The sight of molten metal pouring from a furnace has long been an iconic symbol of industrial might and wealth.
In Australia, the metallurgical industries have provided long term jobs and wealth to many communities. In some cases, this wealth generation has also been associated with unacceptable environmental damage, however, those problems are now largely historical, as furnace technology and practices have advanced greatly since the 1960s.
However, the industry is now under real threat in this country, not from angry environmentalists, but from the recent growth and investment in mining in Australia, which largely reflects the extraordinary industrial expansion of China.
These two combined forces are now placing tremendous pressure on Australia’s metallurgical industry, as the demand for ore drives up the dollar, making it very difficult for our aluminium, steel and other base metal producers to compete in the global economy.
This dilemma is especially apparent in Geelong, where recent announcements from Alcoa are casting doubt about the future of the Point Henry aluminium smelter. This plant is particularly vulnerable because of its age, scale and product mix.

The Point Henry works started operating in 1963, and though it has improved energy efficiency and productivity with time, its electrolytic cells are comparatively small and have higher energy usage compared to new, larger smelters in the Middle East and China.
Over 50% of the plant’s 190,000 tonne per annum capacity is directed towards export and historically Alcoa’s two Victorian smelters have been the state’s largest exporter earners.
The potential closure of the Point Henry works would not only be a major financial setback to Geelong, but to Victoria as a whole. The Point Henry plant also has significant advantages over other aluminium plants in the world, such as good infrastructure, a well trained workforce, stable electricity supply, good environmental standards and direct connection to local industries.
Worldwide, Alcoa has recently closed plants in Italy, Spain and the United States, as it tries to rationalise its operation around the world and compete more effectively. In this context, a “review” is good news and an opportunity for government bodies in Australia to take stock and work with Alcoa to find a better future.
On the other side of the ledger, the two smelters also consume approximately 20% of the state’s electricity supply and so they also represent large contributions to the State’s greenhouse gas generation. Industry experts are somewhat divided on how important the carbon tax is to Alcoa’s thinking.
Certainly, in the short term, the high Australian dollar and strong competition from Asia and the Middle East in the export market are the greatest threats, whereas the structure of the new tax, and its rebates for energy intensive industries like aluminium, means that its effects will be delayed. The Australian Aluminium Council has argued that the carbon will adversely affect medium to long term investment strategies of companies.
I believe that as a nation we should be more proactively engaging with this industry. Australia has great natural resources for aluminium production, good infrastructure and world class scientific know-how to improve the situation in our favour. It is clear to many researchers in this field that using lots of energy to make relatively low grade products is not a winning strategy.
The long-term route to wealth for a country like Australia is to develop metallurgical industries where the products are quite distinguishable in terms of quality and value from what is being produced in Asia. In this scenario, lowering the energy use and overall greenhouse gas generation will only work to make the industry more sustainable.
Ironically, the knowledge to make these changes is right in Point Henry’s backyard, as there is top class research into aluminium production, products and properties at Deakin, Swinburne and Monash Universities, as well as the CSIRO laboratories in Melbourne.
For example, new materials for limiting energy losses from the aluminium process are under development at Swinburne. New alloys and composite materials are being researched at Monash and Deakin. Dr Akbar Rhamdhani at Swinburne is working with Dr Mark Easton at Monash to find ways to make very high purity aluminium. I personally head up a national consortium of Australasian Universities working with CSIRO on breakthrough technology for Aluminium production. Greater engagement from government and industry with such research bodies is required, if a more positive scenario is to be followed.
In the short term, I suspect that “survival” will be the strategy pursued by government and the metallurgical industry in this country. In the medium to long term, I suggest that innovation coupled with sustainability, is where we need to be.
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Comments (34)
David Arthur
n/a (logged in via email @fastel.com.au)
Thanks for this, Prof Brooks. Indeed, Australian metallurgical R&D is first class (how much of it is utilised overseas?).
Would Australia be better off if ores and concentrates weren't exported for processing overseas, but rather were processed in Australia with export of the finished metal?
The world as a whole would certainly be better off, because the decrease in shipping volume would significantly decrease fossil fuel use and hence greenhouse emissions.
So how do we encourage and facilitate…
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Gavin Moodie
Principal Policy Adviser (logged in via email @telstra.com)
Brooks ignores Point Henry's highly subsidised electricity supply, which is up for renewal in 2014.
Joseph Bernard
Director (logged in via email @parasoft.com.au)
Yet another causality of the high australian dollar and what then? we switch to products from countries that have no environmental programs?
