Glencore Mount Isa Mines has commented that the copper smelter in Mount Isa could be shut down if inadequate investment is made in the next 12 months to reline the smelter.
In an interview with The North West Star on Thursday, Glencore Copper Assets North Queensland Chief Operating Officer Matt O'Neill said a decision on the metallurgical side of the business, including the smelter and refinery, would be made by middle to late 2020.
Mr O'Neill said every four years $30 million to $40 million was needed to reline the vessels inside the smelter.
"The only reason we can attract that investment is if we have a solid four-year plan in terms of volume and metal," he said.
"It is a high cost fixed business, so we are looking for the volume of metal which we may or may not be able to generate out of our own operations.
"But the other key aspect is if we come up short of the metal, the costs become the key driver. So standard for the region, power, rail, gas are the three big things we need to do something on in the next 12 months to give ourselves a pretty good shot at trying to get that investment approved."
Mr O'Neill said the other side of the business was the licence agreement, which was also upcoming for renewal.
"In terms of the licence with the government, our licence runs out in 2022 and we plan to extend that to 2026," he said.
"Therefore the next 12 months is around trying to work out what the case is for getting that investment.
"Without that we will close the smelter in Mount Isa and refinery in Townsville."
As for the mining side of the business, Mr O'Neill said it was quite stable with the Black Rock project changing the mining method in Mount Isa.
"We will continue to operate and the life of the mine is currently planned at 2028 with options to extend well past that," he said.
"The Black Rock sub-level cave project is our first step in the copper business to change the mining method here. There is still a reasonable amount of copper left in the ground but it is all at a lower grade so we need to do it a bit cheaper to access that ore and continue to make money out of it.
"We use that mining method at Ernest Henry so we know it works and that is underway looking for production first quarter in 2020.
"The processing assets have capacity to put 200,000 tonnes of our own metal through and purchase 40.000 to 50,000 tonnes of other people's product and that is ongoing."
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