Mining town Moranbah will revive but may never return to dizzy heights: Terry Ryder

I have considerable faith in the longevity of the resources revolution but I wonder whether we’ll see another Moranbah.

With the mounting use of fly-in-fly-out workers staying in miners’ camps, many of the expected benefits of a major mining operation in your region may bypass the local town.

Moranbah is the Bowen Basin coal town in central Queensland where the median house price rose from around $50,000 to $750,000 within a decade, as coal-mining operations emerged and flourished. At one point the town’s capital growth rate (the 10-year average) was above 30% per year.

Now, with downsizing by mining companies as they seek to control costs, plus growing use of FIFO workforces, demand for Moranbah tenancies has dropped. Rents have halved and the median house price fell 5% in the latest quarter, based on RP Data figures, or 7% if you believe Australian Property Monitors. The median rental yield, which was in double digits last year, is now down around 5% or 6%, not much better than a capital city suburb.

Moranbah will revive, once the big miners sort through their cost-control issues, but I wonder whether it will ever return to the dizzy days of 12-15% rental returns and values rising massively.  

FIFO and miners’ camps were once the exception. Now they’re the norm. We’re moving towards a situation where everyone working on a new mine will be on a FIFO roster and no one will live in the local town.  

Bob Wilson, a long-time property writer who works for Hotspotting, has just completed an eight-week research safari through Queensland and the Northern Territory. He reports a stark contrast between towns where FIFO dominates and the ones where the workers live locally.  

The tiny town of McKinlay (population 17), between Cloncurry and Winton, was having a race meeting when Wilson passed through. The race day was sponsored by BHP Billiton, which operates the Cannington silver-lead-zinc mine, for which McKinlay is the nearest town. But BHP Billion has a mining village and an airstrip at the mine, and flies its workers in and out.  

“The only hint of a mine nearby is the steady procession of four-trailer road trains rumbling through McKinlay and turning right at the T Junction out to Cannington mine,” Wilson says.  

Alpha, population 300, sits at the heart the Galilee Basin coal province west of Emerald. “But,” Wilson says, “locals have got over the early euphoria when not one, or two, but five mining companies turned up ready to dig up the basin’s thermal coal and ship it overseas.  

“The easy-going folk in this service town realise now that none of the proponents will turn Alpha into a Moranbah overnight. All have indicated they will operate with FIFO crews and accommodate them on-site or at mine camps elsewhere, as Alpha lacks the infrastructure to cope.  

“Alpha’s little air strip is to be upgraded to airport status, but otherwise it looks like business as usual for the town.”  

The north-western town of Cloncurry has a different buzz, thanks largely to mining company CuDECO.  

Wilson says: “Cloncurry seemed a lot more energised than some of the towns of similar size I have seen on this trip. If uranium mining (discontinued in the 1980s) was Cloncurry’s past, then copper is surely the region’s future. CuDECO has spent six years firming up a resource west of Cloncurry which will produce high quality copper for at least 10 years.  

“Work is due to start soon on the $300 million Rocklands mine with CuDECO holding 60 houses in Cloncurry and deciding to build more homes for the 130 to 160 workers. In the interim, the company has built a workers’ village in the main street. The decision to largely bypass the FIFO option could see Cloncurry develop as a future regional hotspot.”  

Typical houses in Cloncurry cost around $250,000, so there’s room for growth.

Terry Ryder is the founder of hotspotting.com.au