Mining jobs in context

The Pascometer offers an advertorial today for “Queensland Mining and Gas Jobs Expo” which:

…rolls into Caloundra on the Sunshine Coast today with organisers expecting 2000 people to attend.  On Wednesday 10,000 people turned up for the expo’s Gold Coast gig. The patchwork economy is working.

Those with longer memories will recall job applicants queueing around the block for the chance of a position at some new business during harder times, never mind Sydney’s dire Hungry Mile and similar Depression-era stories.

…The lure at the expos, for those with what it takes, is the possibility of combining coastal life style with well-paid employment at fly in/fly out operations. It’s hard work, but it has the potential to secure a base for a thrifty individual.

And there are resources towns keen to attract stayers, to build regions as more than temporary mining camps.

In time it may be seen as another of the great Australian stories, of working men and women building the nation. The Snowy River was small by comparison.

I don’t have much to add except to say expect more such efforts to overcome the labour infungibility problem. But I thought I’d take the opportunity to post a couple of charts from a recent BHP investors presentation on the labour boom described. First, there’s the operational staff:

And then the construction staff:

These are projections for the entire resources industry, which, to my mind, is more evidence of just how limited direct job creation is in the mining sector. The current Australian full time workforce is 8.4 million souls. Let’s say that it will grow by 3% per annum, by 2014 it’ll be a bit above 9 million and the new jobs in mining will be 2% of that, around 180k guessing from the two charts.

Now, there’ll obviously be significant flow on effects as billions upon billions of investment flow during construction. Many more service sector and manufacturing jobs will also be created. But as you can see, once the investment phase abates, ALL of those jobs disappear.

I’m in no way blaming mining. Bring the investment and jobs on. But you really have to ask yourself, is the macroeconomic strategy of “making room” for this by shedding other export sectors really that bright?

Comments

  1. Wow! The expo thing is a really scary piece of evidence this thing has got out of control one form and another. My first question was whether the expo resulted from companies trying desperately to recruit or desperate people willing to fork out a lot of good money desperately looking for a new nirvana.
    I guess as usual it’s mainly about the organisers making lots of boodle!

    Thanks for the graphs

    Not wanting to rake up old coals but my problem with the whole damned ‘make room’ argument is that it is not necessary and indeed just plain stupid. Just stop selling the country off and mortgaging its soul with a totally stupid high A$ at any price policy. Then we’d find an economy all pulling in the one direction…except the finance sector which needs to be brought to heel. Ah, and I suppose truthfully from my point of view, the Government sector needs much the same treatment.

  2. I have explained this flow of employment at MB several times – yet still many think that the resources boom is going to employ vast numbers. It is not. Never has, never will. This is the old furphy raised again.

    The resources boom will be let run its course as there is no other sector that has (had?) the ability to secure investment at such massive scale, improve ToT and supplement government revenues. On an number employed/revenue/profit basis nothing else comes close.

    The management or otherwise of the currency remains an issue that clearly is in the too hard basket. However a high currency has benefits on a day to day basis as well – a prime one being the cost of fuel. If we had had the AUD at 70 over the past few years and oil at USD100 what would the pump price be. How would this expense for businesses transfer through to households. How would this expense impact the fuel susbsidy scheme (already some $10b).

    Swings and roundabouts.

      • Not irate. Exasperated. I have explained characteristic of resources employment this many times. By the more careless (clueless) it is used as part of an anti-resources tirade. They know who they are…Jeez!

      • I have explained characteristic of resources employment this many times. By the more careless (clueless) it is used as part of an anti-resources tirade.

        Its partly a reaction to the likes of Gittins! and the Pascometer promoting the mining boom as an endless source of new jobs.

        Its not, and never will be, as you admit yourself. Meanwhile there is plenty of evidence the strong currency is destroying jobs in other sectors.

    • If we had had the AUD at 70 over the past few years and oil at USD100 what would the pump price be

      Still less than it is in most countries, and perhaps SUV sales would be down instead of going gangbusters. A bad thing? I’m not so sure…

      Frankly, I’d rather have more jobs than cheap petrol.

