The company will pay State Forests who will then pay logging contractors, hauliers, etc up to delivery at the plant.

State Forests to receive the payment and pay all contractors from fellers to delivery to the charcoal plant (there is an opportunity for hidden taxpayer subsidies if the payment doesn’t cover costs)

Contractors will probably be paid according to value of wood carted, eg now State Forests gets $50/cu m (including delivery) for high quality large sawlogs, $7.50/tonne for pulpwood.

Compensation (if not enough wood) depends on terms of contract — under the Regional Forests Agreement, compensation will be paid if more reserves are declared.

In the case of the Western Australian plant, royalty is linked to price of silicon. What happens in the proposed plant will depend on the contract. Will State Forests or charcoal transport contractors have to bear cost rises of diesel and other items?

We understand that finance by the banks for the silicon smelter apparently depends on approval by the State Government of the Environmental Impact Study and the consequent secure 20 year contract with SF for timber supply. Compensation may be payable if further reserves are declared leading to supply reduction.

The following Q & A are relevant

No. 130

*1114 FORESTRY-CHARCOAL PLANTS-Mr Cohen asked the Minister for Juvenile Justice, Minister Assisting the Premier on Youth, and Minister Assisting the Minister for the Environment representing the Minister for Information Technology, Minister for Energy, Minister for Forestry, and Minister for Western Sydney-

(1) (a) Will the Minister guarantee that no direct or indirect subsidy will be provided by the NSW State Government in the charges for delivery of timber from State Forests to the proposed charcoal plant at Mogo near Batemans Bay on the South Coast, including ensuring that the proposed plant pay all charges equivalent to the costs borne by private plantation and forest growers (such as local government charges, land tax, return on capital value of land or land rent, planting and maintenance costs over the full harvest period, all management costs, apportionment and amortisation of related capital works such as roads and bridges and a commercial rate of return on all of the aforementioned)?

(b) If not, why not?

(2) (a) Will the Minister provide the total charge to be made per tonne of timber delivered from New South Wales state forests by State Forests to the proposed charcoal plant at Mogo near Batemans Bay on the South Coast, including individual figures for:
(i) royalties?
(ii) felling?
(iii) loading?
(iv) transport?
(b) If not, why not?

(3) (a) Has State Forests paid any part of the cost for publicity or community education material produced by or for the proponents of the proposed Lithgow Silicon Smelter or the associated charcoal plant at either Dubbo, Gunnedah or Mogo?

(b) If so, how much?

(1) (a) I am advised that State Forests has offered to supply timber to meet some of the requirements of the proposed charcoal plant on the South Coast. Any timber supplied by State Forests will be on a delivered basis and priced at a full commercial (ie unsubscribed) rate that covers State Forests’ costs and a reasonable profit margin. I understand the company will also obtain residues from sawmills, private forests and plantations.

(2) (a) to (b) Negotiations between State Forests and Australian Silicon Ltd on the delivered price of timber are ongoing and are not concluded. However, it is likely that the royalties paid and the charges for harvesting and haulage will be subject to commercial contracts between the proponents, State Forests and private contractors and , hence, cannot be disclosed under the terms of those contracts.

(3) (a) to (b) The NSW Government is committed to informing interested sections of the community about options for sustainable timber supply to the proposed project. In fact, local groups have requested more information be distributed about aspects of the project.
To ensure interested parties are informed about the proposed timber supply, State Forests produced six educational posters in September 2001. These posters explain how timber requirements for the project could be sustainably supplied from State Forests on the South Coast if approved. These posters are available to the public.
I am advised a seventh poster was produced jointly by State Forests and Australian Silicon during October 2001 because it addresses issues relating to both parties. This poster details truck movements from State Forest to the proposed plant and from the proposed plant to the planned silicon smelter at Lithgow. Transport issues have been raised as an important issue by sections of the local community.
I am advised that the production of all seven posters has cost State Forests about $17,600 for design, artwork and printing. This includes State Forests’ cost for the seventh poster – dealing with transport issues – which was jointly shared with Australian Silicon.

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