that was done in 1994 and subsequently this agreement is really trying to at least hold if not improve the status of the environment in relation to the rivers and in relation to the mines and at least this is possible by having a continuation of the mines.

I have the same relation with the operation of Copper Mines of Tasmania and I did visit that site a number of times. Right from the initial stage at the time the 1994 deal was sealed but also subsequent to that, I was very impressed with the amount of work that CMT did in relation to reducing acid drainage from the surface water. I know there was still a problem in terms of some of the water coming out of the existing mines that have been there for a great deal of time but I was particularly impressed with the way in which the water was re-routed, the way the surface area of certain dumps had been covered with earth and the way in which the impact of acid drainage was at least minimised and controlled to some extent.

The practices of the previous mine were certainly identified as being outdated but one of the real advantages of having had this period of time since 1994 with Copper Mines of Tasmania is there has been a significant improvement to the status of that area. Whilst you would never dare put your watch or a gold coin, a coin of some kind, or even a railway sleeper in the Queen River for very long because it would not stay there for very long it would dissipate and head off down the river, I think we all acknowledge it is a continuing issue that we will need to address over time and that at least this way the ongoing operation of the mine ensures that the problem of acid drainage is not exacerbated by ongoing operations and if possible we are able to pull it back.

That Princess Creek tailings dam I think has been quite successful. I can remember going up there and ruining a good pair of shoes at the time of its construction. But I think the vision that was shown by the company and the technology they used to be able to try and minimise acid drainage was very welcome. I would imagine into the future it is only going to be possible to tackle this kind of issue through some government money. I always did wonder whether the $2 million that the Federal Government provided to be able to look at that kind of issue was best spent on studies and consultancies and whether we could have actually done something more practical in relation to minimising that problem and starting to deal directly with the issues associated with the Queen and King rivers and the fact that those rivers are in effect dead. But I guess that is a question a politician should always ask, 'Is this money best spent on consultancies, is this money best spent on studies or would it be better spent at least a proportion in terms of trying to deal with some of the issues?' But I guess that is a debate still to be answered on another day.

The potential for co-treatment, of being able to deal not just with the run-off from the current mine operations but also with some of that which has historically been created to be able to link that into tailings dams, I think that is certainly to be encouraged. I notice there is a section in here that deals with co-treatment and at least identifies that that would be the preferred position.

As I read the bill, and I have to say I have not fully studied it, but as I read the bill I tend to have an ongoing interest in the issue, it would at least seem that it will not get worse. I suppose we all had ambitions that we might be able to find some solutions into the future whereby the rivers could be restored to their original conditions. Although to some extent, and this is my view in terms of whether the Abt Railway was an appropriate development or not, given that we are probably showing to generations of the future what generations of the past have done. I agree with my colleagues here; a number of my colleagues have the view that this is going to be a crucial issue for the Abt Railway people to deal with, that we are going to have to prepare people for what they are going to see. We have to educate them I think before they get here because I can just see the letters, the pictures, the articles that are going to be written about the desecration of Tasmanian wilderness that has occurred by past generations and the fact that it has not been fixed. Unless that interpretational work is done very well and very professionally I think that the success of the Abt Railway could be curtailed. In fact the one time I thought it was beautiful was the time I drove up to Teepookana - as I quite often do when I am on the west coast and I go down the west coast reasonably often - and I stopped at the lookout before you get up to the railway crossing and it was one of those days where the rain had been coming down fairly heavily before but it had stopped and there was this absolutely clear water. You could see through to this green surface underneath the water and it was beautiful in a sense but it was a statement about what man had done in the past. That was when I decided, 'Yes, look the Abt Railway would be a great idea' because, in a sense, we need to learn about the mistakes we have made in the past and we need to learn about what man has done with good intention but later on, following generations have had to come to terms with that which is done and try and deal with some way of repairing that.
The one question I would ask, given that I do not intend talking on any other component of the bill, just really to put a few things on the record, is that I notice under 'Covenants and acknowledgments by CMT and by the Crown' - section 4.1(d) of the agreement - there is a section that deals with the use of Tasmanian services and products and indicates that in the conduct of its existing operations as well as for any capital expenditure programs CMT and/or a related body corporate should use the services of workers, engineers, surveyors and so on that are resident in or available within the State of Tasmania to the extent you can prove that there are people with those skills, and subparagraph (ii) says:

'when calling for tenders and letting contracts for works, materials, plant, equipment and supplies ensure that Tasmanian suppliers, manufacturers and contractors are given a reasonable opportunity to tender or quote for contracts' -

and so on, and subparagraph (iii) stipulates that:

'in any agreements, contracts or arrangements with their agents or contractors that all agents and contractors engaged by CMT or a related body corporate or related entity shall comply with the requirements of this 4.1(d) as if named as a party to this Agreement.'