Maybe the government should carbon tax imports from countries that have no such environmental constraints or program.. What we are then bypassing our climate change efforts by buying goods that have no carbon tax.. Otherwise we are just punishing Australian industry to death.
David Arthur
n/a (logged in via email @fastel.com.au)
The 2011 update of Geoff Carmody's "Consumption-based emissions policy: A vaccine for the CPRS ‘trade-flu’?" is published by CEDA, freely downloadable as part of "A Taxing Debate - the forgotten issues of climate policy" sets out a carbon tax that is applied across the Australian economy, including import.
Crtucially, Carmody's consumption-based tax does NOT adversely affect Australia's exports and trade-exposed industries. This makes it vastly superior to the CPRS, which was the context of his…
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Peter Davies
Bio-refinery technology developer (logged in via email @gmail.com)
Very sad that the bulk of comments for this important issue have degenerated into a debate on Nuclear energy. Even if it could be done, there are other consumer marketing perceptions that only the very brave, and indifferent to the outcome, would take on (glow in the dark soft drinks…).
A more realistic look in Alcoa's backyard reveals the "Green Triangle". Potentially, clean hardwood chips, (especially from acacias, but bluegum will do) can provide a petcoke alternative for the carbon arc furnace…
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Gavin Moodie
Principal Policy Adviser (logged in via email @telstra.com)
In your costing of nuclear power how long did you calculate its waste needed to be stored securely - the several thousands of years until the waste returned to its natural level of radioactivity, or just a few hundred years?
Peter Lang
Retired geologist and engineer (logged in via email @netspeed.com.au)
Gavin,
If you want to find out answers to these anti-nuclear talking points, I'd suggest you visit this site:
http://bravenewclimate.com/integral-fast-reactor-ifr-nuclear-power/
The short answer to your question is that the cost of nuclear waste management is included in the cost of electricity from nuclear plants.
But don't ask to have it all explained to you here. Go to the link above, do some background reading than ask genuine questions on that site. If you don't want to do that, well ...
Derek Bolton
Retired s/w engineer (logged in via email @gmail.com)
Peter,
The elephant in the nuclear costings room is insurance. Every nuclear-powered country on the planet caps the liability, and it's hard to find a decent estimate of what that amounts to as a subsidy. France keeps the details secret. Germany's cap is much larger than most, and the only European one that doesn't equate to exoneration.
I went to the BraveNewClimate site and found an essay on the topic. A lovely application of whitewash.
First, it points out that plenty of other industries…
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Peter Lang
Retired geologist and engineer (logged in via email @netspeed.com.au)
Sorry Derek Bolton, I don't know what picked to read but you certainly didn't go to that site with the intention to learn anything about the subject. There is a list of resources there. Did you do any study at all?
The stuff you are quoting is simply tripe spun by Greenpeace et al. It makes me guess you, as a policy adviser, must be one of the young kids in Julia Gillard's office or caught up in the anti-nuclear, ideological thinking of the Greens and Labor. The same groups who believe the…
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Derek Bolton
Retired s/w engineer (logged in via email @gmail.com)
Peter,
I take it from your response that you weren't actually able to find any flaw in my key points, namely:
1. the essay's discussion of insurance caps as subsidies for other fuel sources does not have relevance to the nuclear v. renewables debate.
2. the quote from the US DoE (hardly a hotbed of greenies, certainly not in 1992) which evaluated Price-Anderson as an effective subsidy of $3bn/y.
You might have done better by following through on that last figure. What does it turn into as c/kWh? I've not been able to find a figure for US nuclear energy production that far back. I found 840TWh for 2007, which would mean a mere 0.35c/kWh. But that's 1992 dollars, and production may have been rather less in 1992.
Peter Lang
Retired geologist and engineer (logged in via email @netspeed.com.au)
No, Derek Bolton, you have completely misunderstood, or misconstrued, what I said.
It is a concern that Policy Advisers act in such a way. These are the people who are supposed to be giving sound advice to governments, yet in the case of Labor, Greens and environmental NGO’s they are more interested in pushing their ideological beliefs. For some of them deception is no obstacle. For them, the end justifies the means.
I am not interested in playing silly games with anti-nuclear debating…
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Derek Bolton
Retired s/w engineer (logged in via email @gmail.com)
I have previously attempted to do the research as you suggest, and the point I came to was that a major unknown was the true cost of insurance (open market, no caps). This does not appear to have been reliably assessed anywhere. There are pro-nuclear sites suggesting it is quite low, anti-nuclear ones showing it as very high. I'm not inclined to put much faith in either. Governments with political reasons for wanting a nuclear industry don't seem to want to find out, or if they have found out…
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Peter Lang
Retired geologist and engineer (logged in via email @netspeed.com.au)
Derek Bolton,
“Keep your vitriol for those who earn it.”
