MINING IN WA & QLD AUSTRALIA IS GREAT ON THE SURFACE BUT NOT SO BRIGHT UNDER THE SKIN

HEAR THE STORIES OF THE UPS & DOWNS IN AUSTRALIAN MINING TOWNS

GRAHAM Evans has lived in Dampier, on the Pilbara coast, for 43 of his 50 years. As a boy, he rode the school bus with the famous Red Dog, and swam off the beach in a now-vanished children’s enclosure, near where a busy hub for commercial seacraft now sits.

Evans’ livelihood is linked to the resources sector that dominates Dampier and nearby Karratha; his business, Australian Marine Services, runs a fleet of vessels that services the enormous and bustling Port of Dampier, from where 140 million tonnes of iron ore are shipped each year.

Yet Evans is ambivalent about the changes that have followed the boom. Karratha, the dusty town earmarked by the state government to become a 50,000-strong ”City of the North”, is bursting at the seams with its population of 14,000, and a fly-in-fly-out workforce that – at any given time – swells the shire’s population by thousands.

PICTURES MALCOLM HEBERLE 2/12/2011 AGE BUSINESS   Story Ruth Williams.Dennis Wellington, Mayor and retailer, owns a store called Leading Edge Hi Fi, Albany.
Mayor and retailer Dennis Wellington. Photo: Malcolm Heberle

It has meant that, after 23 years in business, Evans has never struggled so hard to find, keep and house workers. In a town where workers are paid as much as $200,000 on a mine or construction site, Evans finds it hard to match the wages and conditions on offer. He has had to buy two extra homes just to accommodate his workers, who would struggle to afford local rents that average about $1500 a week.

They are just some of what he calls the ”little frustrations” that come with living in the midst of a mining boom – at the very top gear of the multi-speed economy.

Meanwhile, almost 2000 kilometres to the south, in the WA coastal town of Albany, Elton Woodhams, 35, is contemplating joining the exodus to the north. Woodhams owns a bobcat business and has just finished building his dream home with wife Katie. But in six years running his own business, he has never experienced a time so quiet. This time last year, he was working flat out, five or six days a week. ”It was busy from day one,” he says. Now, he’s lucky to work one day a week.

PICTURES MALCOLM HEBERLE 2/12/2011 AGE BUSINESS   Story Ruth Williams.Elton Woodham, owner, One Tonne Bobcat. ALBANY W.A.
Albany bobcat business owner Elton Woodham. Photo: Malcolm Heberle

With the Aussie dollar soaring, Albany’s crucial tourism industry is facing greater competition from the cheap lures of Bali, and its farming sector was hit by drought last year. But Albany is also suffering the same malaise as any region not linked to the mining boom. It is firmly stuck in second gear.

When those on the east coast picture the two-speed economy in their minds, they see a nation divided between the mining states and the rest. They see WA and Queensland running at full speed, their residents raking in boom-time wages and their state governments battling to spend an endless stream of mining royalties, as the rest of Australia grapples with the consequences.

But the truth is that the so-called patchwork economy is not neatly divided along state borders. It is a region-by-region, suburb-by-suburb, street-by-street proposition that is having an impact on WA just as dramatically as on the non-mining states.

WA, however, must deal with the extremes of the patchwork economy in a state almost as big as NSW, Queensland and Tasmania combined; that has a voracious need for people and infrastructure up north; a capital city, Perth, that is staggering under the weight of a population influx; and large areas in the south that are falling behind.

Nationally, the two-speed economy shows no sign of dissipating. Growing fears on how the financial tumult in Europe will play out continue to weigh on the minds of Australian consumers and investors; unemployment is ticking up and the high Aussie dollar is taking its toll on local manufacturers. This week, the chief executives of both BHP Billiton and Rio Tinto warned of a gloomy outlook for the world economy due to the ructions in Europe.

In WA, retail sales are stronger, wages are higher and unemployment is lower. Despite their caution, both mining bosses reiterated their faith in the continued growth of the all-important Chinese economy, to which WA’s economic wagon is well and truly hitched. Business investment data out this week showed the continued strength of the boom – mining investment surged 22 per cent over the three months to September 30, and 60 per cent over the year, helping boost wider business investment to its fastest rate on record.