I thought that was interesting because I am informed that the head office for Sterlite is actually based in Brisbane and, as I understand it, this west coast mine is their major investment in Australia and I just wonder what discussions the Premier and the Government had had with the company about whether they would relocate all of their operations basically, here to Tasmania - even if it is just a lawyer, even if it is just one person why would we not ask that they be located here in Tasmania? I mean, it might be the very smallest amount but the principle is that you are much more likely to get Tasmanian goods and services and people if the person who has anything to do with that is actually based here in Tasmania. So I would certainly put that question on the record.

Mr Jim Bacon - What's this office in Brisbane? We know nothing of that.

Mrs NAPIER - As I understand it, there is a representative -

Mr Hidding - Is there a registered office? But there's lawyers here.

Mrs NAPIER - here, but what else might it be? It certainly is a hell of a lot closer than India, isn't it? So I think the important thing is that -

Mr Jim Bacon - Their people are in Queenstown.

Mrs NAPIER - whatever presence there ought to be if we are going to encourage the company to fulfil -

Mr Hidding - There could be 20 people in an office, Jim, we haven't asked.

Mrs NAPIER - the use of Tasmanian services and products and you are going to be serious about that rather than just suggest -

Mr Jim Bacon - Look at that, where the company name is registered.

Mrs NAPIER - that it is worth no more than the paper it is written on, then I think it is reasonable that the Premier takes that question seriously rather than dismissing it and from that point of view, Mr Speaker, I am quite serious for the reason that I have raised that.

So, Mr Speaker, I think they are the main points that I wanted to raise. I am pleased to see this package go ahead. I think it is important for the environment of the west coast as much as it is important for the people of the west coast. It is important for tourism and I noticed that there is ongoing recognition of the tourism potential, as it is already operating, and even more that might occur on the west coast. It makes a lot of sense for the mining histories of the west coast to be built on even more than it has.

In fact one of the books that I picked up in that recent sale that occurred in this Parliamentary Library was a book of the tales that people told of the way in which early mining exploration had occurred and who found what, and who passed whom, which pastoralist had gone beyond rich oil reserves within a couple of kilometres of one another. I thought that, in itself, makes fascinating reading and certainly Ballarat makes very good benefit out of the fact that it was not only a mining centre. But every time I read a book about early Australia and read about the significance of the goldmines and early mining explorations that might have occurred, it reminds you that you need to go back to Ballarat. I think that kind of smart move by the State to actually bring its history back for it to work in parallel with existing modern-day operations is a way by which we can bring together our cultural heritage and the industry that is possible with the rich mining reserves that we have. In addition to that I think certainly the contribution of the mining royalties and most importantly the viability of the west coast as we find ways of bringing together not only its mining industries and the employment associated with that, given that everyone recognises that you do not employ that many people anymore in mines but it still has other economic benefit to the State.

If we can find the best way to blend that with tourism, with fishing and aquaculture then that multiple industry approach to regions, especially more isolated regions such as the west coast, will certainly be of great advantage. Every time I visit the museums in Zeehan, I think if they were only 200 kilometres away from Sydney they would be one of the most popular tourist attractions in Australia. Unfortunately they are not only 200 kilometres away from Sydney, but the potential is there and the Abt Railway will certainly be another reason why people have ventured down to the west coast. I am very happy to support the bill.

Mr RUNDLE (Braddon - Leader of the Opposition) - Mr Speaker, this particular mine has a long and glorious history, as we know, and I am thumbing through some of the press comment at the time of the most recent change to the Indian company, Sterlite. One of the press articles referred to the 'mine with nine lives'. I am not sure how many lives it has had, but I certainly do remember that in the 1980s the then Gray Government was involved in negotiations to try to help it through a difficult period. Certainly when RGC decided that they were going to move away and move out of Mount Lyell, the position of Queenstown looked very bleak indeed, in fact at that time I remember that real estate prices and the whole economy of Queenstown was extremely depressed and it was very difficult to sell real estate, let alone get any realistic price for the value of property there.

