‘Back them’: PM’s blunt message after smelter bailout
Robyn Wuth and Jacob Shteyman |
A mining giant has been told to step up after a $600 million taxpayer-funded bailout saved its ailing copper facilities and hundreds of jobs.
The prime minister is urging Glencore to back a key Australian mining community after receiving the three-year financial lifeline and avoiding a “catastrophic” shutdown.
The Swiss mining company will get the cash injection after threatening to shut its loss-making Mount Isa copper smelter and Townsville copper refinery in Queensland.
The joint federal and state deal would keep the doors open, give a shot in the arm to Australia’s position as a key global copper supplier and aid the nation’s transition to clean energy, Anthony Albanese said on Wednesday.
But he added Glencore must repay the support and look after the outback community of Mount Isa by investing in the ailing operation.
“Glencore needs to back Mount Isa, just as Mount Isa has backed Glencore,” Mr Albanese told parliament.
“It is a highly profitable company delivering billions in dividends to shareholders this year alone.
“Future opportunities for industry mean that companies must invest to meet those opportunities.”
The mining giant had already absorbed significant losses to maintain operations and jobs while working on a solution with government, Glencore Metals Australia interim chief operating officer Troy Wilson said.
“It is our hope that conditions improve over the next three years to a point where government assistance is no longer necessary,” he said.
Three funding tranches will be released to Glencore contingent on the company proving it can keep the facility financially sustainable beyond the three-year deal.
It will also have to complete a transformation study to demonstrate further industrial opportunities in the region.
The Mount Isa community faced an uncertain future after Glencore closed its underground copper mine with a loss of almost 500 direct jobs in July.
It warned it was preparing to mothball the nearby copper smelter and its Townsville refinery, forecasting a $2.2 billion loss over the next seven years.
After months of talks, federal Industry Minister Tim Ayres and Queensland Resources Minister Dale Last on Wednesday confirmed the lifeline after flying into Mount Isa.
“We will not see this community die,” Mr Last said.
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.
The federal government has been under pressure from the minerals processing industry to prop up loss-making facilities or risk further eroding Australia’s industrial workforce amid high energy costs and international price distortions.
Rescue packages have already been doled out to the Whyalla steelworks in South Australia and Nyrstar’s lead smelters in South Australia and Tasmania as part of the government’s Future Made in Australia push.
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 federal opposition said any effort to keep the copper operations open was good news but only a short-term solution.
“Unless governments are prepared to face up to the fundamentals, we are simply kicking this down the road,” Nationals leader David Littleproud said.
Federal MP Bob Katter, whose seat of Kennedy covers Mount Isa and the region surrounding Townsville, said Glencore’s proposed shutdowns would have been “catastrophic” but echoed concerns that further bailouts might be needed.
The Australian Workers Union welcomed the deal, saying it ended months of uncertainty for thousands of regional workers.
AAP
