Glencore is ditching Australian copper. What does it mean for our critical minerals industry?

In the next 30 years, the world will need at least twice as much copper as it currently produces.

Next to Chile, Australia holds the world’s largest copper reserves, with most deposits lying under South Australia and Queensland’s North West Minerals Province.

Despite increasing global demand for the critical metal and Australia’s position to meet that need, Glencore announced in mid-October it would close its last copper operation in the country, the Mount Isa mine, in 2025.

Experts say Glencore’s decision to get out of Australian copper should not be seen as a lack of faith in the industry.

“Demand for copper isn’t going away, it’s only going to be exacerbated,” said senior resource analyst with MineLife, Gavin Wendt.

Meanwhile, Glencore’s decision to keep running the Mount Isa smelter created opportunities for smaller miners and prospective projects in the North West Minerals Province.

“There’s a lot of investors wanting to fund emerging projects in Australia,” Mr Wendt said.

Clock ticking on dated copper mines

Glencore’s closure of its Mount Isa asset reflected a worldwide issue in copper mining as established operations reached their expiry date, Mr Wendt said.

“What’s common among a lot of copper operations these days is that all grades are declining the deeper you go underground and big mines are reaching the end of their life. That is what is happening at Mount Isa.

“It is simply not a profitable enough asset in Glencore’s portfolio anymore.”

As copper grades declined at established mines and importers sought higher-quality product, budding Australian minerals miners had a golden opportunity, Mr Wendt said.

“The world still needs huge amounts of quality copper and investors are looking at Australia as a low-risk mining market with huge critical minerals potential,” he said.

Smaller miners taking over

In April 2022, Glencore announced it would sell its Mount Margaret copper mine in the North West Minerals Province, which had been lying dormant since 2014, to Australian miner Comet Resources which saw “significant potential for resource growth”.

In January last year, Australian company Evolution Mining announced the purchase of the Ernest Henry copper-gold mine from Glencore for $1 billion.

“For Glencore it’s more a matter of offloading smaller operations than it is offloading copper-specific projects,” Mr Wendt said.

“One of the benefits of having smaller companies manage these mines is that they are able to devote more time and resources to actually maximising the efficiency of these smaller operations,” he said.

The fact that Glencore was keeping its copper smelter open would draw more investment in smaller mines across the region, Mr Wendt said.

“Companies are now more incentivised than ever to commercialise copper deposits.

“Knowing that there is existing processing infrastructure in the North West Minerals Province is a massive boon for those emerging mines to get investors on board,” he said.

Government looks to accelerate projects

Following Glencore’s announcement that it would close its Mount Isa copper operation, the Queensland government promised up to $30 million to accelerate the development of resource projects in the North West Minerals Province over the next five years.

And last week, Prime Minister Anthony Albanese announced $2 billion would be injected into mining and processing critical minerals to fuel the global shift to renewable energy and reduce reliance on China.

“We want to move Australia up the international value chain in critical minerals, energy, and manufacturing,” Mr Albanese said.