PERTH (miningweekly.com) – Diversified miner Xstrata on Wednesday refuted claims that it would be withdrawing from its Mount Isa operations, in Queensland, as a result of the proposed super profits tax (SPT).
“Xstrata would like to reaffirm its commitment to Mount Isa,” CEO for Xstrata copper Steve de Kruijff said.
“The Ernest Henry Mining (EHM) copper mining operation, near Cloncurry in north-west Queensland, is a critical part of Xstrata’s integrated north Queensland operations, which also includes Xstrata’s Mount Isa Mines copper and zinc mining and processing operations, and the Townsville copper refinery and port operations,” said De Kruijff.
Xstrata operates two separate mining and processing streams at Mount Isa, including a copper and zinc/lead/silver projects.
The zinc operations include the underground George Fisher mine, from which 3,1-million tons of ore are mined a year, and two openpit zinc/lead mines, namely Black Star and Handlebar Hill.
The copper operations include two underground copper mines, the Enterprise and X41, from which 6,2-million tons of ore are mined a year.
“The EHM underground mine development is key to building a sustainable future for these operations and the continued supply of copper concentrate to our smelter in Mount Isa, which in turn supports our refining operations in Townsville.”
De Kruijff noted that Xstrata’s mining, smelting and refining operations in north Queensland played a vital role as an economic driver in the state’s north-west, and contributed more than A$1,9-billion to the Queensland economy last year.
Earlier this month, Xstrata suspended A$586-million of expenditure to develop two Australian projects, because of the proposed SPT.
The two affected projects were the A$6-billion Wandoan thermal coal project and a A$600-million project to extend the life of the Ernest Henry copper mine, both of which were in Queensland.
Xstrata was suspending a A$400-million budget on the shaft underground mine at Ernest Henry, A$91-million on early works and detailed design at Wandoan, A$82-million of additional exploration at Wandoan and A$13-million of drilling on additional coal expansion projects in Queensland.
The diversified miner’s decision to suspend the capital expenditure on these projects came a month after it announced the suspension of a A$30-million exploration programme for the Mount Isa and Cloncurry districts, also in Queensland.
“The proposed federal government's SPT has the potential to impact the long-term sustainability of Xstrata’s north Queensland copper operations,” De Kruijff said.
“While we are currently committed to our existing copper and zinc operations in north and north-west Queensland, we urge the federal government to engage in meaningful consultation and to put an end to the uncertainty that this proposed tax is creating regarding future investment decisions.”