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ABC News
4 days ago
- Business
- ABC News
Mount Isa copper smelter's planned closure prompts fears production will move overseas
What would Queensland's "Stack City" be without its smoking stack? By 2030, the outback city of Mount Isa will find out. The famous candy-cane-striped copper smelter, or stack, gave the mining town of more than 18,000 residents its nickname. Swiss multinational Glencore has set a five-year deadline for its closure. However, if it is unable to receive government support to rebrick the smelter in 2026, that date could be brought forward. It comes after the mining giant announced it would shut the historic Mount Isa copper mine, which will finalise production next month. With the smelter and its closure date looming over Mount Isa's skyline, industry experts fear Australia's domestic copper production could be pushed to the brink. North West Queensland is one of the most mineral-rich regions in the world, and copper is arguably the star in the soil. The critical mineral is one of the most in-demand commodities in the world. Australia has two copper smelters, and Mount Isa's unique all-in-one facility comprising a mine, smelter and concentrator is a major investor drawcard. Copper from all over Queensland, New South Wales and South Australia is sent to the Mount Isa smelter. Mining analyst Gavin Wendt said that without the Mount Isa smelter, Australia's domestic copper processing industry could be headed offshore. "[The smelter] has potentially decades of life ahead of it, but it needs significant investment now," he said. Mr Wendt said another copper-producing country, such as China or the United States, would respond differently to a smelter closure of this magnitude. For example, China's government heavily subsidised its smelters, giving the country the upper hand, he said. "If we allow facilities like this to shut down across the Western world, it reinforces China's strategy, which is to subsidise its own infrastructure, subsidise its own production, to undercut Western-world production so that it closes, and then eventually China will raise the price of its products. "We will be paying more and [China] will be in a position of market dominance." Queensland Premier David Crisafulli told the ABC last week that losing the Mount Isa smelter would remove a major national capability. "There's a sovereign risk with not having that," he said. "Particularly how important copper is at the moment for some of the things we're looking to do, including in the renewable space." Mr Crisafulli said the closure would raise doubts about the future of surrounding mines that relied on the smelter's gas and would make the region a less attractive site for new mines. Queensland Minister for Natural Resources and Mines Dale Last said the government was working towards a solution. "I'm working collaboratively and urgently with Glencore on a path forward," he said. "We are working through several options to support its continued operations." Glencore interim chief operating officer Troy Wilson said the company's smelter could not survive in the international market without government help. The amount of bailout money the company has requested from state and federal governments has not been confirmed. However, it has acknowledged other industrial bailouts, including Whyalla Steelworks's $2.4 billion package in February this year. Independent corporate analyst and previous Mount Isa Mine worker Peter Strachan said a local smelter was a strategic asset and was irreplaceable in today's market. "To build a new smelter in Australia somewhere now would be a huge job from an environmental-permitting [and] land-rights point of view," Mr Strachan said. Even if approved, he said a replacement smelter would cost about $1.5 billion. "You can't replace those realistically in Australia," he said. Mr Strachan said the mineralisation from surrounding copper mines, including Ernest Henry and Duchess Copper Gold Project, could provide enough copper to keep the smelter working for the next 15 years. "But it really relies on being able to maintain those assets in a way that works economically and to ensure that the project keeps going," he said. Mr Strachan said the solution could come from mining companies with big pockets, but also governments and junior mining companies working together. "There needs to be a multi-party deal that includes the smaller miners who say they've got mineralisation in the ground, it's ready to dig, and there needs to be some sort of deal worked out to enable everyone to move forward in unison," he said.
Yahoo
19-02-2025
- Business
- Yahoo
Mitsui Joins Rio in Australia Iron Ore Mine for $5.3 Billion
(Bloomberg) -- Japanese trading house Mitsui & Co. will buy a stake in an Australian iron ore project for $5.3 billion, in a bet that the global steel industry will need high-quality raw materials to support its push to go green. Why Barcelona Bought the Building That Symbolizes Its Housing Crisis Por qué Barcelona compró el edificio que simboliza su crisis inmobiliaria Trump Child Refugee Agency Shares Data With Immigration Enforcers A Filmmaker's Surreal Journey Into His Own Private Winnipeg The company will take a 40% holding in the Rhodes Ridge site in Western Australia from two minority shareholders, it said Wednesday. Rio Tinto Group — one of the world's top two iron ore suppliers — will continue to hold 50% of the project, which is slated to start production in 2030. The investment is a 'crown jewel asset' in the metals-rich Pilbara region and Mitsui's single-largest ever, President Kenichi Hori said in Tokyo. 'After years of relationship-building spanning across generations, we were able to negotiate for this agreement,' he said. The swoop on an untapped resource reflects major shifts in the iron ore market as China's economy slows and steelmakers face a daunting task to decarbonize. While demand is growing at a slower pace than in the boom years of this century, more high-grade material is needed to produce steel with greener technology. 'The deal represents a continuation of the strong working relationship that Mitsui already has with Rio Tinto,' said MineLife Pty analyst Gavin Wendt. 'The deal also ensures ongoing supply of high quality iron ore for Japanese steel mills.' Mitsui has been involved in Australia's Pilbara iron ore region since the 1960s, and has metals-related investments from Brazil to China. It's a partner with Rio at Robe River, another mine in the area. Mitsui shares were down 1.4% in Tokyo at 3:30 p.m. local time, while Rio rose 1.1% in Sydney. Not Developed Mitsui is buying all of VOC Group's 25% interest in Rhodes Ridge, plus a 15% stake from AMB Holdings Pty, which will continue to hold 10%. The Japanese company will form a joint venture with Rio, which spent $77 million on studying the project in 2023, to prepare for mining. VOC and AMB are the private enterprise vehicles of the heirs of prospector Peter Wright, who alongside business partner Lang Hancock found vast fortunes of iron ore in the region. The discoveries eventually generated a new age of billionaires in Australia, including the Wright and Bennett families behind VOC and AMB, respectively. Rhodes Ridge is one of the world's largest undeveloped iron ore deposits, with a mineral resource estimated at 6.8 billion tons. It's expected to produce as much as 40 million tons a year in its first phase starting 2030, but Mitsui said future output could reach 100 million tons. Rio has struggled to maintain production of superior quality iron ore grades in the Pilbara, and tapping the relatively iron-rich deposit at Rhodes Ridge may help offset declines elsewhere. The miner's much-trumpeted Simandou project in Guinea — also a high-grade source — is due to start ramping up from later this year. Iron ore prices have tumbled from a record above $230 a ton during the pandemic to trade close to $100 a ton over the past few months. China's property crisis has ended the nation's breakneck growth in domestic steel demand, although its steel mills still made about a billion tons last year. --With assistance from Jake Lloyd-Smith, Andrew Janes, Shoko Oda, Stephen Stapczynski and Katharine Gemmell. (Updates with comments from Mitsui executives from third paragraph) Before DeepSeek Blew Up, Chatbot Arena Announced Its Arrival The Startup That Stepped In When the Baby Formula Supply Chain Broke The Undocumented Workers Who Helped Build Elon Musk's Texas Gigafactory The Unicorn Boom Is Over, and Startups Are Getting Desperate Japan Perfected 7-Eleven. Why Can't the US Get It Right? ©2025 Bloomberg L.P.
