Archive for the ‘MINERS & FAMILIES’ Category

Giant mine pit ‘swallowing’ 400-year-old Peruvian town

Saturday, December 5th, 2015


The Peruvian city of Cerro de Pasco, perched high up in the Andes, is about to sink — literally and metaphorically — into the deeps of a half-century-old, open-pit zinc and lead mine

The Peruvian city of Cerro de Pasco, perched high up in the Andes, is about to sink into the deeps of a half-century-old, open-pit zinc and lead mine that has been belching streamers of dust and polluting its surroundings for years.

The locals, National Geographic reports, were submitted to a series of health tests in 1996 when the effects of contamination became more prominent. In 2007, the U.S. Centers of Disease Control and Prevention (CDC) joined the investigation only to verify the fact that more than half the children tested had high lead levels in their blood stream. This drove authorities to declare a “state of environmental emergency” in Cerro de Pasco in May 2012.

cerro-de-pasco-mine image www.www-globalcommodities (1)



Very little has changed since. According to the article, locals keep dealing with lead poisoning and its consequences, including lower IQ levels, seizures, organ dysfunction, and even premature death.

Residents have made attempts to reach out to the central government, asking for a permanent solution, especially after 2,070 children were diagnosed with lead levels that implied twice the danger. The authorities’ promised to build a new hospital, however, has yet to become a reality.

cerro-de-pasco-mine image www.www-globalcommodities (2)

Meanwhile, the company that operates the vast mine, Volcan Compañía Minera, continues to expand the pit in the middle of the city, said to be as deep as the Empire State Building is tall.

Half-century mining history

The Spanish found silver in the caverns of Cerro de Pasco about 500 years ago, and through the 20th century its mines enriched many — including prominent Americans. The caverns were opened in 1956 and today the central Peruvian Andes region is still home to 14 mining companies operating at high production levels.

But the wealth extracted from Pasco’s land is, unfortunately, not shared among its people. The latest statistics available show that between 2013 and 2014, Cerro de Pasco was — in fact — the region that saw the highest rise in poverty in the whole country.

In 2008, Peru’s Congress passed Law No. 29293, calling for the resettlement of the entire population of Cerro de Pasco, a city of 70,000. But the government failed to come up with a process to accomplish that, so the law has largely been ignored.

A Volcan’s spokesman told National Geographic that moving the town was not the company’s responsibility. “It is an issue that concerns the national government, in coordination with the regional government and the local government of the city.”

In October, authorities met once again with community members who marched to Peru’s capital Lima. One of the key points agreed upon was that the Ministry of Health would guarantee care for all those with high levels of lead in their blood.

The government, local media reported (in Spanish) also agreed to build a clinic for heavy metals detoxification and a modern toxicology lab.


Henry Sapiecha


Saturday, November 9th, 2013



Residents of a Northern Nevada town are $20 million richer after reaching a settlement with a company accused of covering up a leaking World War II-era copper mine, the Associated Press reports.

Seven hundred neighbours of the old Anaconda mine, located about 65 kilometres southeast of Reno, claimed that Atlantic Richfield and its parent BP America had “intentionally and negligently” concealed the extent of chemical leakage into their drinking water.

Atlantic Richfield, which purchased the Anaconda mine in the 1978, acknowledged no wrongdoing in the settlement. It argued that the region has naturally occurring uranium and that there’s no proof that the copper mine caused the contamination.

Residents filed the lawsuit after an EPA investigation determined that uranium, a by-product of the mine, was leaking into groundwater, resulting in “dangerous levels of uranium or arsenic or both” in 79% of wells north of the mine. A US Labour Department review in 2008 also revealed that the clean-up schedule had not been enforced.

The companies will pay $7 million in property damages, $900,000 for a medical monitoring fund and up to $12.5 million to connect water supplies with the city of Yerington’s water distribution system.

In its heyday, Anaconda Copper Mining, the company that originally operated the Nevada mine, was the fourth largest company in the world. Between 1952 and 1978, the mine produced 1.7 billion pounds of copper. It shut down due to low copper prices.


Henry Sapiecha

fine gold line


Tuesday, July 2nd, 2013


On the Indonesian island of Java, men mine sulphur from inside Ijen crater where there is a lake filled with two and a half million tonnes of acid. Breathing in Hydrogen Sulphide around 40 times the safe level set in the UK, the miners bear the scars of their labour – poisoned lungs and skin criss-crossed with burns and scars. They carry 90kg loads up 200 metres out of the crater and back down the volcano’s outer slopes to a weighing station – a journey they make several times a day.