      • Less than most countries…and a comparison of km’s travelled? We are a high fuel use nation.

        The jobs question is interesting and whereas I accept that in some sectors high AUD has affected employment, an analysis of the numbers absolutely directly affected would be interesting.

        A thorough analysis of whether it was high currency or downstream globalisation outcomes or poor business model or plain bad luck. To date our unemployment rate has been remarkably close to stable, so I’m not convinced has to how widespread this ‘loss of jobs’ is. A little less hysterical media headline and a little more fact is needed.

      • +1 on the root cause analysis of a few failed/successful manufacturers

        Maybe our stats man Rumple can take a swing at it?

    • We have a pipeline of investment now of well over 100bn where it is all but locked in.

      This is both domestic capital and international capital employing Australians in construction fortunately much of it equity rather than debt.

      It may not be far reaching in terms of who it employs but I can assure you it has been a few good years for construction professionals, trades and labour who are on the civil construction end of things and it will all be pretty ordinary when it all ends as it surely will…

      I would be happy if it went till June 2014 as it appears BHP is projecting around collective capex expenditure increases but I suspect the investment phase of this boom has only about another 12 months to run.

      Industrial cycles were understood over 100 years ago. The length of time for new capacity has a strong relationship with the length of time of an investment boom in any industrial commodity.

      When did this boom start again? How long does it take for a mine to go from start to finish? Give it a little extra for the “unprecedented” increase in demand and the drop in investment during the GFC (I believe that extended this little boom so was indeed a good thing for Australian mining companies as they got to milk high prices for longer) over this period and you have a recipe for an overshoot in capacity that surely more than just economists and savvy macrobusiness readers can see? Unfortunately our government cannot see it.

    • 3d,

      You say ” If we had had the AUD at 70 over the past few years and oil at USD100…..”

      I have long been intrigued by this “if the $A was this, then fuel would be that” argument. Have seen it used a few times of late.

      It seems to me that a high $A and a low $US are two sides of the one coin. In other words, the $A is high for many of the same reasons that the $US is low.

      Hence, it seems to me that it is somewhat misleading to rejoice about the purchasing power of the $A in respect of oil, when the main reason that oil is so “expensive” is because the $US is weak.

      Swap the currency situation around, and we would have a weak $A buying oil priced in far fewer strong $US? Net result? Much the same cost to us in $A, as I see it.

      Also, hasn’t oil (notwithstanding increases driven by market factors) simply been yet another beneficiary of the current fascination with resources? The very factor that has driven the $A to its heights? Take away that factor – the $A falls….but so does the price of oil.

      The whole crux of this argument seems to be the postulation of a drop in the $A, with no corresponding increase in the value of the $US, and no reversal in the price of oil.

      I don’t buy it.

      • You are quite possibly right. Generally on an historical basis.

        I raise the AUD/petrol conundrum in a slightly mischievous roundabout way of reminding how fortunate we are to have the resources in the first place. Many just want to AUD to fall right now and don’t see the connection. Also a bit of a poke at the many commenters here at MB openly hostile to mining.

        For the argument, if Australia were not a resource rich nation I am sure the AUD would be at near historical lows . We would have fallen to recession. We would remain burdened by foreign debt. We would be in a dire position. Cost of petrol would be onerous (but we have resources so this is not our position).

        Perhaps if/when commodities crash we return to halcyon days of low AUD and cheap fuel. I am not convinced it will be quite so. I don’t buy it.

  3. This is exactly why Keynesian fiscal management can work if employed properly.

    We should build the government infrastructure during gluts in demand. During a period of private investment in capital works the government should pull its head in.

    Unfortunately rather than saving both money and projects during this boom the government is spending it all giving them nothing for the certain end of this “pipeline of investment”.

    • I wish I could edit my post!: rather than glut in demand I should have said during a reduction in private sector demand!

