General News
24 July, 2024
Glencore fights Katter on proposed change to its Mount Isa Mines Act
The mining giant has defended its position in a submission made to the state government.
Glencore has slammed Robbie Katter’s proposed amendments to the Mount Isa Mines Act, claiming they cannot be realistically implemented, ignore existing ministerial oversight and would threaten investment in the city.
Writing in its submission to the state parliamentary inquiry that is currently investigating the Katter’s Australian Party amendment bill, put forward by the Traeger MP in May this year, Glencore said the proposal to force it to relinquish unused mining assets to a third party failed to realistically consider the nature of operations at MIM.
“The proposed bill is aggressive, unworkable and fails to consider the practical reality that the mining and processing facilities at Mount Isa Mines function as a fully integrated complex,” said the submission by Glencore Australia Zinc Assets chief operating officer Sam Strohmayr.
“It has no regard for how the third-party operations can co-exist with the ongoing mining operations of Glencore at the mine.
“This poses safety, environmental, logistical and commercial risks. The bill refers to Glencore relinquishing existing rights but is silent on the issue of obligations (payment of rent, environmental compliance, rehabilitation liabilities etc) on the incoming acquirer of our mining rights, particularly when we would still be operating on other parts of the mine.
“How would the practical aspects of co-existence work in relation to infrastructure, logistics and other facilities?
“How are safety, environment and other compliance obligations managed where two different companies are effectively mining in the same place for different minerals?”
Glencore said it was also unrealistic to demand the cessation of mining activity would have no adverse impacts on the Mount Isa or Queensland economy.
“The bill proposes that the minister can only approve a change to the Mount Isa Mines operations if the Minister is satisfied that the change will not adversely affect the economy; or... a third party is selected by the minister and Glencore agrees to relinquish its rights to that third party,” the submission states.
“It is hard to imagine how the reduction or cessation of some existing mining activity would not have some ‘adverse impact’ on the Mount Isa community or Queensland (eg. loss of jobs, loss of export revenue, loss of royalties) and therefore this limb might never be satisfied.
“The bill does not provide an option that allows the operator to cease an existing activity even though no third party might tender and agree to acquire it.”
Glencore said the existing regulatory regime that oversees mining lease approvals provides the State Government with “extensive” discretionary powers to demand information and action from mining companies.
“The Mineral Resources Act provides that all leases for prescribed minerals must have a ‘development plan’ which provides the regulator with detailed information about the nature and extent of activities to be carried out under the relevant lease,” it said.
“Those plans must be approved by the (state) Minister.“
Glencore said the amendment bill proposed a “retrospective encroachment on existing rights of the lease holder” that would increase the level of sovereign risk and jeopardise private investment in the state.
The much-anticipated submission from Glencore could spark a fierce debate over sovereign rights versus sovereign risk as city leaders navigate the fallout from up to 1200 job losses when MIM underground copper mines cease activity next year.
When introducing the bill to state parliament, Mr Katter said he wanted to send a clear signal that Queensland resources “are not just here to be exploited”.
“This bill is about giving power back to the Queensland people so they cannot be exploited at the whim of a global commodity trader such as Glencore,” Mr Katter told parliament.
“We cannot expand copper production when we are overseeing the shutdown of the third biggest copper mine in Australia.
“If it was fully depleted and there was no one wanting to buy it – fair enough – but we have buyers who say that they can operate that mine and that it is of great interest to them.”
However, Queensland Resources Council CEO Janette Hewson wrote in her submission that the amendment bill would have a detrimental impact on mining sector confidence in Queensland that would increase sovereign risk.
“Sudden changes to the policy requirements that govern an existing mining operation significantly erode the ability of mining companies to appropriately plan for projects that can span several decades,” Ms Hewson wrote.
“Stable policies allow mining companies to comprehensively plan for the full mining life cycle, which inevitably includes mine closure.”
Glencore said the company had provided opportunities for Mount Isa Copper Operations workers to relocate to non-impacted areas, such as George Fisher Mine.
The company’s submission said that about 660 workers had expressed interest in redeploying to other areas of the company, with more than 70 transfers approved.
“Every mine has a beginning, a middle and an end,” the Glencore submission said.
“After over 60 years of operation, the economically viable copper ore bodies at Mount Isa Mines have been mined out. It is never an easy decision to close a mine, knowing that workers and their families will be impacted.
“Our approach has been to provide almost two years advance notice of the closure so we can engage and consult with our workforce through this transition.”
Glencore said that low grade resources had been incorporated into the mine plan, which had extended the mine life to 2025.