News Alert: Smelting and Refining of Mount Isa copper in Queensland to cease.
Guest post by Viv Forbes
The first industries of Australia were farming and mining and these two have been the backbone of the nation ever since. Both are threatened by the taxaholics in Canberra.
Shorthorn and Brahman cattle arrived with the first fleet and coal was discovered by convicts at Newcastle in 1791, just three years after the First Fleet arrived. The first Merino sheep arrived in 1797 and coal mining started in 1798. Since then mining and farming have earned the majority of Australia’s income.
Wool and wheat, gold and silver, butter and cheese, copper and lead-zinc, leather and tallow, iron and steel, sugar and wine, coal and hydro-carbons, meat and mutton, aluminium and uranium, timber and fish, nickel and titanium – these comprise Australia’s Magic Pudding.
But the Gillard/Green/Garnaut Carbon Tax Coalition hate our primary industries because they all depend on carbon fuels and produce the carbon dioxide that feeds our crops. Our backbone industries are seen as dreaded “polluters” and treated like noxious weeds and serpents to be removed from the green Garden of Eden.
Our pioneering squatters and prospectors blazed the trails which Cobb and Co turned into the roads of Australia. Wool from the merinos, almost alone, carried the nation until the 1850’s when metals started to create wealth – lead, copper and gold were discovered in the 1840’s and 1850’s. Mining started soon after and then cattle raising became profitable to feed the miners. Better roads, towns and then railways were built to move our primary products to the smelters, spinners, millers and tanners in Europe. Ever since, our great primary industries and the industries dependent on them have supported all Australians.
Mining is largely a materials handling operation, and it needs a lot of energy for mining, crushing, grinding, smelting, refining and transport.
The first copper mines extracted only high grade surface ore. They mined it selectively using human muscle power, packed it to the coast using camels, donkeys, horses and bullocks, and shipped it on sailing clippers to smelters in Europe. All stages used politically correct “green” energy.
But “green” transport moves slowly. Some loads of ore that looked profitable when they left the Peak Downs Copper Mine in central Queensland on donkeys, were sold at a loss, months later, when they landed at the copper smelter in Wales. Mining was thus an intermittent business – booming when metal prices were high, closing when prices fell.
But the high grade surface ores never last long, and the deeper primary ore is generally much lower grade. It was OK to send 40% copper ore from Cloncurry to the coast using horses and drays, but ore containing just 2% copper would not cover the costs.
So the first metal processing started with primitive on-site smelters (often using wood and charcoal, both “green” energy). Smelters removed most of the impurities leaving crude metal with +95% copper which was exported to overseas refineries. Later, Australians developed the flotation process to produce metal concentrates to feed the smelters. And trucks and trains started to carry value-added products to the coast.
The great Mount Isa Mine was discovered in 1923 – lead smelting started in 1931 and metal smelting at Mount Isa has continued ever since – 80 years of value adding in Australia.
Early in World War II, Australia found itself short of copper and Mount Isa was asked if it could produce copper. A crash program took place to convert the lead smelter to producing copper and the first blister copper was poured at Mount Isa in1942. Refining of blister copper started in Townsville in 1959.
Mines can only be where the deposits are found. But smelters and refineries can be located anywhere between the mine and the ultimate customer for the metals. And just three factors dictate where metal processing is located – political costs, processing costs and transport costs. The political cost (tax burden) depends on the common sense of the electorate and their knowledge of where the real wealth is created. The processing and transport costs depend mainly on the local costs of wages and energy.
The first trains and power stations all used steam engines burning low cost local coal. Then came cheap diesel transport for trucks and trains. Now electric trains are again running on cheap Australian coal. This low cost carbon energy supported our high wages and ensured that mineral processing became a big business in Australia – iron and steel, lead-zinc-silver, copper, nickel, aluminium, gold, uranium, limestone, coal, oil and gas are all processed to some extent in Australia.
There is no point introducing a carbon tax that does not increase the cost and thus reduce the use of coal and diesel energy. Mining and mineral processing and transport probably consume over 50% of Australia’s electricity, which is mainly coal powered with minor gas. And they are huge users of diesel for utes, trucks, shovels, dozers, scrapers, mobile power and drilling rigs. Therefore, no matter what they say, all of Australia’s mineral processing advantages are threatened by their carbon tax.