  4. I should add that for younger workers and experienced older trades I do think the boom offers tremendous opportunities if you are prepared to dig for a few years – Pascoe is right on that point.

    Modern camps in the North West are superb – gyms, theatres, gamesrooms, restaurant quality smorgasbord meals all at no expense to the employee. Some of these new camps are better than the hotels in town I have stayed in! The employees will no doubt be on FIFO shifts which range from 6 days on 7 days off to 4 wks on 10 days off in an environment where high temperatures are the norm etc. The minimum you would expect to receive would be $150k and increasingly far more for some skills.

    A younger person faced with that or a job at a …… at say entry $80K why not give it a go. Those that are prudent do very well. Those that are not have a great time spending the bucks. Win Win!

      • maybe….but there is nothing wrong with what he is saying about these opportunities. It’s the advice I hand out to anyone with a skill set that is in demand.

      • One wonders why the mining PR bot needs a sales pitch?

        If its so frickin’ wonderful up there why on Earth do the miners have trouble finding workers?

        I’d bet my bottom dollar Fanboy lives in a comfortable Perth suburb and spends as little time as possible in the Pilbara, especially at this time of year!

      • Tourism, education and manufacturing.

        I don’ t see that big an issue for the first two. Education is employing anyway so it can’t be suffering too badly and if the cost for international students loses market share in the short term, it can always be made up later. There’s no real loss of capacity.

        Tourism strikes me as similar if worse. Once you shut a resort, it’s gone. But at least the IP ain’t that hard to find to rebuild later.

        Manufacturing is that big one for me. Lose a factory and you lose the equipment, skills, IP – the lot. Very hard or very expensive to rebuild.

      • Lorax, you’ve got me! But I have recently spent several day visiting in a range of exotically located projects and I assure you, the scenery is often spectacular (in a This is a Big Country way)and the weather was comparatively mild.

        Truth is Lorax, most up there do love it. Most in other places have a very inaccurate idea of what conditions are like. If they knew they would be flocking.

      • OK HnH – May as well focus on manufacturing. Manufacturing jobs lost:

        – What number total
        – What umber per year
        – Number directly attributable to high AUD.
        – Number directly attributable to other reasons, ie move production offshore to take advantage of lost cost production
        – Number attributable to none of above

        Let’s give it some perspective.

      • Fair enough.

        A quick look at that article doesn’t appear to support any kind of argument for significant widespread manufacturing job loss due to high AUD. Some job loss, yes.

        (I will add the Scribd doc facility was down for maintenance so perhaps that told more).

      • dumb_non_economist

        3d1k,

        When after doing 14 12 hr days straight including going from D/N shift do you get to/feel like viewing the scenery?

        In addition to this I’ve come across quite a few FIFO workers and very few rave about it, apart from the income and in some areas the money is crap. My sister did kitchen/house work for a period 14 on 7 off and it worked out to $21 ph flat rate.

      • Actually sounds enticing – particularly for a single, non-dad not tied to paying a mortgage…..

        sigh..

        But there’s a definite plateau in earnings – and all booms end, even if it takes a decade or so.

        My father in law was a geological mining expert and has lived through all the booms and busts of the last 40 years. He says thank Dog for no personal income version of the RSPT, because the boom was the ONLY time he made money…

      • “Actually sounds enticing – particularly for a single, non-dad not tied to paying a mortgage…”

        ANYTHING sounds enticing for a single non-dad with no mortgage!

      • “…no personal income version of the RSPT, because the boom was the ONLY time he made money…”

        A fair enough reason why the personal should be extended to the corporate!

    • I concur.

      Having spent 3 years up there straight out of uni and having the pleasure of moving from 130 to 200k pa in those years, the ability to advance yourself and your family is amazing. Difficulties arise as mentioned when the time you are being compensated for away from your family becomes to much then it is time to come home for good. Either that or become another pillyb divorce statistic.

      As much as returning to the big smoke brings with it new opportunities, geez I still miss the place and lifestyle!

