Yet they are essential for the nation's economic survivalAny country trying to manage its economy on commodity exports and service industries alone will experience grave financial difficulties in the new millennium.
When a major infrastructure project is to be sited west of the Blue Mountains in New South Wales it has the potential to reverse a thirty year trend which has seen inland Australia being emptied of people through loss of jobs and erosion of living standards.
Historically the first home of Australia's steel industry, the pretty little town of Lithgow looks set to embrace a major three billion dollar aluminium smelting project.
At a public meeting on June 8 in the local RSL Club auditorium around 800 local citizens enthusiastically endorsed the concept which is now in an advanced state of planning.
Aust-Pac Aluminium and Multiplex Construction are the joint venturers. In their presentation at the meeting they indicated that the completion and acceptance of the final Environmental Impact Statement during 1999 could lead to concluding feasibility studies by the end of this year and commencement of construction by June 2000. It is claimed that the smelter will be comparable with the most modem in the world and will produce 450,000 tonnes of aluminium per annum.
The Federal Member for Calare, Peter Andren MHR, has gone on record to state - "The Aust - Pac Aluminium project offers economic security to the Lithgow district and also helps secure the industrial future of the region. The ready access to rail, water and gas on a dedicated Minerals and Processing Park makes the Aust-Pac plant a natural addition to Lithgow's proud industrial history".
The implementation of the aluminium smelter project is, of course, subject to a detailed and favourable technical, financial and environmental assessment. A key element in this decision making will be the price of the electricity to be used in the smelting process. A low electricity price will give Lithgow aluminium a financial edge in a competitive global market.
According to Gerard Martin MP, the State Member for Bathurst, the Lithgow aluminium smelter "has the potential to deliver the biggest economic boost to the Central West region of any project over the last twenty-five years". He claims
"It is no exaggeration to say it has unamirnous support in the local communities and provides the solid economic base necessary to create meaningful employment opportunities for the region". Direct employment in the operating smelter is estimated to be around one thousand jobs.
The "flow-on" effect of the smelter operation to the local business communities could create another five thousand positions in employment ranging from business services, transport, electricity generation and public administration to trades, restaurants and accommodation.
The transport of bauxite, aluminia and aluminium would bring employment benefits to Port Kembla Port in the Illawarra as well as to rail and road freight companies operating between the dedicated port facility and Lithgow.
In terms of mineral wealth per capita, Australia leads the world. The time appears to be right to increase aluminium production from Australia's enormous bauxite resources. These are reckoned to be about 3,000 million tonnes of economically recoverable ore with a present annual production of 45 million tonnes. The present commodity export value of Australian alumina is around $AUS 2.7 billion per annum and that of Australian aluminium around $AUS 2.3 billion.
But in the highly competitive environment of the new millennium abundant and high quality bauxite will not of itself ensure success for the proposed Lithgow facility. Many South East Asian countries - especially Indonesia with low labour costs and sizeable domestic markets for aluminium products, would like to embark on a smelter project. Indeed, some believe that the genesis of the Lithgow project can be traced back to that country.
As Karl Stewart, Chairman of Aust-Pac has noted "The timing of an agreement on a world competitive energy price. is important. This unique opportunity to develop a major
regional industry will disappear if our timetable is overtaken by other overseas smelting initiatives".
Australia desperately needs new value adding industries. Lithgow now has a narrow window of opportunity to regain her former glory as a major metal producer replacing steel billets with aluminium ingots. At present the project is held up to protracted negotiations over electricity pricing. Some sources fear that if the NSW Government and the electricity industry vacillate over this issue much longer, the aluminium production facility will indeed disappear overseas. An emerging contender is the Gulf state of Dubai.