Mount Isa: The Mining City

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The North-Western Queensland city of Mount Isa is inextricably linked to the fate of mining. With the recent China slowdown and related transition in the Australian resources sector, Minetalk spoke with Mount Isa Mayor Tony McGrady to discuss the impact this was having on Mount Isa. In the interview, Mayor McGrady gave his insights about the recent Glencore Xstata merger, railed at the suggestion of 500 workers being made redundant as a result, commented on how the current status of the mining sector is a case of "ebbs and flows", predicted that uranium mining could be a future reality for Mount Isa Mines and gave his (pointed) opinion on Tony Abbott and the FIFO worker debate.

mt Whe Northwest Star has reported that copper smelting operations would cease in Mount Isa in 2016. What is your reaction to this?

TM: This is a commercial undertaking and from time to time MIM will make decisions based on what’s good for the company… twelve months ago the Queensland government lifted its ban in uranium mining in the state of Queensland and we have two massive, commercially-proven deposits of uranium: one just outside the city and one in the Gulf of Carpentaria. The reality is that while there could be some change at MIM I don’t believe for one moment it will have any adverse effect or impact on the community and on the city.

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mt I understand that there are a growing number of boarded up shops as well as a general drop in the property market affecting Mount Isa at present. Do you expect this situation to resolve itself?

TM: That’s a nonsense. I can’t see one single boarded up shop in the whole of the city of Mount Isa. I mean, this is the nonsense that we have to put up with all of the time. People have to understand that in the resources sector we have our peaks and we have our troughs and that depends on the world markets and the prices which mining companies get for their product. The thing about Mount Isa is [that] we have copper, silver, lead and zinc. Therefore when there’s a downturn in the market, say in copper, often the price of zinc goes up and it offsets the downturn in the other commodity. The reality is that the whole world is going through a downturn and we’re not immune to that. Added to the downturn we have new owners of Mount Isa Mines (MIM) - Glencore - and people are a little concerned about what the new owners may do, may not do and so you’ve got that uncertainty. I can assure you there’s not one single commercial premises boarded up and life is good in Mount Isa, except the fact there is a downturn in the market. I’ve been in this city for over 50 years and I can assure you that I have been through many of these so-called downturns before and when we come back we come back bigger and stronger than before we went into that bit of a slide.

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mt  Do you believe the mining and carbon tax should be scrapped?

TM: There is a lot of politics being played about the carbon tax and the resources tax and everything else. I think what the average punter understands is that with the resources tax which Kevin Rudd introduced and Julia Gillard followed through - it didn’t affect Mount Isa. The vested interests mounted a campaign which I believe contained many untruths. Carbon tax is a different issue, and of course you would have seen the United Nations report which indicated that the world has to do something. So, Mr Abbott with all his rhetoric will find that he has to address this problem, he might call it a different name but every country around the world has got to note the report from the UN and take the necessary action. Unlike Mr Abbott, I don’t dwell on slogans. I much prefer to discuss and debate the issues… [climate change] is not something you can resolve with slogans – you have to sit down and you have to work out what’s best for the country and what’s best for the planet.

mt  How do you see the recent Glencore Xstrata merger impacting on Mount Isa?

TM: I recall ten years ago when Xstrata took over MIM and there was weeping and wailing in some quarters about [it meaning] the end of Mount Isa and you know what? Mount Isa came out of that stronger than it went in. I would say that if Xstrata hadn’t moved in when they did we may not have the city of Mount Isa that we enjoy today. I think the same thing could apply with Glencore. They’ve come in, people are nervous, people are always nervous about the unknown. But one thing I’ve learned in life is that if you are going to compete, if you are going to stay above water, then you have to make changes and sometimes those changes are not always palatable. We have a city and under the city we have wealth in the ground. We’ve got stuff in the ground that the whole world wants. Whether we pull it out today, next month or next year it will always be there and the future of this city, whether [the mines] are owned by Glencore or whoever, is safe for many generations to come.

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mt  Do you care to comment about the anecdotal evidence suggesting that the number of redundancies caused by the merger has adversely affected Mount Isa?

TM: I’ve been in the city 50 years… I’ve seen all of this happen. We went through a stage some years back when a company came in by the name of Proudfoot and they went through the organisation and they made savings. Unless you have a productive and profitable organization, the jobs of every single person in the organization is under threat. Whilst I don’t want to see anyone lose a job… sometimes the hard decisions have to be made. I don’t know the number of people who may be retrenched.

mt  It was rumoured to be 500.

TM: I don’t take notice of those figures because they are pulled out of the air. Any of the discussions I’ve had with senior management at MIM, that figure has never been put to me. People pull these figures out of the air without any substance at all.

mt  You have previously mentioned the phasing out of contractors. Going hand-in-hand with the managers losing their jobs, how does this affect Mount Isa?

TM: What [MIM] has done is to draw on people who live in the city. You’ve heard the debate about FIFO, where people live on the Gold Coast or in Cairns or in Townsville. They fly in, they earn their money and they fly out to spend it elsewhere. This policy of MIM gives emphasis to people who live in Mount Isa, whose kids go to Mount Isa schools, who go to Mount Isa doctors, who shop in Mount Isa shops. They’re the people I want in the city and if MIM have made a decision that the emphasis will be on permanent employees as opposed to contractors, well three cheers for MIM.

mt  What are your thoughts on FIFO workers?

TM: FIFO workers are as good as any workers. It’s the philosophy of FIFO which I object to. The reality is that you have a situation where people live on the Gold Coast or the Sunshine Coast or wherever and they fly in, they earn the dollars in my community, they fly out and they spend the money and they leave nothing behind. They make no contribution whatsoever. What I want is people to come and live in this community, pay rates to my council, spend in Mount Isa shops, go to local social clubs. They’re the sort of people I want. I don’t want people to fly in and then fly out without becoming a citizen of my community.

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mt  With the downturn in commodity prices and the transition the industry is currently going through, how confident are you about future investment and even new mining operations developing in your region?

TM: We have the materials in the ground here: copper, silver lead and zinc and uranium which the world is crying for. Whether it’s six months or nine months away it’ll turn round and this city will once again be seen as a place for investment, a place where people and companies will come and want to be part of the action. I’ve never been so confident in the future of this city as I am now. In my humble opinion the best days are still to come. The whole world wants copper, silver, lead, zinc and uranium. There has been an international financial crisis… in some of the European countries unemployment is up to 25%, amongst young people it’s 75%. The world has been through hell and back and once [countries] start to get back on their feet, such as China… the world will come back to normal and when that happens, when they start spending, they’ll want the products we have here in the city. I’ve got no doubts at all… the future of Mount Isa is secure for many years to come.

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Minetalk Poll

Is the mining boom in Australia over?

Is the mining boom in Australia over?

No, it's just media hype.
Yes as a result of lower demand.
Still plenty of resources.
There will be a second boom.
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