  5. 3d1k

    “management” of the currency is a rather kind way of saying…The high dollar brings consumer benefits. Therefore we are prepared to borrow whatever is needed, sell off whatever industry, sell off nearly all our mines, destroy whatever farming resources, in order to maintain the high dollar.

    A high dollar is great if it doesn’t depend on borrowing or the sale of assets. Our high dollar depends on both.

  6. Tom “This is both domestic capital and international capital employing Australians in construction fortunately much of it equity rather than debt.”

    The problem with the ‘equity’ is that is always (talking on a 50 year time horizon)has been and still is almost entirely Foreign equity. Where we are at in this regard is not the ‘fault’ of just the current Government but the result of a long term shallow policy, pursued by every Government of every colour, of negative real after tax interest rates resulting in a poorly structured economy,over-consumption and nil savings.
    Right now we MUST have all the foreign investment, borrowings etc to maintain our current lifestyle.
    My frustration, and to a certain extent I’d surmise 3d1k’s, is somehow everyone expects their current lifestyle and job sitting in an air-conditioned office in Canberra while at the same time throwing ‘dirt’ at anyone actually doing or making anything.

    • When there is a misallocation of capital which surely the current investment boom will bare out in the coming years, that misallocation is better to have been committed by foreign investors than local ones IMO.

      As you say this foreign investment is manifesting itself in higher agg demand locally and this is driving our standard of living for now and almost certainly in an unsustainable way which will be apparent when mineral prices fall back to a level not conducive to further CAPEX around mines.

      Anyone with any sense of history would agree with the ideas implied in the last para of your comment around the sustainability of this current investment boom in mining. What worries me is that while treasury say of course it cannot go on forever, the government seem content to wait for the impending disaster with no drastic (and it must be drastic at this late stage!) action.

      We need to make hay while the sun shines, sure and allowing foreigners to invest in our country allows this, but we also need to save some of it for a rainy day when this foreign capital stops.

      During 2008 we were told the libs left us with a structural deficit. Nothing has been done about this and when the minerals boom ends not only do we have no sovereign wealth fund we will also have fiscal deficets which will have to be wound back at precisely the wrong time.

      I think we are far too complacent around this and how soon we forget the sentiment in late 2008 when it appeared the boom was over… Why didn’t we save more federally. Why did we give it all back as tax cuts… A few years on and we are complaining about costs of living pressures when it surely cannot get better than it is today?

      • Tom
        The misallocation of capital has occurred over a long time. My time frame on it is 50 years. Throughout the last 50 years we ought to have had the savings available for investment such that we owned our own mines. Over that time our development might have been a little slower. We may have consumed less with less Macmansions and their associated gear. We would have had less of a service and government industry and more manufacturing and mining. However, by this stage we would be a much more prosperous country than we are now with a lot less of some of the problems that society now experiences.

        As to saving…why do we ourselves not save more?
        Why must it be the government?

      • I am considering specifically the misallocation around mining investment with the view that prices will not be this high for long.

        Agree the private sector is spending too much but is precisely during these periods governments should be saving for the inevitable retracement in private investment and expenditure.

        Malcolm Turnbull summed it up better that I can in his october newsletter (putting to one side the libs did not really save enough anyway:

        “But there is also real concern about the Gillard Government’s complacency in the face of this good fortune. Several people asked me why we were not establishing a savings fund, as the Norwegians have, as it seemed obvious that the mining boom would not last forever. Others were genuinely amazed at the extravagance of the National Broadband Network. One senior official described the Australian NBN policy as being “from our point of view, completely crazy.” ”

        He is talking here of business leaders in Europe speaking of Australia.

        I don’t know what the answer is around private savings. Any wealth that has grown here is at least in part on the back of asset price appreciation which can as easily turn negative in the future. I guess the idea is the government needs to keep its poweder dry for the inevitable day that consumers stop spending and business stop investing. I fear it is not that far away and in truth to move now would be moving too late anyway.

  7. Dave From Pakenham

    H&H – I doubt exporting manafacturers have been crowded out. They don’t exist.