This is the culture of the Left wing web sites, including the Conversation. The Lefties continually complain getting it back but dish it out all the time - Like Andrew Glikson continually screeching about “Deniers”, and most others giving advice to me about what I should day, but don’t attack those of their Ilk for the example they set. So I suggest you reserve your comments for those of like mind. Get them to clean up their act, and…
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Peter Lang
Retired geologist and engineer (logged in via email @netspeed.com.au)
Sorry Derekd Bolton, I made a mistake assuming you were a Senior Policy Adviser. I got you confused with Gavin Moodie. However everyting else I said stands.
Derek Bolton
Retired s/w engineer (logged in via email @gmail.com)
... and I found this recent link:
German report: full insurance would add from 20c/kWh to $3.40/kWh to cost of nuclear: http://www.bee-ev.de/_downloads/publikationen/studien/2011/110511_BEE-Studie_Versicherungsforen_KKW.pdf
Gavin Moodie
Principal Policy Adviser (logged in via email @telstra.com)
There is no such thing as low cost nuclear power, along with all its other problems.
Peter Lang
Retired geologist and engineer (logged in via email @netspeed.com.au)
Gavin,
That is a simplistic statement. The fact is nuclerar is by far the least cost way to supply low emissions electricity. If we want low emissions, we'll have to go nuclear. If we are not concerned about emissions, then we shold stick with coal until thosr suffering nuclear phobia get over it, or are bred out.
Shirley Birney
retiree (logged in via email @tpg.com.au)
I imagine those also suffering from "nuclear phobia," would be the 86,000 US victims who, since 2001, have received more than $7.4 billion from the US Department of Labour to cover expenses for the medical treatment they have endured (are enduring) for their radiation illnesses?
And how does one compensate Mother Nature for Padcucah's Uranium Enrichment plant in the US which is the largest single emitter of ozone depleting CFCs in the nation?
The carnage being perpetrated on the environment by this industry is significant, the details having been published on this forum previously. What excuse does BNC use for obscuring the officially documented details or is the nuclear debate on BNC all to do with the filthy lucre?
Peter Lang
Retired geologist and engineer (logged in via email @netspeed.com.au)
Thank you for this interesting article.
I understand that even with state of the art plants, they still use a great deal of electricity. If my understanding is correct, then I wonder if you could please comment on this suggestion:
Aluminium needs cheap electricity. With governments intent on shutting down brown coal power stations in Victoria, replacing them with more expensive gas generation and imposing a carbon tax on top of electricity prices, there is no way aluminium smelting can remain…
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Peter Lang
Retired geologist and engineer (logged in via email @netspeed.com.au)
"Here I review the paper “Simulations of Scenarios with 100% Renewable Electricity in the Australian National Electricity Market” by Elliston et al. (2011a) (henceforth EDM-2011). That paper does not analyse costs, so I have also made a crude estimate of the cost of the scenario simulated and three variants of it.
For the EDM-2011 baseline simulation, and using costs derived for the Federal Department of Resources, Energy and Tourism (DRET, 2011b), the costs are estimated to be: $568 billion…
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Derek Bolton
Retired s/w engineer (logged in via email @gmail.com)
I'd like to see the numbers on the relative efficiencies. Aluminium metal is inherently a high energy product (which is why recycling is sensible). The main reason the industry exists in Australia, despite our high dollar, high wages and old industry, is the extremely cheap electricity.
It doesn't matter how efficient you make the process, the product is underpriced today. It needs to be made with low-emissions energy or pay a substantial carbon price.
So the root problem is that other countries making it will do so without such an impost.
One possibility is to make the process more flexible. Wind energy is cheap, storage expensive, so ramp up when the wind blows.
Joseph Bernard
Director (logged in via email @parasoft.com.au)
Other countries have industries because they have under priced labour costs and currency which will also change as time progresses.
The cost of setting up an industry and infrastruture in an invrestment in our future which should not be just abandoned. surely
Gavin Moodie
Principal Policy Adviser (logged in via email @telstra.com)
Insurance companies refuse to insure against the risk of nuclear power without legislated indemnity or capping of their liability. They therefore judge the risks of liability to be too high or too uncertain to set a premium. To suggest that they are somehow suborned by greenies is absurd.
I suggest that those who feel the need to bolster their position with personal invective review the Conversation's community standards. You might also reflect on the point of your post. If it is to vent some personal anger or frustration go kick a footy in the park. If it is to persuade people to your view reflect on how effective insulting your interlocutor may be.