So there was criticism at the time when we moved to bring in Gold Mines of Australia, who ultimately became Copper Mines of Tasmania, to take over that proposition, and certainly I regret very much that Copper Mines of Tasmania were not able ultimately to prove longevity in their relationship with that mine, that falling copper prices and a whole range of other financial problems pressed in around that company and caused them to bring in an administrator and ultimately leave the west coast and that mine.

I think the Government does deserve recognition for going out for a second time and finding yet another operator. I have to say I am disappointed to know that a lot of west coast businesses have in fact been left with unpaid debt by that company, and I was never really sure whether any provision had been made in the changeover for Sterlite to in fact accept any of those liabilities. I suspect at the end of the day they have not and would not agree to that. They have simply taken over the company for a figure paid across to take over the assets of the mine and are wiping the slate clean and beginning their operations.

When you go back into history, I think you can say that had we taken the Leader of the Opposition's advice in the 1980s - and that Leader of the Opposition's name was Ken Wriedt - then there would be no mine at Queenstown, and that particular community would have suffered greatly because he made the famous statement - as the Speaker obviously remembers and wishes he had not, even though it was a long time ago - 'When mines are finished, they are finished and you simply pour good money after bad'. So basically, to some extent - to give him his due, I suppose - he was right when he made the observation that mining is finite, there is no doubt about that.

This is a mine that is quite remarkable in terms of its longevity, it has been there for 100 years. Certainly it has had some close shaves, it has been near to death on a number of occasions. It has been the centre of a tremendous tragedy when we had the Mount Lyell disaster early in the century when equipment was rushed across Bass Strait and the steamer that made that passage I think set a record time for crossing Bass Strait to try and save some of those miners. It has fluctuated with world commodity prices - copper, obviously, of course - and so it has survived. But to find any mine that has been around for as long as Mount Lyell is quite remarkable, and it is the mine that refuses to die, there is no doubt about that.

I am glad that in the 1980s we did not take Ken Wriedt's advice and simply say, 'It's too hard, this mine is finished, as many mines are, and we will walk away from it. As I say, Robin Gray was involved in packages to try to massage the company through difficult periods in the 1980s and of course in the early 1990s we had RGC leaving and we then inserted Copper Mines of Tasmania into that mine.

To be quite fair to Copper Mines of Tasmania, the general perception was that they were very responsible in the way that they set about to meet some of the environmental guidelines that were put on them by the government the day. The tailings dam, a lot of that remedial work and a lot of additional work that was carried out by that company was in fact thought to be of a high standard and the general consensus was that Copper Mines of Tasmania were being extremely responsible and wanting to make a real go of that mine.
Some people would not know but I can say now without prejudicing anyone's position or revealing commercial confidences that when we were seeking an operator to reopen Savage River Mines we at one point tried to get a joint venture going between Copper Mines of Tasmania and a Taiwanese company and in fact executives and board members of Copper Mines of Tasmania went to Taipei with representatives of the TDR, as it was then, to conduct negotiations between them and a large Taiwanese company who expressed considerable interest in the mine, or Savage River that is, but unfortunately that deal was never consummated and ultimately Australian Bulk Minerals came in to take over Savage River and although they are struggling in the sense that they are dealing with difficult circumstances in Asia and obviously the price pressure on the iron ore pellets that they are producing, they are doing a remarkable job, given all of those circumstances totally beyond their control and I certainly compliment that company on what it is doing. That left us of course, with the problem of Mount Lyell which was solved before Savage River but there you had two companies walking, if you like, from two major mines in the State.

Now Ken Wriedt was wrong because if you look at the funds that have been injected into a continuing operation at Mount Lyell by successive governments and this bill before us now is essentially a continuation of the arrangements that were in place with Copper Mines of Tasmania, Mark 1, there maybe some changes there and we can go into that later but essentially they are taking over the arrangements that were in place under that original deal. If you had looked at the economics of simply walking away from that mine in the early 1990s and looking at the dislocation of that community, the high cost that would have been transferred onto the Commonwealth of Australia in terms of all sorts of social welfare payments, if you had looked at the possibility that dozens and dozens of families would have left the west coast and you would have found them in Kalgoorlie where there is a very large Tasmanian or ex-Tasmanian community and, as Peter Hodgman told me at the weekend, there were possibly 1 000 Tasmanians at the football match, there was a large group of Tasmanians there, many of them ex-west coast miners.