“I do it to feed my wife and kid. No other job pays this well,” adds Sulaiman.

Sulphur mining video below reveals the dangers

One of the most poisonous places on earth & lung destroying atmosphere


fine gold line



Tuesday, February 19th, 2013

The meek shall inherit the earth,

but not its mineral rights:

Meet mining’s 40 richest billionaires

Frik Els | April 16, 2012

Billionaire_collage copy counts more than 90 billionaires involved in minerals, metals and mining on the planet with a combined wealth of well over $300 billion.

Sourced & published by Henry Sapiecha


Tuesday, December 4th, 2012

Australian miners have reduced overhead by $2 billion and laid off nearly 10,000 miners over the last couple of months, according to a report by R2Mining and CostMine.

“The majority of the Australian mining industry has found that it is no longer profitable to invest in the current economical climate,” writes the report authors, Shahriar Shafiee and Nick Abbate.

“The main factors threatening the Australian mining industry are the fall in mineral commodity prices over the last 12 months, the uncertainties created around the mining and carbon taxes, an increasing royalty rate, a strong Australian dollar, and slowing of China’s economic growth.

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“Therefore with the no improvement in commodity prices expected in the short.”

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Sourced & published by Henry Sapiecha


Saturday, February 4th, 2012

The Rinehart story in pics

FOR iron ore billionaire Andrew Forrest, Gina Rinehart’s move this week to become Fairfax’s largest shareholder is nothing if not serendipitous. For the mega-wealthy, control of Australia’s most influential newspaper group, Fairfax, is like an insurance policy against political decisions that run against their commercial interests.

Rinehart has paid less than $200 million for this insurance and while she probably will have to pay more, the investment could yield a hefty return.

According to well-placed sources Rinehart was not the only candidate running the ruler over Fairfax – Forrest and his mate Kerry Stokes were sniffing around as well.

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Gina Rinehart

Over on the east coast of Australia another astute investor, Peter Hall from Hunter Hall, was also taking a very keen interest in Fairfax.

His fund was not looking for a big stake but he was prepared to take a $10 million punt that either Rinehart or Forrest would.

He thought Fairfax stock was undervalued late last year but figured he had an insurance policy if Fairfax’s prospects went pear-shaped. Hall’s own insurance policy – the emergence of a billionaire seeking influence – paid off.

Just in time, too. Hall was getting more concerned about the media group’s advertising and readership numbers in December and January. Hall sold his shares in Fairfax to Rinehart this week.

Kerry Stokes may have also had an agenda. Sure, influence would have played a significant part in the appeal of Fairfax and he is a big holder of iron ore assets. But he has also made plenty of money out of media over the past 30 years and has other properties – such as the Seven television network and West Australian Newspapers (WAN) – which could have dovetailed nicely with the country’s largest independent news publisher.

For Rinehart and for Forrest the rationale is simple. Invest several hundred million to gain control of Fairfax, and wrest the political agenda from the government.

In Rinehart’s case this would involve using the editorial influence of Fairfax to get rid of Labor and its expensive (to her) taxes – the minerals resource rent tax and the carbon tax – an outcome that could ultimately save billions.

The more politically agnostic Forrest might have been happy to leave the regime but lose its troublesome policies.

The roughly $200 million spent on Fairfax shares could be a downpayment on saving Rinehart and the other resource barons a multiple of this figure in future tax.

Remember, in the hard world of finance, a $100 million annual saving in tax is the same as adding $1 billion to the value of your business. The splendid kicker for Forrest is that he gets all the benefits of Rinehart’s insurance cover without having to pay for the premium or the excess.

But this may not be a fool-proof plan because taking control of the editorial agenda is not necessarily that easy. Rinehart will first have to acquire enough shares to control the board. The 12.6 per cent she has now probably won’t do.

The investment banking strategy experts contend Rinehart will now need to increase her interests to a whisker under 20 per cent – the threshold set by the corporations law, beyond which a full takeover bid for all shares must be made.

From this point, Rinehart would probably still fall short of the necessary shareholding needed to take control of the board and the company. Once the 20 per cent is reached she will be able to use the corporations law to creep upwards at the rate of 3 per cent every six months.

Within a year she will be able to reach a shareholding of almost 26 per cent without the need to make a takeover – the dynamics of power on the Fairfax board would have her in a strong position of influence.

Ironically the template for this corporate manoeuvre was used by Stokes to get his tentacles around West Australian Newspapers.

Back in 2008, Stokes took control of WAN from the humble shareholding of 22.3 per cent, having crept up the register from just over 19 per cent. It’s slower than a takeover – you can only buy 3 per cent every six months – but cheaper.

