3 days ago
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.
