Mount Isa and the North West Minerals Province's Key Value Creation Opportunities
In light of the globally competitive environment for mining investment, there is likely to be a significant payoff from efforts by policy makers at all levels of government to promote a low risk, attractive environment in the North West Minerals Province.
Securing future investment could be worth an additional $373 million in tax each year for the State and Federal Governments under low commodity prices, and $739 million under moderate commodity prices, on average over the next 30 years.
Simultaneously, the need for diversification of the Mount Isa economy is clear – to promote economic and social resilience. Opportunities exist in the region to diversify the number and size of businesses in the minerals sector, to explore and develop future opportunities in mining, gas and renewable energy, to invest in irrigated agriculture and its potential benefits
for the cattle industry in Mount Isa, and to build a broad-based economy across tourism, aquaculture and services.
The importance of diversification
In the North West Minerals Province a relatively small number of large players dominate total mining production and employment there is a heavy reliance on Mount Isa Mines (MIM), owned by Glencore, with an estimated 9,280 jobs linked to both MIM's mining and processing operations and indirect job creation. Across the broader NWMP, there is also now a heavy
reliance on the continued production and profitability of Phosphate Hill and Dugald River.
The risk is that the high degree of concentration are exacerbated by the lack of new entrants into the mining sector. Many observers await the discovery of the next 'giant' resource, however, it is a priority to reduce the region's reliance on the incumbents by increasing the number and diversity of businesses in the minerals sector.
Economic resource potential of mining
Mount Isa continues to have substantial unexploited mining resources and thus has the potential to continue to add significant value to the local, Queensland and national economies.
The potential of the North West Minerals Province depends on the commitment of companies to develop both the known resources, and resources that have yet to be discovered. Indications are that substantial mining potential remains, and that further work will confirm those resources.
Economic resource potential of gas
Map 3. Queensland basins – unconventional petroleum
Conventional and unconventional gas exploration is still at very early stages in north Queensland. The prospects that are relevant for the region are the Isa Superbasin, including shale gas at Lawn Hill, Termite Range and Riversleigh, as well as the northern part of the Georgina Basin (appendix B provides a map of these regions). However, there is limited understanding of the full potential of the area due to its remoteness and to land access, native title and other investment barriers.
Across both shale gas and oil, exploration in Queensland has been centred around the Isa Superbasin and Georgina, Cooper and Eromanga basins. The release is designed to attract junior and major explorers, and applicants are assessed according to their proposed exploration work programs. However, the latest four-year land release plan for exploration focuses on the
Cooper and Eromanga Basins and not the Isa Basin.
Economic potential of intensified agriculture in the broader region
The agricultural industry in Mount Isa and the broader Barkly region of north-west Queensland is limited to extensive cattle operations. The industry has adapted to a low feed and high risk environment by extending and integrating operations across large corporate producers with fattening properties and feedlots further south as well as through their large scale slaughter and marketing operations.
- There is a significant opportunity for the North West and Gulf regions to intensify and diversify its agricultural production.
In 2013, the CSIRO found the scope for irrigated developments in the Flinders Catchment to be substantial. The study found that large areas of potentially irrigable agricultural soils (more than 8 million hectares, 2 million of which is the most promising), with the 'potential for an irrigation development totalling 10,000 to 20,000 hectares, supporting year-round mixed irrigated and dryland cropping'.
- If crops were grown to their potential, the regional gross margin of crop production could exceed $35 million per year, compared to virtually zero at present.
- The development of irrigated agriculture in the Flinders and Gilbert Catchments would allow for the production of supplementary feed sources for cattle in the region allowing for the intensification of the regions cattle industry reducing seasonal and market risks, which would then increase cattle numbers.
The following would need to take place in order to capture
- address the impediments caused by land tenure (pastoral leasehold) to allow intensive agriculture based on both large and small scale irrigation.
- At present, only businesses of corporate size have access to suitable land and are positioned to make the large investments needed to conduct intensive irrigated agriculture.
- To realise this potential, there must be the capacity to vary the use of, subdivide, sublease and borrow against land.
- secure access to high reliability water
- assist industry in water storage infrastructure planning, whereby off stream farm dams
have been assessed as the most promising method for supporting large-scale