Federal Government to bail out Mount Isa

The Federal and Queensland Governments will provide a $600m support package to maintain operations at the Mount Isa copper smelter and Townsville copper refinery.

The agreement will allow the smelter — which provides half of Australia’s copper smelting capacity — and the refinery to continue operations until the end of 2028.

Australia has only two operational copper smelters — Mount Isa and BHP’s at Olympic Dam — but they face huge competition from China.

China has invested heavily in copper smelting and now has 44 smelters, with the surge in Chinese production creating an unprecedented decline in the global smelting market, according to the International Copper Association Australia

The bailout follows the shuttering of Glencore’s Mount Isa copper mine in July, which ended more than six decades of operations.

The Australian Workers’ Union (AWU) has strongly endorsed the announcement, saying the package will secure more than 1000 jobs and protect Australia’s critical metals processing capacity.

AWU national secretary Paul Farrow says the announcement brings welcome relief to thousands of regional workers after months of uncertainty.

“Copper is critical to developing future technologies on our shores. You can’t have a Future Made in Australia without the ability to refine our own metals and critical minerals,” he said.

“This package demonstrates that both federal and state governments understand that maintaining our sovereign manufacturing capability isn’t just about jobs today, it’s about securing Australia’s place in tomorrow’s economy.

“Losing the copper smelter, refinery and the sites it supports, like Phosphate Hill, would have been a crippling blow for the North Queensland region, especially after the closure of the Mt Isa mine earlier this year,” said AWU Queensland secretary Stacey Schinnerl.

“Generations of workers have dedicated their lives to this industry, which has bright days ahead of it,” she said.

“Allowing this site to collapse would have been a grave error. We are grateful that long-sighted political leadership has prevailed.”

This bailout comes in a wave of support packages from the federal and state governments to prop up the Whyalla Steelworks in South Australia and two smelters owned by Nyrstar in Tasmania and South Australia.

The closure would have been the fourth in a line of refinery closures in Australia in recent years, with the BP and Alcoa in Kwinana, WA in 2021 and the temporary suspension of BHP’s Nickel West in 2024.

The support package includes several review points and a commitment to complete a transformation study that will examine opportunities to further develop industrial capabilities in the Mount Isa region to ensure long-term economic resilience. The parties will now begin discussions to finalise the detailed formal agreement.

Glencore Metals Australia interim chief operating officer Troy Wilson says this agreement provides a short-term lifeline for the copper smelter and refinery and comes after Glencore had already stepped up to absorb significant financial losses to maintain operations and jobs while working on a solution with government.

“Copper is a critical metal for the future. Competition in the global copper smelting market is fierce and it’s not a level playing field with various countries seeking to secure substantial market positions,” he said.

“We support the [Federal] and Queensland Governments’ push to develop policies which enable critical metals processing to continue in Australia, backed by a mining sector that makes a significant contribution to the economy and supported by affordable and reliable energy.

“Glencore has demonstrated its commitment to sustaining copper processing operations and preserving jobs by absorbing material financial losses. It is our hope that conditions improve over the next three years to a point where government assistance is no longer necessary.

Over the next six years, Glencore has $2.5b in planned or proposed capital investment across the Mount Isa region. This includes further investment in George Fisher mine and potential development of the Black Star Open Cut (BSOC) project.