It all looks economically rosy in WA. But there is another story below the surface.

”There’s a resources boom, but there are also sections of the economy that are travelling very slowly,” says Eric Ripper, Leader of the Opposition in WA and a former state treasurer. ”The property market is flat. Every retailer will tell you business is very slow, the tourism industry is struggling, education exports are challenged.

”So the two-speed economy, the multi-speed economy, the patchwork economy is a feature of WA, just as it is a feature of the national economy.”

THE ghost town of Cossack sits on the coast north of Karratha. Once a bustling port and centre of the north-west pearling industry, it was at its peak during the 1880s, when thousands of prospectors shuffled through the port on their way to the newly discovered Pilbara goldfields.

Cyclones, competition from other ports and the end of the gold rush led to Cossack’s decline, and it was abandoned after World War II.

But, from a lookout near the town, one can see the latest mining boom in full swing.

On the horizon, the ore ships – seven or eight or nine at a time – await their turn to dock and take their load from the giant stockpile at Cape Lambert port, owned and operated by Rio Tinto.

Cape Lambert’s 80 million tonne capacity will be more than doubled by 2016, at which point it will overtake nearby Dampier Port. Throw in the area’s other big resource projects in place or coming soon – Woodside’s North West Shelf LNG operation, its forthcoming Pluto project, Chevron’s Wheatstone LNG project in Onslow, and the tens of billions of dollars of others being planned, built or considered – and it becomes clear where the hunger for workers and money is coming from.

For some, this hunger has resulted in big salaries and big living – a once-in-a-lifetime opportunity to work hard and earn sums of money once unattainable. But this hunger is so strong it has also severely warped the local economy.

In Karratha, a housing shortage has pushed up rents on standard four-by-twos to $1800 to $2000 a week. Few can afford to rent in Karratha unless they are housed by their company, or their rent is subsidised. A hotel room costs between $350 and $450 a night, and can be a rare commodity. A toasted cheese sandwich costs $12, petrol is $1.60 a litre.

The new buzzword in Karratha is ”normalisation” – the process by which this dusty boomtown, with its sky-high rents, FIFO (fly-in, fly-out) swagger and lack of amenity, will again be the sort of place where a family can afford to live in a decent house, whether they work in mining or not.

That is not the case now. Not-for-profit organisations are forced to house their staff in caravans, and the shire is facing a problem of people living in cars or shipping containers, or camping illegally. Such people often have well-paying jobs, says Fiona White-Hartig, the newly elected shire president. ”But it’s just not enough to get them into that rental market.”

White-Hartig is also the president of Karratha Emergency Relief Organisation, which provides food and gas supplies to those in financial trouble. ”We can’t keep up with the demand. And they are people that used to be your middle-class kind of people, but they are struggling.”

White-Hartig says the local economy needs to diversify – she is particularly keen to boost the local tourism industry. But no tourist charter boats operate out of Dampier, despite the diving attractions of Dampier Archipelago.

”That’s really a microcosm of what we’re trying to do – by normalising the community the charter boat business can actually afford to live and operate out of there,” says Nationals leader Brendan Grylls, the state’s regional development minister.

How does a state like WA cope with the two-speed economy? Part of the answer lies in Royalties for Regions, under which 25 per cent of the state’s royalties are invested back into regional areas.

The policy came in after the 2008 WA election, when the Liberals needed the Nationals, led by Grylls, 38, to form government. When Grylls first hatched Royalties for Regions in 2006, 25 per cent of the state’s royalties was worth about $375 million. At the election in 2008, it had swelled to about $600 million. Now, it is more than $1 billion. ”This has gone better than I could have ever imagined,” Grylls says.

In the next few years, Royalties for Regions will pump $1 billion into transforming Pilbara towns such as Karratha and Port Hedland into ”modern, vibrant cities”, which Grylls argues will make it easier to attract workers to the north.

In Karratha, frantic work is under way on a host of new community assets – a new youth centre, recreation centre, family centre, and more and more housing.

