July 3, 2014, midnight
A NICHE steel making industry in the Latrobe Valley, processing iron ore sourced from East Gippsland, is a more realistic prospect than a national mineral processing hub, as suggested by mining magnate Clive Palmer this week.
That was the assessment of Gippsland Regional Plan Leadership Group's chair of economic development Jon McNaught, who believes a more localised version of Mr Palmer's grand vision has viable potential in the Valley.
Earlier this week the Herald Sun reported on plans by the leader of the Palmer United Party to create a "downstream processing" hub in the Latrobe Valley.
Mr Palmer said copper, nickel and steel could be shipped from other states into Victoria via upgraded transport infrastructure, where it could be processed in high-tech manufacturing plants in the Valley before export at a significantly higher market value.
However the 'plan', made in the lead up to the Victorian state election in November, where Mr Palmer has been tipped to run numerous PUP candidates, has been met with widespread scepticism.
"I think in terms of an idea to get people talking about the possibilities for the Valley, it's excellent, but in terms of feasibility it would need to have a bit of work done, and to be honest I don't think too many people have done the numbers on this," Mr McNaught said.
"Clive's talking about many millions of tonnes, which would need some seriously major upgrades to facilities and infrastructure.
"But let's say we had a million tonnes of iron ore being put through a Valley steel mill every year - we could handle that with the existing infrastructure we've got without massive upgrades.
Prospecting company Eastern Iron hopes to establish an iron ore mine in Nowa Nowa where it plans to tap into a 10-million-tonne deposit.
"Eastern Iron is the one company that's in the public about this, but there's a lot more iron ore out that way," Mr McNaught said.
Acknowledging a recent dive in the iron ore price, Mr McNaught said it made even more sense to process before export.
He said with a number of emerging companies seeking to process brown coal for Pulverised Coal Injection in the steel manufacturing process, and steam produced by local power generators, steel processing was emerging as a "natural fit" for the Latrobe Valley.
"In Australia where electricity prices are going up and labour prices are high - no one can deny steel making has some real hurdles to face," Mr McNaught said.
"But when you look at those mines developing in East Gippsland, and the Valley's low cost source of energy and carbon, it makes logical sense to create that integrated hub here."
It's not the first time Mr Palmer has targeted the Latrobe Valley for his grand plans; prior to the 2013 federal election Mr Palmer said he wanted to see "downstream processing" associated with brown coal generation established in the area.
A spokesperson for Mr Palmer did not respond to requests for comment made by The Express.
While State Energy and Mining Minister Russell Northe said most people would treat the 'plan' with a degree of scepticism, he also welcomed the discussion it created.
"Mr Palmer hasn't always been accurate and factual; he said once he was going to construct (a Valley) power station that had been demolished. I'm not sure what exactly he was talking about there," Mr Northe said.
"His proposition is 'pie in the sky' to be brutally frank about it, but I am pleased to see the discussion being had about economic development opportunities in the Latrobe Valley."
Mr Northe used the discussion to pointed to the State Government's $15 million 'TARGET' fund announced in the May budget, designed to drive mineral exploration programs across Victoria.
