Death of a dream: the mining city of Mount Isa is crying out for help
Mount Isa did everything mining was supposed to do for this nation and more. Now it is facing a crisis that will play into the election.
Mount Isa did everything mining was supposed to do for this nation and more. The rich lode of copper, zinc and lead gave rise to an entire city in an empty corner of the Queensland outback, dotting the parched red earth with suburban greenery and steel-roofed homes. They smelted ore onsite to add value to what was dug up.
And people flocked there from all kinds of places with all sorts of hopes to earn big and set themselves up for life.
In its own way, the Isa was the Australian dream come true.
But that was then and this is the 21st century, when so many old certainties seem to be in flux.
The paradox is as stark as the desert landscape 1800km northwest of Brisbane. Mineral prices have rarely been stronger and not one local – not one – has gone down with the virus that has locked down every Australian capital at one point or another in the past two years.
Wages are booming: a school-leaver can earn $75,000 a year to answer phones in an office and even more from an entry-level mine job. If you can find it, a three-bedroom home is yours for less than $300,000.
The locals are blue-collared, with census data showing that nearly half the Mount Isa workforce is employed in trades or mining-related and labouring jobs against an average of 29 per cent for the rest of the country. By rights, they should be in Anthony Albanese’s column.
Yet here’s the catch, and it’s not the only one. Come election time, they mostly vote conservative at both the federal and state levels. Not Liberal or National, but for Katter’s Australian Party.
Septuagenarian Bob Katter has been their man in Canberra since 1993, and his 44-year-old son and KAP leader, Rob, heads a team on the crossbenches of the Queensland parliament.
The only issue with employment is there are too many job vacancies: businesses can’t find help at virtually any price. The mine has 300 positions open, paying from $100,000 a year up to $250,000 for senior machinery operators. For all its prosperity – the median weekly income in Mount Isa is $810, 21 per cent above the national average – the city is shedding population faster than it can attract newcomers, something the old-timers shake their heads at.
Because it really is a great place to live, they insist, despite the isolation and oven-like heat and airfares that will set you back $1100 to escape to the coast for Christmas.
The question arises: is the development model that forged Mount Isa still fit for purpose? For once, the uncertainty is not a function of market forces.
Demand for copper is so strong that Goldman Sachs in May named it the “new oil”. A mainstay of the new economy, integral to everything from electric vehicle batteries to mobile phone handsets and semiconductor wiring, its price would surge 50 per cent to $US15,000 a tonne ($21,000) by 2025, the global investment bank predicted. Lead and zinc, extracted from the same ore body, are also riding high.
On the other hand, the mine is old, nearing its centenary of operations in 2023. The low-hanging pickings were exhausted long ago, pushing production deeper and deeper underground at increased cost. At its full depth, 2km down, the rock temperature is 60C and crews can work only with the largest industrial refrigeration plant in the southern hemisphere chilling the subterranean caverns.
Owner Glencore, the Swiss-based mining and commodity trading multinational, is adamant the return on investment must stack up against some daunting international competition, especially from the copper-producing belts in equatorial Africa and South America and smelters in China and India, all with lower input costs than Mount Isa.
As we report in the news pages, the company won’t commit beyond its existing plan of operations ending in 2026-27.
Compounding this, the demographics are shifting away from resident families to singles who fly in to work and fly out to live their lives, with sharp consequences for the community. Kids’ sport is struggling for want of adults to organise it – and that is merely the leading edge of the FIFO trap, a hot-button issue since Glencore announced plans for seven-day-on, seven-days-off rostering for about 600 miners, part of a 4261-strong permanent workforce. Another 570 people are employed as contractors.
“I’m afraid we will lose the good things we have here and get more of the shit,” says city councillor Kim Coghlan, 58, a blunt-spoken fourth-generation local. “Everyone says it’s the community in Mount Isa that makes Mount Isa and bit by bit we’re losing that.”