It is a matter of law that control is deemed to have passed once a shareholder gets 30 per cent (in the absence of another, larger shareholder.)

Thus, for Rinehart, waiting just one year from now would see her take effective control of Fairfax and the highly regarded editorial integrity of trust, built up over 150 years, could be sacrificed for a few hundred million pieces of gold.

To do this, she would need to inject a few user-friendly editors into the Fairfax newspapers including, The Sydney Morning Herald, The Age and The Australian Financial Review, but this could all be done well in time to influence the course of the next election.

Rinehart has already had some success in achieving influence through the acquisition of 10 per cent of Ten Network last year.

Not only was she readily granted a board seat but the politically like-minded News Corp journalist, Andrew Bolt, was given his own program, some say through Rinehart’s influence.

Bolt’s career ascension also has been helped by Rinehart’s long-time friend and media player and advertising tsar, John Singleton.

Bolt’s voice is also heard on 2GB, the Sydney radio station that is majority-owned by Singleton and home to two of the country’s most strident talk-back hosts, Alan Jones and Ray Hadley.

Singleton, who shares Rinehart’s views on mining and taxes, recently told Fairfax’s Good Weekend magazine: ”We (Singleton and Rinehart) have been able to overtly and covertly attack governments … Because we have people employed by us like Andrew Bolt and Alan Jones and Ray Hadley, who agree with her thinking about the development of our resources, we act in concert in that way.”

Singleton told Weekend Business yesterday Rinehart would be a great addition to the Fairfax board.

”She is a lot smarter than people like (former chief executive) Fred Hilmer and crooks like (former major shareholder) Conrad Black.” Singleton, who is also a former Fairfax director, claims another, Sir Zelman Cowen, didn’t know what EBIT (earnings before interest and tax) stood for.

Singleton says Rinehart doesn’t need the money or the influence but in his opinion she will be active in having her say at board level about the appointment of editors.

”She is frustrated at the negative way Australia is portrayed (by the media) and the fact that mining is portrayed as the big bad wolf and not the saviour … I reckon she wants to have a say but doesn’t make comments in the media because she is not extroverted … it’s not her style.

”I will say to her when I see her, ‘Good on you kid, your father would be proud of you’.”

But he agrees that a full takeover is not on the cards.

To acquire more than the amount necessary for control would be profligate.

Rinehart needs to play the Goldilocks card – not too much and not too little, but just right.

Analysts agree that suggestions Rinehart will make a full takeover bid for Fairfax are strategically wide of the mark.

Taking into account the cost of mounting a full takeover offer and the cost of the debt inside the company the price tag would be near $3.8 billion. That is a hefty price for insurance – the equivalent of paying the premium for a teenager to drive a Rolls-Royce.

It also assumes that Rinehart’s pockets are bottomless.

She has now taken the mantle of Australia’s richest person and there are suggestions that her worth could be great as $20 billion.

But the value of her assets is entirely different to her access to cash flow and the former must be considered a guesstimate. Suggestions that her fortune could be on track to $100 billion appear to have been plucked out of the ether.

Such talk about her personal life and wealth is an anathema to Rinehart. She is intensely private and opens the corporate veil to no one. One example is her involvement in a desperate legal struggle to suppress the details of the acrimonious court battle she is engaged in with her children.

(Interestingly, she is also engaged in a legal battle with Fairfax and other media organisations on suppression of the court case.)

It is only via the relationship she has with her listed partner, Rio Tinto, that the outside world gets a sneak look at aspects of her financial spreadsheet.

At its most general we understand that her half of the yearly revenue from iron ore project Hope Downs produces royalties of about $2 billion a year, which should expand to an additional $600 million to $700 million, based on today’s price of iron ore.

On top of this the primary operating company earns about $100 million a year from her half share in the Hancock and Wright partnership – a legacy from her father’s 1960s foray into the iron-ore-rich Pilbara region of Western Australia.

The estimate of Rinehart’s wealth has been revised over the past couple of weeks on the back of a 15 per cent investment in the Roy Hill development – giving it a value on paper of $10 billion.

But this project is still in its early stages and will need plenty of capital expenditure in both railway and port facilities.

There are two schools of thought on whether she will seek to use her capital to develop this new iron ore prospect or whether she will scope out a buyer.

If Rinehart wants to develop this and ”live the dream” of Lang Hancock, then there would be less room for capital to be sidelined for the likes of a full takeover of Fairfax.

As immense as her current loyalty payments are they are also subject to variations based on the price of iron ore, which is at present at near-historical highs.

