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Billionaire mining magnate Clive Palmer says Australia’s south-eastern states should be developed to provide downstream processing for the big mining states.
Palmer said by encouraging downstream processing in Australia the Government could mitigate the effects of the two-speed economy.
“We should be taking the resources that we have in this country to the states that don’t have the resources and setting up downstream processing,” he said.
“I believe we should have more of that sort of activity taking place in places like Victoria, South Australia and we need policy setting that allows that to happen.”
Currently most Australian mining companies, particularly WA’s iron ore miners, send their raw material offshore with little processing.
Palmer will next year also be an iron ore exporter, and while he did not commit to downstream processing on his own operations, he urged the Government to make changes to facilitate the move.
He said encouraging downstream processing would ensure more positive effects from the mining boom flowed to other sectors of the economy.
“We see our economy is very strong but many of our citizens are suffering,” he said.
Most attempts to encourage downstream processing in Australia have been unsuccessful.
The closing of Rio Tinto’s HIsmelt pig iron plant in Perth, and BHP’s HBI plant in Port Hedland are two examples of a long tradition of failure in the sector.
Earlier this year a Rio Tinto spokesperson told Australian Mining Australia was “full of downstream projects that didn’t survive economically”.