Monday, February 21, 2011
Bluescope Steel chief Paul O'Malley slams carbon tax plan
February 22, 2011 12:00AM
By Geoff Easdown, From: Herald Sun
BLUESCOPE Steel chief Paul O'Malley has panned the Federal Government's plan for a carbon tax, branding it unfair, discriminatory and "not good" for the industry.
He argued the Government would restrain Australian manufacturers if imported products were allowed to land free of any carbon-related impost.
Mr O'Malley aired his views at a press conference after the steelmaker revealed a $55 million first-half loss due to higher costs and lower domestic demand for fabricated product. He conceded Bluescope had been through tough times.
The disappointing first half followed a $28 million loss in the previous corresponding period.
Bluescope Steel shares were hammered yesterday, falling more than 6 per cent when the market opened.
The accounts showed that during the six months to December 31, Bluescope took a $77 million writedown of goodwill on its distribution business and a $68 million write-back on its Coated China assets.
Mr O'Malley said there were signs of stronger industrial activity in the developed world this year.
"However, steel supply, excluding China, remains in an oversupply position," Mr O'Malley said.
"We need to see GDP in the developed world improve and drive increased steel demand, to narrow the supply-demand gap."
Referring to the proposed carbon tax, he said Australian manufacturers would face competitive restraints.
"From a policy perspective, there is a bust between the rhetoric and reality," he said, pointing out that European manufacturers avoided a carbon tax by shifting production.
Mr O'Malley revealed that the company was looking to mine its own raw materials because it was now consuming more than 8 million tonnes of iron ore and 4 million tonnes of coal annually.
An interim dividend of 2c a share, fully franked, will be paid on April 4 to shareholders registered by March 4. Bluescope shares closed almost 3 per cent, or 7c down, at $2.30.