$50m lifeline

Morwell’s ailing EnergyBrix coal briquette factory has been thrown a lifeline, landing $50 million in Federal Government funding, enabling it to continue operating for another two years.

This comes as the factory’s parent company, HRL, continues with an internal restructure of operations, which could see up to a quarter of its power station workforce shed, as it moves to wind back electricity generation.

In announcing the two-year ‘restructuring plan’ on Friday, the government said the funding would allow the briquette factory to maintain production “for a limited period of time” so its 50 Australian customers could transition to cleaner fuel sources.

In a statement from key government ministers, the plan would ensure EnergyBrix was better equipped to meet “site rehabilitation obligations” and “employee entitlements”, however further details surrounding the payment have not been released.

The funding announcement has received mixed responses; while the power industry union has labelled it as a “saving grace” for the ageing operation, albeit temporarily, the Federal Opposition has labelled the funding as “hypocrisy”.

Federal Member for Gippsland Darren Chester said the funding injection would not have been necessary if it was not for the carbon tax, and was the first proof “severe” employment cuts would be inflicted on the Valley by the carbon pricing policy.

“There’s no reason for celebration when the Australian Government is wasting taxpayers’ money on businesses hurt by a flawed policy,” Mr Chester said.

The briquette factory requires steam produced from the neighbouring EnergyBrix power station, which according to contracted operator Mecrus, will become unviably expensive under the carbon tax.

However Construction Forestry Mining and Energy Union mining and energy division secretary Greg Hardy said without the funding injection, the power station would close down all together, taking the briquette operation with it.

“EnergyBrix’s closure will not be an outcome of carbon pricing … it’s a very worn down and inefficient operation, and the company have been planning to wind down operations for some time now,” Mr Hardy said.

Mr Hardy said $27.7 million awarded to EnergyBrix power station by the Clean Energy Regulator as part of transitional power generator compensation payments was a saviour for the “extremely broke” company, and had “kept it afloat”.

A HRL spokesperson said EnergyBrix’s associated companies welcomed the most recent announcement, and said steam would continue to be supplied to the briquette factory for the two-year period.

Meanwhile, moves to restructure HRL’s operations continue; The Express understands 30 voluntary departure packages have been taken up among the power station’s workforce, with affected employees believed to have been notified of their final working dates over the weekend.

According to a power station worker, who wished to remain anonymous, the VDPs would take the shift workforce from 45 to 25 positions, and said employees were going through a “fairly distressing time”.

EnergyBrix power station has applied for the Federal Government’s ‘contract for closure’ process, which will pay selected brown coal generators to decommission generation capacity; however, an announcement on contracts, which was due 30 June, was extended indefinitely on Friday.

The worker said he was not sure at what capacity the power station would continue to operate over the next two years, or “if there will be any power generation at all”.

“Negotiations about this latest funding, and everything about the restructure have been very secretive; not a lot of us know what’s really been going apart from the managers higher up,” the worker said.

“This (restructure) has been a fairly ugly affair; we’ve been a tight working group, and have jumped many hurdles over the years.”

The worker said the funding announcement was the government in acting damage control.

“If we were to suddenly shut, and leave all of the briquette customers hanging, it would look really bad for the government.”