The recent Xstrata decision to phase out their world class copper smelting and refining operations in Australia tells us that the taxes, processing, transport and energy costs that Xstrata expects in Australia are already uncompetitive.
The dreamers in the Canberra cocoon always drool about “value adding”. Their carbon tax will surely cause all mineral processing plants in Australia to lose value, and some will surely close. Low cost coal and diesel power will no longer support our high wages. The value adding will take place in Asia.
We are watching a slow tragedy unfold – the end of an era. Once the mineral processing plants leave, they will never come back. We will be back to the pioneering era of mining – dig it out and ship it off.
And the final tragic irony of the Isa story is this – sending partly processed copper concentrate overseas, instead of smelting it at Mount Isa, will about triple the transport burden and do the same to carbon dioxide emissions.
Viv Forbes
May 2011
Reference – Xstrata to phase out copper smelting and refining:
http://au.ibtimes.com/articles/147308/20110518/xstrata-to-phase-out-copper-smelting.htm
Viv Forbes is a geologist, mineral economist and farmer. He has spent a lifetime working in government, mining and farming in Queensland and NT, from field geologist in the Bowen Basin, to uranium exploration at Rum Jungle, to mill clerk at Mount Isa, to mining investment analyst in Sydney and Brisbane and to company director of gas, oil and coal companies. He should be retired but refuses to. He and his wife Judy live at Rosevale harvesting solar energy from natural pasture using beef cattle and meat sheep.
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Great read!
And on Australian MSM newscasts tonight, sea level rises will be 1 metre by 2100, swamping Sydney, the city to be worst affected. Gillar/Brown and the AGW and carbon tax supporters really are pushing this one hard. There was a bit of a drop in the number of alarmist artciles, but starting today, Aussie MSM is back to its pro-AGW coverage.
No mention of Canada being sensible nor any mention of plans in the UK to build nuclear power plants.
But—but—but, carbon is evil!
/sarc
From the article…
“We are watching a slow tragedy unfold – the end of an era. Once the mineral processing plants leave, they will never come back. We will be back to the pioneering era of mining – dig it out and ship it off.”
It has already started. I forget the company details, but they have gone offshore to Indonesia to process rare earth ores because;
1. Energy is too expensive and will get more so.
2. Wages are too expensive.
3. Environmental compliance costs are too expesive.
4. Taxes too high.
5. Larger capacity plants already located offshore.
6. Larger sources of water (I guess that means cheaper).
To name a few of “reasons” why the company went offshore for that operation. However, there is local opposition to the plant due to fears of radioactive Thorium waste.
It seems our Australian (She’s Welsh, UK) “leaders” really want to win that race to the bottom. If Gillard annouces the actual detail and cost of the carbon tax, mark my words, within a year many companies will announce they are off. It’s already happening in many industry sectors, even in IT, it’ll just add fuel to fire, and speed the process up.
Good post – I have only one minor comment.
“..And the final tragic irony of the Isa story is this – sending partly processed copper concentrate overseas, instead of smelting it at Mount Isa, will about triple the transport burden and do the same to carbon dioxide emissions…”
I think that by now we should be fighting back against the idea that CO2 emissions are harmful. They are not. We currently have low CO2 levels in the atmosphere, and there would be huge advantages to agriculture in doubling them. Now that we know that neither humanity nor the climate will not be affected greatly by doing this, I suggest that we should take every opportunity to push for this, rather than accepting that CO2 outputs should always be minimised…
Julia still expects a tax levied in Canberra to lower the temperature in Queensland, it’s just not going to work. If taxes lowered the temperature we would now be in an ice age. The Labor Party want the tax, the people have showed in the recent polls that they do not want the Labor party.
70% of Queenslanders do not beleive in man made climate change, 60 % of voters would prefer the LNP to get into power instead of Julia’s party.
I’m giving my vote for the next state election to The Queensland Party, they want to put checks in place on Coal Seam Gas exploration and will attempt to keep the larger parties honest.
http://www.facebook.com/TheQueenslandParty
New Anthem required? “Retreat, Australia: Fear”
This is getting really serious. These eco-fascist-loons have got to be stopped.
