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An economic hub of national importance

Mount Isa is the largest inland city in northern Australia and is a critical services, logistics and resource sector hub, making it a strategically important for the Queensland and Australian Governments' vision for developing northern Australia. Mount Isa and the North West Minerals Province are also critically important to the Townsville economy and, to a lesser extent the Cairns economy, and their property markets. due to downstream benefits from mining processing and transportation services, and the associated impact on employment demand and wages.

The Mount Isa economy also generates substantial employment in Brisbane. Based on modelling, the Mount Isa economy contributed $212.8 million to Queensland taxes and $808.0 million to Federal Government taxes in 2015-16.

Mount Isa as an inland services, logistics and resource sector hub

Mount Isa's location and established role as an infrastructure hub for the greater region make it a strategically important city for the Australian and Queensland Governments' northern Australia development agenda.

For example, Mount Isa is the only regional base for north Queensland outside of Cairns for the Royal Flying Doctors Service, and services the Gulf, the Barkly Tablelands in the Northern Territory, as far east as Hughenden and as far south as Bedourie.

Further, the North West Hospital and Health Service in Mount Isa covers an area of over 300,000 square kilometres and provides services the rural and remote communities within North Western Queensland and the Gulf of Carpentaria. Due to its established role as an infrastructure hub, Mount Isa is well positioned both with respect to the commitment to northern Australia and to the expansion of private sector enterprise.

The map below shows that Mount Isa is the largest population base in the inland of Australia's north, stretching 780 kilometres east to Cairns and Townsville, 1476 kilometres south-east to Toowoomba, 1302 kilometres to Darwin and 666 kilometres to Alice Springs.

Mount Isa is important to neighbouring Cloncurry and McKinlay

Map 1. Distance and size of large populations from Mount Isa
Map 1. Distance and size of large populations from Mount Isa

The various Local Government Areas (LGAs) of the North West Minerals Province depend on each other to achieve critical scale as well as the case for future investment by the private and public sectors in this region. The various LGAs mutually benefit from the demand and supply of services based predominantly in Mount Isa, particularly in mining support, health, education and transportation. Therefore, Cloncurry and McKinlay are likely to benefit positively to the types of policies and investments needed to promote investment and diversification in Mount Isa.

Cloncurry's economy of $635.9 million in value added terms in 2014-15 is highly dependent on the Ernest Henry copper mine and the remaining "giant" resource, Dugald River, which is scheduled to commence operations in 2018 and continue until 2035. The McKinlay economy is worth $379.7 million in value added terms and is dependent on the Cannington lead
mine, which is scheduled to close in 2019-20.

Mount Isa's importance to Townsville's economy

Mount Isa and the broader North West Minerals Province is of great importance to Townsville and, to a lesser extent, Cairns. This is particularly the case given the high levels of unemployment currently experienced in Townsville.

The Mount Isa region supports high value adding employment in Townsville. The Mount Isa Mines copper mine currently supports a refinery in Townsville, employing 180-200 people directly, with estimates of a further 800 jobs indirectly flowing from the smelter and refinery. This represents over 1 per cent of the 98,700 persons employed in Townsville in March 2017.

Additionally, mining activity in the North West Minerals Province directly supports demand by its workers for housing (and associated services) in Townsville. This is particularly important noting that house prices in Townsville are vulnerable to further downward pressure arising from any shocks to employment – and Townsville already benefits from very high levels of steady public sector spending in sectors like defence, education and health.

Mount Isa also creates substantial demand for port services and infrastructure in Townsville. In 2016, the contribution of the
transportation, postal and warehousing sectors to Townsville's economy was over $0.56 billion. This represented around 5.4 per cent of industrial value added, down from 7 per cent four years prior.

Importance of Mount Isa to Queensland and Australia

Mount Isa's economy has far-reaching impacts on Queensland's economy and the rest of Australia through generating business and consumption demand and associated employment and taxation.

