FEARS Latrobe Valley workers will be “left in the lurch” have intensified following news this week Energy Brix briquette operations are being “reviewed”, leaving 200 local jobs hanging in the balance.
Managing director of Mecrus, contracted to manufacture briquettes at Energy Brix, Barry Richards told The Express the local business could soon become “collateral damage” of the carbon tax.
He called on the Federal Government to support a structured plan to see the business transition to a newer, more efficient facility allowing it to expand briquette exports, instead of “just hitting us over the head with a cricket bat”.
The Federal Government came under attack from unions, local members of parliament and plant management this week when a statement from Industrial Energy, a HRL subsidiary, that the future of its brown coal briquette manufacturing and supply business was under review as a direct result of the carbon tax.
Industrial Energy said the carbon price would threaten the supply of steam from Morwell’s Energy Brix power station, used to manufacture briquettes.
While the Federal Government said $27.7 million had been allocated to HRL this financial year to help offset the carbon tax impact at the plant, Industrial Energy indicated it was not enough to sustain briquette manufacturing in a “business as usual” scenario.
Mr Richards said if further government support could not be secured it was likely briquettes would become too expensive for the business customers, therefore “not viable economically and we would have to close”.
He said Mecrus had 60 direct local employees but also used at least 10 contractors and 14 drivers daily while purchasing equipment and materials from local engineering workshops and suppliers.
“The ramifications (of a closure) are huge,” he said.
Construction, Forestry, Mining and Energy Union mining and energy division Victorian district president Luke van der Meulen said if there was no steam provision and they totally shut down there would be no jobs there at all.
While about 200 direct and indirect jobs were at risk, he said there were 45 CFMEU workers on site at the power station and the union would seek to protect them and Mecrus workers at the briquette factory.
“There is a lot of talk about 2016 transitioning but we have to do something about job loss as early as July this year,” Mr van der Meulen said.
“We have said that if any of our members lose their jobs as a result of the carbon tax we will call a meeting of our entire membership and anything might come of that…(Prime Minister) Julia Gillard came here and said she would not leave the Latrobe Valley in the lurch…if Energy Brix closes in July and those jobs are lost we consider we have been left in the lurch – and that’s before anything even happens at Hazelwood,” he said.
Energy Brix power station, owned by HRL, has entered into talks with the Federal Government as part of its ‘contract for closure’ scheme, aimed at removing up to 2000 megawatts of coal-fired power generation from the system by 2020.
However if forced to close earlier, it stands to lose millions in potential compensation.
“They are very keen to get the ‘contract for closure’ deal up,” Mr van der Meulen said.
“If the carbon tax means they are economically unviable from 1 July and they have to close without a closure package it would mean any number of millions of dollars they would not be getting.”
Mr van der Meulen suggested this week’s Industrial Energy announcement could have been a ploy to secure more Federal dollars for its business.
“The difficulty we have is that, while we have a real concern for our members’ direct jobs, and the community, HRL seem to be masters at getting government funds from the state and federal governments and we don’t want to be a mechanism for Energy Brix to get a lot more compensation and then close in a few years anyway,” he said.
If, however, Energy Brix is forced to close either of its operations in the immediate future, the CFMEU said it sought agreement with the Valley’s other power generators to absorb redeployed Energy Brix workers.
Mr van der Meulen said a proposed redeployment plan would be workable but required the support of other generators.
When The Express asked Loy Yang Power and IPR-GDF SUEZ Hazelwood about the proposal, neither would comment.
It is known, however, that Hazelwood is currently offering 30 departure packages to its own workforce and has also sought inclusion in the ‘contract for closure’ scheme.
This week’s news drew an angry response from Federal Member for Gippsland Darren Chester who said he was “bitterly disappointed but not surprised” that major companies were “assessing their financial viability in the wake of the carbon tax”.
“It is extraordinary that the Federal Government is hell-bent on introducing this tax without undertaking any analysis of the full impact on the Latrobe Valley and I am disgusted that the union movement has accepted reassurances from government ministers without any guarantees regarding jobs for local workers,” he said.
Federal Resources and Energy Minister Martin Ferguson said Clean Energy Regulator assessments could potentially see further assistance worth more than $100 million in free carbon units go to Energy Brix.
It is believed he was referring to allocations already announced for future financial years.