Pilbara Mining Services
The major iron ore production region, Western Australia’s Pilbara, is driving increased demand for mining service providers through numerous new development and expansion projects by the region’s major producers.
THE three major mining developments in the Pilbara – BHP’s South Flank, FMG’s Eliwana and Rio Tinto’s Koodaideri, set to replace the aging Yandicoogina operation — all have expansions and developments scheduled to be completed over the next three years.
According to Pilbara Development Commission ( PDC) chief executive officer Terry Hill, this is an example of the Pilbara continuing to grow and diversify in the mining and resources sector.
“The three major mine projects are replacement mines designed to maintain current production levels. We understand that the total construction workforce for these mines will create more than 6,000 jobs,” Mr Hill said.
“This will result in increased demand for mining service providers in the construction period and stability in demand for the future.
“It is positive to see the proactive approach the sector is taking to increase the local content in their projects, and to improve the capacity of local businesses.”
The PDC expects to see growth in the existing level of opportunities for local Pilbara businesses through subcontracting, including Aboriginal business, to provide mining services.
“I would also expect that the Tier 1 contracts will include a requirement for the engagement of local and Aboriginal vendors in the selection criteria,” Mr Hill said.
“This aligns to the State Government’s commitment to stimulate economic growth and employment by boosting local content in State developments, while encouraging participation in private sector developments.
“There are also new iron ore (both haematite and magnetite) mines approved or proposed across the region. This will see further opportunities for mining service providers.”
Mr Hill said the resources sector continues to be the backbone of the Pilbara economy, with the labour market in the Pilbara being one of the strongest in the country, able to sustain low levels of unemployment over the past two decades.
“Average unemployment is around three per cent, and in the 2016 Census, there were 63,850 people employed in the Pilbara, of whom about 22,000 were directly employed in the iron ore industry,” he said.
“Another benefit to the Pilbara from recent expansions in the mining sector is a substantial investment in the region’s infrastructure and services through the State Government, and industry and government partners.
“Our Pilbara communities now have high quality health and education services and recreational, sporting and community services and are attractive places where families choose to settle for the long-term.”
There are many small and medium sized enterprises able to either directly contracting to the resources sector or service the regions’ population centres.
Mr Hill said the long history of mining in the Pilbara means everyone involved has learnt to mitigate or avoid any potential negative impacts on the local communities and economy.
“To address the risk of our regional economy being overly exposed to variation in global demand for resources, the State Government has a strong focus on diversifying the Pilbara economy through supporting medium and small enterprises to grow and by working to ensure our communities are vibrant, attractive places to live long-term,” he said.
“This is helping to bolster the Pilbara’s resilience to downturn in demand for resources and stabilise our communities.”
Although the Pilbara’s total population fell slightly after the peak of the last boom, it is trending upwards again, with more than 40pc of respondents from a recent survey of residents by the City of Karratha commenting that they had no plans to leave the city.
In terms of mining employment, Mr Hill said rosters and 12-hour shifts can be difficult for communities, sporting and volunteer organisations as well as family life, but resource companies recognised and were trying to managing the impacts.
“One very positive change is that many companies are now committing to establishing residential workforces, or to drive in, drive out where practical,” he said.
Mr Hill said it was a priority for regional communities across the Pilbara for resource companies to support and grow residential workforces.
“Another important focus is ensuring business, training and employment opportunities are available to Aboriginal people in the region,” he said.
“Aboriginal Australians make up 14pc of the Pilbara’s population, compared to 2.5pc of Australia’s population.”
Working in partnership with the local community, traditional owners, local and state government agencies, community groups, not-for-profit groups and local business is the key to a balanced relationship between resources companies and the regions in which they operate.
This includes State Agreements to enable traditional owners to negotiate a range of social and economic outcomes for their people and communities, investments in public infrastructure in private-public partnerships (for example to iconic East Pilbara Arts centre), investing in education and health facilities and services and sponsoring training and community development programs.
The WA State government has taken it one step further with the establishment of the Pilbara Collaboration Charter (PCC), to deliver further social and economic benefits to the Pilbara community.
The PCC was signed by Premier Mark McGowan, Chamber of Minerals and Energy chief executive Reg Howard-Smith, and leaders from across WA’s biggest resources companies including BHP, Chevron Australia, CITIC Pacific Mining, Fortescue Metals Group, Rio Tinto Ore, Roy Hill, Woodside and Yara Pilbara.
“The charter builds on the industry’s existing social and economic contributions,” Mr Hill said.
“The first priority for the Charter is employment, education and training, particularly the development of pathways to job creation.
“Other areas included in the Charter include community development and health, procurement and supply chain and joint project initiatives.”
Mr Hill said expanding on partnerships with resources and the community is key for future development in the region.
“We see these partnerships as a mutually beneficial way to achieve regional development and better outcomes for host communities as well as resources companies with a long-term presence in the region,” he said.
“There will be an ongoing pipeline of investment in the region with mine replacements and new mines over the next decade – these partnerships will be critical in planning for this and managing consequent community change, ensuring we are prepared for the next period of growth.”