LF,

I will try and use small words.

Hydro's carbon emissions from the process are small in the order of $4m for which they get free permits. What is killing the plant is the $40m increase in the price of electricity for which there is no rebate.

This is based on 16MWhr/ton at $21/MWhr increase for an annual production of 120 000 tons. Emission permits can be given for emissions not electricity consumption.

The cost of electricity is a tax write-off for all businesses.
The demand for aluminium has diminished globally that is the
reason why the company is closing. Production of aluminium
is irrelevant if there is no demand for the product as the
Directors of the Company have repeatedly stated.

The Opposition pushes its agenda and ignores the information
that the government and the media present. They are out of touch
with reality and no amount of persuasion is going to change
this because they are determined to disrupt the governing of
this country. One wonders if they have any interest in this
nation's future.

Lexi,

Electricity is an expense as in Income - expenses = profit, and tax = 30% x profit. Thus electricity is not a tax write off in the normal meaning of the term.

Demand for aluminium has dropped world wide. The question is whether is whether it is made in Aus or elsewhere. The change in emissions is zero.

The remaining smelter in NSW, Tomago, will pay no more for electricity than it does now after July 1 for several years and nor would have Kurri-Kurri with its electricity contract in place until 2017 (a problem being it couldn't get assurances beyond that). In any case, were contracts not in place, on form NSW would likely have subsidized any CT impact: http://www.climatespectator.com.au/commentary/nsws-great-big-coal-subsidy-scandal

This thread is about whether the CT is closing manufacturing. So far only coal-smelted aluminium looks threatened over the medium term as as electricity contracts mature, as is the case in other countries except for India and China. Even in China the the real (unsubsidized) production cost is well above current low aluminium prices due to glut, so it is likely they will recover to the point coal smelting is viable by the time electricity contracts need renegotiation.

The scare-mongering over aluminium and even far less energy intensive manufacturing is purely political and unless Abbott, Pyne et al have a surprise up their sleeves we seem destined for the public to see that well before the next election. In the meantime, the dollar is going the right way, as are interest rates, both being the real issues affecting manufacturing.

LF,

No aluminium is smelted using coal, all aluminium smelting uses electricity.

As for the power contract with NSW owned Macquarie generator, I can only find some indication that the price it buys power for is in the region of $27/MWhr presently. The carbon tax will nearly double this, but whether the contract with the generator allows them to pass this on is unclear. If the generator cannot pass this on, the costs will be paid by the NSW tax payer. What is clear is that when it does, things will look bleak for Tomago and its 1200 employees.

As for the quick cash grab by NSW labor, I agree that it was terrible policy.

*One wonders if they have any interest in this
nation's future.*

Lexi, the real question is, how much have people like yourself
simply been hoodwinked by Govt spin.

Forget aluminium for once. If you were a milk producer or a meat
producer, the carbon tax will cost you thousands. Most of your
income will come from overseas in the form of milk powder or meat,
which is exported. All that the nation is doing, is ripping off
some very efficient small time operators, already battling the high
Dollar and ever increasing Australian costs. Its going to make
things even tougher, it what are already extremely tough industries,
which people like yourself, simply do not understand.

It is hardly in the nation's interest, if these small time
operators throw in the towel and you land up even more dependant on
Australian digging holes, in order to pay architects and libararians.

I fully accept that SM is all about spin, but I also see the reality
of what the carbon tax will do to tens of thousands of small time
operators, who will vote with their feet and give up on what they
are doing, because of the ignorance of people like yourself.

If the carbon tax was costing librarians a hundred bucks a week off
their salaries, you would be outrgaged. If it costs dairy farmers
the same, well it must be for the good of the country! You are
a sucker of Govt spin, you really are.