The loss-making Mount Isa copper smelter and Townsville refinery will stay open as their owner Glencore has struck a deal with the federal and Queensland governments for a taxpayer bailout.
Glencore’s operations in Mount Isa and Townsville were in jeopardy this year as its interim chief operating officer warned the company may have to place the two smelters into care and maintenance until conditions improved.
The company was expected to report a multi-billion-dollar loss for the two operations over the coming seven years.
Industry Minister Tim Ayres will be in Mount Isa on Wednesday alongside Queensland’s Minister for Natural Resources and Mines Dale Last to announce the bailout.
The pair are set to front the press at 11.30am AEDT.
A joint offer was made to Glencore two weeks ago in a bid to secure about 550 direct jobs with the company.
Lobby group Townsville Enterprise estimates that a total of 17,000 jobs are connected to the nearby copper assets.
Glencore was hoping to receive $2b across the coming 10 years, however, it remains unclear how much the company will receive.
The bailout comes as many smelters and refineries are struggling to stay afloat in Australia.
Rio Tinto-owned Tomago, which is Australia’s largest aluminium producer, is seeking billions of dollars from the federal and NSW governments amid high power prices and as cost-effective and consistent renewables remain largely unavailable.
Two Australian smelters owned by international minerals and metals producer Nyrstar have secured a $135m bailout after the local CEO has begged various state and federal governments for a handout as losses mount to “tens of millions a month”.
The federal and South Australian Labor governments have also given the Whyalla Steelworks a $2.4b handout after becoming “irredeemable” under British billionaire Sanjeev Gupta’s company, GFG Alliance.
Nationals Leader David Littleproud said the Glencore bailout was good news but urged the government to establish better operating conditions for Australia’s heavy industry.
“We’re not fixing the fundamentals. What we’re doing is continuing to just fork out and bailout with Australian taxpayers’ money,” Mr Littleproud told Sky News Australia.
“Ultimately, that runs out. Unless you’re prepared to fix the fundamentals of cheap affordable power, then in three years time we’re going to be back to the same problem.
“You can not run an economy of the industrial scale the size of Australia on all renewables.”
Labor faces pressure to keep these loss-making smelters and refiners alive as it aims to establish a green export industry through its Future Made in Australia plan.
Treasurer Jim Chalmers on Tuesday said the Mount Isa facility was critical for the government’s green industry agenda.
“The government’s approach is to do what we responsibly can to ensure that Australia is an export powerhouse for decades to come,” Mr Chalmers said during Question Time.
“It’s about the broader industrial capabilities of our country. We’re doing whatever we responsibly can to get a good outcome for the workers, families, communities and businesses.”