    Education is contrived and no logical regression with the AUD could ever be derived.

    That leaves Tourism and of course, softs, but inelasticity here again – little to no crowding out.

      • I’ve been browsing the DFAT stats (I should get a life, I know). The picture is just not as simple as might appear at first glance. Have a look:

        Merchandise Exports x Broad Level of Processing, Total Exports and Imports (A$ million)

        Item 2007/8 2008/9 2009/10
        Exports

        Processed
        Food 7,780 11,048 9,062

        Simply
        Transformed
        Manufactures 15,462 14,421 12,476

        Elaborately
        Transformed
        Manufactures 29,897 29,455 26,528

        Other 21,234 25,387 23,347

        Imports 7,703 8,976 8,671
        STM 14,809 16,436 13,700
        ETM 137,004 143,305 136,535
        Other 7,881 11,251 7,741

        I know the currency effects tend to distort the picture, but it is notable that the terms of trade fell 4.4% in 2009/10.

        We can see a decline in both imports and exports of manufactures through 2008/9-2009/10. This is consistent with the collapse in world trade generally from late 2008, persisting into 2009/10 and from which global industrial output has not yet recovered.

        It is notable that exports of primary products, unprocessed foods and fuels also dropped (very steeply) in 2009/10 compared with 2008/9. Likewise, imports of primary products also fell in the same period.

        This suggests to me that the difficulties experienced by Australian manufacturing cannot be solely due to the mining boom or the high dollar. Factors that are common to manufacturing in other economies must also be contributing to these difficulties. During The Boom, Act I, manufacturing exports generally rose, even as the currency underwent a steep and sustained appreciation. ETM rose from A$25.9 billion in 2001/2 (to A$29.9 billion in 2007/8), while the “other manufactures rose from A$9.34 billion to A$21.2 billion.

        I think the global industrial sector generally suffers from excess capacity, saturated product markets, distorted pricing (resulting from currency manipulation) and, in the last 3 years, stagnant incomes, increased private sector savings and generally stunted demand. This is reflected in the failure of industrial output to regain pre-GFC highs in almost every industrial economy.

        Australian manufacturers have not been exempt from these forces. I think the Dutch idea is overdone. We are becoming un-bubbled, despite The Boom, Act II.

        Consider, during all those years when we experienced declining terms of trade (that is, declining real prices for our primary exports), those manufacturing-intense economies that imported from us also experienced increasing terms of trade. This did not prevent them from maintaining industrial sectors. In many ways, it may well have strengthened their advantages.

    • Your time frame is way too short Dave. It’s the problem with the prognoses of most ‘economists’ in this country.

      Extend your analysis over 60 years and see if you arrive at the same conclusions.

      • Dave From Pakenham

        i dont follow – was simply suggesting to H&H that its not export facing industries that we have to worry about, with respect to employment from the crowding out of higher interest rates, its the impact on ‘endogenous’ industries that has a greater impact on employment.

        time frame is irrelevant.

      • Time frame is not irrelevant. The structure of the economy is relevant. True we NOW have a serious problem of a whole retail service/Government/housing sector that is way out of kilter as a result of relying on debt for our way of life. In that you are correct for a short term outlook.
        In the long term we reached this point through woeful economic and financial policies. The problem now, as has been the point of H&H’s stimulated debate, is how to handle this.
        I’m pretty sure that how to handle it is not to continue, in fact exacerbate, the mistakes that have been continually made over the last 50 years.
        Short term it’s easy, lower interest rates, stimulate the housing sector,keep selling off industries and mines, keep borrowing more, bring in more people and park them around cities, create more Government. We have enough natural resources to keep it all going for a while yet.

