Glencore memo braces hundreds of workers for shutdown at Mount Isa copper smelter and refinery
Glencore tells its hundreds of copper smelter and refinery workers it is on the brink of shutting down. It wants to strike a deal with taxpayers offering to forfeit two-thirds of the equity for joint venture support.
Mining multinational Glencore says it will be forced to close its Queensland copper operations after failing to reach a rescue deal with the state, as pressure mounts on the federal government to put the metal on the nation’s critical minerals list.
Swiss-based Glencore sent a message to staff at its Mount Isa copper smelter and Townsville refinery on Wednesday, telling them to brace for job losses after the LNP government’s offer of indirect financial support fell short of securing the assets’ future.
The closure of the smelter would put the future of northern Australia’s largest inland town in doubt. Mount Isa is the anchor city of Queensland’s northwest, with its businesses and hospital servicing not only its 18,000 residents but the region as a whole.
It comes amid political and industry pressure on the Albanese government to prioritise investment in the metal – which is used in everyday devices such as mobile phones, electronics, and solar panels – as competition in the commodities sector intensifies globally.
Glencore is on track to lose $2.2bn over the next seven years unless something changes and it is running out of time after five months of talks with the Queensland and federal governments. The company will make its final decision by the end of September.
The smelter and refinery directly employ 550 people, with about 500 jobs also on the line at Dyno Nobel’s Phosphate Hill operations, which rely on a smelter by-product.
But the Crisafulli government, which is leading negotiations on behalf of the federal government, remained unmoved.
The Australian revealed that Mines Minister Dale Last had on Monday offered the business a range of incentives, including payroll tax deferrals. Mr Last doubled down on Wednesday that no “blank cheque” would be written to sustain a successful business.
“The Crisafulli government continues to negotiate in good faith but will not be writing a blank cheque for a multinational company that returned $US2.2bn ($3.35bn) to its shareholders just months ago, and continues to act only on its global commercial priorities rather than in the interests of the Mount Isa and Townsville communities,” he said.
The state’s assistance package does not include a cash injection, is estimated to add up to about $150m in assistance, and is considered by Glencore too small to save the smelter and refinery.
Senior Glencore executive Suresh Vadnagra said shutting down was a last resort measure and that the mining and minerals processing giant was open to taxpayers taking a big equity stake in the copper refinery and smelter.
“Time is running out,” he said. “We have been engaging with the government for the past five months. We need to know in the coming weeks whether there is a viable solution on the table from governments or whether we start planning to transition the copper smelter and refinery into care and maintenance.”
It is understood Glencore is open to taxpayers taking the lion’s share of equity in the assets to keep them open.
As Mount Isa residents prepare for the long-anticipated closure of Glencore’s copper mine this week, mayor Peta MacRae said the retirement of the smelter would be another blow.
“This is a bigger problem than just Mount Isa,” she said. “It’s not about politics, it’s about the survival of thousands of families.”
To secure the future of the mining town, opposition spokeswoman for resources and northern Queensland, Susan McDonald, said the Albanese government must include copper on the list of critical minerals.
“Labor has been flat-footed while watching this looming disaster,” she said. “They did it while the nickel industry collapsed, and now they’re doing it to the copper industry. We won’t re-establish metals manufacturing in Australia easily if they don’t take urgent and immediate action.”
Senator McDonald said adding copper to the list would not only make global businesses more confident to invest nationally, but also unlock federal loans and grants to keep the Glencore smelter operational, including the Future Made in Australia Innovation Fund and the Northern Australia Infrastructure Facility.
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Originally published as Glencore memo braces hundreds of workers for shutdown at Mount Isa copper smelter and refinery
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