Surely the ultimate point of contributing to sites such as the Conversation is to promote a better world, and surely the Conversation above all others seeks to do this by evidence and rational argument rather than by flinging irrational insults.
Peter Lang
Retired geologist and engineer (logged in via email @netspeed.com.au)
By the way Gavin, can you explain why the Government has underaken to carry all the risk of escape of CO2 from CCS, but if you had your way would not cover any risks from a nuelcar plant despite a much lower level of risk.
Aslo why do you argue that the propbabilty of nuclear accidents is low but the consequence is high? What is the basis for you arguing that the consequence is high? Given that there have been three accidents in 50 years in commecial nuclear power stations involving radiation…
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Peter Lang
Retired geologist and engineer (logged in via email @netspeed.com.au)
"rather than by flinging irrational insults."
If that was the case you and those of like mind would not be continually screching "Denier" and the rest of the investive an innuendo they use much of the time. Of more soignificance, and demonstrating yours and their bias, you would be aiming it those who of your ideological persuasion who dominate the site. But noe of you see fit to try to clean up your own act.
Spare me your "advice".
On the issue of insurace, Iv;e addressed it above. If you want to understand the relative costs of the technologies do the homework, don't just pick on one made up thing that suits your case and try to make an issue to support your phobia.
Gavin Moodie
Principal Policy Adviser (logged in via email @telstra.com)
I don't know why the Australian Government is carrying all the risk of escape of CO2 from carbon capture and storage. Perhaps because the technology is unproven.
I don't argue that the probability of nuclear accidents is low but the consequence is high. I expect you are confusing me with someone else again.
Peter Lang
Retired geologist and engineer (logged in via email @netspeed.com.au)
What do you mean by "the consequence is high"? Compared with what? What is the basis for your statement? Did you look at Figures 1 and 2 here (and the accompanying text that explains what they mean)?
http://bravenewclimate.com/2010/07/04/what-is-risk/
Joseph Bernard
Director (logged in via email @parasoft.com.au)
Whoops, Fukushima, your soaking in it!
no problems, should see the the size of the mushrooms growing near the core, almost big enough to be seen from space and it glows in the dark.. No need for lights anymore, bonus. Pity everyone has to move.
So if the quake does not crack you up? Just watch the evil fast breeder of the west - Monju.. Just when you stop and take a breath, well then quicker than you can say.. Faster Breeder technology, another accident happens.. http://www.theage.com.au/environment/fastbreeder-reactor-faces-closure-20120201-1qtg2.html
Seems like everytime there is an accident, the stakes go up.
Mark Duffett
(logged in via Facebook)
Saying 'Monju' as if it's shorthand for 'evil fast breeder reactors are dangerous and evil' etc. only reveals the ignorance and alarmist motivation of the author. The problems with it have been primarily administrative and political, not technical. The truth about Monju is here: http://bravenewclimate.com/2010/09/18/ifr-fad-7/
Joseph Bernard
Director (logged in via email @parasoft.com.au)
Maybe follow the thread and take note that there seems to be an idea that Nuclear is totally safe and there is little to no consequence?
Obviously we live in a world where accidents do happen and the article provided is a recent article which serves as evidence to that fact.. And the consequences in nuclear industry are extremely high.. another fact..
Peter Lang
Retired geologist and engineer (logged in via email @netspeed.com.au)
Joseph Bernard said:
"Maybe follow the thread and take note that there seems to be an idea that Nuclear is totally safe and there is little to no consequence?"
That is the sort of misleading, distorting, dishonest statement that is typical of the ant--nuclear activists - another example of Alarmists. Alarmist about one thing tend to be alarmists about many things. They are just Alarmists, catastrophists, distorters of the truth by nature.
I don’t recall anyone saying "nuclear is totally…
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Shirley Birney
retiree (logged in via email @tpg.com.au)
Peter Lang, thanks for shedding light on your lack of substance. And thanks for yet another link to the BNC hymn book. When can we expect yet another plug for Tom Blees’ book on a radioactive planet? I daresay it gives me unspeakable pleasure to allude to BNC chief’s shockingly inaccurate (nay embarrassing) account of the Fukushima disaster for which he did at least apologise after the world’s first triple meltdown:
http://www.mayomo.com/99917-fukushima-radiation-prof-kodama-angry-about…
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Mark Duffett
(logged in via Facebook)
What a farrago of misinformation, misrepresentation and character assassination.
Shirley Birney
retiree (logged in via email @tpg.com.au)
Unfortunately Mark Duffett your one-liner, in patterns of effective argument is invalid (and fallacious!)