BY: JESSICA CUMMINS
The Pilbara support service hubs of Port Hedland and Karratha are preparing for a new wave of growth, as the region’s revitalised resources sector changes gear.
The mining centres of Port Hedland and Karratha will be the centre of a new wave of mining and resources activity.
Last month, Fortescue Metals Group approved its new $US1.3 billion Eliwana project, which is set to create 1900 jobs during construction.
BHP’s $4.7 billion South Flank will replace its Yandi mine, creating about 3000 construction and operational positions, while Rio Tinto expects to make a final investment decision on its massive Kooldaideri project by the end of the year.
In a statement last month, Woodside chief operations officer Meg O’Neill also said the company was entering a new multi-billion dollar growth and construction phase.
WA Treasurer Ben Wyatt told the ABC these project announcements should give West Australians confidence in the long-term value of the mining industry.
“It highlights the fallacy some people have around the idea that the mining sector simply goes bust — it doesn’t, it changes, it morphs into a new phase and this is a new phase for BHP and an exciting time for the WA economy,” Mr Wyatt said.
“WA is at its core, and is going to be for a long period of time, a mining state and these sorts of decisions highlight that’s not a negative, it’s very much a positive.
“The WA economy is very much on the uptick. This is a massive shot in the arm for the economy and a huge vote of confidence in the way it’s tracking, and also importantly in the global economy, so this is exciting.”
While these changes are sure to bring job opportunities, infrastructure upgrades, financial security and more people to the Pilbara, Karratha and Port Hedland will also grapple with a number of associated challenges.
Port Hedland
The Australian Mining Review spoke with Port Hedland Chamber of Commerce president Peter Carter about ongoing issues the town faced during the boom and bust cycles.
“During the downturn we probably lost around 4000 people from the town, approximately 150 to 180 businesses closed down, and house prices dropped between 60 to 90 per cent,” he said.
“A house that was worth $749,000 dropped to $90,000 last week and another property that was worth $525,000 sold for $60,000…you have no idea how bad it is.
“The last four years have been very bad and very quiet. A lot of businesses left town and laid off workers in order to stay in the town to try and keep the town going, because they thought the downturn would recover.
“Now, because the downturn lasted so long nothing has been built. No houses were built during that time. We are totally unprepared for the boom.”
This is despite the town being on a constant cycle of construction to production over the past 20 to 30 years.
“Port Hedland is a boom and bust sort of town, it’s the nature of the beast,” he said.
“Will the cycle be as bad as the last one? Nobody knows.”
I the meantime, the Chamber is engaging with major miners and more small to medium businesses through programs, collaboration and events.
“The Chamber has funding from BHP and Pilbara Development Commission (PDC) to build the web business hub, which is an innovation hub that will bring businesses together that are unable to branch out into a shop front to help them collaborate,” Mr Carter said.
He said one of the big challenges the town faced, as Rio Tinto, BHP and FMG ramped up their driverless fleets in the Pilbara, was the fear that the already short supply of trade skilled workers would get worse.
“We really want to see local people with skills in the town trying to help it grow,” Mr Carter said.
“For example, we are trying to get more small businesses in town involved in local buying programs such as BHP’s C-RES; we are encouraging businesses to sign up and get involved with local contracts.”
Karratha
The City of Karratha, 240km south of Port Hedland, is well-positioned with investment in infrastructure preparing its local business community for sustainable growth, according to Karratha chief executive officer Kylah Morrison.
Although the downturn saw the number of businesses drop from 962 to 800, Ms Morrison said the town faced these challenges by investing in infrastructure.
Ms Morrison said the Chamber has been helping businesses streamline their operations in preparation for the next boom.
“I think the biggest issue that we’re going to face is human capital; we are already seeing wages increase and it has been difficult for local businesses to get certain skill sets in the region,” she said.
“What we need are specific skills sets and for businesses to relocate to the region so that we have the man power we need. The main skill sets we need are heavy machinery drivers, the trade skilled workers, and heavy diesel mechanics; the roles where we are seeing the wage increases.”
Last year the Federal Government announced a $15 million, four year commitment to establish up to eight community owned, regional study hubs – with the Pilbara selected as a leading candidate.
The Higher Reform Package stated that the hubs would support regional students to study courses locally from any Australian university.
Ms Morrison said the town hopes the hub will become a place of distance education support and ultimately an oil and gas centre of excellence.
With advancements in the mining industry heading towards automation and driverless fleets, Ms Morrison said she hoped the resources companies would consider Karratha as a destination for future training and operating.
“With the massive change or destruction to the industry we have to remember the human element and weigh that up – the most important thing to consider is, yes we are moving to automation and driverless fleets but why can’t we base the operator of those fleets in the Pilbara?” Ms Morrison said.
“We’ve got a diverse range of projects coming online with over $10 billion in capital investment expected over the next 10 years in the Pilbara – Karratha is well positioned to make the most out of the next cycle.”