Glencore (LSE: GLEN) is set to shut its final two copper mines in Mount Isa, Queensland, next week, ending more than six decades of operations and marking the company’s exit from upstream copper production in Australia.
The closure, first announced in October 2023, includes the Mount Isa copper mines and associated operations, including smelters and concentrators.
Initial estimates put job losses at more than 1,200, but Glencore revised that figure in April to around 500, citing progress in workforce redeployment.
An internal memo circulated this week by Glencore Australia’s metal business interim chief operating officer Troy Wilson, confirmed the company is nearing a financial breaking point with its processing operations and needs swift government intervention. Glencore is considering shutting down the nearby copper smelter and Townsville refinery and may offer governments an equity stake to keep them running.
Shares in Glencore gained 1.9% to close at £3.29 on Wednesday in London, valuing the company at £39.1 billion (US$53 billion).
Three paths
For months, the Swiss company has lobbied both state and federal governments for support to keep the smelter operating, which processes third-party ore from companies including BHP. But Suresh Vadnagra, a senior Glencore executive, told The Australian that the Queensland government’s latest proposal falls short.
Vadnagra outlined three possible paths: direct government support to close the economic gap, a joint venture with Glencore, or a shutdown until market conditions improve. Queensland Minister for Natural Resources and Mines Dale Last defended the state’s position in remarks to Bloomberg News.
He said the state wouldn’t support not be a multinational company that returned $2.2 billion to its shareholders this year.
Rival China
Glencore’s Wilson said in June there was “no longer a level playing field” with China, pointing to significant subsidies for Chinese smelters. Glencore expects to make a final decision on the smelter by the end of September. It processes more than 1 million tonnes of concentrate annually from across Australia. Its potential closure reflects a wider crisis in the sector.
Despite a strong long-term outlook for copper, Western smelters—many of them Glencore-owned—are under pressure from plummeting treatment and refining charges, ore shortages and relentless competition from Chinese facilities.
The memo to workers comes on the heels of Glencore’s decision to sell its Lady Loretta zinc mine and associated landholdings to Austral Resources Australia (ASX: AR1) earlier this week.
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