Australian Aluminium Council chief executive, Marghanita Johnson, who represents Tomago and the Portland smelter in Victoria, which is currently benefiting from government-subsidised electricity prices, said gas prices were critical for the industry.
“Access to competitive energy remains the foundation of industrial competitiveness,” Johnson said.
However, independent economist Saul Eslake said he was suspicious of any use of government money to support a private company.
He said if the government believed on national security and economic grounds that Glencore needed support, it should take an equity stake in the company rather than hand over $600 million in taxpayers’ money.
“Rather than money with no strings attached, an equity stake would mean at least there would be a dividend paid back to taxpayers when – or if – the company is back in a position to make a profit by itself,” he told this masthead.
University of Western Australia macroeconomist Jakob Madsen said ultimately the money being pumped into Glencore could be a waste.
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“Dying companies are usually due to technological progress that causes creative destruction of dinosaur companies. Dying industries generate technological regress,” he told this masthead.
“Subsidies to Glencore don’t save jobs in the long run – research shows that the unemployment consequences of failing companies are temporary, so the employment argument does not work. Progress is made by good jobs in progressive industries, not by maintaining alienating companies.”
Manufacturing subsidies have been a feature of Australia since the 1940s, but ramped up in the 1980s as the federal government reduced protective tariffs and opened industries to international competition.
Aluminium smelters have received government support, particularly via cheap electricity supply, for more than 40 years. In the 2024-25 budget, the federal government established a $23 billion, 10-year Future Made in Australia fund, to support industries needed for clean energy and low carbon production, such as critical minerals, green steel and aluminium.
Prime Minister Anthony Albanese said in April 2022, before he formed government at the May election, that Labor’s plans to cut emissions and boost clean energy would deliver “nothing less than a revival of manufacturing”.
On Wednesday, Albanese signalled ongoing support for Glencore and other manufacturing businesses.
“There are third generation workers at the Mt Isa facility. Our Government wants there to be a fourth and fifth generation,” he said.
Industry Minister Tim Ayres said copper was critical to Australia’s energy transition, including for building solar panels and wind turbines needed to achieve the government’s renewable energy goals.
In July, Glencore closed its underground copper mine at Mount Isa, with a loss of almost 500 jobs. It warned then that it was prepared to put the smelter and its Townsville copper refinery into care and maintenance until market conditions improved.
“This agreement provides a short-term lifeline for the copper smelter and refinery,” Glencore Metals Australia interim chief operating officer Troy Wilson said.
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