Fairfax shares have now fallen back below Rinehart’s recent 81¢ buying spree price, which is a clear suggestion the market is not expecting a full takeover.

The additional wrinkle in the Rinehart financing story is in the battle being waged over control of a large chunk of the family’s fortune.

Rinehart’s three oldest children, John Langley Hancock, Bianca Hope Rinehart and Hope Rinehart Welker, are trying to remove her as the trustee of the Hope Margaret Hancock trust, set up by their late grandfather Lang Hancock. They are alleging ”serious misconduct”.

Regardless of the outcome Rinehart will remain an extremely wealthy woman – one who Singleton contends can always get an audience with any politician. But then so can Andrew Forrest and Clive Palmer.

But the introduction of the mineral resource rent tax is clear evidence that the rich can get the ear of Canberra but not necessarily change policy, as Forrest himself discovered.

The ability to influence a large media organisation is a far better political attention grabber.

If Rinehart increases her investment in Fairfax sufficiently to take control of the board, the potential returns for her interests in mining could be monumental.

It’s certainly a better bet than standing on the tray of a flat-bed ute holding a loudspeaker.

Sourced & published by Henry Sapiecha


Saturday, February 4th, 2012

Cast in iron: Yes- the millions turned to billions

Leonie Lamont February 4, 2012

It was 20 years ago that the mining magnate Lang Hancock’s widow, Rose, summoned journalists to the gate of her flamboyant mansion, and dispensed copies of her recently departed husband’s will.

It was 1992, the year both Hancock’s daughter, Gina Rinehart, and Rose first appeared on the BRW Rich List. Lang Hancock’s $150 million fortune had been divied up, each woman listed with a fortune of $75 million, in recognition of the will’s 50:50 split.

There were decade-long legal battles, the bankrupting of the estate and paying down debts for business follies. But importantly the iron ore royalty ”rivers of gold” paid by Hamersley Iron (now Rio Tinto) to Hancock Prospecting were preserved in corporate structures for Mrs Rinehart and her children. The deal struck in 1962 involves a continuing royalty valued at 2.5 per cent of ore mined from many of Rio’s West Australian mines.

Given today’s iron ore price, that royalty stream now accounts for about $100 million a year.

In 20 years, Mrs Rinehart has taken her $75 million inheritance to her fortune as Australia’s richest citizen. The Forbes Asia rich list named her this week as the wealthiest woman in Asia, worth $16.88 billion. Other calculations, based on iron ore prices of US$140 a tonne last week, value her at $20 billion.

She first cracked BRW magazine’s billionaires list in 2006, when her fortune sprang from $900 million to $1.8 billion. The upward trajectory was evident in 2005 when two wealth generating forces took off.

Iron ore prices jumped by 70 per cent, and her royalties rose accordingly. But the greatest source of her wealth lay in the Pilbara mining project Hope Downs, named after her mother, Hope.

After her South African partner Kumba Resources was taken over, she bought out its 49 per cent stake in what was one of WA’s biggest and richest iron ore deposits. At the time, Hope Downs accounted for half her wealth, being valued at $472 million.

Hope Downs propelled her into the billionaire ranks, and after taking Rio Tinto on board as joint partner, by 2007 Hope Downs was exporting ore. It has been estimated that when Hope Downs reaches full production of 45 million tonnes annually, Mrs Rinehart will receive an income stream of $40 million … a week.

By 2014, her second iron ore mine, Roy Hill, is due to start exporting. Even bigger than Hope Downs, the $7 billion mine is being developed with the Korean steel maker Posco, and it was the sale of a stake to Posco that helped double Mrs Rinehart’s fortune this year.

The doubling is a pattern. Last year, BRW shows her wealth also more than doubled, from $4.75 billion to $10.31 billion.

Going back 40 years, one can find the seeds to another source of this wealth – Hancock’s close friendship with the long-time Nationals premier of Queensland Sir Joh Bjelke-Petersen. The Hancock empire took early stakes in Queensland coal leases, with grand plans for rail lines laden with coal trains spanning the north.

Last year, Mrs Rinehart parlayed some of those assets, in Queensland’s land-locked Galilee Basin, into a $1.3 billion sale to GVK, the privately owned conglomerate of the Indian billionaire G.V. Krishna Reddy. Mrs Rinehart retains a minority share in that deal, and GVK has planned for a $10 billion outlay on the first phase, which includes a 500-kilometre rail as well as new port facilities in which Hancock interests will have a serious stake.

