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Posted: 2024-08-28 20:09:49

A giant candy-striped copper stack has greeted drivers arriving in Mount Isa for more than 60 years.

It is a compass point, towering over the suburbs below as it pumps exhaust fumes from the copper smelter.

But the outback city, which has a population of about 18,000 people, is grappling with the looming loss of its lifeblood industry and 1,200 direct jobs.

Swiss multinational Glencore, the operator of Mount Isa Mines, announced in October last year that copper mining operations would end in 2025.

The company has committed to keeping the smelter open until 2030, pending ongoing government support.

But with the mine's closure imminent and other potential copper projects at least several years from beginning production, a tussle is brewing to keep the smelter operational and the town alive.

Mount Isa City Council chief executive Tim Rose said the smelter was vital to regional job security.

"I do not think that people right across the breadth of the state understand this but there are about 2,500 to 3,000 jobs across the whole region that are tied up with that smelter," he said.

"It is a massive sovereign risk if it closes in 2030."

A man works in a furnace wearing protective equipment.

The men were working in the Glencore copper smelter furnace in Mount Isa. (Supplied: Glencore)

Copper smelter one of two in Australia

Copper is having a global moment.

Demand for the mineral is set to double over the next decade, and it has been earmarked as a strategic mineral by the Australian government because it is essential to making renewable energy technologies, electronics and communications infrastructure.

Commodity markets have responded to the growing demand with copper prices hitting an all-time high in May this year.

Mount Isa has been one of two major domestic sources of the mineral since 1953 when it became a one-stop-shop for copper production — mine, concentrator and smelter all next door to each other.

The underground copper mine is the deepest in the country, reaching almost 2 kilometres under the earth. 

But Glencore said the ore beyond that depth was "not economically viable", and the mine had reached the end of its life.

About 40 per cent of copper smelted in Mount Isa comes from the adjoining mine, with the other 60 per cent from other copper mines in the region, South Australia, or overseas. 

The closure of the mine will leave a supply gap for one of only two copper smelters left in the country after decades of decline in domestic metals processing.

Revived by $15 million in subsidies from the state government when it faced closure in 2020, the future of the smelter has become the focus of a debate over Mount Isa's future.

Close up of Robbie Katter

Robbie Katter says Glencore should be held accountable for its decision. (ABC News: 7.30)

The 'use it or lose it' bill

Katter Australia Party Member for Traeger, Robbie Katter, has introduced an amendment bill to the Queensland Parliament hoping to force Glencore's hand to tender out its mining lease to other interested parties if it does not continue to mine it.

The bill would result in the Mount Isa Mines Act being changed so that Glencore could not stop mining without ministerial approval, and that the approval could not be given unless the lease was opened up to third party tenders.

Glencore would still own and operate the copper smelter and its other mineral assets in the region.

At a parliamentary committee hearing held in Mount Isa earlier this month, Glencore's chief operating officer for zinc assets in Australia, Sam Strohmayr, said the proposed bill was "aggressive, unworkable and fails to consider the practical reality that the mining and processing facilities at Mount Isa Mines function as a fully integrated complex".

Speaking in support of Mr Katter's bill, Mr Rose told the committee the smelter supported 500 jobs directly and that it was vital for the community that it kept running, despite the closure of the copper mine. 

Nicknamed 'The Copper City', the outback township of Mount Isa is built around its mine.  (Supplied)

Mount Isa at an 'economic cliff'

Eyes are turning to what projects might help fill the economic hole left when Glencore's copper operations end.

The state government has attempted to smooth the road to commitment for a new mine near Cloncurry, an area nearly 100 kilometres north-east of Mount Isa known for its large copper and gold deposits.

It has granted South African miner, Harmony Gold, $20.7 million in conditional grant funding under the Mount Isa Mining Acceleration Program for the Eva Copper Project.

The project would become the largest copper mine in the region — generating about 800 jobs during construction and 400 jobs when operational.

Mr Rose said the proposed open-cut mine would access ore of a slightly lower grade but it had the potential to replace all the ore that was mined out of the underground Glencore copper mine that was supporting the smelter.

"All of the copper mines probably in this whole region will not be viable without that smelter because they are so intrinsically linked," Mr Rose said.

"That is the important thing for the state to understand.

"If that copper mine closes, there will be massive ramifications not only for Mount Isa but also across the whole of the north-west through to Townsville."

Despite the state government sweeteners, a final investment decision on Harmony Gold's copper project won't be made until 2026.

Current copper mines in north-west Queensland include Evolution's Ernest Henry Mine, previously owned by Glencore, which has a 2040 life span and employs about 450 people.

Mount Isa Mayor Peta MacRae said although she believed the region had a bright future, "projects do not happen overnight".

"We are facing an economic cliff if we are not given the right support," she said.

"There is a 10-year window to get some of these projects up and running."

"The danger is the skilled workforce moving away, which will then stop these projects from happening. 

"We need to retain our skilled workforce in Mount Isa and we need all the help we can get to do that."

The parliamentary committee will table a report on November 1.

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