  8. Then we have the dark side of the mining boom – the underming of social stability in local communities caused by the very large disparity in earnings between the resource workers and many ordinary local workers and by the FIFO phenomonen itself, whereby a great deal of the income generated does not enter the local economy but simply flies away elsewhere, even as living costs are distorted upwards. $850 per week for a unit in what is probably Gladstone’s oldest high-rise unit block. The situation here is becoming ludicrous, many ordinary jobs don’t pay enough to afford the exhorbitant hikes in the cost of the basic human need for shelter from the elements. Many young adults can no longer leave home and go out on their own – it’s either live with their parents for God knows how many years to come or leave the area altogether. The actions of LNG companies, landlords and property investors and the QLD government have all combined to create a perfect shitstorm that is showering my hometown with crap. I can envisage the place being little more than an empty shell well before 2020.

    • Lefty, we’ve talked of this before. Is there some valid reason why construction camps (of the kind of speak of above) cannot be built in the Gladstone area. This would alleviate some pressure on local housing.

      • The accomodation to house literally thousands of workers is being built and some of the camps are almost complete (I had a stickybeak at one the other day – they actually look pretty nice for something that is just a temporary workers camp – a lot nicer in fact than some of the dumps up for rent for ridiculous prices). But it’s too little too late. There are FIFO camps all over the mining areas but they don’t seem to have had any dampening effect on sky-high housing and rent in any of those places that I’m aware of. If you can point me to an abundance of decent rentals for $300 per week in places like Karratha and Moranbah to name just two, I’d be interested to hear about it.
        The LNG companies are in fact offering some rental subsidies to affected locals, but the criteria appear pretty stringent and many people do not qualify, including those with jobs. I don’t know a lot about it but I wouldn’t mind betting that any such token gestures will only end up subsidising landlords who will pocket the subsidy and keep hiking the rent for as long as the subsidy continues to be paid.

      • FIFO workers these days have an unbelievably luxurious life. When I was a FIFO worker on a seismic crew in the early 80s, we lived in tents.

      • This is the governments fault in my opinion.

        Workers would be flocking to Port Hedland and Karratha if the land release was such that living there was viable.

        Because rent is so expensive already, building new homems has this component added into them and the spiral now continues. It is just to expensive to build there.

        A FIFO worker costs big money even relative to the high wages they get and a larger proportion would live locally if it were viable.

        There are simply not enough homes.

        Of course I am talking here only about mines near towns. Some will always have to be serviced by FIFO workers. Others can have a mix. If we had more efficient government processes around land release more would be the latter.

        I am quite certain in the boardroom of BHP they do not applaud the fact subbies businesses have to pay massive rents on industrial premises in town and then charge stupid rates to work on the mines to remain viable because their workers are not residential either? They would far sooner see the town viable for a community of their workers and workers businesses too. It is in their interest as well.

        They are a victim of our governments ineptitude along with the rest of the community being crowded out.

      • You’re kidding. Right?

        No idea how it is destructive to society, I’ve seen no evidence of it and FIFO is big in Perth. It is a lifestyle not suited to all. Some can turn up to the same workplace for 25 years, others can’t. No-one is forced to participate. Most love it (but curiously don’t always admit such to spouses).

        Secondly, with divorces in the general population around 50% rate it would appear a lot of factors may be destructive to families…

      • Jelmech: The societal ‘damage’ I think you may be referring to is sadly all too common in outback rural communities everywhere…

      • “You’re kidding. Right?
        No idea how it is destructive to society, I’ve seen no evidence of it and FIFO is big in Perth”

        Respectfully 3D1K, FIFO is really quite destructive to local communities and it seems difficult to understand how you could have missed it – I’m watching it unfold as we speak. Perhaps FIFO’s level of interaction with the members of the local communities they are stationed in is too low to really appreciate what has transpired.

