The gas shock rolls on:
Speaking after Glencore warned it may shut its Mt Isa copper smelter and its Townsville copper refinery within a year, big manufacturers like BASF and the Tomago aluminium smelter respectively warned there was limited chance of new investment in Australia and that further job cuts were likely…BASF’s Australian and New Zealand chairman David Hawkins said Glencore’s suggestion that Australia’s investment climate had “materially changed” rang true in terms of energy prices.
More manufacturing businesses going under:
Industrial gas buyers have voiced worries that the planned Domestic Gas Security Mechanism will not rein in soaring prices on the east coast to an affordable level, despite assurances by the government.
…But buyers such as Weston Aluminium, Qenos and others have expressed concern that the mechanism will do little to do bring down prices in the short term. Asking contract prices for gas have surged to $20 a gigajoule for some customers, more than double the level of expiring contracts.
…Sources say that some of Santos’s existing domestic gas customers, including steelmaker Arrium, are feeling side-effects from the talks because Santos has put potential increases in domestic sales contracts on the table as part of its negotiations with the government. Some of the customers are thought to be worried about speaking out for fear of imperilling their already fragile gas supply position.
Serious thought should be given to nationalising Santos. This behaviour is clear discriminatory pricing and is in violation of all of the commitments it made prior to constructing GLNG. If it’s going to fuck over the entire east coast economy like this – with no remorse whatsoever – then deeply punitive action is warranted. Local gas prices remain miles above the same gas in Japan:
A national gas company could then force a solution on GLNG partners, benchmark the local price for the other cartel members and force develop reserves.
This gouge is destroying the national interest.
