Evolution Mining CEO: Glencore smelter closure threatens green energy goals
The Glencore refinery and smelter in Queensland remain on the brink of closure after weeks of warnings from the company and talks with the state and federal governments. That's led to fears of another heavy industry shutdown just months after Labor campaigned on revitalising Australia's manufacturing sector, which is battling high labour and energy costs.
The Albanese government is funding the underwriting of an expanded capacity investment scheme, which aims to fast-track the construction of major solar and wind projects to meet its 2030 target of 82 per cent renewables.
Evolution Mining chief executive Laurie Conway said if the copper smelter closed, it would never re-open, and Australia would be forever consigned to importing the processed copper needed in big volumes for the energy transition. 'I think the Queensland and federal governments need to really understand that if that smelter closes, it will never reopen,' he said on the opening day of the Diggers & Dealers mining conference in Kalgoorlie. 'Having smelting capacity for a commodity that is going to be critical to the renewable pathway is fundamentally important, and I think the government has a role to play.'
Anthony Albanese was given a green light to turbocharge his clean energy revolution, with the Productivity Commission declaring the net-zero transition will cost even more than expected and that greater government intervention, regulation, incentives and carbon pricing are needed to hit Labor's climate targets without crippling the power grid or damaging productivity.
Mr Conway said the Queensland government's role was to provide services and support in the region, while the federal government needed to weigh up its responsibilities alongside its renewables targets and support for that industry.
'The more copper that you can process here, (the more it helps) in terms of renewables. You need copper to achieve those targets,' he said.
'If you don't have that capacity ... you are beholden to others.'
It is understood Glencore held talks with the Queensland government on Monday but remains at an impasse in Canberra.
Swiss-based Glencore is due to release its half-year results on Wednesday and provide an update on the future of the smelter and refinery that are losing about $30m a month. Glencore has said it will make its final decision by the end of September and has offered the federal government a range of assistance options, including handing part ownership to taxpayers.
Mr Albanese talked tough on Glencore in parliament last Friday, but acknowledged his government wanted to protect the national interest and jobs in Mt Isa, where the smelter is based.
'Let's be clear about Glencore though. It is a highly profitable company. Just this year they paid $2.2bn in dividends to their shareholders. Australia has been pretty good to Glencore. It's about time that Glencore recognised it needs to be good back to Australia,' he said.
Glencore's Mount Isa mining operation, known as MICO, closed last week, leaving it more reliant on supply from small and medium-sized copper mines in the northwest of Queensland.
Evolution has a life-of-mine offtake agreement with Glencore covering copper produced from the Ernest Henry mine that Evolution acquired from Glencore for $1bn in 2021.
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.
A global desire to decarbonise by 2050 would require a significant increase in the number of mines and volumes produced, according to experts. EY said part of the energy transition would require massive volumes of copper – about 41 million tonnes – necessitating the construction of about 40 new large copper mines globally.
The Productivity Commission report also raised the issue of the government's controversial Capacity Investment Scheme for renewables which is due to stop in 2030 as potentially meaning the electricity sector might not decarbonise quickly enough in the next decade.
Andrew Forrest's Squadron Energy said it advocated for policy settings that reflect 'the true value of firmed renewables' and enabled investment in generation storage, grid upgrades, and regional development.
'This aligns with the Commission's recommendation to replace the Renewable Energy Target and Capacity Investment Scheme with more effective market mechanisms post-2030,' Squadron said in a statement. Read related topics: Climate Change Politics
Business leader Warwick Smith has warned Anthony Albanese to hasten slowly with any reforms agreed upon at the upcoming economic roundtable, amid warring unions and corporate groups. Business
Australia will set minimum prices for rare earth minerals and broker national supply deals to break China's grip on the critical defence material.
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