To date, her Midas touch with mining has not been translated into profits in her forays into Australian media assets – Ten Network Holdings and Fairfax Media, which publishes the Herald.

Received & published by Henry Sapiecha


Saturday, December 3rd, 2011


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…


Saturday, August 20th, 2011

World No. 1 platinum miner

raises pay offer

as union threatens strike

Anglo American Platinum has, according to South Africa’s National union of Mineworkers, raised its pay offer to workers in attempt to ward off possible threatened strike action

Author: Agnieszka Flak and Olivia Kumwenda
Posted:  Saturday , 20 Aug 2011


South Africa’s National Union of Mineworkers said Anglo American Platinum (Amplats), the world’s largest platinum producer, again raised its wage offer on Friday, trying to head off a strike that could cause a jump in global prices of the precious metal.

The platinum sector is the latest to be affected by a wave of disputes in the country’s mid-year “strike season” after stoppages in other mines, steel and fuel threatened to dent growth in Africa’s biggest economy.

“There is an improved offer …it will be taken to members for consideration,” NUM spokesman Lesiba Seshoka told Reuters. He expects a vote to start on Monday and would not disclose details of the offer.

The union will meet Amplats again on August 31.

The company on Thursday offered raises of between 7.5 percent and 8 percent, up from a previous offer of 6 percent to 7 percent.

NUM lowered its demand to between 11 percent and 12.5 percent from 15 percent, which is triple the inflation rate.

The union has said its members at Impala Platinum rejected a revised offer from the world’s second largest producer of the metal and will refer the dispute to arbitration.

“We insist on a double-digit increase across the board,” said Eddie Majadibodu, the NUM’s chief negotiator at Implats.

Implats had raised its offer to between 8 and 10 percent, while the union has been asking for 14 percent.

NUM workers in the gold and coal sectors have already reached deals for 7 to 10 percent increases, which could serve as benchmarks in the platinum talks.

The labour disputes are likely to unnerve investors already wary about putting money into the country due to steep power tariff hikes and a debate around mining nationalisation.

Implats and Amplats account for two-thirds of global platinum supply and any strike could push prices higher.

Platinum rose to its highest since early May on Friday, up 1.4 percent at $1,861.49 an ounce, partly inspired by a rise in gold, widely seen as a safe-haven for investors.


In a separate dispute, more than 200,000 water, sanitation and refuse workers seeking 18 percent wage increases marched without major incident in Johannesburg on Friday after setting fires and looting vendors at rallies in Cape Town this week.

The NUM, with more than a quarter million members in various sectors, has also threatened a strike at state utility Eskom, which supplies almost all of the country’s power, after rejecting a 7 percent pay rise offer.

Any significant pay rises would affect the utility’s strained balance sheet and could lead to further steep rises in electricity tariffs.

Further wage hikes will make it more costly to hire the workers needed to bring power by 2014 to the 25 percent of the country’s households that still have no access to electricity.

Wage deals over the past years of double to triple the inflation rate have made the country less competitive by driving up the cost of a workforce that is already more expensive and less efficient than those in emerging market peers.

But the ruling African National Congress, which is in an alliance with organised labour, does not want to antagonise a group that has supplied it with millions of votes by pushing workers to accept more modest pay increases.

© Thomson Reuters 2011 All rights reserved

Sourced & published by Henry Sapiecha


Wednesday, August 17th, 2011


Work at two of Rio Tinto’s Pilbara mining operations have been halted this morning after a 27-year-old man died when a container fell on him, according to police.

A Rio Tinto spokesman said the man was changing a hydraulic cylinder on a front-end loader in the mobile-equipment workshop when he was killed.

His co-worker raised the alarm, and Tom Price police were alerted to the man’s death immediately after the accident at around 8pm.

“Somehow some  equipment came lose and he was trapped,” the spokesman said.

“There was another work-mate with him at the time but I am not aware if he saw the incident or not.”

Operations have been suspended at the Brockman site near Tom Price, while the nearby Nammuldi site has also been halted this morning as the investigation is continuing

The two mines sites will be closed for at least the rest of today. A decision has not yet been made on when the operations will recommence.

A Department of Mines and Petroleum spokeswoman said a representative would arrive at the mine site today to investigate the accident & death.

Colleagues and family of the deceased man have been offered Rio Tinto’s counselling and support service.

WA unions expressed sorrow at the workplace death and reiterated its call for the state government to adopt some stronger health and safety laws.

From the start of 2012 WA will have the weakest health and safety laws in Australia as new uniform laws take effect in every state and territory except WA, a spokeswoman said.

Sourced & published by Henry Sapiecha