        Of course FIFO is big in Perth – that’s where most of the wage income generated in the Pilbarra towns ends up. It flies home with them at the end of each shift, largely bypassing local economies. It’s crucial to understand that we’re not talking about the effect on the places the FIFO’s live (which is surely positive, consumer demand-wise) – we’re talking about the effect on the places that they WORK. I’d also wager that the majority of the houses in places like Karratha are owned by absentee landlords living in places like Perth – the income is simply siphoned away elsewhere.
        In Gladstone’s case, I see the LNG companies, landlords/investors and their agents, and the QLD government as essentially parasites – and Gladstone as the host body. The LNG companies stand to rake back gazillions in profits – they don’t care what happens to the people already living here. The QLD government stands to rake back gazillions in royalties – they don’t care what happens to the people already living here (we’re only one seat in state parliament after all – not enough to make a difference by way of protest vote). And landlords and property investors and their agents stand to rake back large sums by exploiting the situation and their own townsfolk (though increasing numbers are no doubt investors from afar, keen to plug their feeding tubes into the host body).

        Now I hasten to add that I have nothing against the FIFO workers themselves – they’re just taking advantage of the offer of a well-paid job. But the effect of the FIFO phenomonen itself on local communities is serious and to pretend otherwise is unhelpful.

      • Lefty, I really don’t see it that way. Perhaps the WA dynamic is different.

        I recall a few years ago when activity began to ramp up residents in Tom Price and Newman bemoaned the onset of FIFO saying it would destroy the fabric of the towns.

        It didn’t. It changed the nature of the towns but people adjust. Businesses found they did very well. Government was probably glad they did not need to provide more schools/health facilities etc. Most that feared the FIFO phenomenon were long-term residents and change is always a challenge.

      • I’m sorry 3d1k, but what you are saying simply doesn’t ring true to me. Your argument that FIFO has brought general prosperity to local communities does not accord with any anecdotes I have heard from people who have recently lived in mining towns both here and in WA, nor with studies and parliamentary inquiries I have perused, nor – most importantly – with what I am seeing with my own two eyes right here. The severely distorted costs of living and the fly-over effect on demand for goods and services as wage earnings are simply flown away elsewhere is – blindingly obviously – a depressant on business conditions.

        Perhaps there is something truly remarkable about Tom Price and Newman that make them immune to the damaging effects – something that makes them prosper under conditions that harm other places.

        I would be interested to hear your thoughts as to exactly why you believe that the FIFO phenomonen brings prosperity to local communities. If we can replicate these particular conditions here, we may be able to reverse the rot that is beginning to occur.

      • Lef-tee

        Local councils (and some social welfare groups) always claim that FIFO disrupts the fabric of the community. There is just such a story here today. They avoid addressing the practical issues such as:

        a) Major workforce requirement experienced during construction. Typical project may require up 4,000 skilled workers on a fluctuating basis for a period of say 2-4 years. Post construction operational staffing is usually in the low hundreds. It is not practical nor sensible long term to accommodate large numbers in town on a ‘permanent’ basis.

        b) Many projects in WA are located hundreds of km’s from even a small town. Again FIFO is the practical solution, camps being located close to site and staff flown direct to project.

        c) Government infrastructure costs developing services in remote towns for effectively short term (construction period) benefit – it is simply not economical for taxpayers to fund extensive water/sewerage/roadworks etc required. Camps are constructed at company cost (in the main).

        Gladstone has a population of around 30,000(?), towns like Tom Price, Newman and Hedland populations of a few thousand permanents. Businesses in these towns do fare well, particularly fast-food/liquor etc but clearly there is not the range of business you would find in a more populated town – so I defer to your Gladstone experience there. Also, remember these WA towns are remote, very remote in comparison to Gladstone.

        Whilst Gladstone will go through a period of adjustment, some not easy, it is likely to be relatively short term, not more than a few years until project completion, life then returns to the new normal – and trust me – some businesses will rue the end of the construction phase!

        FIFO works here, despite a few relatively minor concerns. Gnerally not concerns shared by FIFO workers themselves…

        This report gives a pretty good overview of the WA FIFO experience, pro’s and cons. I think you will find it informative:

        http://www.peopleforthefuture.com.au/files/files/20_FIFO_Report.pdf

      • For another view of FIFO, try this:

        http://www.businessspectator.com.au/bs.nsf/Article/mining-boom-FIFO-wages-jobs-WA-infrastructure-pd20110908-LH5BQ?OpenDocument&src=srch

        By the way, 3d – I spent quite a while in the offshore oil industry in towns with 7/7 and 14/14 offshore shifts.

