The $500 million investment in infrastructure at Port Kembla steelworks that ended this week might be the last major investment on the site if BlueScope Steel and the Illawarra cannot convince the Federal Government to make changes to its carbon pollution reduction scheme.
While Wednesday night's blow-in of the No 5 blast furnace delivered plenty of promise with its increased capacity, greater efficiency and ability to make higher quality iron, BlueScope bosses are concerned about the impact the proposed scheme will have on the future of 12,000 Illawarra families the steelworks supports.
The company supports the need to reduce emissions in Australia but is worried about the threat the Rudd government's scheme poses.
It is also concerned about silence from Illawarra's political, community and business leaders.
"We have been surprised that people locally are fairly quiet on the issue," BlueScope chairman Graham Kraehe said."It would be helpful to have a more public voice I think."
Mr Kraehe used a visit to Wollongong yesterday to check out the final chapter in the reline and thank everyone involved in it and the $134 million sinter plant upgrade.
But he also echoed managing director and CEO Paul O'Malley's warning about the scheme.
Mr O'Malley, in announcing the firm's $66 million loss on Monday, said the scheme jeopardised thousands of jobs in the Illawarra because it unfairly discriminated against the Australian steel industry.
Mr Kraehe said it was a matter that urgently needed to be addressed because it threatened jobs and major capital investment in the Port Kembla plant, such as the proposed $1 billion co-generation plant.
"We have calculated that ... with the faults in the CPRS the cost to BlueScope over the next eight years .... will be an extra tax of somewhere between $500 million and $1.4 billion," Mr Kraehe said.
"With the current uncertainty around the CPRS we are not in a position to commit to any major project. Certainly there is no way we can contemplate, as much as we would like to do it, the co-generation project.
"Environmentally it is the one real opportunity we have to make a significant change. If we are unable to continue to be able to invest in major projects such as co-generation and a major upgrade of our steam generating assets ... over time we will gradually lose that world competitiveness. That is particularly critical when we export 50 per cent of our output."
BlueScope bosses are becoming increasingly worried about what might happen if they cannot convince Prime Minister Kevin Rudd to amend the scheme.
Mr O'Malley said the firm supported reducing carbon emissions but the scheme as it is now would effect production costs and the Australian steel industry's ability to compete overseas.
Mr Kraehe said BlueScope Steel had a proven track record as an environmentally responsible company, investing $500 million on environmental improvements globally over the last 15 years with the Illawarra benefiting from a significant amount of that money.
The company has initiated 150 separate pollution reduction projects to improve air, water and waste management at the steelworks, which recycles about one million tonnes of scrap metal each year and has recycled more than 14 billion litres of water since October 2006.
Mr Kraehe said three simple amendments to the proposed scheme (see box) could help BlueScope and the regional economies it supports.
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