A half-finished nine-storey tower, complete with crane, dominates Karratha’s skyline. It is the Pelago West, a $97 million, 114-unit luxury apartment development that will have pools and other ”resort-style” accoutrements. There is nothing else like it in Karratha, but it is a sign of things to come.

The developer, Finbar, is selling one-bedroom units in the Pelago for $600,000; the three-bedroom, two-bathroom apartments, which averaged $975,000, have sold out.

For a new ”luxury” home in Karratha, these are not bad prices; at the local real estate agent, a basic two-bedroom fibro ”townhouse” is for sale at $459,000 (currently rented at $750 a week), and a modest, two-year-old four-by-two is selling for more than $1 million (currently rented at $1900 a week).

What will be Karratha’s main street, with trees and alfresco dining, is currently an unremarkable thoroughfare. What will be a developed waterfront is now an expanse of red dirt and mangroves. There is no cinema in Karratha, and few places to lunch – at least not alfresco. Vibrancy seems some way off.

When the infrastructure is all built, Graham Evans says, ”it will be a good thing. It should have all been put in place 10 years ago. They waited until there were too many people here before they did it.”

Evans has doubts about whether the long-standing locals are getting a fair share of the boom. ”My opinion is that they feel a little bit left out. You get people who fly in and fly out, they are fed and given housing allowances, but a lot of average people don’t get the big dollars, and the cost of living is still high.”

Pelago West overlooks Warambie Estate, a new development of 100 homes built for ”service workers” employed in government, non-government organisations or local businesses.

The houses are closely packed, identical and tiny – they seem smaller than some of the boats parked next to some Karratha homes. And they are not, strictly speaking, cheap – the rent is between $300 and $500 a week, depending on the number of bedrooms. ”It is still a lot of money, but compare it to $1500 to $2000 a week, that’s quite cheap,” White-Hartig says. ”It is fantastic, but the reality is we could have another 300 and barely scratch the surface of the need.”

It is the oldest town in the shire, Roebourne, that remains its most disadvantaged. Roebourne’s population, 75 per cent of which is Aboriginal, also lives with the high cost of Pilbara living. But it also lives with the legacy of Roebourne’s tragic history – dispossession, oppression, deaths in custody. Alcoholism, domestic violence and poverty linger.

Royalties for Regions has reached Roebourne, and the mining companies are channelling funds into the community.

There are indigenous job programs, and land access agreement between traditional owners and mining companies. The asbestos-ridden shacks of a notorious part of town called ”the village” are being torn down and replaced with new homes. There’s a new youth centre, and on the edge of town, a 400-lot housing development owned by the Ngarluma Aboriginal Corporation.

Yet Roebourne’s community organisations struggle to provide services and to keep staff, who are the subject of regular poaching attempts from mining companies. As hard as businesses like Australian Marine Services work to keep staff, non-government organisations like Roebourne’s Yaandina Family Centre have it even harder.

From Roebourne, the distance to policymakers in Canberra feels particularly vast. For 12 years, Yaandina has been trying to raise funds for a new residential aged-care facility in Roebourne – a place where, due to the health and social disadvantages faced by Aboriginal Australians, the ageing process kicks in at 45.

”We hear about this two-speed economy all the time,” says Veronica Rodenburg, Yaandina’s chief executive. ”This is the third speed here. We arguably work in the richest place on the planet, but we work amongst the most incredible levels of poverty and dysfunction.”

THE economic divide between the mining and non-mining parts of WA – the Karrathas and the Albanys – is stark. At the last census, Karratha’s median household income was $2010 a week, while Albany’s was $846 – a gap that is likely to have expanded in the five years since. Karratha’s median house price is $777,500, says the Real Estate Institute of WA. Albany’s is just $365,500.

This year, 800,000 people will pass through Karratha’s airport. At Albany, 57,000.

But there is a tantalising possibility that the mining boom will arrive on Albany’s doorstep. In March, Tasmanian iron ore miner Grange Resources will announce whether it will go ahead with a $2.6 billion magnetite iron ore mine at Wellstead, about 90 kilometres from Albany.

