The deal struck between Glencore and the Australian and Queensland Governments to keep the Mount Isa Copper Smelter and Townsville Refinery operational should be applauded.
The fate of the key copper assets had been hanging in the balance for some time, but the $600M co-investment partnership just makes sense. With both Governments committing $300M each over a 3 year period, the new funding aims to keep both businesses viable till at least 2028.
The decision not only protects the direct jobs of staff, but according to one consultancy, the facilities underpin as many as 17,000 jobs across northern Queensland through contractors, suppliers, and service providers. Not too mention all the other community businesses that rely on local employment.
It’s also a smart move in a world rapidly dividing into copper camps, helping to secure Australia’s position in the global copper supply chain. An important geopolitical strategy in the face of copper undersupply and over demand where having your own processing infrastructure is a distinct advantage.
Of course the challenges for Australia are still there. The problems Glencore faced like rising energy costs, aging plants, international competition & environmental compliance will still need to be sorted out, but the new deal allows time to find sustainable solutions.
A public/private deal like this one also come with its own complications, and while it remains to be seen how well the 3 parties can work together it’s nevertheless encouraging to see the sort of flexibility and innovation it must have taken to shape the agreement.
The Mount Isa and Townsville facilities represent approximately half of Australia’s copper smelting capacity, but losing them could have struck a much bigger dent in our sovereign capability & supply chain security.
Some have argued that it’s not only a waste of tax payer money, but could open the floodgates for calls to publicly support other industries or businesses. I understand the concern, but copper is now such a powerful ingredient for economic health that to not have acted would have been a much bigger risk.
Cheers, John Fennell