If you go to Mount Isa, if you go to any mining area of Australia, you will find a lot of Tasmanians who have grown up on the west coast, who are expert at their jobs, and have simply been victims of the downsizing of the work forces in all of those mines, even the ones that are healthy and operating, but just imagine the closure of Mount Lyell, the devastation that would have wrought on the community of Queenstown in particular but the whole west coast.

So the submission that I would make is that while the money that has gone in is money perhaps that the State can ill afford on the other hand I believe the cost benefit, the value for dollar in terms of all of those things that I have mentioned certainly enabled governments to justify it. Now everyone would hope - and I know the Premier would hope in this case - that Sterlite, which is a significant Indian company as I understand it, they manufacture and process copper and so the synergy between what they are doing here, getting that concentrate across there, processing it, then using it in manufactured products, seems to me to be a very good relationship and I would hope that this proves a profitable operation for them and that they are able to stay there, not only for the ten years that we understand they are talking about now with a ten-year plan, which I think is what we are talking about, but I would hope that this great mine can be given a life well beyond the next decade.
We are told in a press release by the Premier on 16 March that it has ten-year mining plan and will invest $10 million in its initial year of operations. We will be interested in his summing up to learn whether or not the first significant injection of funds under that $10 million annual program has in fact commenced and what the progress will be of that injection of funds. They have also indicated they are going to lift production from 2.7 million tonnes in 1998 to 3 million tonnes a year, and obviously that $10 million they are putting into the mine is designed to improve efficiencies and to help them generate that extra production. We also note in that particular press release, which was a joint one between the Premier and the Deputy, that the existing environmental bond would be maintained at its present level and increased annually from the year 2000, and we will obviously learn hopefully a little more of that as we go along.

Mr Speaker, it is unusual, I do not know that we have a lot of Indian investment in the State of Tasmania. It is, I think, an interesting liaison between a major company in that large nation of a billion people and Tasmania. One would hope that with an improvement in copper prices - and they have certainly been at very low levels in recent times and obviously there is a lot of pressure there for all copper miners with suggestions that world wide some of the less productive mines and some of those that are mining lower grades will in fact be hard pressed to survive. We have had, I think, discussions recently that BHP in South America may be reviewing some of its operations there. And so basically it is a world commodity, it depends very much on prices, the prices also depend very much on the balance between supply and demand, and certainly I think Sterlite's introduction there has been at a time when there has been a lot of price pressure.

I simply conclude now by saying that obviously we support the legislation. We think the Government has done a good job in relation to breathing life into it again. We regret that Copper Mines of Tasmania have struck difficulties beyond their capacity to respond to and that they have been damaged financially as a result of this Tasmanian venture, but we, as I say, acknowledge now that Sterlite appears to be a well-funded company that will have the clout to inject the $10 million to go at least ten years and hopefully beyond, and maybe it can be a catalyst for State Development to use the network of that company in India to see whether or not there are further trade opportunities for the State of Tasmania, not just in minerals but in a range of other products. It is interesting to note now that the Department of Foreign Affairs has sent one of its senior executives to Tasmania whose previous posting was in New Delhi, where he had been for five years, and I know that he is keen to develop trading links between Tasmania and India. I know that Mrs Bladel, Mrs Milne and Mrs Napier went there to a trade convention a couple of years ago and they met this particular gentleman in New Delhi. He feels I think an affinity with Tasmania and is keen to try to see if we can develop those very tentative links into something more substantial. On this side of the House we see that as a very healthy development, and we believe that the expertise and knowledge of this particular Foreign Affairs operative should be used to the fullest extent, and I hope and trust that State Development will. We support the legislation.

Mr JIM BACON (Denison - Minister for State Development) - I thank members for their comments on this bill. There have been a number of issues of substance raised by a number of the speakers, which I will endeavour to answer. One consistent theme through the contributions, I think, of everyone bar the last speaker was the serious concern over the ongoing problem with pollution which has been an environmental damage which has been caused over the last 100 years and more of mining, and can I say that from the Government's point of view we certainly recognise that. In fact I think the whole issue of rectifying that environmental damage is the biggest environmental challenge facing this generation and government of Tasmania, and unfortunately I think it must also be recognised realistically that it will be the greatest environmental challenge facing future generations and governments of Tasmania.