If it happens, it will be huge. The mine will need 600 workers, its own desalination plant and water pipeline, its own power line from the coal generation hub of Collie 300 kilometres away, and a pipeline through which the magnetite slurry will travel to Albany port. Hopes are, understandably, high.

In the meantime, the newly elected mayor, Dennis Wellington, has other plans to bring the mining boom to Albany. He is touting the city as a FIFO base, pointing to its relatively affordable housing – compared with up north – and range of schools.

”One of the things that’s been said about Albany for a long time is that it’s got a lot of potential,” Wellington says. ”But you can’t eat potential, you’ve got to realise on it. And in the next five years we’ve got to realise on our potential.”

Right now, Albany is getting the raw end of the resurgent mining boom. The high dollar is tempting tourists overseas, especially to Bali – just 3½ hours from Perth by plane, compared with a 4½-hour car trip to Albany.

Local retailers cannot remember a time so quiet. Last year, the wheat, sheep and canola farms that surround Albany were hit by a severe drought, hobbling the agricultural sector that accounts for almost half Albany’s economy. A better harvest is expected this year.

The GFC was not kind to Albany, whose local council lost hundreds of thousands of dollars in investments linked to the US subprime mortgage market, sold to it by the now-defunct Grange Securities. The GFC also helped finish off the timber managed investment scheme spruikers Timbercorp and Great Southern, which had big operations in Albany.

And it scuttled plans for a new luxury hotel on Middleton Beach, at a site where the town’s only four-star hotel, the Esplanade, once stood. It was demolished in 2007 to make way for the bigger complex that never eventuated, and the site is now a gaping, weed-strewn patch, protected by a high fence. Locals recently hung socks in the fence in protest at the situation.

Thanks, in part, to Royalties for Regions, Albany has a new entertainment centre and it will soon have a new hospital. But it remains without a four-star hotel – an embarrassing situation for a tourist town.

”If things don’t pick up by January, I’m going,” says Elton Woodhams, the bobcat driver. He loves Albany, but it also has its frustrations – nothing ever seems to get off the ground. But if he and Katie move north, he will lose his hard-won contacts and clients. And they will be adding to one of Albany’s biggest, longest-running problems – the departure of its youngest, brightest and most productive residents. Once, they left to find their fortunes in Perth. Now they travel north to the mines.

According to WA government estimates, Albany’s unemployment rate rose in the three months to March this year from 4.6 per cent to 5 per cent – the highest in at least five years. But with a median weekly household income almost $200 a week below the national benchmark, many of those struggling in Albany are people with jobs.

”Most of my clients used to be low-income earners or people on disability payments or Centrelink,” says Diane Daly, a financial counsellor with Anglicare’s Albany office. ”There has been a big change. We are now seeing couples with families that are both income earners who we would call ‘middle class’, struggling to keep on top of things.”

This year, Melbourne think tank the Grattan Institute cast a critical eye at Royalties for Regions, and other government programs designed to ”kick-start” regions losing out in the patchwork economy.

It questioned the wisdom of investing so much money in ”lagging” regions such as Albany and remote places like the Pilbara, warning of ”significant risks” in the ”very expensive” strategy.

Says Grylls: ”I think they are wrong, and I will use every waking moment of my political career to prove them wrong.”

EVEN as WA is becoming more confident about its new-found economic clout, resentment is growing about what is widely seen as a lack of understanding of its situation in Canberra and the ”eastern states”. The carbon and mining taxes have not helped this perception, nor has the row with the federal government over WA’s move in May to boost state royalties on iron ore.

There is a deep belief that WA is shouldering too much of the burden of propping up the weaker states in the federation, and that it is being deprived of funds it needs to build infrastructure to drive the resources boom.

This financial year, WA received 72¢ in the dollar back from its GST contribution; WA Treasury forecasts WA’s dividend to drop to 33¢ in the dollar by 2014-15 – an amount both sides of WA politics decry.

