Albanese government to bail out Mount Isa copper smelter

Swiss multinational Glencore’s struggling Mount Isa copper smelter will receive a bailout to keep the plant in operation and secure at least 600 regional jobs, Industry Minister Tim Ayres will announce today.

The second industry rescue package this year comes less than a month after Glencore said it would be forced to close the facility, which operates at a loss, if it could not secure federal or state government funding. Of particular concern was the cost of re-bricking the smelter infrastructure, which has to be done at considerable expense every four years.

Glencore’s lead and copper smelters in Mount Isa. Credit: Paul Harris

The cost of the deal to rescue Australia’s third-largest industrial facility is currently unclear, but is expected to be announced at a doorstop interview Ayres is holding in Mount Isa on Wednesday morning. An offer was reportedly made from the government to Glencore last month, but details were not made public.

It follows a raft of requests for funding and deals from industrial sites across the country. The federal and South Australian governments inked a deal in February to support the Whyalla steelworks at a cost of around $2.4 billion, including $1.9 billion for new owners to upgrade its infrastructure.

Negotiations over a multibillion dollar package to support the Tomago aluminum smelter — the nations largest energy consumer — were also underway earlier this year.

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In July, Glencore closed its underground copper mine at Mt Isa, with a loss of almost 500 direct jobs. It also warned then that it was prepared to put the smelter and the Townsville copper refinery into care and maintenance until market conditions improved.

Glencore had said the smelter assets were losing money and forecast a $2.2 billion loss over the next seven years.

During question time on Tuesday, Treasurer Jim Chalmers lauded Ayres’ work in securing a deal for Glencore, saying: “Minister Ayres has been doing a heap of work with the Queensland government and Glencore to try and find a solution here … good progress has been made and more will be said about that before long by Minister Ayres and I don’t intend to pre-empt that.”

“The government’s approach is to do what we responsibly can to ensure that Australia is an export powerhouse for decades to come. The Mount Isa copper smelter is a nationally significant asset, a significant facility for regional Queensland’s industrial capability and that has driven our efforts right throughout this process,” Chalmers said.

“We are doing whatever we responsibly can to get a good outcome for the workers, families, communities and businesses,” the Treasurer said.

The federal opposition said any effort to keep the copper operations open would be good news for the local community.

“This is welcome news but it should never have taken this long,” resources spokeswoman Susan McDonald said in a statement.

“For months, smelter and refinery workers in Mount Isa and Townsville - plus support industries - have lived under a cloud of uncertainty while the federal government dragged its feet.”

News of this bailout comes as Australia’s largest steelmaker, BlueScope, warns a shortage of affordable gas on the eastern seaboard could prevent it from lobbing a bid to rescue the collapsed Whyalla steelworks.

BlueScope is leading a consortium that’s considering a joint bid to buy the South Australian steel mill, which had been owned by British billionaire Sanjeev Gupta but was placed into administration this year.

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