MELBOURNE (Reuters) - Glencore (LON:GLEN) will spend A$500 million ($356 million) to extend the life of its copper smelter and refinery in the Australian state of Queensland beyond 2022, after reaching a funding agreement with the state government, both parties said on Wednesday.
The global miner said it had secured a one-off incentive from the Queensland state government for the business which includes its Mount Isa copper smelter and Townsville refinery, ahead of a state election at the end of October.
The Queensland state government said it had offered "multi-million dollar" support but did not provide further details.
Queensland Premier Annastacia Palaszczuk said state funding would help protect jobs and maintain critical industrial capability and supply chains during tough economic conditions due to the coronavirus pandemic.
The support package will allow for the bricks lining the Mount Isa smelter in the north west of the state to be replaced late next year, a process that occurs every four years.
"This incentive will partially mitigate the negative costs of continuing these assets which face high fixed costs and struggle to compete internationally," Glencore said in a statement.
Australian manufacturers have for years been struggling with high power prices, which account for a substantial portion of metal production costs.
The agreement will secure around 570 direct smelter and refinery jobs, and a further 520 jobs at chemicals maker Incitec Pivot 's (AX:IPL), operations in North Queensland, which take sulphuric acid from the Mount Isa plant, the government said.
As part of an A$8 billion funding package, the Queensland State government will also spend A$50 million on the Mount Isa rail line to boost capacity between the state's north-west minerals province where miners like South 32 (AX:S32) also operate, and Townsville, which is its largest port.
Glencore also said it would also examine the economic feasibility of large scale e-recycling or custom smelting.