Global miner Xstrata Mount Isa Mines says it plans to phase out copper smelting at Mount Isa and refining operations in Townsville by the end of 2016 in a bid to sustain the future of its Mount Isa operations through expanded mining and concentrate production.

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. 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 to phase out the copper smelting and refining operations in north Queensland and focus on further development of copper mining and concentrate production projects had not been adopted lightly, but was a necessary response to changing global market conditions.

He said: “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. 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.

“Our operational plan over the next five years will 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.”

Mr de Kruijff underlined Xstrata’s commitment to its workforce and the surrounding communities.

“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.”

In relation to copper operations, Xstrata is currently investing AUD589 million in the transformation of its Ernest Henry open pit mine to a long term underground mine and the construction of an associated magnetite processing facility. It has also recently announced an intention to invest AUD175 million in the acquisition of two copper projects from Exco Resources.