Optimistic outlook on Ernest Henry deal

Kennedy MP Bob Katter says he is heartened by an Australian company's purchase of the Ernest Henry copper-gold mine in a $1 billion deal, and the fact the sale was not expected to affect local processing jobs. The deal reinforces the appeal of the Mount Isa and Cloncurry region, according to MineLife analyst Gavin Wendt, who believes new owner Evolution is the ideal sized company to take over ownership of the mine and potentially grow the asset. Evolution Mining has entered into a binding agreement with Glencore to take a 100 per cent interest in Ernest Henry Mining at Cloncurry. It comes after Evolution originally acquired an economic interest in Ernest Henry in 2016 via joint ventures that delivered 100 per cent of gold and 30 per cent of copper and silver produced within an agreed life-of-mine area. Federal member for Kennedy Bob Katter. Mr Katter said he initially held concerns on what the long-term impact of the sale would be for Mount Isa and Cloncurry, but was pleased it would not negatively affect the copper smelter in Mount Isa. Related: Evolution buys major Glencore copper asset “We have received assurances that Glencore will offtake 100 per cent of the copper concentrate and it will be processed, as normal, by Glencore in its Mount Isa smelter and Townsville refinery,” he said. “One of KAP’s core principles is that ownership of resources is by Australians and I am optimistic about what this company will bring to the region.” Announcing the Ernest Henry deal this week, Glencore said its commitment to North-West Queensland would continue with the Mount Isa Mines copper and zinc complex, copper smelter and Townsville copper refinery. The company said it would also increase its focus on lower-cost, long-life copper assets in its global portfolio like those in Africa and South America. Evolution expected to bring fresh approach, build on asset MineLife founding director and senior resource analyst Gavin Wendt. MineLife founding director Gavin Wendt said the North West had a well-earned reputation as a great place for miners to operate, reinforced by community support. "Ernest Henry is a world-class asset and a very meaningful one in terms of its output, so it is great to see it back in Australian hands," Mr Wendt said. "Copper is increasingly becoming a much more valuable component in terms of the world economy and the global focus on renewables, which is why we are seeing a rush of established companies looking to get their hands on quality assets." He said while Ernest Henry had possibly become too small an asset for a company of Glencore’s size, and with mine life dropping below 10 years, the company may not have been very motivated to engage in meaningful exploration to try to extend operations. "Evolution will take a different approach," Mr Wendt said. "The company has proven itself to be dynamic in terms of getting the very best out of the assets that it acquires, especially in terms of exploration and boosting production life. Fat Prophets resource analyst David Lennox . "It has a very successful track-record of achieving this with its portfolio of gold assets, and I think it will bring a fresh approach to Ernest Henry and be able to grow the asset." Fat Prophets resource analyst David Lennox said he suspected that, given the buoyant copper price, Glencore may have seen this as an opportune time to divest themselves of part of an asset. "My feeling is that their strategy going forward would be probably be the same as Evolution's - that it's better to control the whole of an asset rather than be beholden to a partner and all the decisions that have to be agreed," he said. He said Fat Prophets believed the general outlook for copper was positive given the move towards electric vehicles, which demand greater copper in their manufacture. While the supply side had been constrained, he expected a period of consistently high copper prices would accelerate work to bring new mines online.

Optimistic outlook on Ernest Henry deal

Industry Queensland

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