“… and produce the carbon dioxide that feeds our crops”
Gosh, whatever did crops do before the invention of our primary industries?
It’s in line with all Green-powered decisions; they always end up with a solution which is worse than the original problem. Such are the perils of making decisions on a purely emotional basis.
Vote these ignoramuses out of office. Or riot in the streets.
What do these political fools think Australia can export if not food crop and minerals. They can’t exist on much else.
Do what California is doing- exporting jobs to India and China. Once these people have a foothold the price will rocket.
We MUST , somehow, find a way to force an election, before this idoicy is passed through parliament !
the future of Australia depends on it.
In some ways, Global warming is just another scare like ozone, the millennium bug and Swine flu. Like all these, a bit of “science” leads to a massive media and then political action, real science finally catches up dousing the source of the scare … the MSM get bored trying to make mountain out of a rapidly eroding molehill and finally the politicians try to pretend it never happened.
But, I’ve been thinking about GW and whilst we’re well into the “couldn’t care” phase on MSM coverage (in most of the world – not Australia obviously), I can’t see how the politicians are ever going to pretend it never happened.
For a start half of Scotland is going to be covered by their bird mincers and its got to be hitting tourism big time – bird mincers they were ever so keen to be photographed when it all started – but bird mincers that just don’t seem to have the same PR kudos now! Then there are the carbon taxes, the electricity supply networks that have been ransacked to remove or handicap all the decent generators (engineering wise).
Swine flu ended when when the politicians stopped having meetings to show they were doing anything and all they have to show is a hoard of useless & expensive vaccines. They didn’t commit to decades of billions of pounds of public subsidy taking from the poor to give to rich land owners and money grabbing wind developers.
There will be no “soft landing” for the political elite when this global warming fiasco ends. You can’t just ignore the huge gaping hole in the Western economies blown out by these absurd carbon taxes – they’re not coincidental stores of vaccines – they are hundreds of thousands of jobs gone. Not just now, but as China is more than willing to take them for herself – they will be gone forever.
This scare won’t just be forgotten – we’ll be paying for these damned bird mincers for decades, paying for the lost jobs, paying for the nose diving economy and each and every year the pressure will grow to make the politicians pay for their mistake.
Its madness. We have a Government appointee to an ‘independent’ Climate Commission reporting to the Government that yes, the AGW theory is ‘settled’, that sceptics are ‘denialists’, that “the deniers were making a very emotional attack on the science – it was not a rational criticism”
All cheered on by his fellow appointees included Tim Flannery who is earning $180,000 a year for his role on the Commission.
The report was gleefully accepted by our PM and seized on as ‘proof’ that we need a Carbon tax.
Speaking of Australia – what has happened to the Thompson Family?
This man talks plain common sense. Rule him out of court immediately!
/sarc
The new unhappy lords in Canberra won’t hear this, they are reached only by the schmoozing of the well dressed lobbyists paid by special interests who have much to gain by crippling the traditional industries of Australia,,, for a while.
Then they’ll move on to pastures new, pausing only to asset strip and sell off the ruins of a once prosperous nation.
Unless the people wake up.
Wake up Australians! Shake to Earth like dew
The chains which in slumber have fallen on you!
Better roads, towns and then railways were built to move our primary products to the smelters, spinners, millers and tanners in Europe.
Prose that sings, Viv! and all faithfully true — but you left out the riverboats; a magic part of our haulage history.
Shame the people in raptures are going to feed it all to the birds… (and Polly actually only ever asked for a cracker; not the whole shebang…).
Its worse than we thought. When these taxation schemes significantly impact primary resource management, it results in the concentration of essential resource products into the hands of fewer people and nations. The loss of a local copper extraction facility puts the host nation at a huge future disadvantage in the “information age”. We’ve already seen the effect of rare earth supply issues in computer technology production. There is a minor silver lining: resources not extracted now will be avialable at a later date when the demand price makes it worthwhile to continue production.
As most reasonable people know, the effects of shutting down an industry like this are far reaching. By way of example, I am sitting here in New Hampshire, USA concerned because Mt Isa is a customer of my customer. I receive not insignificant revenue directly from Mt Isa as a result of software I wrote some years ago. It appears that I will be losing that revenue stream eventually.
