The Chinese conglomerate that controls Australia’s largest cotton farm has approached Malcolm Turnbull’s office to express interest in buying the Liddell coal-power plant in the NSW Hunter Valley.
UPDATED: Tony Abbott and Barnaby Joyce have both used the Coalition partyroom meeting to urge Malcolm Turnbull to do more to keep the Liddell coal power station open.
According to a government MP, Mr Abbott raised an article in The Australian this morning and asked why the government did not attempt to facilitate a sale of the plant to Chinese group Shandong Ruyi.
Mr Turnbull responded by saying the government was not Liddell and could therefore not sell the coal-fired plant in the Hunter Valley. He added the government was agnostic on energy sources.
Mr Joyce spoke in the partyroom to say it was important the 45-year-old power station stay open.
China push to buy coal plant
Former Australian rugby union great Nick Farr-Jones wrote to the Prime Minister’s office in December declaring that his client, Shandong Ruyi Group, was interested in buying the 45-year-old plant, which AGL is closing in 2022.
Mr Farr-Jones, the director of consulting firm Taurus Funds Management, wrote that Shandong Ruyi, which has a controlling stake in the $240 million Cubbie Station cotton farm in southwest Queensland, wanted to invest in clean-coal technology and become a player in the Australian energy market.
The captain of Australia’s 1991 World Cup-winning Wallabies rugby team suggested the government should raise Shandong Ruyi’s interest in Liddell when it lobbied AGL to sell the coal-power plant to a third party.
AGL so far has refused the government’s request to extend the life of the 1800-megawatt power station, instead planning to replace Liddell’s power capacity with renewables, gas and a planned battery.
The Australian reported last week that Liddell’s closure may cause power outages because only 100MW of the replacement capacity has been funded.
In an email sent to Mr Turnbull’s deputy chief of staff, Clive Mathieson, on December 15 last year, Mr Farr-Jones said a senior representative of Shandong Ruyi met Scott Morrison in the middle of last year to detail the company’s ambition to invest in Australia’s power sector, including in thermal coal assets.
Shandong Ruyi, which is chaired by Qiu Yafu, specialises in textiles but in recent years has expanded into other industries including energy and real estate. The group bought the 96,000ha Cubbie Station in 2012, sparking intense criticism from the Nationals, but must reduce its initial 80 per cent stake in the farm to 51 per cent by late this year.
“Following the recent announcement by AGL that they intended to close the Liddell coal-fired power station in coming years, I thought I would drop you a quick note regarding a client of ours who would definitely be prepared to invest in latest-technology, low-emission, coal-fired power,” Mr Farr-Jones wrote. “To that extent they would review the current Liddell plant with a view to extending the life of the plant to provide reliable, lower cost power to NSW. They would also look to invest in Queensland, particularly north Queensland.
“Around six months ago I met with the Treasurer (Minister Morrison) with the son-in-law of the president of Ruyi to make sure he was aware of Ruyi’s intentions to invest in the power sector in Australia.”
The Australian understands Mr Mathieson, who had dealings with Mr Farr-Jones when he worked in the NSW Premier’s office, acknowledged the receipt of the email.
A spokesman for Mr Turnbull earlier has said no response was provided to Mr Farr-Jones, and that the Prime Minister’s office did not raise Shandong Ruyi’s interest with AGL.
Shandong Ruyi, one of China’s largest integrated textile companies, has partnered with Chinese state-owned company Huaneng Power on power projects globally, including building low-emission, coal-fired plants in Pakistan, Mr Farr-Jones’s email said.
Mr Farr-Jones, a former City of Sydney councillor who was flagged as a potential replacement for Mr Turnbull in the seat of Wentworth before the 2010 election, would not comment on the email to Mr Mathieson, a former editor of The Australian, or his relationship with Shandong Ruyi yesterday. He confirmed he knew of a party who was interested in buying the Liddell coal power plant if it proved to be economical.
Mr Farr-Jones said he had not approached AGL because he was waiting to review the government’s independent advice from the Australian Energy Market Operator. Last week AEMO advised the government that AGL’s replacement plan for Liddell was potentially insufficient. It is awaiting a response from AGL.
Mr Farr-Jones said he would “strongly encourage” the government to ask AGL to divest plant to another party if there was the potential to make it economical.
“I’m obviously doing it for business reasons but there is another reason: it gets to me the impact that renewable energy and the subsidies required to make that power economical has on these horrifically increasing electricity prices and the impact it has on families in Australia,” he said. “My concern is for all consumers but particularly for families who are in the low socio-economic group and particularly elderly people who worry a lot, hence they don’t cool their place in summer and heat their place in winter.
“If the plant was available then any third-party purchaser would obviously need to conduct detailed due diligence on the economics of investing multiple millions of dollars in extending the life of the plant into low-emission technology,” Mr Farr-Jones said.