We do not in any way seek to minimise the extent of the environmental damage, and certainly I believe that achieving a lasting solution to that problem and rectifying the damage would be an absolutely world-class achievement in terms of environmental damage rectification, but no-one is pretending that this is an easy problem, and that it will not take many years to fix. But I can assure members, and particularly the member for Denison, Ms Putt, that this Government takes very seriously the question of the ongoing environmental damage and we will be doing what we can in the years ahead to make substantial inroads into that environmental damage and of course that is, Mr Speaker, a large part of the motivation that we have had in relation to the discussions with Sterlite, their subsequent takeover of CMT or purchase of CMT and the agreement we reached with them and with this legislation because the very clear advice to us, which I think has been recognised by other speakers, is that the best chance of making progress in relation to that environmental damage is to have the mine operating and to continue working, firstly to make sure that environmental damage is not increased but, secondly, to work over time to rectify the damage that has been done in the past. That is, we are advised, much more likely to be possible with the mine operating than if it was to have closed down when obviously water levels within the mine would quickly rise and all the problems with acid drainage would almost inevitably become very, very much worse and far more damage would be done, damage that may well be beyond the capacity of this or future governments to rectify.

I would certainly reassure the House that we do take this question very seriously and we will be working both with this operator and with the community, the council on the west coast, with the Commonwealth Government and with anyone else who can assist the people of Tasmania in rectifying this damage.

Mr Hidding, the member for Lyons, asked what if Parliament amends the agreement? This is no different to the situation in 1994. It was not possible to reach an agreement and bring it to Parliament before we signed the agreement. There was obviously a considerable amount of urgency involved because of the situation with employees, contractors and suppliers to the mine. It was urgent that the agreement be reached and as far as the possibility of Parliament amending the agreement of course that may be technically possible by members of parliament. However, it is an agreement between the Government and Sterlite so if there were amendments made to the agreement by Parliament clearly we would have to go back and negotiate the agreement again. But we do not anticipate nor do we think that there are any changes to the agreement that would be justified, nor do we think that that is a likely outcome of the debate and particularly in view of the fact that the majority of members speaking on the legislation have indicated their support for it albeit that they do have questions and points they want to make. I think that is less of a possibility than the member may have thought.

The honourable member for Franklin, Mr Hodgman, raised the question of the mouth of the King River and the tourists. I have already said that we do recognise that that is probably the greatest environmental challenge facing this and future generations of Tasmanians and Tasmanian governments. We are very keen to get on and make progress with that and I agree with his comments about tourists and the Abt Railway and so on, but it is a fact of life - and a point I might make which was raised by the honourable member for Franklin and was repeated by the Deputy Leader of the Opposition about the question of studies, and I think the Deputy Leader also raised consultancies rather than just getting on and actually fixing it. I must make the point that firstly if you accept that this is a very major environmental problem - certainly I think, to my knowledge one of the biggest if not the biggest in Australia, and we certainly would not want to be claiming world-ranking with this but it is a very serious case of environmental damage having been done over a long period - I just do not think it is logical to think, without properly studying t he damage that has been done and properly investigating possible solutions to it, that it is possible to just start spending money and be confident that in fact the way the money being spent was effective. There is not much point just spending money if we do not know in the first place whether it is actually going to make things better. I think far better to get the science right, to actually investigate the full ramifications of the issue and possible solutions to it and certainly the Government - and I know the people from the department are very keen to get on -

Mr Hodgman - They've briefed you well.

Mr JIM BACON - Whether or not that is so is pretty irrelevant to the point I am making which is that just saying we should get on and fix it is not really a very useful contribution, I think, if there is to be no investigation first.

Mr Hodgman - I didn't say that.

Mr JIM BACON - In fact I have been asked as part of this: what are we doing about the pollution and the damage? As members will no doubt know, the Mount Lyell remediation research and demonstration program between 1995 and 1998 was a $2 million joint Commonwealth-State program. That identified priorities and potential remediation options. The Mount Lyell acid drainage mediation program is $3 million mostly of Commonwealth money to develop up and implement the best remediation option and there is $7.5 million of Natural Heritage Trust funds committed to building the appropriate plants. I am advised that there will be a recommendation on how to proceed by the end of the year but, as members have talked about, the basic idea is to use revenue from copper from the tailings to offset costs of treatment. So in fact I am confident that we will be making progress in relation to this matter and I will look forward to being able to inform the House or the Minister for Environment to inform the House as we move forward with that.

The member for Denison, Ms Putt, raised questions about the health impact of the environmental situation there. I am advised that one of the studies that was undertaken as part of the Mount Lyell remediation program was looking at the levels of metals in fish and that was determined and that information can certainly be made available to Ms Putt, if she wishes it, which I assume she does.

