Mining Giant Calls for Government Support Amid Flood of Cheap Chinese Copper

One of the world’s largest natural resources companies is calling for a government lifeline as Chinese domination of the market forces the possible closure of two Queensland facilities.

The Swiss-owned Glencore’s Mount Isa copper smelter and Townsville refinery employ around 600 workers but are losing money due to an increase in volume from international smelters and refineries, particularly in China, leading to a global oversupply of smelter capacity.

“It is true that mines have a beginning, a middle and an end. It is also true that critical mineral mines, smelters and refineries like those in Mount Isa and Townsville must be able to compete internationally to survive,” said Glencore Metals Australia Interim COO Troy Wilson said in a statement to The Epoch Times.

More competition for copper concentrates has pushed down refining and treatment costs around the world to 25-year lows.

However, for Australia, the cost of electricity has instead risen, making processing more expensive compared to countries like China.

“At present, Australia is lagging behind other nations in its ability to retain critical minerals processing capability in the country,” Wilson said.

“Glencore is open and transparent with the community—even when it means making difficult decisions like closing the underground copper operations, and possibly the Mount Isa copper smelter and Townsville copper refinery this year if we cannot reach an agreement with the Queensland or federal governments.”

The Mount Isa smelter is one of only two remaining copper smelters in Australia and the only one that processes concentrate from other mines.

Glencore says the facilities move billions every year around local economies.

In a statement provided to workers, Wilson said negotiations with the state had been underwhelming as it urgently seeks to receive support from the federal tier.

The company predicts it will fall short by $2.2 billion within a decade.

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No Blank Cheque: Minister

Queensland’s Minister for Mines Dale Last said Glencore needed to prioritise local communities and would not be receiving a “blank cheque” from the state.

“The Crisafulli government continues to negotiate in good faith but will not be writing a blank cheque for a multinational company that returned $2.2 billion USD to its shareholders just months ago, and continues to act only on its global commercial priorities rather than in the interests of the Mount Isa and Townsville communities,” he told The Epoch Times.

“The Queensland government has put a genuine and responsible offer on the table to help secure the future of the Mount Isa copper smelter and Townsville refinery because the Crisafulli government backs our resources and minerals processing sectors and the hardworking families who rely on them, and we’re asking Glencore to do the same.”

The Epoch Times understands the Crisafulli government has offered a number of incentives to Glencore including deferral of payroll tax.

Last urged action at a federal level to deal with the growing impact of dominance from overseas.

“Our advocacy with the federal government continues because the competitiveness of smelters in Australia is a national issue, and it demands a national response,” he said.

Calls for Investment Environment to be Improved

The Katter’s Australian Party, which presides over the Mount Isa region, wants the government to avoid giving cash bail outs and to instead look at broader reform.

“We want arrangements such as an equity share or a new common user smelter, not cash handouts to Glencore. We need a special economic zone out here, and CopperString completed,” said MP Bob Katter in April. CopperString is a new 840 kilometre electricity transmission line from Townsville to Mount Isa.

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Australian MP Bob Katter holds a press conference to discuss issues facing his rural electorate in Canberra, Australia, on Feb. 14, 2018. Michael Masters/Getty Images

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“There’s an industry-led solution that’s been given to the Queensland government, but instead, we have the accountants in Brisbane leading the negotiations, with ridiculous offers of tax and accounting trickery—just handouts by another name—which would never be enough to keep the facility open regardless of who the owner is,” said son and fellow MP Robbie Katter, in comments to The Epoch Times.

“Let’s not forget that there is a trade war going on around the world, yet it seems Queensland government is choosing to ignore solutions that enable us to keep our part in copper production.”

Robbie Katter said that failing negotiations with the state, the federal level would need to come to the table to secure Queensland’s copper future and Australia’s mineral sovereignty.

“This critical infrastructure must be reformed, not saved with cash,” he said.

“There’s a much more sophisticated solution out there, driven by industry, that simply needs to be put on the table by the state government.”

Federal Minister for Resources Madeleine King was contacted for comment.

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