Brenda Strong

Aluminium body hits out at LNG industry due to "thin" market

AUSTRALIA'S peak body for aluminium production has hit out at the LNG industry, saying developments are serving international interests at the expense of the Australian market.

Miles Prosser, executive director at the Australian Aluminium Council, has claimed local gas buyers, such as alumina and aluminium producers, are the victims of "a thin and shallow market."

That's despite a promising future for LNG, underpinned by over $200 billion worth of LNG developments across Australia, including three on Curtis Island in Gladstone harbour.

Gladstone is also home to the world's largest alumina refinery, QAL, and across QAL and Rio Tinto Yarwun, nearly 2000 people are employed in the industry.

"Claims that there is plenty of gas available and that the market will find a solution are simply wishful thinking when domestic users struggle to find suppliers in a thin and shallow market," Mr Prosser said.

Australia's alumina and aluminium sectors use over 140 petajoules of gas annually - while Australia produced 2270 petajoules of gas in the 2011-12 financial year.

"The absence of a deep and efficient gas market makes it extremely difficult for domestic industry to secure long-term gas contracts, which is stifling investment decisions," Mr Prosser said.

Last month, a report from the Australia Institute showed tradition industries in the Gladstone region would pay an extra $2.9 billion for gas in the next decade, as LNG export drives up prices.



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