Steelmaker Warns Jobs at Risk Without Higher Tariffs

A general view of the steelworks and coal loading facility in Port Kembla in Wollongong, Australia, on Feb. 1, 2021. (Brook Mitchell/Getty Images)

Steelmaker Molycop has warned it could lay off 300 jobs—over half of its Australian workforce—if the Anti-Dumping Commission does not agree to raise tariffs on Chinese competitors.

President of Molycop’s Australian branch, Michael Parker, told The Australian that the company would consider ending local steel production and instead manufacture their products with cheap Chinese imported steel if their call for raised tariffs is rejected.

The American-owned company is the last domestic producer of steel grinding balls, a component used in the processing stage of gold, copper, and lithium mining.

While Parker stressed the company did not want to make that decision, it would be impossible to compete with cheap, state-subsidised Chinese-imported steel balls without the tariffs.

“We can join the party like everyone else,” he said. “It would be the loss of another sovereign capacity.”

Molycop previously submitted an application to the Anti-Dumping Commission in 2016 on the same issue.

The commission found their Chinese competitors had been subsidised and therefore imposed various tariffs, ranging from 1 percent to 34 percent, on the imported grinding balls.

The tariffs are set to expire in September, so Molycop now wants the tariffs raised and extended for an additional five years.

Parker says the loss of their company’s steel ball manufacturing in Australia would reduce Australia-based customers’ resilience. However, he also admitted that few of those customers cared about a locally-based supply chain.

“They’re all about reducing costs,” Parker said.

The company’s push for more tariffs comes amid high tensions in the diplomatic relationship between the two countries, which began after Australia led the call for an independent inquiry into the origins of the CCP virus.

In retaliation, Beijing imposed punitive economic sanctions on Australian products, including 80 percent tariffs on barley. Australia recently brought the dispute to the World Trade Organisation, to which Canada and Russia joined with shared concerns.

Economic sanctions from Beijing also hit iron ore. However, that didn’t stop the country from importing the mineral. Prices for Australian iron ore rose to a 10-year high of US$178 per tonne, which made up for the slight reduction in Chinese demand.

The Department of Energy and Resources forecasted iron ore exports to reach a new high during the current financial year.