Mining express switches to cruise
At 6.30am a long line of minibuses are disgorging a steady stream of workers in soiled high-vis at Warrawandu Village.
It is knock-off time for the nightshift crews of BHP Billiton’s iron ore mines east of Newman.
The FIFO men and women head for their rooms after a long night on the yellow gear or the tools.
There have been no trips back to camp for meal breaks during the 12-hour shift. As part of a productivity drive, management at the two-year-old mine has deployed mobile crib rooms to cut out the sometimes 40-minute round trip.
While Warrawandu boasts impressive recreational facilities, the FIFO life is not for everyone. But living in a remote Pilbara town doesn’t appeal to all, either.
When BHP offered 150 Eastern Ridge mine workers staying at Warrawandu the chance to reside in nearby Newman, only 15 expressed interest. Five have moved into company homes.
“It was somewhat surprising, the level was quite low in terms of interest,” Jimblebar general manager Andrew Buckley says.
The response does not appear to be the result the Nationals WA would have been hoping for after pressing BHP to close its Kurra Village FIFO camp near Newman.
Mr Buckley says that, apart from about 160 workers who will stay at Newman’s Eco Village and company-owned flats, the closure of 1600bed Kurra will see most its occupants housed further out of town.
“While the headline might look fantastic, the reality is not actually the best outcome,” he said.
“It’s commercially great (for BHP) but not great in terms of people actually being in town and spending money.”
He said the resources giant would have spent $5 million to $7 million upgrading Kurra if the lease was renewed.
“On top of that, the council loses about $500,000 a year in rates,” he said.
The mining cycle is a perennial issue for towns such as Newman. The town’s population of 6000 is about half what is was about five years ago. A three-bedroom home now rents for $350 to $500 a week, compared with $1500 to $2000 in the boom times.
Newman may no longer be a company-owned town, but the BHP footprint is everywhere.
A $30 million shopping centre nearing completion was bankrolled by the miner.
Industry figures argue that, instead of a bust, iron ore mining has simply made a transition from construction to operation.
Employee numbers might be lower, but the work is more stable and long term. BHP people will tell you there is 100 years worth of ore left at its Pilbara operations.
The iron ore price may be a fraction of the boom years, and midtier miners such as Atlas Iron have been struggling, but the majors are shipping more ore than ever.
That’s because of new mines cranking up and expansions of existing ones.
BHP’s newest $US3.2 billion ($4.2 billion) Jimblebar mine has been operating for two years with a workforce of about 1000.
Gina Rinehart’s new Roy Hill mine is ramping up towards reaching nameplate production next year. Chief executive Barry Fitzgerald says the number of workers punching the clock is expected to rise from 1300 now to 2000.
After a troubled and drawn-out construction period, CITIC Pacific’s Sino Iron mine is operating at Cape Lambert with a workforce of about 1000.
Yara’s $US800 million technical ammonium nitrate plant on the Burrup Peninsula in the past few months has begun producing the explosives materials used for mine site blasting. The 500 jobs provided during construction has been winnowed down to 70.
Construction has started on Rio Tinto’s $440 million Silvergrass project, providing about 500 operational jobs.
The construction to operation phase is also under way in liquefied natural gas. The biggest resources project of all, Chevron’s $US54 billion Gorgon LNG facility on Barrow Island, loaded its first tanker in February.
On the mainland, Chevron’s $US29 billion Wheatstone LNG project near Onslow is close to completion, with the first shipment tipped for mid-2017.
While Woodside’s Browse LNG project remains in limbo, management is taking a look at onshore and offshore options.
The State’s oldest LNG asset, the Woodside-led 32-year-old North West Shelf project, is undergoing $500 million to $700 million in lifeextension work at its Karratha Gas Plant. About 70 per cent of North West Shelf staff are residential.
The oil and gas company owns about 700 homes in Karratha.
Woodside closed its 2200-bed Gap Ridge accommodation village after Lands Minister Terry Redman refused to extend the lease beyond May 2017. Workers are housed at four other third party-owned facilities in Karratha.
A Rio Tinto train comes in to Parker Point.