News that Glencore is seeking government support for its Queensland smelter needs to be seen as a long term investment in the Australian copper industry, not a short term fix.
Smelting may not get the headlines that new copper discoveries or big export prices get, but it lies at the heart of a vibrant, self sufficient industry.
Australia has only two operational smelters—Glencore’s at 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 of them, but the surge in Chinese production has created an unprecedented decline in the global smelting market.
There are more smelters being built internationally too, including in Indonesia and India, with government support. All of which has contributed to rapidly falling treatment charges from $90/t to $20/t.
This is a global problem of course, not just here in Australia, but making sure we have the capacity and skills to process copper here is just smart business. The way the Mount Isa smelter operates makes that abundantly clear.
It not only produces copper plate called anode to around 99.7% purity, but its further refined at their Townsville Refinery to 99.95% pure metal and shipped to market as commercially ready metal plate. A sulphuric acid by product is also used extensively by local industry I believe.
Access to a smelter—and Mount Isa has clients right around the country—is also a mitigating factor in the viability of junior miners.
Glencore has shown a commitment to the Queensland and Australian copper industry. While the Mount Isa underground copper mine is slated to close this year after 60 years of operation, the company is actively enabling other assets like the George Fisher Mine or the Black Star open cut project.
Governments routinely back industries they see as strategically important for the country’s future—you only have to look at all the programs to fund startups to realise that—and nothing is more important than copper. In a world rapidly taking sides to secure viable sources of the red metal we owe to ourselves to be as self reliant as possible.
Cheers, John Fennell
