Another Australian smelter saved as governments step in
Taxpayers will foot the bill to save another struggling smelter as work is tipped to start at Nyrstar in Port Pirie following its government funding windfall.
The Port Pirie facility is one of the world’s largest multi-metal smelters. Photo: Nyrstar
A second rescue plan has been enacted to save a struggling Queensland smelter on the back of already announced funding for South Australia.
In Port Pirie, an $80m upgrade is set to begin as part of a $135m state and federal government funding package for the Port Pirie smelter and Nyrstar’s zinc refinery in Hobart, announced in August.
Meanwhile, in Queensland, taxpayers will fund Swiss mining giant Glencore to the tune of $600 million over three years to save its ailing copper facilities and potentially hundreds of jobs.
Glencore has been threatening to shut its loss-making Mount Isa copper smelter and Townsville copper refinery, saying it could not afford to operate them without subsidies.
But on Wednesday, federal Industry Minister Tim Ayres and Queensland Resources Minister Dale Last announced they had struck a deal to keep them running.
Ayres said the agreement provided much-needed certainty for workers and maintained Australia’s domestic minerals processing capacity, which was fundamental to economic resilience, self-sufficiency and the transition to net-zero emissions.
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“Copper is critical to building solar panels, wind turbines and energy storage systems,” he said.
“If Australia didn’t already have established facilities like the Mount Isa copper smelter, we’d be looking to build them to protect Australia’s industrial capability.”
In July, Glencore closed its underground copper mine at Mount Isa with a loss of almost 500 direct jobs.
It also warned it was preparing to put the nearby copper smelter and its Townsville copper refinery into care and maintenance until market conditions improved.
The Mount Isa smelter is one of Australia’s largest industrial facilities and energy users, providing about half of the nation’s copper smelting capacity.
More than 600 direct jobs and a further 500 jobs at the nearby Phosphate Hill facility will be protected by the bailout.
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Three funding tranches will be released to Glencore contingent on the company proving it can keep the facility financially sustainable beyond the three-year arrangement.
It will also have to complete a transformation study to demonstrate further industrial opportunities in the region.
Glencore said the assets were losing money and forecast a $2.2 billion loss over the next seven years.
The federal government has been under pressure from the minerals processing industry to prop up loss-making facilities or see Australia’s industrial workforce further eroded amid high energy costs and international price distortion.
But thousands of jobs remain up in the air at Australia’s largest energy user – the Tomago aluminium smelter in NSW – where the government is considering another bailout.
The government maintains it will not be simply propping up facilities that have been left to wither by neglectful owners but will be applying strict requirements for companies to invest in their long-term viability.
Federal MP Bob Katter, whose seat of Kennedy covers Mount Isa and the region surrounding Townsville, said the closure of Glencore’s copper operations and the simultaneous shutdown of the Phosphate Hill facility would be “catastrophic”.
“We’ve got our industries hanging by a thread: bananas, copper, phosphate, they’re all on the scaffold,” he said.
The $600 million package will be split between the Commonwealth and the Queensland government, with work on the specifics of the funding arrangements to be completed over coming weeks.
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