General News
19 November, 2025
EXCLUSIVE: Glencore's $600m smelter package in doubt
With the future of Phosphate Hill in doubt, Glencore has yet to sign an agreement with the state and federal governments.
Mount Isa’s copper smelter and Townsville’s refinery could still close next year, as Glencore considers the possibility of sensationally rejecting a $600 million support package from the state and federal governments.
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UPDATE: Glencore says this morning that the claim that it is considering rejecting the $600m deal is "completely false".
A spokesperson said the company was "on track to sign the agreement".
North West Weekly stands by this morning's original story and its accuracy.
Glencore refused to answer follow-up questions on what conditions it was trying to put into the agreement should Dyno Nobel go through with its plans to shut down Phosphate Hill.
A list of the original questions sent to Glencore can be found at the bottom of this article.
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It’s been 42 days since federal Minister for Industry Tim Ayres and state Minister for Natural Resources and Mines Dale Last flew into Mount Isa to announce the three-year deal that would guarantee the copper smelting operations in the North West.
But there was a catch.
The deal had yet to be signed.
Dyno Nobel's threat to close Phosphate Hill in September next year has shaken the Swiss commodity trader's confidence in committing to the future of the smelter and refinery.
Seven weeks after the announcement and pen has yet to be put to paper between Glencore and the governments, other than the original Heads of Agreement, a preliminary, non-binding document.
Glencore confirmed as much in a statement to North West Weekly.
“Following the announcement of a funding support package with the Australian and Queensland governments to continue operating the Mount Isa copper smelter and Townsville copper refinery, all parties are continuing to work through the very detailed agreement process,” a Glencore spokesperson said.
“These discussions are commercially sensitive and confidential in nature.”
North West Weekly made a number of attempts to contact Senator Ayres for comment, but his staff did not reply to emails and text messages.
Mr Last said this week he expected all parties to “honour their commitments”.
“The Crisafulli government is committed to the future of North West Queensland and securing long-term jobs across the copper supply and processing chains,” he said.
“While commercial matters remain confidential, we’re actively engaged with Glencore and expect all parties to honour their commitments.”
CLOSURE THREAT ROCKS NEGOTIATIONS
Glencore was left blindsided by Dyno Nobel, which issued a statement on October 1 – a week before the announcement of the smelter/refinery package – stating that it would close its Phosphate Hill operations in September 2026 if a buyer could not be found by March 31.
A high-level source told North West Weekly that Glencore was not willing to sign the $600 million deal with a black cloud hanging over Phosphate Hill.
“The deal might still get done but there will be a lot of conditions put in place to cover the potential closure,” they said.
“What’s the point of re-bricking the smelter if you have to shut down in September next year?”
Member for Traeger Robbie Katter said he was not aware that the deal hadn’t been ratified when contacted by this masthead, and questioned the appropriateness of making the announcement before all parties had signed.
“Should they have made it? Well, no,” the Mount Isa-based MP said.
“This is a manifestation of precisely what we warned against, which was doing a quick fix versus a long-term solution.
“What was announced was a political fix to try and buy them some time, but it was never a solution.”
Mr Katter said the fact that the Dyno Nobel situation was known prior to the announcement should have set off alarm bells.
“There’s no point operating if something else fails in the value chain,” he said.
“We always said it was a symbiotic relationship. If you don’t have one, it all falls over.”
'INEXTRICABLY LINKED'
Due to the nature of Glencore’s copper smelter, the on-site acid plant owned by Dyno Nobel, and its Phosphate Hill fertiliser plant south of Mount Isa, none of the three operations can work without the other.
The copper smelter sends sulphur dioxide (a by-product of the smelting process) to the acid plant, which treats the off-gases and uses them to manufacture sulphuric acid used in fertiliser production.
Sulphuric acid is shipped by rail to Phosphate Hill to help make fertiliser. Phosphate Hill relies heavily on low-cost acid sourced from the Mount Isa smelter/acid plant.
The acid plant is also critical in terms of Glencore maintaining its compliance with air quality limits.
This was reiterated last month when Glencore said this on the day of the funding package: “The Mount Isa copper smelter and Dyno Nobel acid plant are inextricably linked – one cannot operate without the other,” a spokesperson said.
Mr Katter said both Glencore and Dyno Nobel needed a better gas price, rather than government bailouts.
“(The governments) still haven’t fixed gas prices or come up with a gas reserve policy,” the KAP leader said.
“They’ve said some nice words about it, but they haven’t delivered.
“And here we are.
“I think I could count to memory at least four or five times that we've formally (brought up the gas issue) just in state parliament over the last 10 years.
“I'm sure dad (Member for Kennedy Bob Katter) has done the same in federal parliament.”