Contribution to royalties and other state taxes

Mount Isa delivers significant revenues to Queensland, through royalties, payroll taxes and land taxes as well as excise duties.

In 2015-16, Mount Isa contributed:

Estimates indicate the total contribution of Mount Isa's mining industry to taxation for Queensland in 2015-16 was $212.8 million.

Additionally, Cloncurry and McKinlay provided a further $164 million in royalty revenue in that year, according to the Queensland Resources Council (QRC). Therefore, the North West Minerals Province (including McKinlay) delivered over $259 million in royalty revenue in 2015-16 or around 12 per cent of total royalties collected in Queensland.

Employment in Brisbane

Mining activities in Mount Isa generate a huge impact on the workforce and economic prosperity in Brisbane. Around 22 per cent of Queensland's direct mining industry workforce resides in Brisbane. Based on the share of full time equivalent employees in Mount Isa, compared to other regions of Queensland, we can estimate that the Mount Isa mining industry generated around 800 full time equivalent employees in Brisbane.

It has been estimated that in 2015-16, the direct and indirect employment generated in Brisbane from the overall minerals and energy sector was 153,445 jobs. Applying the same approach, we estimate that Mount Isa's overall direct and indirect contribution to this was at least 6.7 per cent or 10,280 full time equivalent (FTE) employees in Brisbane, supported indirectly through induced demand from economic activity in Mount Isa.

Taxation collected for the Commonwealth

Mount Isa's mining sector contributes significantly to the national economy, particularly via company and personal income taxation streams. Estimates indicate that the direct and indirect contribution of minerals value added in Mount Isa to Australian Government taxation including from business and consumption-induced demand was approximately $1.03 billion in 2014-15, falling to $0.81 billion in 2015-16.

Impact of mining activity on other industries

The Mount Isa route was selected over Moomba for the Northern Gas Pipeline, largely based on the existence of supplementary industries around Mount Isa and the North West Minerals Province such as Incitec Pivot. The Northern Gas Pipeline, due for completion in 2018, will connect the Northern Territory gas supplies for the first time with the LNG infrastructure and gas supply grid of eastern Australia.

The Northern Territory Government's Power and Water Corporation will use a gas sales agreement (for surplus gas) with Incitec Pivot Limited to lock in guaranteed gas supply for approximately 10 years from the completion of the Northern Gas Pipeline (by Jemena). The investment is estimated to be in the order of $800 million to construct the pipeline, funded
by the private sector, and will support maintenance and operation teams in both Tennant Creek and Mount Isa. As gas reserves become proven in the Northern Territory and in the Georgina Basin, Jemena may consider building a further
link connecting Mount Isa to the Wallumbilla gas hub (east of Roma) in Queensland.

State and Federal policy agendas relevant to Mount Isa

As the analysis shows, Mount Isa is critically important to the future economic performance of Queensland and northern Australia. There are a number of key State and Federal Government policy agendas, which are highly relevant to Mount Isa.

Key policy agendas among these are:

Map 2. Proposed economic development zone
Map 2. Proposed economic development zone

- the Australian Government's White Paper on Developing Northern Australia. The White Paper agenda includes 54 programs, including

- the Queensland Government's Advancing North Queensland: Investing in the Future of the North which targeted five priorities in north Queensland, including:

In addition, there are several specific State and Federal policy issues that relate to Mount Isa and the North West Minerals Province, for example:

- the feasibility study for the proposed 'missing link' in the national rail freight network — the Mount Isa to Tenant Creek Rail Link and the associated reforms proposed to build economic activity in the economic development zone (shown in Map 2 - Note: The black and white dotted line is only an indicative possible route for the MITCR)
- the North West Minerals Province Strategic Blueprint

- investments in the Flinders and Barkly highways
- the Queensland Trade and Investment Strategy 2017-2022, Advancing Trade and Investment, which includes a dedicated, focus on north Queensland.


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Mount Isa Council

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