Uncertainty in North Queensland following media reporting around Glencore’s (LSE:GLEN) planned closure of its Mount Isa copper smelter and Townsville refinery may yet open up opportunities for other explorers and producers, according to attendees at the Noosa Mining Conference.
The main pain points centre on job losses, reduced economic contribution to the region and state, and the shuttering of one of Australia’s only two copper smelters.
Lion Selection Group (ASX:LSX) Managing Director Hedley Widdup tells Mining.com.au on the sidelines of the Noosa Mining Investor Conference this week that Glencore requires around 2 million to 3 million tonnes of copper ore to make economic sense for it to continue operating the Mount Isa smelter.
“The interesting thing is, though it has been known for a very long time – Glencore would not be new to this, Mount Isa Mines had studies on this back when it was MIM, there’s a hell of a lot of metal left in the ground and there’s a very attractive open pit shape which takes a lot of it out,” Widdup explains.
“The problem is it has got two smelters, two concentrators, a tailings disposal line, underground refrigeration and various other things, which are all within the footprint of that pit. So it would all need moving.”
Widdup says there is a huge benefit to the smelter remaining operational because it eliminates the high cost of having to rail copper concentrate to the Port of Townsville.
“North Queensland has always been an expensive place to do business because of the tyranny of distance,” he says.
“I think there’s a couple of project feasibility studies that you could find in the public domain that might suggest to transport a tonne of product from Mount Isa along the train line to Townsville is going to be a multiple of what it costs BHP (ASX:BHP) to take a tonne of iron ore from the Pilbara all the way to China.
“It costs a lot of money to send a tonne down that railway in North Queensland.
“There is a viable case into the future but someone more or less needs to take a fresh development approach to it, which is probably where a lot of those discussions end.
“I don’t know if there is a permitting blockage in taking Mount Isa to the next iteration of its life, which I think will probably happen.”
QMines (ASX:QML) executive Chairman Andrew Sparke tells Mining.com.au the company is currently in talks with Glencore.
The company has copper-gold and copper-zinc projects within 90km of Rockhampton in Queensland.
“We’ve got a great relationship with Glencore. We’re talking with them at the moment. They’ve obviously got the smelter in our region, so it’s a logical conversation for us,” Sparke says.
“But I think they’ve made it public that they want to close that smelter by 2030. We see central Queensland as being really the forgotten end of Queensland. There are seven or eight deposits all within 150km of each other.
“We’ve now consolidated three or four of those. We see this, I don’t want to use the word Mount Isa 2.0, but certainly there’s a big regional play that’s forming here.
“We think we can be a big part of Queensland’s copper and gold production going forward.”
Another opportunity for the region, according to Widdup, is the abundant supply of sulphur in old tailings dams that could be utilised to support Queensland’s growing vanadium sector.
“Across Queensland, North Queensland in particular, there are a lot of tailings dams which are in various states of rehabilitation or abandonment which have an awful lot of sulphur in them,” Widdup notes.
“There’s a vanadium industry perched for development in North Queensland and one of the inputs is sulphuric acid.
“Rather than importing all of that stuff, keep the smelting business going, there is an awful lot of business that could be done in a holistic sense there.
“You need the private sector to see a rosy future and I am convinced there is one.”
Write to Angela East at Mining.com.au
Images: Glencore & QMines