”That’s money we need to build the infrastructure, to allow the industry that generates the wealth to keep generating the wealth,” says state Treasurer Christian Porter, who wants the issue looked at in the GST review currently under way. Last month, Porter’s update on WA’s economy revealed a $325 million operating surplus, but a $315 million jump in public sector net debt to $12.3 billion. It is a result, Porter says, of the government’s spending on the infrastructure needed to ”keep this kind of growth going”.

There is a parallel between the WA government’s attempts to ”share the benefits” of the boom throughout WA, including with Royalties for Regions, and the federal government’s efforts to spread the mining wealth through measures such as the GST and mining tax.

But take too much money out of WA, the state government cautions, and the national economy will suffer. The loud warning is that if WA cannot keep up with its own boom, investors and mining companies will take their capital elsewhere. ”If that happens … that growth will be lost to the country forever,” says James Pearson, chief executive of the WA Chamber of Commerce. ”It won’t reappear in a marginal electorate in Sydney or the back of Bourke. It just won’t go ahead, because capital is footloose and Australia is by no means the only country with iron ore, coal and natural gas.”

But this argument is hard to swallow on the east coast. Patchwork economy or not, WA currently boasts an enviable set of economic figures. WA Treasury is forecasting the state’s economy to grow by 4.5 per cent this financial year, and by 4 per cent the year after. Australia’s forecast GDP growth rate of 3.25 per cent this year and next looks anaemic by comparison. Unemployment in WA stands at 4.2 per cent, nationally it is 5.2 per cent.

”The bottom line is that the growth is overwhelmingly a good thing,” Porter says. Lower, middle and high-income workers in WA all earn more than their interstate counterparts, he says, an advantage that remains, even taking into account the state’s higher costs of living.

But the state opposition says many West Australians are missing out on the spoils of the boom.

”A resources boom can widen inequality in a society, and societies becoming more unequal, suffer more social problems. I think that’s the danger,” Ripper says.

Ripper was treasurer when the boom took off in 2006, which sparked a damaging real estate frenzy from which Perth is still recovering. ”My judgment at the time was that a boom is not good news for everyone – it can be bad news for a lot of people.”

Sourced & published by Henry Sapiecha

NOTE-From the editor


All this need for skilled people in the mining sector and there are many people I personally know who have to go through hoops to even get an interview for a job in mining environments.
I get sick & tired of these wingers and poor me attitudes of people in mining environments & bragging about the money they make.
Very competant people with degrees and work/life experience as well as an enthustiastic attitude are having to answer to 18year olds who take job applications and process  them.
They [The 18year old] then assess the applications and qualify the applicants input.
The system is a joke as are these ’18year old ‘ morons appointed to process the applications by some jerk off agency which is barely qualified or experienced.
How degrading is that?  The ‘Lang’ Hancock camp in WA would shudder at the thought.
The mining job industry is a tough seat of the pants environment, but it has been hijacked by ‘job processors’ who allow so many good hard working people to fall through the cracks. We have the people here to fill your needs
Get a grip and reform the mining job assessment process. Sure you want to weed out the incompetant & undesirables but you are doing it at the expense of great people with a lot to offer the mining industry.No wonder your sector is always screaming for more people.
I have no sympathy for you. CHANGE THE PROCESS-DO YOU HEAR ME…?
If you people in the mining scene are serious about getting good people into your work environment then contact me. Henry Sapiecha
You seem to be in different world because you  and I are separated by these ‘agencies’ who have created a niche for themselves in assessing the applications of genuine job seekers.
They [agencies] are necessary but please change the selection criteria and the assessors training or the selection criteria
Another very serious drawback is/are the entities which specialize in extracting high fees for these so called training courses that have to be done @ very high $$$ costs to even get a look in with the mining companys.
The Australian Qld government also is spending millions of dollars on promoting mining jobs and it seems like a total waste of money in that they are feeding us all this crap about jobs available in the mining industry, yet qualified persons are ignored as ‘unsuitable’.
That mine sector talk about getting in overseas workers etc.
You have got to be kidding when we are screaming for work and jobs.
What is it you do not understand????
The delegation of screening mining job applicants is flawed in its structure & application. CHANGE IT…

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