Smelter bailout may not be the last

Zac de Silva and Abe Maddison | October 9, 2025

More minerals processing facilities could be in the line for government bailouts after a $600 million funding package for Glencore’s ailing copper facilities.

It comes as an expert warns governments must be “absolutely clear” on the reasons for the massive cash splash, and do some “wheeling and dealing” to exploit Australia’s critical minerals industry. 

On Wednesday, the Queensland and federal governments committed $600 million over three years to keep the Mount Isa copper smelter and Townsville copper refinery in operation, protecting 600 jobs.

The facilities are part of a crucial strategic sector for Australia with volatile markets and subsidies from foreign governments making the international copper trade an unfair playing field for Australian producers.

“They are only struggling on the global market because of those unfair trade practices,” Industry Minister Tim Ayres told the ABC on Thursday.

Asked if he was expecting further packages for other facilities around the country, Senator Ayres declined to rule it out.

“We are watching the situation in these smelters and heavy industry closely, but we’re acting carefully in a disciplined way,” he said.

In February, Prime Minister Anthony Albanese announced a $2.4 billion bailout for South Australia’s Whyalla steelworks, forcing the operation’s troubled owner into administration.

David Whittle, the co-founder of the Critical Minerals Consortium, said that while Australia needed to preserve critical mineral industries, “ultimately, we also need to get paid for it”.

“So there needs to be some wheeling and dealing on the part of the federal government with our partners to ensure that they’re helping with this, we’re the providers,” he said.

China’s successful 40-year project to exert control over the supply chains it needs for its vast manufacturing capability had major implications.

“Copper is a big deal – it’s already in short supply globally, and China controls a significant proportion of the world’s smelting capability,” Dr Whittle said.

“This opportunity is only going to be realised if we can get some preferential deals of some kind with our trade and security partners, so that they are providing enough funds to these mines … to make it worthwhile to actually produce these minerals in Australia.

Mr Albanese indicated this week he will discuss the preferential supply of critical minerals to the US when he meets President Donald Trump.

“We don’t know what the details of that are, but hopefully part of that is some support from the US in maintaining those supply chains, and if they want preferential supply, hopefully they’re prepared to pay for it,” Dr Whittle said.

“So preserving that capability in Mount Isa is strategically important to us as a country and our broader trade and security partners.”

Dr Whittle also noted that many other industries relied on the copper, lead, zinc and silver produced at Mt Isa. 

“The smelter also produces significant quantities of acid as a by-product, and that acid is used in manufacturing and in other mining operations,” he said.

“So if that acid supply dries up because the smelter closes, then that’s going to have impacts on many other businesses.”

The Association of Mining and Exploration Companies said keeping the Mount Isa smelter open was “the right decision for Queensland and Australia”.

“Thousands of jobs depend on it, not just within the operation, but across the broader North West Minerals Province community,” AMEC chief executive Warren Pearce said.