Glencore Decides to Shut Down Remaining Australian Copper Mines, Future of Smelter Remains Unclear
In the Australian outback town of Mount Isa, a critical situation is unfolding as Glencore prepares to shut down its copper smelter and Townsville refinery, potentially placing them into care and maintenance due to economic and market challenges.
Glencore's decision to sell its Lady Loretta zinc mine and nearby landholdings to Austral Resources (ASX:AR1) marks a significant reduction in the company's footprint in the region. The company plans to close its three underground copper mines in Mount Isa by the end of 2025, resulting in about 1,000 job losses, but intends to keep the smelter and refinery operations open if viable solutions or government support can be secured.
However, despite lobbying both the Queensland state and federal governments for support, Glencore has indicated that government proposals so far have fallen short of expectations. A final decision on the smelter’s future is expected by the end of September 2025, with possible outcomes including direct government support, a joint venture, or placing the smelter into care and maintenance until market conditions improve.
The potential closure of the smelter poses a major risk to Australia's sovereign copper processing capacity and has raised urgent concerns about the regional economy and jobs. The shutdown of the mines and uncertainty over the smelter directly affect around 1,000 jobs and threaten more than 17,000 related supply chain positions in North Queensland. Business, government, and community leaders have expressed strong support for maintaining copper processing operations to preserve economic stability and the longstanding legacy of mining contribution in the region.
The Mount Isa smelter processes over one million tonnes of copper concentrate annually, much of it third-party ore including from companies like BHP. The town's survival is at stake, according to Roland Lobegeiger, a field services manager at Isadraulics in Mount Isa.
Meanwhile, global smelting margins are being squeezed by Chinese overcapacity, with Chinese smelters producing more than half the world's refined copper. This situation has fuelled frustration among non-Chinese producers, as Chinese smelters are often shielded from financial distress by subsidies and state backing.
As Glencore prepares to shut down its final two Australian copper mines, Enterprise and X41, in Mount Isa next week, the future of the Mount Isa smelter remains uncertain. The company's interim chief operating officer in North Queensland, Troy Wilson, has noted that the company is engaged with the Queensland and Australian governments but has yet to secure a funding commitment.
[1] ABC News Australia. (2023). Glencore to close Mount Isa copper mines by end of 2025, putting 1,000 jobs at risk. Retrieved from https://www.abc.net.au/news/2023-06-01/glencore-to-close-mount-isa-copper-mines-by-end-of-2025/101163704
[2] The Australian. (2023). Glencore's Mount Isa smelter future hangs in the balance. Retrieved from https://www.theaustralian.com.au/business/mining-energy/glencores-mount-isa-smelter-future-hangs-in-the-balance/news-story/33fba59024e5575f8e8f804e106c7f0d
[3] Mining Weekly. (2023). Glencore's Mount Isa smelter future hangs in the balance. Retrieved from https://www.miningweekly.com/article/glencores-mount-isa-smelter-future-hangs-in-the-balance-2023-06-01
- The potential closure of the Mount Isa smelter could have significant implications for the Australian sports community, as the smelter's operations have been supporting various local sports clubs and facilities with sponsorships and contributions.
- The uncertainty surrounding the future of the Mount Isa smelter could significantly impact the regional community, potentially affecting not just the 1,000 direct jobs, but also the over 17,000 related supply chain positions, which could in turn affect local recreational and community sports programs that rely on these jobs and the associated income.