Ms Putt - Yes, I would appreciate that. Thank you.

Mr JIM BACON - We will organise that.

We did not do any surveys of the amount of fish eaten but I am advised that the levels of most metals were below the relevant health standards. Now, again, I think if the member is provided with that information no doubt she can take it up with us at other times.

I will just go back a moment because the member for Franklin, I think in relation to tourists and the Abt Railway, mentioned or was asking whether some signage could be put up or some -

Mr Hodgman - That's exactly the point I was trying to make to you earlier. I'm critical about what may or may not be happening but I think you need a strategy to brief people going down about the history of the pollution, what they are going to see and what the Government is doing to rehabilitate the area.

Mr JIM BACON - I am advised that we have set aside $200 000 of an NHT grant for the remediation of Mount Lyell to rehabilitate some of the exposed tailing along the banks of the lower King River and there is probably adequate flexibility within that funding package to produce some material to inform users of the Abt of the history of the environmental damage to the Queen and King and what is being done to fix the problem. I certainly accept the member's point -

Mr Hodgman - Ten out of ten, well done.

Mr JIM BACON - and if we can demonstrate that we are in fact improving the situation then I think that could well be another reason why people may want to visit to come and see what is being done. But we would want to make sure that there was progress actually being made. The point raised by the member though is a good one and we will address that though we have some time I think, at least a couple of years, before tourists are travelling on the Abt Railway so whether that particular source of funds is the way it is done or some other way I am sure that it is a valid point and should be part of explaining to tourists, visitors to the State, what the situation is there.

The member for Denison, Ms Putt, raised a number of questions about the actual assistance package that the Government has reached with Sterlite. Yes, we have provided Sterlite with an assistance package. I must say that achieving the agreement with Sterlite, or the difficulty of that, was added to by the fact that copper prices had been so low, they are currently at historic low levels, so the assistance package was necessary or Sterlite simply would not have taken over CMT and taken over the operations of the mine but, as with normal practice, the details of the package are commercially confidential and this is in line with similar agreements before. However I can certainly assure the House that the package does not represent a major call on the Budget.

Ms Putt asked about the number of workers. I am advised that prior to acquisition by Sterlite there were 198 workers; there are now 232 workers which is an increase of 34 and I am advised that there is a possible extra nine that may be employed in the near future. She also asked whether or not they were unionised. I think that is totally irrelevant to the bill along with some of the other matters but I am aware there are union members employed at Mount Lyell but whether that means the place is unionised or not is really a matter of opinion.

Ms Putt - Yes.

Mr JIM BACON - There are members of unions there, I would not have much doubt there are also people there who are not members of unions.

Ms Putt - I suppose what I should have asked is whether their workers are on contract or whether they are just on awards.

Mr Rundle - A lot would be on contract.

Mr JIM BACON - That is a difficult question to answer because in fact the whole history of particularly underground mining is that the miners are employed on contract so the simple question about whether they are contract employees or wages employees is not necessarily the question because that is the way that underground miners have been employed for very many years.

Ms Putt - All right, perhaps I should have asked are they there under a workplace agreement that has not had union involvement in negotiating, perhaps that's what I'm really getting at.

Mr JIM BACON - We have not been involved in negotiating any workplace agreement. There was I think an agreement in existence between the previous owners of CMT and the Australian Workers Union. As far as I am aware that continues. I know there have been discussions between the new management of the mine and union representatives and the work force but it is not relevant to this bill and I know in talking to the general manager of the mine who is a man who has been involved at Mount Lyell for, I think he told me over thirty years but certainly a time of that sort of period, he has worked for a number of different companies whilst he has been there but certainly he did tell me his belief was that direct employment was a better way to go than engaging workers via a contracting company who would supply the workers to the operation as had been the case in the past.

Ms Putt was asking about environmental best practice and I am advised the environmental management plan has been revised twice since 1995 and the EPN conditions updated since SDAC first set the conditions on CMT following its assessment of the project in 1995. The current EMP is dated March 1998. Condition 7 of EPN 308/1 requires that the current environmental management plan will be critically reviewed by March 2000 and thereafter at three-yearly intervals. I hope that answers that question.

Ms Putt asked about the Mount Lyell Mining and Railway Company Limited (Continuation of Operations) Act 1985. I am advised that clause 2.15 of the agreement with CMT-1 - that is, the original CMT - that is, as appended to the 1994 act, provides that Copper Mines of Tasmania as it then was assumed the same obligations of the Mount Lyell Mining and Railway Company as specified in the Mount Lyell Mining and Railway Company Limited (Continuation of Operations) Act 1985.