Mr Katter said the future of the North West would be in grave doubt if the gas situation was not quickly resolved.
“I'm not one to defend big companies, but it doesn't matter what size business you are in the North West or what sort of mining company you are – you can't endure some of the world's highest energy prices,” he said.
“You just can't compete when you're paying $16 a gigajoule and everyone else is paying $6 around the world.
“And that's the reality the Australian government and the Queensland government need to face.
“If they want to try and let those people try and compete on those terms, it's going to close down eventually at some point.
“You can absolutely guarantee that.
“But if they want to address it, they're going to have to change something.
“I'd argue it's just the free market disease that our governments have had for the last 30 years.
“They just can't comprehend walking away from all the free trade nonsense that's led us to the point we're at.”
PUSH FOR SPECIAL ECONOMIC ZONE
The Member for Traeger said the current situation highlighted the need for a Special Economic Zone in the North West.
“If anyone thought (the $600 million package) was a solution and problem solved, you had rocks in your head,” the MP said.
“The KAP, in the strongest terms possible, tried to warn both the state and federal government of that. And they identified that long-term solutions were too tricky, they found too difficult, or that it was going to take more time.
“I don't really trust them saying that because I think when governments say that things take too long, that's just a euphemism for putting it off and trying to get around never having to deal with it.
“So yeah, I think it's been a real swing and miss on this rescue package and they need to work really fast to do this properly and do it as a package so you don't have to keep coming back
“Just get to the root of the issues. There's not a lot of them, there's just a handful.
“You can get your head around them pretty quickly and resolve them, and then they don't have to touch it again.”
Last month’s announcement said the federal government and state government would invest up to $600 million over the next three years in Glencore’s Mount Isa copper smelter and Townsville refinery.
“This support package will alleviate immediate pressures on the facility and reinforce Australia’s position as a key global supplier of copper in an increasingly competitive market,” the official media statement said.
“Funding will be provided in three payments of up to $200 million over the next three years, contingent on the completion of a transformation study, alongside other review points.
“The transformation study will focus on driving sustainable and long-term industrial capability in Mount Isa.
“It will evaluate the end-to-end copper value chain in the region and seek to understand the long-term opportunity for the facilities, industry and Mount Isa workers beyond the support period, positioning the region for a more diverse and resilient future.
“Both governments have now signed a Heads of Agreement with Glencore, giving certainty to workers, local communities and the businesses that rely on the Mount Isa operation.”
'ENGAGED IN THE PROCESS'
This week, Glencore said it still had an eye on the future of the smelter and refinery.
“Our focus remains on planning for the future of these operations, including the detailed scope and opportunities for the Transformation Study,” a spokesperson said.
Senator Ayres was questioned the day after the $600 million announcement about the lack of support for the Phosphate Hill operation.
He said the federal government would ensure Dyno Nobel was “engaged in the process”.
“That's what this is all about; an interdependent industrial ecosystem where one facility depends upon the other, and they depend upon each other for their future viability,” the federal Minister said.
“The Townsville refinery, too … absolutely vital for the existence of both of those facilities. So that's what this strategy is all about.
“I've met with Dyno Nobel, of course, and spoken to them a number of times.
“We'll make sure that they are engaged in this process. The issues that confront that business are complex.
“The owner has plans for, you know, alternative ownership of that facility. Let's make sure we work together to secure the best new ownership possible for that facility in the community's interest.”
QUESTIONS TO GLENCORE
These were the questions we put to Glencore this week:
1. Has the $600m package between Glencore and the state and federal government officially been ratified? At the announcement, it was yet to be signed off.
2. Has Glencore received any payments from the government yet?
3. Dyno Nobel says it will close Phosphate Hill and the acid plant by September next year if it doesn't sell the business by March next year. Is there any way the copper smelter could operate if the acid plant were to shut?
4. What reliances does Glencore require from the government from other operators in the area ie CopperString and Phosphate Hill?
5. Given acid is so important to the new vanadium industry and the government's critical mineral strategy, what happens if the acid plant shuts down?
6. There is talk that the closure of the acid plant would create a major gas surplus for Glencore. Is that true and what does that mean?
7. Has Glencore spoken to the Director General of the Department of Natural Resources and Mines about the prospect of not accepting the $600 million package?
8. Should Mount Isa residents be concerned about the future of the Mount Isa Copper Smelter?
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This was the response from Glencore:
"Following the announcement of a funding support package with the Australian and Queensland Governments to continue operating the Mount Isa copper smelter and Townsville copper refinery, all parties are continuing to work through the very detailed agreement process. These discussions are commercially sensitive and confidential in nature.
"Our focus remains on planning for the future of these operations, including the detailed scope and opportunities for the Transformation Study."