Take northwest Queensland, of which Mt Isa is the centrepiece.
It’s an historic mining area with big producers including BHP Billiton at Cannington, Xstrata copper at Mt Isa itself, Southern Cross Fertilisers at Phosphate Hill, not to mention all the juniors pegging and drilling.
The State Government has seemingly recognised the importance of all this mining activity and has proclaimed what it has called the Northern Economic Triangle.
But so far this represents more words than action, as became clear at a recent meeting in Townsville where the regional mining companies met with the Queensland Resources Council (QRC).
It would seem that miners up in the northwest face fairly serious constraints, and this means delays to production and start-ups at a time when analysts are predicting that the commodities boom is about to go off the boil, not so much in terms of demand as in prices being paid.
Just out from the London office of BNP Paribas is its quarterly base metals review.
The outlook is not too rosy, with the commodities team predicting further sharp weakening in the nickel price, zinc and lead easing significantly in 2008, and a looming slowdown in copper sales. (Tin is the only exception, with BP predicting much higher prices.)
This gloomy outlook is not accepted universally, but that does not make the situation our industry people face in northwest Queensland any less serious.
They suffer shortages of labour and equipment and drilling rigs and rising fuel costs just as does the rest of Australia. But there are added impediments.
One is the railway line from Mt Isa to Townsville. The complaints coming out of the industry are that the line is such poor shape that trains are limited in places to 20 kilometres an hour and that Queensland Rail has no interest in additional business.
Railway industry sources suggest that QR is really only interested in coal traffic and serving new base metal mines in the northwest is of no interest to the state-owned carrier.
These sources also say that the line is not as bad as some make out, that upgrading is done and QR has some of its more powerful locomotives on those trains.
Nevertheless, the mining industry is planning to mount a case that the Federal Government’s AusLink fund should do something about the Mt Isa railway line.
In the commodities boom, if you miss the train you also miss the boat in terms of getting top prices for your metal.
Electricity supplies are another issue. While Queensland has a surplus of power, that surplus is not capable of being distributed to the northwest, hence the need for Xstrata Copper to build its own power station.
Road transport in the wet season is another concern.
Housing is short and childcare parlous – we have heard of one female mine engineer who recently had to give up her job in the Mt Isa area because there was no place available.
So, as the QRC puts it, northwest Queensland is one of the world’s most highly mineralised regions and yet its potential has yet to be realised even though that potential has been appreciated for the best part of a century.
Perhaps one solution would be for Queensland to take a good hard look at the fact that it is the only remaining state in Australia where railways remain the near-monopoly of a government instrumentality.
Perhaps certain lines – and the Mt Isa line in particular – should be sold into private hands.
In Western Australia, we see the Babcock & Brown-dominated WestNet Rail looking at building a new railway to link iron ore producers in the Mid West region. If that can be done in WA, why not in Queensland?
State government railway departments/corporations have, since the 1950s, been more preoccupied with closing lines than running trains.
In WA, the line that served Meekatharra and Wiluna was one of the first to go in that state’s “rationalisation”. What price to have that railway now?
