Glencore relief revealed: $600 million in bridge funding from federal/Qld governments for Mount Isa copper smelter

Following reports this week that federal industry minister Tim Ayres and Queensland regional development minister Dale Last were to announce a bailout for Glencore’s Mount Isa Copper Smelter and Townsville Refinery, the size and structure of the support have been shared.

Ayres (pictured) announced on Wednesday that the funding will amount to $600 million, split 50/50 between the federal and state governments, helping to keep the two sites operational until the end of 2028.

This follows five months of negotiations to keep the multinational owner from mothballing the refinery and smelter.

“Funding will be provided in three payments of up to $200 million over the next three years, contingent on the completion of a transformation study, alongside other review points,” the statement reads.

It adds that the transformation study will focus on “sustainable and long-term industrial capability in Mount Isa” and evaluate “the end-to-end copper value chain in the region and seek to understand the long-term opportunity for the facilities, industry and Mount Isa workers beyond the support period”.

The copper smelter itself was due for expensive “re-bricking” works next year, a one-every-four-year requirement, with the last re-bricking costing $30 million. Glencore had reportedly requested up to $2 billion over ten years to keep it operating.

The smelter contributes roughly half of the nation's copper-making capacity.

According to Glencore, it employs 600 workers across the two sites. Local business lobby group Townsville Enterprise claims that 17,000 jobs are tied to these operations.

The Australian Workers' Union said it “strongly endorsed” the support measures, which secured “more than 1,000 jobs” and protected Australia's critical metals processing capacity.

“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,” said National Secretary Paul Farrow.

Shadow industry minister Alex Hawke tied the bailout and other recent ones – the Whyalla Steelworks, Hobart zinc works and Port Pirie lead smelter – to high prices resulting from “reckless energy policies”.

“Until the government gets the baseline economic settings right, taxpayers will be on the hook for more taxpayer-funded subsidies delivered through Labor’s opaque National Reconstruction Fund and so-called Future Made in Australia agenda,” said Hawke.

The opposition did not mention China by name, but acknowledged that “Malicious state actors have also contributed materially to the systemic weakening of Australia’s industrial base through the manipulation of markets, among other outcomes.”

Picture: Tim Ayres/Facebook

Further reading

Mt Isa mayor pleads for government intervention as 17,000 jobs hang in balance

AWU calls for smelter strategy amid growing crises

Federal, SA, Tas governments pledge $135 million to save Nyrstar’s struggling smelters, explore critical mineral diversification

Government rescue package for Mt Isa copper smelter expected