Glencore Gets $395 Million Government Bailout for Australian Copper Smelter, Refinery — 2nd Update

By Rhiannon Hoyle

Glencore will get a government bailout valued at up to 600 million Australian dollars, equivalent to US$395 million, to keep its Mount Isa copper smelter and Townsville refinery in Australia's Queensland state open for the next three years.

The Swiss commodities giant has been losing money from the smelter and refinery because of a China-led oversupply in smelting capacity and high Australian energy costs, among other reasons, and warned officials it would close the operations without government support. Glencore has been in talks for the past eight months with Australia's federal and Queensland state governments, which will share the costs of the bailout equally.

The deal was pieced together as Western policymakers fret about China's dominance in producing many minerals essential to modern technologies and military needs. It follows a roughly US$87 million bailout from federal and state governments in Australia for one lead and one zinc smelter owned by a unit of commodities trading giant Trafigura.

Australia needs to maintain its domestic minerals and metals processing capability at a time where global production is becoming increasingly concentrated in a single market, the country's industry minister Tim Ayres said Wednesday.

China has accounted for 75% of all copper-smelter capacity growth globally since 2000, consultancy Wood Mackenzie said in a report last year. Today, China accounts for more than half the world's capacity.

"If Australia didn't already have established facilities like the Mount Isa Copper Smelter, we'd be looking to build them to protect Australia's industrial capability, and strengthen the capability needed for [the] future," said Ayres.

Copper demand in particular is widely expected to surge because of the metal's heavy use in electric vehicles, renewable energy and data-center infrastructure.

The Mount Isa smelter and associated Townsville refinery "are strategic national assets that underpin the copper supply chain across Queensland and the country's critical minerals strategy," Glencore said in a statement.

The operations account for half of Australia's copper-smelting capacity. Mount Isa is the only smelter in the country that treats products from local and regional mines as well as across Australia, Glencore said.

"Competition in the global copper smelting market is fierce and it's not a level playing field with various countries seeking to secure substantial market positions," said Troy Wilson, interim chief operating officer for Glencore's Australian metals business.

Wilson said the rescue deal provides "a short-term lifeline" for the smelter and refinery. The miner has already absorbed significant financial losses to keep the operations running while in talks with officials about government support, he said.

Glencore projected a A$2.2 billion loss from the operations over the seven years to 2031, according to a memo sent to employees in July.

"It is our hope that conditions improve over the next three years to a point where government assistance is no longer necessary," Wilson said Wednesday.

The operations, which employ about 600 workers, produce a pure copper cathode that is exported via the Port of Townsville to customers worldwide.

The bailout will include three payments of up to A$200 million over the next three years, contingent on Glencore meeting certain obligations including a "transformation study" to explore long-term options for the operations and the region more broadly, said Ayres, the industry minister.

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com

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October 07, 2025 23:48 ET (03:48 GMT)