Buyer of Ernest Henry mine looking at $350m expansion

A big copper and gold mine in northwest Queensland is about to have a new owner

Australian gold company Evolution Mining has cut a $1 billion deal with Swiss-based Glencore to take full control of the Ernest Henry copper and gold mine near Cloncurry.

Australian gold company Evolution Mining has cut a $1 billion deal with Swiss-based Glencore to take full control of the Ernest Henry copper and gold mine near Cloncurry.

It is being viewed as a positive move for the region with the potential to extend the mine’s life and see a $350 million expansion in the underground operation.

Evolution already has the rights to all of the mine’s gold revenue and 30 per cent of its copper and silver revenue through an $880 million investment in 2016.

But now it plans to have 100 per cent ownership and to take over operational control with

Glencore’s employees to move to Evolution as part of the sale due to finalise in early January.

The underground mine employs 600 people, both employees and contractors.

Evolution Executive Chairman Jake Klein said they had long coveted to own Ernest Henry.

“It is a world-class asset in Australia and one which we know extremely well due to our successful investment in the asset in 2016 and proud that it will once again be 100% Australian owned,” Mr Klein said.

“The acquisition is consistent with our strategy, materially improves the quality of our portfolio and delivers both strong cash flow and mine life extension opportunities.”

The mine has a life of nine-plus years but Evolution is looking to extend that through a potential $350 million expansion of the mine deeper underground.

Evolution will also continue an agreement with Glencore where the concentrate will be treated at Glencore’s Mount Isa smelter and Townsville refinery.

In a statement, Glencore says its commitment to northwest Queensland will continue through its Mount Isa Mines copper and zinc complex, copper smelter and Townsville copper refinery.

The company says it will continue to be among Australia’s leading producers and exporters of “green” metals underpinning the transition to a low-carbon future.

State Resources Minister and Member for Townsville Scott Stewart said the $1 billion sale was a “huge vote of confidence” in the future of the Ernest Henry mine and the value of copper.

He said the jobs the operations secured across the region were crucial to economic recovery.

Katter’s Australian Party Leader and State Member for Traeger Robbie Katter said the dilution of Glencore’s dominance in the region was “healthy”.

He also said it was a good time to reflect on the importance of the North West Minerals Province to the entire region, including Townsville, and the need to develop infrastructure like the proposed CopperString transmission project.

Mr Katter said CopperString “still needs a big push by government” to ensure it proceeds.

BUSINESS ENGAGES ON MEGA POWER PROJECT

DEVELOPERS of the proposed $1.7 billion CopperString transmission line mega project are engaging with businesses as they aim to begin construction by mid next year.

About 100 business representatives met with the project’s preferred lead contractors UGL and CPB Contractors in the city on Monday to hear about what would be required.

The project involves developing a transmission line between Townsville and Mount Isa, connecting the minerals rich northwest region with the national electricity grid.

More business meetings are planned along the corridor.

CuString chairman John O’Brien said they were engaging with local suppliers to ensure they could access the services and labour they would need as well as maximise local content.

“We are very committed to ensuring the maximum contribution comes from the local community,” Mr O’Brien said.

The project will create about 750 construction jobs and require significant inputs including 23,000 tonnes of aluminium alloy conductor cable, 66,450 tonnes of steel for transmission towers and 125,000 cubic metres of concrete.

Mr O’Brien said they were in the midst of a “very intense process” with the state government working on the regulations which would be required to operate the transmission network.

He said they were well advanced on the Environmental Impact Statement process, with a revised draft EIS now being assessed by government agencies, and working to secure a 120m-wide easement along the project’s 1000km route.

“Our objective is to be, by the middle of next year, full steam ahead with the process of the detailed design and construction,” Mr O’Brien said.

Mayor Jenny Hill, who attended the Townsville meeting, has given her strong support, saying the project was “really important” for the entire region.

She said it would provide the ability to develop renewable energy projects, cut carbon emissions and deliver affordable energy for mines and mineral processors.

“We can see a number of new mines possibly opening up as a result of CopperString. The big thing for us is about the renewable (energy) corridor and the ability to bring that energy into the east coast and places like Townsville,” Cr Hill said.

Townsville Enterprise CEO Claudia Brumme-Smith said CopperString was an economic development project which would support mining and renewable energy projects, which would in turn support the production of green hydrogen.

She said Townsville Enterprise wanted to see governments commit to investing in the project.

“The time is now to make the commitment,” Ms Brumme-Smith said.

Originally published as Buyer of Ernest Henry mine looking at $350m expansion