Global Swiss-based miner Xstrata says it will close down its copper smelting activities at Mt Isa and refining in Townsville, in north Queensland, as part of a program to "sustain the future of its ... operations" in area.
Xstrata announced the program on Wednesday, saying it also would expand its Mt Isa mining and concentrate production operations.
Copper smelting at Mt Isa and refining in Townsville would close by the end of 2016, Xstrata said, in a statement from its local subsidiary, Xstrata Mount Isa Mines.
The statement follows a report in News Ltd newspapers on Wednesday that said Xstrata would threaten the closures as part of a stand-off with authorities over emissions.
The report said up to 500 jobs would be lost by the closures.
News that makes sense
Your trusted source for staying up-to-date with the world around you. Get free daily news updates and analysis, straight to your inbox.
The Xstrata statement said, however, that the Mt Isa smelting and Townsville refining would phased out by the end of 2016.
"The future for Xstrata's north Queensland operations includes the expansion of existing mining operations and the potential development of new mines at Mount Isa and the broader region," Xstrata said.
"This would also include the continuation of lead smelting and the expansion of port facilities in Townsville and create long-term employment opportunities."
Xstrata Copper North Queensland Chief Operating Officer, Steve de Kruijff, said the plan had not been adopted lightly, but was a necessary response to changing global market conditions.
"Market conditions have been very challenging for copper smelting and refining operations as a result of overcapacity in the global market, low treatment and refining charges and increasing operating and capital costs," Mr de Kruijff said.
"The economic viability of our Mount Isa copper smelting and refining operations has been under increasing pressure for a number of years and cannot be sustained in the long term
. "We need to evolve our business to ensure we can secure the future of our operations for the long term."
Mr de Kruijff said Xstrata's operational plan over the next five years would see significant investment in north Queensland to focus on exporting mineral concentrates, along with the development of the necessary infrastructure to increase rail and port capacity.
"We want to make it absolutely clear that we value our people.
"Our main priority is to ensure employees remain with the business and we will be working closely with our workforce to deliver retraining and retention packages to support our operations well into the future."
Xstrata said the company's Mt Isa resources of 587 million tonnes of zinc mineral and 416 million tonnes of copper mineral were "potentially accessible" through expanded underground and open mine operations.
Concept studies into development were proceeding.
Xstrata Mount Isa Mines said it would submit an Environmental Management Plan to the Queensland government seeking endorsement for its long-term strategy for Mount Isa operations.
"We take our environmental responsibilities very seriously and we are committed to complying with all environmental objectives as required by the new regulations," the company said.
Xstrata would continue to work closely with the Queensland Government, its employees and local communities to implement its long-term strategy for sustainable operations in north Queensland.