Her great-grandfather, Walter Davidson, was one of the pioneers, a contemporary of prospector John Campbell Miles who staked the first mining claim in 1923 after he stumbled across geological formations that reminded him of Broken Hill. Coghlan worked for the mine before becoming a nurse, married a miner, reared four children and dotes on her first grandchild, when she can. Between family and council commitments and running a touch football competition there’s barely a spare moment. “Cogo” is the go-to person for anyone who needs help.
Inevitably, she was at the forefront of the community campaign against the new 7-7 roster for miners of a week of 12-hour shifts followed by a week off. It doesn’t sound like a big deal but she insists it is. A tremor at the mine ripples outward like a seismic event. In a city of 18,000 there are few who won’t be affected, one way or another, by what happens there.
The company insists the roster change is a productivity measure, not the gateway to fly-in, fly-out operations that are increasingly standard for the industry.
Matt O’Neill, chief operating officer of its Queensland Metals division, says he is committed to maintaining an on-site labour force. “I am happy to say there is no intention to go to a FIFO workforce because it is more expensive to start with, and it’s not what the community is set up to do,” he says. “But it’s a cyclical market and you have to be careful.”
He too is a local, brought up in the Isa, who reverse-engineers FIFO to work Monday to Friday at head office in Brisbane. Home for him, his wife and their four children is by the mine site, a lifestyle choice. “That’s the reason why we’re still there,” O’Neill, 47, tells Inquirer. “The kids come home in the afternoon and you don’t see them again until six o’clock. You don’t need to worry about them … that’s the strength of the town. And it shouldn’t change.”
That doesn’t mean it won’t. As Coghlan points out, the pressures on the community are mounting and will become intolerable if FIFO takes hold. For whatever reason – remoteness, a harsh climate, the capacity of skilled workers to earn six-figure salaries in the city or on the coast – Mount Isa’s resident population is ebbing away at a rate of 2 per cent a year, by one pre-pandemic count.
“There is no shortage of work here but there is a huge shortage of workers and I don’t think there would be a business in the city that doesn’t have a problem,” Coghlan says. The lived experience goes to the time it can take to see a GP at one of the three understaffed private medical clinics – weeks when they’re busy – and the dearth of volunteers to keep touch footy going. For a while it was touch and go whether the local softball competition would continue; home care services for the elderly are struggling, she warns.
Walk the baking streets of the city centre and you will see the signs everywhere. One hairdresser has posted in the shop window: “Sorry, no bookings for new customers.” Yet, perversely, the accommodation shortage is acute. While homes are bargain-priced for sale, rents are another matter.
A three-bedroom house will comfortably command $750 a week – assuming it’s available, which few are. Singles crammed into shared places hotbed between shifts. Some employers have given up advertising for staff. Troy Lusk, of Mount Isa Four Wheel Drive Services, was down to one mechanic when he had work for four.
He offered $125,000 a year but got nowhere. So he put on his son, Trent, as an apprentice. “People just don’t want to move out of their comfort zones any more,” he says.
The McDonald’s and Bunnings outlets both need help. At Bambino Espresso Cafe, proprietor Annika Roberts has closed the doors on Sunday because she can’t fill the shift. “If I want to go back to full opening hours, I would need another four or five people,” she says.
Coghlan says she gets it. Her hometown is a long way from anywhere and the money on offer is not as enticing as it once was, given that construction tradies, for example, can readily pull down $100,000-plus in the city. But how many hours would they have to work to earn that, she asks? “You can have a more balanced life here if you have a family,” she says, echoing O’Neill. “People make friends for life in Mount Isa. It’s what makes it special.”
Historian Geoffrey Blainey, who wrote a rollicking account of the city’s birth and development, Mines in the Spinifex, says by some definitions it was the “only major success” among the inland centres that took root deep in the interior. Take Alice Springs. With a population approaching 30,000 it has decisively outgrown Mount Isa, Blainey says. “But Mount Isa has created far, far more wealth for the nation. A host of employees far from Mount Isa depend directly on Mount Isa’s wealth. Moreover, the government subsidies which Mount Isa’s people have received are far smaller.”
