General News
20 November, 2025
MITEZ sounds alarm on soaring gas costs
The member-based organisation has put together a report highlighting the need for policy change on gas.
A new energy briefing prepared by MITEZ (Mount Isa to Townsville Economic Zone) has been circulated to senior federal government figures, warning that North West Queensland’s energy costs are now threatening the viability of major mines, regional jobs and future investment.
MITEZ CEO Maria James confirmed to North West Weekly she had shared an interim summary of the organisation’s gas market study with key stakeholders and decision-makers ahead of the full report’s release.
“Given recent news articles, I thought it timely to share with you,” Ms James wrote, noting the final version was close to completion.
The summary paints a stark picture of a region heavily exposed to soaring gas prices, with North West Queensland paying some of the highest energy costs in the country despite underpinning billions of dollars in national economic output.
According to the report, gas prices on the east coast have tripled since LNG exports began from Gladstone in 2015, leaving domestic customers vulnerable to global price shocks.
By contrast, Western Australia’s long-standing domestic gas reservation has kept prices “relatively low” and virtually eliminated volatility.
For our region, the consequences are significant.
The North West Power System (NWPS) – the isolated grid supplying Mount Isa, Cloncurry and surrounding mining operations – relies on natural gas for about 80 per cent of its generation.
Around 80,000 gigajoules of gas are imported daily into the system at an estimated $16 per gigajoule, costing the region roughly $1.28 million every day.
Just five years ago, the same gas load cost $400,000, highlighting the steep escalation.
On top of that, large industrial users are paying a further $2.07/gigajoule under the Australian Carbon Credit Unit scheme.
Industry consultations cited in the MITEZ summary reveal that wholesale customers on the NWPS were paying up to double the energy costs faced by comparable users connected to the National Electricity Market (NEM).
The implications stretch far beyond power bills.
Gas and energy now account for up to 30 per cent of total operating costs for some resource producers.
The report warns volatility has already delayed or altered regional projects – including a return to diesel generation in some cases – and is preventing new value-adding industries from establishing in the region.
Major North West operations reliant on gas include Glencore’s copper and zinc businesses, Ernest Henry, Dugald River, Eloise Mine, Cannington and Phosphate Hill.
Together, these operations support more than 5000 direct workers and contribute more than $3.3 billion to gross regional product each year.
The MITEZ study calls for urgent policy action, identifying four immediate priorities:
• A domestic gas reservation scheme to stabilise east coast supply and price.
• Accelerated development of the Beetaloo Basin to lift regional volumes and place downward pressure on prices.
• Activation of the $200 million North West Energy Fund to support local generation and storage.
• A firm commitment to complete CopperString’s Western Link by 2030, enabling full connection of the NWPS to the national grid.
The document stresses that uncertainty around CopperString’s final stage was holding back more than 3GW of renewable generation proposals, along with major mining and processing investments such as Eva Copper and multiple phosphate developments.
“Fixing energy in the North West isn’t just about economics – it’s about national capability and future growth,” Ms James said, pointing to the region's critical role in copper supply, fertiliser production and the emerging clean-energy manufacturing sector.
TOWNSVILLE ENTERPRISE JOINS IN
To address the gas crisis, Townsville Enterprise is calling on the federal government to urgently reform gas pricing and market mechanisms to ensure an affordable domestic supply.
They are also calling on the Queensland government to implement a state-based domestic gas policy that secures Queensland gas for Queensland industries first.
CEO Claudia Brumme said gas affordability and supply insecurity have become the biggest threats to job security, investment and future growth across North Queensland.
“Energy affordability is no longer just an economic discussion – it’s about survival for many Queensland industries,” she said.
“There are two key issues heightening concerns around gas supply for industry. Put simply, the current regulatory settings aren’t encouraging new gas development. Secondly, we’re exporting our gas supplies overseas and interstate.
“This is a double-barrelled challenge constraining supply for domestic use and putting pressure on pricing.
“Our industry, including smelters, refineries and fertiliser facilities have been on death row and calling for Government bailouts due to too high energy costs.”
Mount Isa mayor Peta MacRae backed the submission, citing the dependence of the North West on gas pricing.
“North Queensland industry consistently cites high power costs and difficulties securing sustainable supply contracts as the biggest barriers to moving projects from feasibility to investment – and ultimately delivering the jobs and economic benefits our regions deserve,” Cr MacRae said.
“Queensland has the resources, the expertise and the industrial base to lead Australia’s energy transition. But without affordable gas, we cannot build the manufacturing and processing capacity that our economy – and our current and future workforce – depends on.”
