Kelly not betting on chip mill’s future

Eden-Monaro MP Mike Kelly was in town on Friday to meet with voters and members of the Eden Chamber of Commerce and Port of Eden Marina (POEM) group.

While painting his vision for Eden-Monaro as a national flagship of renewable energy (see story page 2), Dr Kelly said he doubted that the South East Fibre Exports (SEFE) chip mill had much of a future.

“We need to diversify the base here. There is a very uncertain future for the chip mill. If you were a betting man you wouldn’t put money on their survival,” he said.

“If the chip mill fell over tomorrow, I’ve been working on a solution.

Because of the Clean Energy Future program, we have a number of start-ups around the region using new technology. AKT Evolution is looking to expand their high technology recycling business and is prepared to make Eden the hub for their international effort. 

“They’ve said to us if the chip mill fell over today they would take over the site. If that doesn’t happen, we’ll grow the business (AKTE) anyway.”

AKT Evolution is an Australian owned and operated waste management/recycling company that extracts nutrients from waste products with unique and patented technology, the Kix dehydrator. The chairman of AKTE - and the scientific brains behind the Kix dehydrator - Joe Ruiz-Avila lives in Cobargo. A growing interest both overseas and in Australia in the Kix dehydrator has positioned the company for expansion. Back in February the company forecast double digit growth of at least 20 per cent per annum.

However this has all come as news to SEFE general manager Peter Mitchell, who acknowledges that they are still doing it tough, but they are working hard to secure a future through exporting iron ore from Eastern Iron.

“I heard Kelly said in a meeting last week in Bombala we (SEFE) would be finished by September.

“I think he’s being reckless. He’s making assumptions about our future without talking to us.

“We’ve got no intention of shutting down,” Mr Mitchell said.

“Things are still tight. The market prices (for wood chip) are pretty poor.

“But there’s a chance with the iron ore that the overall business can remain in the black. And there hasn’t been any direct statement from Nippon that without the iron ore we would necessarily shut down.”

On December 6, 2012, it was announced that SEFE’s wharf facilities had been identified as the number one option for exporting iron ore from a new mining project in Nowa Nowa, Victoria.

Mining company Eastern Iron Limited announced through the Australian Stock Exchange it had completed a scoping study into the Nowa Nowa project and was moving into the feasibility stage.

The $37 million mine would export more than 800,000 tonnes of magnetite iron ore per year using SEFE’s ship loading facilities. 

Peter Mitchell says progress with the iron ore export project is positive and moving quickly.

“We’ve been to Gladstone looking at loading and we’ve been to Townsville looking at loading.

We’re getting nothing but good vibrations about this project.

“The feasibility study and the approval processes are running parallel. Eastern Iron are trying to fast- track the whole process.”

Dr Rob Bain from the POEM group, an ex-executive director of the National Association of Forest Industries for 11 years, also expressed concerns at Dr Kelly’s comments on Friday.

“If SEFE goes, Blueridge (timber mill in Eden) will close at the same time,” he said.

“That would mean a massive loss of local jobs. It’s not just the workers on the plant (SEFE) - for every one of those there are five or six others in the community.

“If you couldn’t sell the low quality logs (for wood chip), the economics of harvesting and regeneration doesn’t work. Even from a Green point of view, if you stop taking the chip logs and you subsidise Blueridge (to keep it open) you will degrade the forests down here.”

Mike Kelly said: “About 300 jobs hang off those 40 (chip mill) jobs. If we bring all those other things online they will be completely subsumed.”

“You can’t see SEFE surviving on iron ore alone. If it does, well and good, but we need to be ready in case the Japanese pulled the plug.

If they did tomorrow we could put AKT in there tomorrow.” 

Peter Mitchell remains unimpressed.

“Kelly hasn’t spoken to me about developments on the iron ore front.  The only call I got from him was just after Christmas and he asked how the (planned) trip to Japan went to talk about SEFE’s future with the shareholders. I told him we didn’t actually go to Japan but we had the opportunity to run at least another 12 months.

“IF – that’s a big if - there was some decision to phase out it wouldn’t happen overnight. We’ve got 5000 hectares of plantation that we would have to utilise and we’ve got other obligations.

“In the worst case scenario it would be a number of years and I don’t think that’s likely at this stage. The Japanese understand we’ve got contractual obligations.”

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