Big industries threaten to shun SA over its unreliable energy record

A PEAK manufacturing body has weighed into the power ­debate by backing the Federal Government’s concerns that big industry will shun South Australia over its unreliable energy record.

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A PEAK manufacturing body has weighed into the power ­debate by backing the Federal Government’s concerns that big industry will shun South Australia over its unreliable energy record.

On the day full power was restored to Arrium’s Whyalla operations — a fortnight after the statewide blackout threatened its future — Manufacturing Australia said the crisis was extremely damaging to the state’s reputation.

Chairman Mark Chellew said: “The lack of stability and high power prices in SA are threatening both existing and future manufacturing investment in a state already reeling from automotive closures.

“New manufacturing investment is particularly at risk. Energy costs are one of the key input costs in manufacturing.

View of Adelaide blacked out from Windy Point. Picture: Bianca De Marchi

“The more expensive and unstable our energy system, the more difficult it is to make the economic case for building new manufacturing plants, or making necessary reinvestment in existing plants.”

Industry heavyweights BHP and OZ Minerals are yet to regain full capacity, with Olympic Dam’s surface operations in maintenance mode and Prominent Hill’s situation “very fluid”.

In Parliament on Monday, Prime Minister Malcolm Turnbull said the SA Government had failed to “keep the lights on”, which wasn’t “terribly helpful if you want to revive your manufacturing base”.

“Come to SA and pay more for your electricity than anywhere else — what an extraordinary proposition,” he said.

Australian Industry Group SA head Steve Myatt remains reluctant to quantify the economic impact of the power outage, saying only that it “will run well into the tens of millions, if not substantially more”.

“We believe the state produces approximately $400 million per day of goods and services and although the entire state was not sidelined for 24 hours, parts of the state have been severely inconvenienced for a lot longer than a day,” he said.

An Arrium spokesman estimated the company had lost in the “ballpark of $30 million”.

BHP and OZ Minerals will reveal their financial hit at upcoming quarterly meetings.

“We’re not in a position to detail the overall cost impact ... it’s still a very fluid situation that’s effectively out of our hands,” an OZ spokesman said.

Late on Tuesday ElectraNet said the restoration of power lines near Melrose and Blyth had allowed additional load to industrial customers.