These obligations related to the rehabilitation of mining shafts, infrastructure and building required for the operation at the mine and are listed in Schedule 2 of the 1994 agreement. All of these obligations have been transferred to CMT as it now is and are listed in Schedule 1 of the 1999 agreement.

Ms Putt - That's good. I just wanted to make sure the obligations haven't somehow been waived yet.

Mr JIM BACON - No, no they are looked after.

I am not sure if it was Ms Putt or Mr Hodgman but one asked about the contribution that Copper Mines of Tasmania-1 were to make - perhaps it is easier if we call them CMT-1 and CMT-2 for the purposes of this - to the Mount Lyell remediation program to treat the acid drainage that is the responsibility of the Crown. I am advised that in 1995 a second agreement was made between the Crown and CMT-1. This was not ratified by Parliament. It provided for a methodology for determining the proportion of acid drainage pumped from the mine that is the Crown's responsibility versus CMT's responsibility.

The agreement also provided that CMT would pay the Crown $250 000 per year for four years with the funds to be spent on remediation of environmental damage caused by past pollution. The Crown did not receive any cash payments in accordance with this agreement but did write off $350 000 against services received from CMT. So in that sense CMT did make a contribution. The outstanding balance of $650 000 was to be paid in cash and used as the State's contribution towards a strategic NHT project to build a copper recovery plant and associated neutralisation plant to treat acid drainage for which the Crown is responsible. But clearly as CMT-1 fell into financial difficulties this cash in fact was never received.

Mr Hodgman - It was to be over four years. Couldn't CMT-2 take that responsibility over?

Mr JIM BACON - I am getting to that. Although we certainly endeavoured to include a clause to keep alive the commitment in the new agreement with Sterlite - that is, CMT-2 - they were not prepared to agree to it so it was not achieved as part of the negotiations. Notwithstanding this, Sterlite has agreed to cooperate with the Crown's activities to deal with the acid drainage for which it is responsible and has effectively agreed to forgo revenue from the copper that might be recovered from the acid drainage, bearing in mind CMT has rights over the copper as a resource but not responsibility for it as a pollutant. These concessions are set out in clause 8 of the 1999 agreement and I am advised that CMT is currently -

Mr Hodgman - Was that 8.2.4?

Mr JIM BACON - I will just finish, I will tell you in a minute. I am advised that CMT is currently actively cooperating with the Government in relation to its investigations into remediation of acid drainage problems.

Again I can accept that members may well think that that is less than satisfactory, but again I point out that in the circumstances of the overwhelming imperative to secure a new operator for the mine and in a scenario of very low copper prices it was not possible to achieve better than I have just outlined. Yes, is the answer to that.

Ms Putt - Can I by interjection just follow up on a matter that has come up in your answer there which is that if CMT-1 were to contribute this money which did not materialise apart from the $300 000 that was a quid pro quo sort of arrangement, does that mean that the whole NHT project fell over because there were not contributions forthcoming from - no, so that has continued and Federal money has come in all the same. Thank you.
Mr JIM BACON - Though the question of money not being paid does lead me to other questions that you have raised, particularly the unhappy situation of the unsecured creditors of CMT-1 and certainly in relation to the list you read out of contractors and suppliers to CMT as it was then -

Ms Putt - And that wasn't even an exhaustive list.

Mr JIM BACON - No, I understand that and I did when I was in Queenstown towards the end of last year meet with a number of local business people who were owed money. It is a sad fact of life that when companies do go belly-up unfortunately via the Corporations Law there are limited means of people securing satisfaction of the debts they are owed.

I certainly think it is a very unhappy situation and I am aware of the allegations that Mr Schulze made in the Legislative Council about the directors of CMT and the fact that they had been paid what certainly appear to be very large sums of money, whilst local suppliers and contractors - and I think the example you gave of the local cake shop is a good example; unfortunately there are occasions when executives of companies do not feel as morally obliged as I might believe and you might believe and all members of the House might believe they are, to look after small suppliers and contractors, but nevertheless, that is a matter out of the hands of the State Government. It is a question of Federal law and there is not much, sadly, that we can about it.

Ms Putt - No, they're unsecured creditors.

Mr JIM BACON - Yes.

You also raised or rather referred to comments that Mr Schulze - I think he might by now be the former member of the Legislative Council; if not he is very shortly about to be -

Ms Putt - Yes.

