Image for Don’t conduct any due diligence ... Just throw money ...

*Pic: The Pioneer Memorial with the Empire in the background ...

We were in the front bar of the Empire Hotel – an imposing late Victorian edifice built, with no expense spared, in the early years of Queenstown’s mining boom.

My drinking partner was excited, and not just because he was being paid $50,000 to prepare a report identifying tourism opportunities for the region.

“Why would you change a fucking thing?”  he enthused.  “There are people who would pay millions just to recreate a façade of what’s already here.”

He had a point.  The dominant features of Queenstown’s streetscape had scarcely changed in nearly a century, with only the odd utilitarian government building acknowledging a later period.

This was back in 1998, and it wasn’t the first time the government had attempted to foster a tourism industry independent of Strahan on the West Coast.  It wouldn’t be the last. 

But the stumbling block had always been seen as the locals, whose antipathy towards visitors was the stuff of legend.  Certainly in the 1980s, attitudes varied from disdain towards outsiders (hotel dining rooms routinely ceased service at 6.30pm so the chef could go home for tea) towards outright aggression, evident in the cowardly bashing of former Greens leader Bob Brown by a pack of youths.

Now, with commercially viable seams of copper running out, the future of mining in Queenstown looks as bleak as the surrounding hills.  Just days after Copper Mines of Tasmania pulled the pin, politicians of all shades descended on the town, as they have done every time the mine operator has run into trouble in the past.  Except this time, they don’t have any answers.

Nor is this the first time Queenstown has faced economic challenges.  When the High Court put an end to the Gordon below Franklin Dam in 1983, many claimed it would be the end of the West Coast.  In reality, the application of compensation funds to other power schemes, together with the construction of an unnecessary road linking Zeehan to the Pieman, provided years of activity.

But the town’s lifeblood has always been the Mount Lyell mine.  The dollars from Hydro developments have come and gone.  Hundreds of mining companies have fossicked, dug, developed and in a few cases, profited from the rich mineral resources beneath the soil.  And through it all, Mount Lyell continued.

Except it didn’t.  The mine actually closed in 1994, reopening the following year after the government of the day offered a new operator payroll tax and royalty waivers, and wiped the environmental slate clean, despite a century of toxic activity which had poisoned the King and Queen rivers.

That’s been the contemporary response; ignore what mining activity has done to Queenstown.  Assume the locals need jobs in the mine.  Don’t conduct any due diligence.  Just throw money at the owner of the operation.

Robin Gray used that approach in 1985.  Faced with falling copper grades, Renison Goldfields (who owned the mine at the time) put their begging hat on and tried their luck with the Liberal Government of the day.  Possibly as payback to the town which cheered him when he donned boxing gloves in the main street during the Franklin campaign, Gray wrote a cheque for $5 million.

Neither of those bailouts worked, and the mine failed again in 1998 leaving $9 million in unpaid bills.  Everybody missed out – from the local coffee shop, listed as an unsecured creditor owed $900, to the taxpayer, who picked up the $2 million still owed to Aurora, TasRail, Mineral Resources Tasmania, and Treasury itself.

So incoming Premier Jim Bacon, after declaring the remediation of the King River the biggest environmental challenge facing Tasmania, threw more money at a new operator, and signed off on another round of handouts, payroll tax relief , royalty waivers and environmental exemptions.

Another $30 million went to the region to restore the old Abt Railway, after locals, including the indefatigable Viv Crocker, had campaigned for years to see the historic line restored. 

Despite political assurances a local operator would be favoured, a fully-funded Queenstown consortium backed by an experienced Canadian rail operator was spurned in favour of (now bankrupt) developer Roger Smith, the man responsible for Launceston’s Penny Royal complex.

Smith, possibly able to throw in a low-ball tender thanks to his existing ownership of the second hand sleepers recovered from the North East rail line, soon unloaded the railway to Federal Group.  Federal Group later found the sleepers needed replacing at a cost of $15 million, and walked away.

Now of course, the future of the very railway is in doubt.  Queenstown has never really enjoyed any economic gains from its existence, with Federal Group having had commercial incentives to encourage passengers to spend their dollars at the Strahan end of the journey, where they owned pretty much everything.  They never invested in Queenstown itself.

Things are likely to get worse.  Next year, the Henty gold mine will close.  Grange Resources, operator of the Savage River mine, needs a sustained rise in iron ore prices to remain viable.  Avebury, Allegiance’s former nickel mine offers some hope, but those spruiking its merits as a jobs bonanza for the region seem unaware of the problematic metallurgy which plagued its short operating life (arsenic anybody?)

So where do the workers go from here?  Queenstown, like most of the West Coast, was founded by pioneers.  Hard people.  Working men (and a smaller number of very resilient women), often prepared to risk their lives just to arrive in the region.

Many of those still there are from that stock and I doubt they’re particularly keen on the offer of working groups, economic development committees or mobile Centrelink units.  They deserve respect, not platitudes.  Realistic appraisals of what government can do.  And certainly, they need a government which will listen, not offer solutions which have failed spectacularly in the past.

In return, after 130 years of mining, the community itself needs to accept the inevitable limitations of resource extraction as an economic driver and start looking to an alternative future.  There’s enough entrepreneurial energy in Queenstown to achieve that.

• Tom Ellison’s book - Around Australia by Schooner - will be released in November.

All Tom Ellison’s analysis/commentary for Tasmanian Times can be found HERE