Glencore Gets $395 Million From Australia to Keep Smelter Open
(Bloomberg) — Glencore Plc said it will receive a combined A$600 million ($395 million) from the Australian federal and Queensland state governments to keep its Mount Isa copper smelter and associated refinery running for another three years.
The lifeline comes after an eight-month negotiation over Glencore’s request for financial support to keep its operations running amid rising cost pressures. Closure at Mt Isa was seen as a significant economic threat to the region and its industries.
“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,” Troy Wilson, chief operating officer for Glencore’s Australian metals business said in a company statement.
A decade of aggressive Chinese expansion across the metals supply chain has driven intense competition, forcing numerous smelters across the world, including in Australia, to shut down.
After neglecting to maintain their own capacity for years, the US, European Union and others are racing to reduce their reliance on China. The issue has taken on greater urgency after Beijing curbed exports of several critical minerals, including rare earth metals used in the defense and energy industries, in response to US President Donald Trump’s trade war.
Earlier this year, the Australian government provided $87 million to Trafigura Group for the Port Pirie lead smelter and Hobart zinc smelter, as losses mounted due to high costs and competition from China.
The Mt Isa smelter processes up to 1 million tons of concentrate sourced from miners nationwide, among them BHP Group, which supplies ore from its Olympic Dam operation more than 1,000 kilometers (620 miles) away in South Australia. With support now secured, Glencore said it plans to invest a further A$2.5 billion into its Australian operations, which also include two zinc-lead mines in Queensland. Glencore closed its two copper mines in the region earlier this year.
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