Mining and Heavy Industries

Energy debate flares up after Glencore threat

Copper has slumped in price.

The national debate over energy prices for industrial consumers has reignited this week after Glencore threatened to wind up its massive Queensland copper operations if conditions didn’t improve.

Glencore, which operates a large copper operation in Queensland’s north, appeared to use the national debate over government funding for Adani’s controversial Carmichael coal mine and railway, to highlight the lack of help it feels like it is getting from the State and Federal Governments in the ongoing energy crisis.

Major industrial energy buyers like Glencore have faced increasingly steep energy bills of late, due in part to the huge amount of gas being exported through Queensland’s three new LNG terminals, which are drying up domestic supply.

While the Turnbull Government and ACCC have moved to investigate the situation, Glencore wants action soon.

In a letter reportedly sent to Queensland’s Premier, the Prime Minister, and the respective state and federal resources ministers, Glencore copper boss Aristotelis Mistakidis said the company may consider closing its copper processing facilities, including its smelter in Mount Isa, and refinery in Townsville.

“There are a range of cost factors which are currently impacting the ongoing viability of our copper operations in Queensland,” he was quoted by Fairfax, “including energy, labour, rail and freight.

“Given the current electricity prices and 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 at one of our other plants offshore.”

The letter has sparked further comments from industry members, also unhappy with the continued state of energy supply.

Matt Howell, chief executive of Australia’s largest aluminium smelter business Tomago, told the AFR the company was also investigating cutting into production as a result of “ridiculously high” wholesale energy prices.

Part of the Turnbull Government’s response has been an investigation by Chief Scientist Alan Finkel, the findings of which are due mid-year.

But the Prime Minister’s office pre-empted the investigation’s findings this week by ruling out any emissions intensity scheme, and confirming that the Clean Energy Finance Corporation funds could indeed be used for “clean” coal technologies.

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