Glencore has confirmed it has sent a letter to the prime minister and Queensland premier casting doubt on the long term future of its North Queensland copper operations.
The response comes after the Australian Financial Review was handed a copy of the letter which threatened to wind up operations.
Glencore has not denied the substance of the letter, as reported.
“Glencore has been open and transparent with State and Federal Government about a range of cost factors currently impacting our copper operations in Queensland,” a Glencore spokesperson said.
“Our focus is on investigating options for secure, affordable and reliable energy / electricity supply at Mount Isa and Townsville to service our operations.”
The spokesperson said they would continue to review processing operations at the Isa smelter and Townsville refinery “with a range of economic factors considered and in line with major investment decisions.”
“We acknowledge that the Queensland Government has made a significant effort to engage with us to discuss our operations,” the spokesperson said.
Meanwhile a spokesperson for the Premier said the Treasurer Curtis Pitt was meeting with Glencore representatives at 3pm today to discuss the issue.
We have also send the following question to the Prime Minister’s Office:
What is the federal government doing to address this issue of power prices escalating to the point it is putting companies out of business? Or is it prepared to sit on its hands and allow the "catastrophic failure of national policy making" (per ABC Four Corners "Power Failure" report May 8) destroy the livelihood of thousands of people in an already economically depressed part of the country?
The Australian Financial Review is reporting that Glencore has threatened to close its Mount Isa copper operations in a letter it sent to the Prime Minister and other political leaders last week.
The AFR said Glencore’s director of copper business Aristotelis Mistakidis has threatened to wind up operations in a letter to Prime Minister Malcolm Turnbull, Queensland premier Annastacia Palaszczuk and their respective resources ministers.
In the letter dated May 26, Mr Mistakidis is said to have cited high costs for energy, labour, freight and rail, as well a "materially changed" national investment environment.
The company said it would no longer guarantee copper processing facilities including the smelter in Mount Isa and a refinery in Townsville.
Mr Mistakidis says Glencore's operations run 24 hours a day, 365 days a year and need affordable, secure and reliable electricity, but the price of power has risen 100 per cent in three years and will continue to escalate.
"Given the current electricity prices add uncertainty around future supply, we need to consider options for shutting our smelter and refinery [and] ship copper anodes direct to market and/or refine oat one of out other plants offshore," he says in the letter.
"While our business acknowledges the efforts of the Queensland government to consider options for maintaining and extending our smelting and mining operations, the investment environment in Australia has materially changed.
"We are not in a position to guarantee continued operation of our processing assets, instead we review these assets on an annual basis.
"The current uncertainty and escalating costs do not support further investment in these assets at this time.”
The North West Star has contacted Glencore for a response.
Member for Mount Isa Rob Katter told the ABC this morning he was shocked by the news and he won't tolerate threats.