The thing is, the enviro-jihadists will rejoice over a (supposedly) dirty, greedy, polluting business like this being shut down. But they never think about economic devastation that will be born by the innocent workers and inhabitants of Mt Isa. Nor will they ever know about the layoffs that will occur in the Brisbane water testing laboratory when a large chunk of their revenue is torn away. Indeed, the reverberations couldn’t be felt any further from Mt Isa than Manchester, NH, USA, yet they will be.
And this is just one mine… so far.
The Gillard government has today released a Climate Change Committee report which prophecies climate caused doom and gloom and declares the science is settled – skeptics better get over it.
The general public is not buying the report.
My historical family was involved in Gold Mining in Australia between 1865 and 1901. They moved all gold mining activities to South Africa in 1901 after labor costs got too high. (Unions got too strong). The gold seams in the Australian mines did not run out – it was just uncompetitive to mine with the high cost Australian labor force.
“John Marshall says:
May 23, 2011 at 3:24 am
Vote these ignoramuses out of office. Or riot in the streets.
Do what California is doing- exporting jobs to India and China. Once these people have a foothold the price will rocket.”
There is no alternative in Aus, they are all alike and support some sort of “carbon tax” (Labor) or “direct action” (Read taxpayer funded “action”, or, errrmmm…a tax – Liberal). Riot in the streets, in Aus? You are kidding! Too much sport on TV for that. Now pull AFL, RFL and V8 Super Cars etc off FTA TV, yeah you’d have riots!
Jobs and mfg have already started to leave Australia. An ironic example would be the former Labor Govn’t of New South Wales (NSW). All state Govn’t uniforms, nurse, police, bus driver etc etc, WAS made in NSW. It is now made in and imported from China.
“Brendan says:
May 23, 2011 at 3:27 am”
That’s AU$180,000 p/a for that PART-TIME position. He receives other income. Clearly to be a Govn’t climate change adviser is a real earner.
Voting doesn’t work. Time for the Anglosphere Spring.
bit of “science”
That nails it.
A little learning is a dangerous thing;
drink deep, or taste not the Pierian spring:
there shallow draughts intoxicate the brain,
and drinking largely sobers us again.
“Twas well observed by my Lord Bacon, That a little knowledge is apt to puff up, and make men giddy, but a greater share of it will set them right, and bring them to low and humble thoughts of themselves.”
Allegedlly, there is a degree of misquotation here, but who cares?
“”The political cost (tax burden) depends on the common sense of the electorate and their knowledge of where the real wealth is created.””
With the bodged voting system used in Austrailia there is not much hope there.
I await the inevitable.
Viv Forbes is to be congratulated for bringing this to the attention of the world.
Xstrata stated it has been forced into transferring these carbon emissions from a very remotely located plant in the Southern Hemisphere to a processing plant in the already overpolluted Northern Hemisphere, probably in China, by economic circumstances here in Australia. The result of their decision enviromentally, will be no more than ex. mining employees and local business employees going on to government welfare type “green jobs” here in Australia, if they are lucky.
This is a terrible indication of the tragic attitude of Australian voters who have endorsed the views of the current Queensland and Australian Governments.
Few people realise that as little as 40 years ago this company was the number one company by market capitalisation in Australia, and a huge generator of wealth for this nation . It was also the financial strength of the Queensland economy. The Mount Isa Mines Limited investments that Xstrata bought had a sound future, and I fully understand the local federal MP Bob Katter’s frustration with all the current government decisions.
I guess by now that you realise that I had invested most of my working life of more than 50 years associated with this proud Australian company. Xstrata, the swiss based international company, will no doubt survive and probably prosper from this action proposed by 2016. There will be many business employees, as opposed to government employees, all over Australia that will wonder at the “Climate Change Madness” that has obsessed our politicans when this starts to impact on their take home pay..
Reducing pollution is a great idea, and MIM did a good job of employing world’s best practise using CSIRO strategies where applicable. Where is the CSIRO now in defending Xstrata’s MIM operations from this projected backwards forced action by governments.?