Glencore to Close Canada’s Largest Copper Operation Due to Rising Costs
Glencore is planning to close its Horne smelter, which is Canada’s largest copper production facility. This decision stems from rising operational costs and environmental concerns associated with upgrading the aging infrastructure. The closure could significantly impact the global copper supply, especially as the industry anticipates shortages influenced by disruptions in major copper-producing regions.
Details of the Closure
The Horne smelter, located in Quebec, has an estimated annual output exceeding 300,000 metric tons. In addition to Horne, Glencore’s Canadian copper operations include the Canadian Copper Refinery (CCR). Together, these facilities employ over 1,000 workers.
Financial and Operational Pressures
- Upgrade costs projected to be over $200 million (CAD $281 million).
- Glencore faces significant regulatory, financial, and operational challenges globally.
Despite this plan, a Glencore spokesperson emphasized that there has been no decision regarding the closure timeline for Horne or CCR. The spokesperson also indicated ongoing initiatives to enhance emissions reduction and secure necessary investments for modernization.
Environmental Concerns
The planned closure is partly influenced by a lawsuit filed against Glencore in Quebec concerning emissions of arsenic from the Horne smelter. The provincial Superior Court has allowed residents to claim damages dating back to 2020. Although Glencore stated that the operational challenges are unrelated to the lawsuit, the pressure to create an environmentally safe operation is mounting.
Impact on the Copper Market
As copper prices reached record levels of US$11,200 per ton at the end of October 2023, the uncertainties surrounding Horne’s operations have drawn attention. The copper market is currently witnessing disruptions, particularly from mines in Indonesia and Chile, leading to supply chain concerns.
Historical Context
The Horne smelter has a rich history since its establishment in 1927 and it pioneered the recycling of electronic waste in 1980. Currently, Glencore processes around 100,000 metric tons of electronic waste annually to produce various metals including copper.
USA and Canadian Copper Trade
Most of Glencore’s Canadian copper output is exported to the United States, which remains a net importer of copper. In the previous year, Canada exported over 150,000 metric tons of copper, making up approximately 17% of U.S. copper imports, placing Canada second after Chile.
Market Challenges
In the current market, profits for custom smelters have dwindled due to heightened treatment charges caused by global supply shortages. Treatment and refining charges have seen negative trends, forcing smelters to pay miners for raw materials rather than receiving payment.
As Glencore navigates these complexities, the future of copper production in Canada remains uncertain. The decision to close the Horne smelter reflects broader trends facing the mining industry, emphasizing the need for sustainable practices and economic viability.