Another challenge, the cost of electricity, offers a potential bridge to the future. The city is off the national grid, serviced by a stand-alone gas-fired plant run by energy infrastructure provider APA Group. O’Neill says the price of power to the mine is double what it would pay in Townsville, 10 hours’ drive away, where Glencore’s copper refinery is located.
“Cheap power used to allow us to compete with everyone else,” he says. “I think we can still get back there … but we lost our cheap power story, our competitive advantage, a while ago.”
Enter CopperString 2.0, a planned $2.3bn transmission line to link Mount Isa into the national power grid. The project is supported by the Queensland and federal governments and is in the final phase of environmental impact evaluation. A no-brainer, proponents such as the Katters say.
Yet after a decade of furious agreement on its potential they’re still waiting for the green light. CopperString’s managing director Joseph O’Brien – a nephew of Bob Katter – says commercial power prices in Mount Isa would be cut by nearly two-thirds were it to proceed. The surrounding Northwest Minerals Province, a treasure trove including strategically important rare earth elements, would be opened up to mining and downstream processing. Vast solar and wind farms could go from the drawing board to being plugged into the National Energy Market.
What’s the hold-up? “It’s very complex,” says O’Brien, who has applied for funding under the federal government’s under-used $5bn Northern Australia Infrastructure Facility. “It’s the largest geographic expansion of the NEM that’s ever been undertaken and you are integrating an existing power system into the NEM. So there are a lot of moving parts. But I agree, it could be faster.”
Blainey says it would be a “national shame” if Mount Isa were allowed to wither away.
The changes have come thick and fast since MIM Holdings, the original Australian-owned mine operator, in its heyday Queensland’s biggest listed company, was acquired in 2003 by Anglo-Swiss Xstrata and, in turn, Glencore.
MIM weathered one of the fiercest strikes in Australian industrial history in 1964-65, culminating in a lockout of mine workers and the imposition of draconian state of emergency measures by Queensland’s then Country Party government.
But MIM was so entrenched in the community that it bought every child in town a pricy Christmas present. As a boy, I queued on Kruttschnitt Oval to receive a much-cherished Meccano set.
In 2011, Glencore flagged that it was reviewing the future of the mine-site copper smelter and by association the refinery in Townsville, with a potential loss of 500 jobs. Both facilities stayed, but anxiety snakes through the city every four years – coincidentally or not, aligning with the Queensland election cycle – while the company ums and ahs about stumping up the $40m cost of rebricking the ageing furnace in Mount Isa. A deal inked last year with Annastacia Palaszczuk’s Labor government, believed to involve a $15m contribution from the state, will take the operation through to 2024.
O’Neill makes no apology for what many see as a cynical ploy by the company, especially when copper prices and demand are so robust. He says these have nothing to do with the viability of the smelter or the refinery: like all Glencore assets, they must be viable in their own right.
“We are not going to have one subsidising the other. That doesn’t make sense for us as an organisation,” he maintains. But it makes you wonder where we are headed as a nation when the Mount Isa template was to add value to resource production and reap the riches otherwise ceded to processors and manufacturers overseas.
O’Neill says the real story of Mount Isa, one of adaptation to an unforgiving environment and the quintessentially Australian tyranny of distance, is as relevant as ever.
Who knows what that might look like in the future?
“I don’t think the model here is busted but it needs to be talked about … Covid has certainly changed things,” he says.
“People want to work in a certain way and having someone say there is one way or the highway, well, I think we are getting past that point.
“We need to coexist with different modes of people working – fly-in, fly-out, working remotely, residential or whatever other version there is. I think the flexibility and way organisations and communities adapt to this is important.
“You want to be in front of it, not behind it.”
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