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Glencore threat to leave Mt. Isa: Part nationalisation necessary

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Garpal Gumnut

Garpal Gumnut

Ross Island Hotel
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This may have passed under the radar of many capital city based investors but there is a real possibility that Mt. Isa may become a ghost town should Glencore close it's copper smelter. The Katter Party are pushing for funding from the LNP Qld. State Government and the ALP Federal Government to save the town. As this article from the Townsville Bulletin indicates short term small injections of fund won't work. Given the billions being spent on the Brisbane Olympic Games which will temporarily boost the capital's economy it seems reasonable for the Glencore operation to be nationalised to protect Northwest Queensland.

gg
 

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there are mutterings the cost of railway services from Townsville to mtIsa are quite steep, too.

but should subsidising be fair?
 
F#%K Glencore.

Like any vital National industry should be taken over at Minimal cost. Kept going in the national interest. Once Stable the re-privatised.
 
From all accounts subsidising has a poor track record in Australia. There is serious talk of partial nationalisation whatever that means. None of the major parties are pushing it atm. as it would involve expenditure along the lines of the Brisbane Olympics to be realised. Unfortunately that would mean that if the ALP ever got back in to power politically, the joint would be run by the CFMEU with all the attendant governance problems.

It is quite a problem because Mt. Isa is doing it tough atm. and the Dreamtime is a nightmare for the inhabitants. There is basically no functioning town of a reasonable size between Brisbane and Darwin which would bring national security issues in to the conundrum.

Glencore from my knowledge of them are not the nicest bunch of people neither. The KAP Katter's Party are the only one's making any noise atm. and Mt. Isa to the coast is their heartland.

My bet is that government would spend more keeping actors and influencers employed on the Gold Coast than working men and women in Mt. Isa. Nobody cares about the bush.

gg
 
restructuring in a big way ... corporate transformation / M&A ahead?

Glencore shifts $30b in assets to Australia in major restructure​

Peter Ker Resources reporter
May 29, 2025

Glencore has shifted more than $30 billion in foreign assets into an Australian subsidiary in a huge restructure designed to make it easier to strike a future mega-merger with a rival commodities giant.
Coal mines in Canada, South Africa and Colombia, a copper resource in Argentina and a South African manganese, chrome and vanadium business are among the assets shifted into the local Glencore Investment Pty Ltd.

The restructure comes less than a year after Glencore publicly debated the merits of demerging its flagship coal division, and eight months after it tried to engage Rio Tinto in merger talks for the second time in a decade.

Despite deciding against the divestment of the company’s coal division, which delivered 38 per cent of earnings last year, Glencore chief Gary Nagle has shifted all of Glencore’s global coal assets into the same Australian entity that holds its NSW and Queensland coal mines.

The changes were quietly disclosed to the Australian Securities and Investments Commission on April 30, although the company said the transaction took place in December. That was four months after Nagle announced that Glencore would no longer spin off the coal business.

The undeveloped Mara copper project in Argentina was also shifted into the same Australian entity with the coal mines, but has since been moved into another Glencore subsidiary. Mara is a low-cost copper and gold option because of its proximity to Glencore’s existing Alumbrera processing plant.

The South African ferroalloys division, which makes chrome, vanadium and manganese near Johannesburg, has also been transferred into the local subsidiary. The transfer means that the total assets held by the Australian vehicle has doubled to $US42 billion ($65 billion). The asset transfers required $US3.8 billion of cash to move between Glencore subsidiaries, as well as $US614 million of intra-company share issuances.

Tribeca Investment Partners portfolio manager Ben Cleary said Glencore appeared to be readying for a transaction with the restructure.
“None of their suitors want coal or South African assets, similar to the process that Anglo American has been going through over the past 12 months,” he said. “The Glencore coal assets would trade at a much higher multiple in Australia than London. There won’t be much reason to go to London other than the cricket if Glencore and Anglo get knocked off.”

