Mining giant says multiple smelters at ‘breaking point’ in blow to nation’s critical minerals ambitions
Glencore may make a grim call on its loss-making copper operations within weeks as the US, Australia, India and Japan join forces to condemn critical minerals market manipulation.
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Glencore says smelters and refineries across Australia are on the brink of collapse and it will be forced to commit to a decision on the future of its Mount Isa copper smelter and Townsville refinery possibly within weeks.
The Glencore operations have suffered from China upgrading its copper processing capacity on top of the high energy and labour costs of operating in Australia, in a problem it says undermines the Albanese government’s Made in Australia ambitions.
“This is bigger than Glencore and goes to the heart of state and federal government critical minerals policies when you have a number of smelters and refineries across Australia clearly at breaking point,” Glencore’s head of corporate affairs in Australia, Cass McCarthy, said.
Up until now it has said a decision on Mount Isa would be made before the end of 2025.
“We continue to proactively engage with government in the hopes a regional solution for the Mount Isa smelter and Townsville refinery can be found over the next month or so,” she said.
Meanwhile, foreign ministers of the US, Australia, India and Japan met in Washington, taking a thinly veiled swipe at China’s attempt to exert continued domination over critical minerals supply chains.
“We are deeply concerned about the abrupt constriction and future reliability of key supply chains, specifically for critical minerals,” the official statement said.
“Reliance on any one country for processing and refining critical minerals and derivative goods production exposes our industries to economic coercion, price manipulation, and supply chain disruptions, which further harms our economic and national security.”
It is estimated Glencore is losing up to $30m a month on the smelter and refinery, and cannot proceed without substantial government assistance.
Glencore is due to meet Queensland mines minister Dale Last again on Monday to discuss the future of the business that employs 550 people and supports copper miners in Queensland as well as Dyno Nobel’s local operations.
The copper smelter provides a by-product at negligible cost that is a critical input for Dyno Nobel’s Phosphate Hill operations. Dyno Nobel declined to comment on whether it had a plan B should Glencore leave Mount Isa.
Lobby group Townsville Enterprise estimates 17,000 jobs are connected to the downstream copper assets and is calling on industry and government to find a solution.
Glencore is one of a number of smelter and refinery operators looking for help, including Rio Tinto for its Tomago aluminium smelter near Newcastle.
The Australian reported in May that global commodities trader Trafigura zinc and lead smelters are battling to stay afloat.
Nyrstar Australia, wholly owned by Trafigura, operates smelters that directly employ about 1500 people and could be retrofitted to produce five critical minerals. However, its multi-metal smelter at Port Pirie in South Australia and zinc refinery in Hobart are both struggling.
Glencore reportedly asked for a $2bn government bailout for the copper assets. That figure could represent the losses Glencore would incur over six years losing $30m a month.
Glencore said in a community update: “We don’t comment on the detail of confidential discussions with government but note the amounts being quoted in media are consistent with support for other large critical industrial complexes in Australia like the Tomago aluminium smelter, Whyalla Steelworks, the Boyne aluminium smelter and CopperString project.”
Treatment and refining charges (what companies pay to have their products processed) are at 25-year lows as a result of excess global smelting capacity, largely in China and India, and a shortage of copper concentrates.
Glencore’s Mount Isa mining operation, known as MICO, is closing this month, leaving it more reliant on supply from small and medium-sized copper mines in the northwest of Queensland, including from ASX-listed companies 29Metals, Austral Resources, Carnaby Resources, Evolution Mining, True North Copper and Cyprium Metals.
Some in government are leaning on Glencore to use its profitable operations elsewhere in Australian to cross-subsidise copper processing, but this would cruel investment in other areas.
Glencore’s coal operations in Queensland, for example, have paid more than $4.4bn into state government coffers since a hike in royalties in mid-2022.
Mr Last and Federal industry minister Tim Ayres met Glencore’s leaders in Brisbane on June 19 for talks on the copper business and then travelled to Mount Isa. Chief executive Gary Nagle has also met Queensland premier David Crisafulli face-to-face to discuss the issue.
Glencore has put several assistance options forward without a breakthrough.
Originally published as Mining giant says multiple smelters at ‘breaking point’ in blow to nation’s critical minerals ambitions
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