Boyne Smelters Limited (BSL) today made a submission to the Federal Government’s Renewable Energy Target (RET) Review, calling on the Review Panel to eliminate the current $25 million per annum cost of the RET.

In its submission, BSL’s General Manager Joe Rea said the Australian aluminium industry was facing unprecedented challenges to its viability from depressed aluminium prices and the continued strength of the Australian dollar. The aluminium price today in Australian dollar terms is more than 20 per cent lower than it was during the global financial crisis and 40 per cent lower than the long-term average.

"Manufacturing aluminium is highly electricity intensive and, as such, is highly exposed to the cost of the Renewable Energy Target (RET). Indeed, even after the current partial exemption the RET still costs BSL around $25 million per annum…Put simply, BSL cannot afford to continue to pay this subsidy to renewable energy generators and is seeking a full exemption from the RET burden," Mr Rea said in the submission.

Mr Rea urged the Review Panel to support this 100% exemption from the RET on the most exposed manufacturing industries such as aluminium smelting. Aluminium is a globally traded commodity and, as a result, the owners of BSL have no ability to pass these costs through to their customers, he said.

"BSL has limited ways in which costs can be reduced and we have been actively reducing workforce numbers and reducing capital expenditure to remain viable," Mr Rea said.

"The continuation of these RET costs can only be offset by further reducing workforce and reducing capital expenditure."

Fast Facts

• Boyne Smelters Limited (BSL) has been operating since 1982 and is Australia’s largest aluminium smelter.

• The smelter is situated in Central Queensland and produces more than half a million tonnes of aluminium each year.

• The operation employs around 1,000 people and indirectly supports about 6,700 jobs nationally with 3,000 of these jobs in the Gladstone region.

• The smelter contributes more than $1.4 billion annually to Australia’s Gross Domestic Product with more than half of the economic benefit of the smelter operation going to the Gladstone region.