The dispute erupted again in August 1964, when the State Industrial Conciliation and Arbitration Commission rejected a proposal for a weekly pay rise of £4 in lieu of an increase to the bonuses. The miners, prominently led by Pat Mackie, began to work to wage, a go slow tactic that led to reduced mine output. Dissension arose in union ranks over the direction the industrial dispute should take, with AWU leaders refusing to expand the dispute outside Mount Isa. Mackie was accused of communism and expelled from the AWU. Mackie and other militant unionists were also dismissed from MIM.

By 10 December, Premier Nicklin issued an order-in-council, demanding MIM employees return to contract work, and increasing police powers to enforce the matter. The order-in-council was quickly amended to allow the dismissal of workers unwilling to comply. MIM immediately fired 230 underground miners and locked out the rest.
Premier Nicklin declared another state of emergency on 27 January 1965, permitting police to cordon off Mount Isa, enter houses without warrant, and seize strike materials. This order-in-council was met with widespread disapproval, and was withdrawn four days later. The dispute petered out through February and March, as enough miners returned to work to resume production. A large number of workers’ demands were eventually met in the MIM Award of June 1965.