Nearly a century after copper was first discovered in Australia's North West Queensland, production of the red metal is set to get a huge boost from the state government's A$5 billion transmission grid build-out.

CopperString 2.0 is expected to lower production and processing costs in the mineral-rich Mt Isa region when it connects Queensland's North West Minerals Province to the national grid. The 1,100-km project also stands to lure additional interest in copper exploration and investment, which have been on the rise for the past year.

The region has vast reserves of copper, zinc, vanadium and cobalt. CopperString will unlock access to over A$500 billion worth of new critical minerals in the nation's largest renewable energy zone, according to a March 7 statement from the Queensland government.

"Downstream processing for critical minerals is highly energy intensive, so reducing power costs substantively will make a big difference to the commercial viability of projects," Warren Pearce, CEO of the Association of Mining and Exploration Companies, told S&P Global Commodity Insights. "For industry, this gives a lot clearer understanding of the comparative advantage versus elsewhere, and a case you can take to market to win investment."

The association has lobbied for the North West Minerals Province's access to the national grid and renewables for about a decade.

Pearce likened CopperString to a 1969 rail corridor agreement that opened the Bowen Basin to coal exports and led to Queensland becoming a major driver of Australia's status as the world's biggest coking coal exporter. The government will use at least A$500 million in coal royalties to help pay for CopperString, which is part of Queensland's "SuperGrid" of solar, wind, battery and hydrogen generators connected via publicly owned transmission assets.

Surging copper interest

The CopperString investment, rising copper prices and a "major regional dynamic shift" present a "big tailwind for copper and other base metals while also elevating the opportunities for rare earths and other critical metals," David Wilson, managing director of privately held Transition Resources Pty. Ltd., told Commodity Insights in an interview.

The dynamic shift was Glencore PLC divesting the Ernest Henry mine and plant to Evolution Mining Ltd. in 2022, before which "companies with a small deposit not quite big enough for a stand-alone mine had limited options to sell the ore," Wilson said.

CopperString substantially lowering energy costs "is a really critical part of removing risk and bringing some of the more marginal operations online, and not only just copper," Wilson said. Developing more conventional copper projects can also help companies fund deposits with more geologically complex critical minerals such as rare earths.

Queensland has lacked a major copper discovery in several decades, Wilson said. Yet this could change given copper exploration in the state has hit record levels in the past year, according to Australian Bureau of Statistics data.

Glencore, which owns and operates Australia's second-largest copper producer, Mount Isa Mines Ltd., welcomed the CopperString investment as a "very positive development," though it awaits project specifics.

"Glencore's copper and zinc business is a large user of energy in north Queensland, and access to affordable and reliable energy for our operations is a key priority," a spokesperson said in a statement to Commodity Insights.

Glencore's Mt Isa smelter serves as an offtaker for projects in Queensland and across the Northern Territory border. Glencore's Townsville refinery is near a port that would export much of North West Queensland's critical minerals.

Scouting next Mt Isa

Andre Labuschagne, the Aeris Resources Ltd. executive chairman, said CopperString would generate opportunities for both Glencore and others in "one of the best copper regions in Australia, if not around the world."

"There are a whole bunch of explorers which have not discovered the next Mt Isa yet, but there have been some major discoveries and developments in the region" more recently, Labuschagne said in an interview.

Transition Resources made a significant high-grade copper discovery in March of what looks like "a new copper mine in the making," where it is eyeing a "substantial hub-and-spoke development model" in North West Queensland's Cloncurry region, the company said in a statement. In February, it made a gold-tungsten greenfield discovery that includes cobalt and rare earths.

DiscovEx Resources Ltd. and Carnaby Resources Ltd. announced a major copper-gold discovery in 2021 at Greater Duchess in Mt Isa. Comet Resources Ltd. is also trying to buy the past-producing Mount Margaret copper mine from Glencore's Mount Isa Mines.

Austral Resources Australia Ltd. produced its first copper cathode from its Anthill project near Mt Isa in mid-2022. In that same year, South African mining giant Harmony Gold Mining Co. Ltd. also bought Eva, Australia's fourth-largest undeveloped primary copper resource, according to S&P Global Market Intelligence data.

Aeris transferred processing of ore from its Mt Colin project to Glencore's Mt Isa copper concentrator in early 2022, having previously processed it at Ernest Henry. Aeris also bought many regional tenements in the region, along with the former Barbara open pit mining operation, where it is studying a potential underground operation.

Queensland's government did not respond to a request for comment.

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