A Glencore spokesman said the restructure was first conceived when the Swiss company was considering the coal demerger, and was completed even though it had decided to keep coal.
“As part of the planning for the previously considered coal spin off, combined with the acquisition of [Canadian coal mines acquired from Teck Resources], we commenced a process to restructure the coal business and align it with the management structure,” he said. “As this was already in progress we chose to complete the restructure despite the shareholder engagement resulting in a decision not to proceed with the spin-off.”

Glencore did not say why copper, chrome, vanadium and manganese producing assets had been placed in the subsidiary with the coal assets.
The restructure means most of Glencore’s South African mines are now under one roof. BHP has previously made it clear that it does not want to work in South Africa, where infrastructure is poor, violence at workplaces is common and black empowerment laws complicate ownership structures.

Other possible merger partners like Rio do not want to own coal mines. The restructure puts most of Glencore’s unattractive assets in one vehicle, and makes a structural simplification of its copper assets easier.

While departing Rio chief executive Jakob Stausholm was reluctant to engage in merger discussions with Glencore, some members of his executive committee – one of whom may become his successor in the top job – are understood to be more amenable to the concept.
 
Garpal Gumnut said:
there is a real possibility that Mt. Isa may become a ghost town should Glencore close it's copper smelter.
Click to expand...
I'm not familiar with the economics of this particular facility but in general for smelting and refining the big costs tend to be energy, raw materials, labour and in the case of a location such as Mt Isa transport will also be significant.

In the case of Mt Isa well energy costs aren't extreme but they're also definitely not cheap by world standards so that's a negative, and I hear reports about the cost of transport to the coast too which would be another factor. :2twocents
 
Dona Ferentes said:
another article on the potential merger actions

Click to expand...

BHP aren't going to buy any coal assets are they?

Not sure who else would want to pick up assets in dodgy areas either, except for S32, but they're half the MC of this new division.


Back to Mt Isa, QLD really needs to keep that working. Maybe someone like S32 scoops up some minor development plays in the vicinity and keeps the mill working in order to keep Mt Isa's light on.

Out of left-field, maybe the US could buy Mt Isa and build and airforce base there for strategic projection. Might need other options when Tindal is blown up in a first strike.
 
Every energy intensive project in Australia will be currently having a viability audit carried out, to see if it is viable to convert the process to renewables and also what carbon offsets will need to be purchased to meet the legislated emission targets.

If the mine life and expected return on investment doesn't add up, my guess is the asset will be moved on or closed, before they become a liability.

I think there will be quite a few more, before 2030.
Add to that the Federal Government has got its work cut out just meeting it's electrical commitment, while bailing out Whyalla and Rio Tintos aluminium smelter and I think Mt Isa will probably have to paddle its own canoe

From google, because I can't be bothered chasing the exact detail:

Specific projections:
  • Some sources suggest that carbon offset prices could reach between $20 and $50 per metric ton of CO2 by 2030, representing a significant increase from current levels.

  • Other projections predict a tenfold increase in the price of carbon offsets by 2030, potentially reaching $30 per metric ton, according to Senken.

  • These price increases are expected to be driven by increased demand from companies aiming to meet their net-zero goals and the need for higher-quality offset projects.
 
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the naming reflects their attitude

DirtyCo., formally Glencore Investment Pty Ltd, the subsidiary now includes coal mines in Canada, South Africa and Colombia, a copper resource in Argentina and a South African manganese, chrome and vanadium business.

Along with coal mines, the undeveloped Mara copper project in Argentina was shifted into the Australian entity, although it has since been moved into another Glencore subsidiary. Mara is a low-cost copper and gold option because of its proximity to Glencore’s existing Alumbrera processing plant.

61331d14cc5e12ea796c6a668d8fdbfb9615524fc1e2ef0967.jpg
The South African ferroalloys division, which makes chrome, vanadium and manganese near Johannesburg, has also been transferred into the local subsidiary. The transfer means that the total assets held by the Australian vehicle have doubled to $US42 billion ($65 billion). The asset transfers required $US3.8 billion of cash to move between Glencore subsidiaries, as well as $US614 million of intra-company share issuances
 
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