We provide the full transcript so that the Mount Isa community can understand the context and wording of the entire conversation.

The interview was held after the Community Information Session held at the John Middlin Centre last Wednesday.

Chris Burns (NW Star Journalist): Let's start with the future of the copper smelter (currently set to close in December, 2016). What does the legislation passed through Parliament on Tuesday (which cancelled Transitional Environmental Programs of air and water quality) mean for you?

Mike Westerman (North Queensland Copper Assets Chief Operating Officer): The legislative changes that came about yesterday (Tuesday) just clears a pathway for us to put a business case to allow for the continued operation of the smelter.

So what that in effect means is a first positive step. So it’s a first step that allows us to update our operating conditions. From there we need to make sure it’s environmentally sustainable and that we have a business case that supports continued operations.

CB: How long will it be until you make the decision?

Mr Westerman: Now that legislation is in place it just allows the Department of Environment to actually do their job. That allows them to update our environmental authority.  We’re hoping to get that in the next month or two.

In parallel to that we will run a business case to see when those limits come back, whether that’s a sustainable outcome, so we’re looking to potentially have that in the next couple of months.

We understand that the community and our employees are pretty keen to know as well, these things take time and we’re working as fast as we can to get that certainty.

CB: You acknowledge then that the outcome of the decision of the copper smelter has some significance to the community?

Mr Westerman: Yes, absolutely, we were asked because we understand there are 250 positions within that copper smelter, there are significant contracting opportunities associated with the copper smelter, and any decision that gets the balance right between the environment and the socio-economic impacts of closing something like that down is of particular interest to us.

CB: There is a rumour Glencore already sold the copper smelter to a foreign party. Is this true? 

Mr Westerman:  We’re an integrated producer of copper, and while the copper smelter adds value we would continue to operate that. We’re not interested in any third party operating on our site.

CB: What is the advantage of opening the processing plant now to junior miners, and potentially expanding that in the future? Is that something you would look at (expanding)?

Mr Westerman:  Absolutely, so as grades and volumes drop within our current mines there is capacity to process third party ores that obviously has to be environmentally sustainable and have to make sense for us as well, so we’re in it to make a dollar.

I don’t see based on current ore resources in the North West that anyone is going to build a concentrator or smelter any time soon so we’re in a pretty good position, we do understand we can produce the upfront capital costs of our people to enter the copper industry.

CB: My understanding is former owners of the mine used to allow gougers (independent miners) access to the processing plant, but were at some point in time locked out of it. Could such a business decision to process third party ores potentially encourage the return of the gouger? Or is that something you’re not interested in?

Mr Westerman: Look, it could as long as it doesn’t… these assets operate under strict conditions, whether they be environmental conditions or operating parameters.

If you change the products that are going into those it could upset the current performance of your own products. It could be an actual net cost to the business. All things being equal enough with product that can operate in an efficient matter, we’re open to ideas.

CB: You mentioned in the community meeting the challenges of smelting copper here. Could you further elaborate and explain the advantage of sending ore directly to China?

Mr Westerman: The economics are quite simple in terms of smelting here or smelting in China. If the treatment of concentrate is significantly cheaper in China or the transport costs are significantly lower than it’s more economically viable to treat in China.

If I’m talking about shipping costs, I’m talking about the labour or power costs in China.

CB: There is another rumour of redundancies made. Is that the case, and if so in which areas?

Greg Ashe (Chief Operating Officer of Zinc Assets Australia – who has listened quietly to the conversation so far):  Normally Mike and I don’t deal with rumours.

I think some of that might be coming from that over the past three years we’ve had the Ernest Henry project,  the George Fisher expansion, we’ve had a Greenfields built at Lady Loretta, so there have been an awful lot of extra people, extra contractors required to get those done, but that’s not to steady state.

Now those projects are done we’re back in a steady state of people we actually need, so there may be a misconception that when people saw all those extra people around that somehow that was the new norm. All those big projects are completed so there’s not that many people around.

Mr Westerman: In a production perspective we’ve employed over 304 people over the last year within our operations. So construction people come off but in terms of the core operations we’ve continued to replenish the people that have left from natural attrition and that number is over 300 (in copper and zinc production).

CB: Regarding Glencore’s plan for zinc in the North West as discussed in the community meeting. You’re very well aware of your competitors, the closure of (MMG’s) Century. What are you hoping the advantage will be for Glencore in terms of that?

Mr Ashe: For the first part, we have to be sensitive to other operations. Century was an iconic mine that has been around for a long time. Really what I’m referring to is that it’s a supply and demand thing.

What we see from a Glencore perspective is that these large mines are closing because they are simply running out of zinc to process, and the cost of bringing this new production is huge. We need a price increase and this hasn’t happened, so there aren’t new mines being built currently.

And so that’s where we see an advantage for Glencore zinc. We’ve just spent a billion dollars investing in George Fisher, Lady Loretta, McArthur River, to take advantage of the price that is going to go up as the people supply that product go offline.

One of these things we will do though is talk to Century about some of their people and maybe there’s a fit there.

CB: So George Fisher would be at the heart of Glencore’s zinc plans?  

Mr Ashe: Correct. If you look at reserves and resources currently from the end of December 14, we had the equivalent of 35 million tonnes of zinc sitting in George Fisher. So for us we’ve just invested capital in George Fisher, so we believe we have a 20 year plus life ahead of us.

[End of interview]