PRIME MINISTER
OFFICIAL OPENING OF NABALCO PTY. LTD. ALUMINA PLANT
GOVE, N. T. 1 JULY 1972
Speech by the Prime Minister, the Rt. Hon. William McMahon
CH, MP.
Many of you have come from other parts of the world
for this ceremony, and many more of you have flown in from
" down South". I have come from Darwin and Kununurra, where I
have had the pleasure of inaugurating several other northern
development projects. I want to thank you, Mr Meyer, the Chairman of Swiss
Aluminium Limited of Zurich, and the Australian partners, for
inviting me to take part in this opening ceremony.
I am sure I speak on behalf of all the guests when I
say how impressed and enthused I am by what I have seen and
heard. I understand that this impressive and massive alumina
plant has been'korking up" for about a month now. And I am told,
too, that we may have to wait a few weeks more before we see the
first production alumina perhaps another five or six weeks.
I wish I could stay that long but, as you will know, it would
pose difficulties in a year like this.
Mr Chairman, you and your partners in this
European and Australian joint venture can take pride in the fact
that this plant will be " on stream'" one month ahead of the
company's own schedule, and five months ahead of the deadline
agreed to with the Federal Government.
It is now just over three and a half years since the
joint venture agreement was signed, with the present level of
per cent Australian participation. The partners then thought
that exports of bauxite would commence in 1P71, that the first
stage of an alumina plant of half a million tons per annum capacity
would be complete by tih end of 1971, and that expanded production
of a million tons a year of alumina would be achieved by the end
of 1974. / 2
2
In 1969, these objectives had to be revised to take
account of the delay flowing from financial reconstruction of the
project. Taking this into account, it is all the more remarkable
that in this remote and undeveloped part of Australia, where literally
all the basic infrastructure had to be provided before construction
could begin, you have completed this alumina plant ahead of target.
There must be few projects of this size, cost and complexity anywhere
in the world which have been completed in such a short period.
This is a tribute not only to you, Mr Meyer, and to
your executives, but to the many contractors and sub-contractors and
to the multinational workforce who have met their deadlines, and shown
again that Australian and international partnership can operate
successfully to bring a major mineral project into operation.
We have already seen this happen in the West, we are
seeing it here again today in the North. I am sure that with
experience as a guide and barring the unpredictable, as the project
develops, it will beat the forecasts and the target dates for future
development. Another illustration of this success story is that the
plant will produce one million tons of alumina per annum by next July,
sixteen months ahead of schedule. By then, the Gove Project will be
generating an annual export income of $ 60 million, and that income
could double in the foreseeable future, with expansion of the alumina
capacity and possible eventual development into aluminium refining.
There has been, as we all know, a downturn in the
aluminium industry. That is true, but the speed at which this venture
is going ahead shows the confidence of the industry in the fact that
this is a temporary situation.
This project has in fact an assured market for the
whole of its alumina production for twenty years, and the Australian
partners may choose to sell uo to 30 per cent of production themselves.
For the basic raw material, bauxite, Gove alumina
can arrange contracts for up to 40 million tons over 20 years. It
has already contracted 33.5 million tons, including 19.5 million tons
to Japan, and 14 million tons to Eurooe. This is private enterprise
in action and deserves to be praised by all of us.
To gain some idea of the significance of this project
to the Territory, we should recall that the total value of mineral
production here in the Northern Territory in 1962-63 only nine
years ago was $ 7.5 million, and five years ago, it was only a
little over $ 20 million. Gove is a project of great national significance. It
makes its contribution in many ways to export income, to employment
and, if you will forgive me as a former Treasurer, to our taxation
income. / 3
-3
It bears mentioning again that these achievements have
been made possible by a co-orerative effort between Australian and
overseas investment, investment that has been welcomed because it has
played a dynamic role in Australia's general economic development
throughout the postwar period. It has added to our domestic savings,
even though they have been high by world standards. These investments
have also brought here technological resources and managerial know-how
which might not otherwise have been available to us.
Recently, in Canberra, we have completed a far-reaching
review of overseas investment policies. As a result, we will soon
be presenting five papers to the Cabinet dealing with
whether there should be some regulation or control of
capital inflow;
whether we need better guidelines for borrowing;
the question of interest rates;
whether Australian companies should have greater flexibility
to invest overseas; and
whether there should be more flexibility in overseas.
corporations borrowing here from us.
These papers will be considered with the objective of ensuring that
the decisions made are unmistakably in the best interests of Australia
and Australians. It is obviously in the national interest to ensure thait
there is major participation by Australian companies in ventures of
this kind. I am glad that the Australian equity of 30 per cent
may be increased to 50 per cent depending on future programmes.
Australian companies may not have the majority financial
holding in this venture, but I understand there has been a true takeover
on the staff side, and that Australians now occupy some 60 per cent
of senior managerial Positions. As well, it is the company's policy
that Swiss managers will be progressively replaced by Australians.
Mr Meyer, it is more than satisfying to me, as Prime
Minister of Australia, to oen this plant with the knowledge that it
will process Australian natural resources in accordance with the
policy of the Federal Governmrent, and it will make an important
contribution, not only to decentralisation and northern development,
but to the prosperity of this wonderful and developing country of ours.
Mr Meyer, to you and your Australian colleagues and to
all the people present here too, I can say that it is with the
greatest pleasure that I officially open this plant and look forward
to seeing it get really into production. 1