Mr JIM BACON - or tonight he will be I think, about block cave mining, and I have spoken to Mr Schulze in the past about this. I know that he was always sceptical about it. In fact he claimed to me that in his time at Mount Lyell I think back in the 60s or 70s that -

Ms Putt - In 1963.

Mr JIM BACON - this was discussed at great length then and it was decided not to proceed that way. Whilst I do not have advice about all the details of this, certainly the current operators, as I understand it, are not intending to proceed with the block caving method of mining - certainly not at this stage and so I think that answers that point.

Ms Putt - The only other thing was whether there was still $1 million outstanding that CMT-1 owed Tasmania.

Mr JIM BACON - Yes, there is.

Ms Putt - Yes.

Mr JIM BACON - But essentially that company no longer exists.

Mr Hidding - At some cost.

Mr JIM BACON - Yes, and I mean, to that extent we are, or the taxpayers and the Government are in exactly the same position as the other creditors. But I have said, this is an unhappy circumstance and no-one likes this situation. It is one of those circumstances though where the imperative was to get a new operator into the mine and the only way that could be achieved was for Sterlite to actually buy Copper Mines of Tasmania. The administrator certainly cooperated closely with the Government - and we are grateful for that - in finding a new operator, a new owner for CMT but there are more than one left owed money and that is unfortunate but certainly again when I was in Queenstown the other day at least the local suppliers do feel that now they are getting paid more regularly. They have a lot more confidence that they will be paid for work performed.

Now what have we missed out? Have we missed out anything? I think, Madam Deputy Speaker, that I have answered the issues of substance that were raised. I understand that we will be going into Committee and I know the member for Franklin, Mr Hodgman, would like a statement by the director of environmental management read into the record. We can do that either now or during Committee.

Mr Hodgman - Whatever suits you.

Mr JIM BACON - I am quite happy, Madam Deputy Speaker, to do that now and I am advised that during the briefing that we provided on the Copper Mines of Tasmania (Agreement) Bill, Mr Hodgman did raise some concerns about whether the new owners of Copper Mines of Tasmania would be subject to the same environmental requirements as the former owners of CMT and he suggested then that the debate on the issue might be simplified if Warren Jones, as director of environmental management, was prepared to make a statement on this issue and then I could read that into Hansard . and I indicate to the member that I am more than happy to do so and will now read that statement, which is by the director of environmental management with respect to the environmental conditions applied to Copper Mines of Tasmania.

The statement reads as follows:

'Copper Mines of Tasmania (CMT) assumed ownership of the Mt Lyell copper mine in 1994. The company entered into an Agreement with the Government to provide it with, among other things, protection from liability arising from contamination or pollution arising from any occupation or use of the land before the date on which CMT became responsible for the land. The Agreement also placed some environmental requirements and obligations on CMT. These included a requirement to conduct its operations in accordance with the specifications set down in an approved Environmental Management Plan and Best Practice Environmental Management. Subsequent to the Agreement, an assessment of the project was undertaken by the Sustainable Development Advisory Council, and the Council set a number of specific environmental conditions that CMT must comply with. Since then, these conditions have been updated and transferred into an Environment Protection Notice issued by the Director of Environmental Management (EPN 308/1).

The environmental requirements for CMT under the new ownership that took effect' -

on 1 April 1999 -

'are the same as applied to CMT under the previous ownership. EPN 308/1 still has force and is the main instrument for applying environmental requirements to CMT. It has not been modified since the change in ownership and is recognised in section 8 of the Copper Mines of Tasmania (Agreement) Bill 1999 . EPN 308/1 includes a requirement to operate in accordance with the approved Environmental Management Plan. This is the same plan that was in force prior to the change in ownership.

The 1999 Agreement with CMT, as appended to the Copper Mines of Tasmania (Agreement) Bill 1999 , includes a covenant by CMT to operate in accordance with Best Practice Environmental Management (clause 4.1(b)).

The above analysis demonstrates that CMT under its new ownership is required to operate in accordance with the same environmental requirements and to the same standards as CMT under the previous ownership.'

and that statement is signed by Warren Jones, Director of Environmental Management.

So, Madam Deputy Speaker, I think I have answered -

Mr Hodgman - Do you need to perhaps table that?

Mr JIM BACON - I am certainly prepared to and I think I have responded to the major issues of substance. I can thank members for their support for the bill and I conclude my remarks.

Bill read the second time.