Glencore, Canada Near Deal to Save Threatened Copper Facility

pxskr1wrdik88mu]rhb}7s73_media_dl_1.png Bloomberg reporting

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(Bloomberg) — The governments of Canada and Quebec are pushing to save the country’s only copper smelter after Glencore Plc threatened to shut it down over new pollution-control requirements.

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The Horne Smelter, about 390 miles northwest of Montreal, is one of small number of facilities in North America that can process copper concentrate and recyclable materials such as electronic waste. The Swiss resources company said last month it was suspending plans to invest nearly C$1 billion ($720 million) in its Quebec copper operations after hitting an impasse in talks with the province over measures to reduce harmful arsenic emissions. 

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Without a deal, the facility would have to be wound down, impacting North America’s already constrained capacity to process copper into useful products. But Quebec has now proposed legislative changes to address some of Glencore’s main concerns. If passed, the metals company would get more time to reaching tougher emissions targets.

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Meanwhile, the Canadian government is considering a financial aid request for about C$150 million to help pay for new pollution-control systems, according to people familiar with the matter, asking not to be identified because the matter is private.

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“While awaiting regulatory certainty, we are open to evaluating other mechanisms, particularly financial ones, for sharing risks,” Glencore said in an emailed statement. 

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The office of Canadian Industry Minister Melanie Joly declined to comment the ongoing discussions with the company. Gabrielle Landry, a spokesperson for Joly, said the smelter at Rouyn-Noranda, Quebec, is “a strategic asset within our industrial base and an important part of our domestic capabilities.”

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Landry added: “Protecting our industrial backbone matters, just as the health and safety of Canadians does.”   

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The copper smelter represents about 16% of North America’s annual production capacity with approximately 215,000 metric tons of copper concentrate and copper scrap, according to the US Geological Survey. There are only four operating smelters in the US and one in Mexico.  

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Closing the smelter would also jeopardize Glencore’s copper refinery in Montreal, which is supplied by it. About 3,200 direct and indirect jobs could be impacted, the company has said.

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Charles Cooper, Wood Mackenzie Ltd.’s head of copper research, said the Horne Smelter has been “absolutely instrumental” in North America’s copper market, as US smelting and refining capacity doesn’t meet its domestic needs. The facility also produces byproducts such as gold, silver, platinum, palladium and other metals, along with sulfuric acid used in fertilizers, according to Glencore. 

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“If you lose the Horne Smelter, you lose all of that ecosystem, and then you lose your ability to recover those critical metals that governments now consider important for strategic purposes,” Cooper said.