        Not sure how, statistically speaking, the divorce rate stacked up…..but it sure was a case of “while the cat’s away, the mice will play”.

        And I’m not talking about the blokes out on the platforms.

      • I think those sorts of concerns have been around for years, don’t you. Vested interests waving the flag. If remains that FIFO is successful, despite some of the challenges it poses.

        As for infidelity…up to the individual regardless of circumstance – indeed a very real part of human life. I recall a scientific longitudinal study in the US from the 50’s which was abandoned as widespread blood tests results indicated that many offspring were not the offspring of male (post war). Then again – perhaps that was a form of FIFO!!

      • 3d1k,

        Thanks for your reply – but a justification for the existence of FIFO is not what is needed. What is needed are solutions to the very real problems FIFO causes for local communities.
        The argument that FIFO is by far the most efficent and in some cases the only way bring large, transient workforces into remote areas like the Pilbarra or smaller regional centres like Gladstone may be accurate (though we managed it for decades here before FIFO ever existed) but you seem to be presenting it with the unspoken implication “take a spoon of cement and harden up” – an attitude very easy to hold when you stand to benefit. But surely you can understand why people who live here, especially long-term residents and those who have called the place home for generations, do not share the opinion that the right of resource companies to take the easiest route to maximum profit trumps the right of locals to not have their lives and communities turned upside down?

        So can you understand why your contantly emphasising the needs of multinational corporations while casually dismissing or downplaying the negative impacts on communities like mine is giving me the shits? Good to see that you’re doing well at the money end – and that our concerns are not shared by you – but spare a thought for those directly under the arse end.
        Thank you for the link which I will read in depth – however, I note that it is presented by the minerals council of Australia so I expect it to be informative but biased.

  9. My current curiousity is how many of those claimed future BHP jobs are dependent on their (BHP’s) previous projections for the iron ore price and China’s continuing demand, which is turning out to be rather incorrect. If I remember correctly, BHP’s demand projections were along the lines of 4% compounding increase per year in iron ore demand, whilst their output increases by several times that. Their price predictions did not involve falls, either.

  10. “gyms, theatres, gamesrooms, restaurant quality smorgasbord meals”
    Maybe, but to quote from South Pacific:
    “What aint we got, we aint got dames!”.

    Besides, I’m not sure I’d find an upmarket version of Stalag Luft 5 particularly enlightening after a few pick axe swinging hours.

    • Mining BoganMEMBER

      ‘…we aint got dames!’

      Not been there have you Rob? I must admit I was surprised at the amount of women running around the place. Smart, attractive ones as well! Score! Orright for me, not for blokes missing their ladies back home.

      The mining bot is correct. These new camps are very good. No comparison to the old ones. Christ, I’ve stayed in some shockers.

      He has over-exaggerated the wages though. Well, for where I am. In some camps you’ll get glassed out of envy if you say you’re on $150k.

      • MB go to the North-West, construction phase wages are often in excess of $150K. Many crane and heavy equipment people on circa $200,000+ (construction rates + allowances). Diesel/hydraulic specialists $180K. This list goes on. Even safety officers are on close to that (and they don’t do much)!

      • Mining BoganMEMBER

        Oh, there are those sort of wages there. I wouldn’t be there if I wasn’t. I’m in the NW by the way. That new camp at Yandi is fabulous.

        Just saying that for those who think they can come up with basic skills and expect to earn a motza then think again.

      • Mining BoganMEMBER

        Bugger! That made no sense. Blame a bottle of Mud House Sauv Blanc I shared at lunch. Maybe the second…

      • Was just in Yandi a couple of weeks ago – would have gladly shared a bottle or two.

        And Rob B’s ‘there ain’t no dames’ call is definitely not the case…

        Cheers.

  11. As a Pilbara FIFO worker, I sense a whole lot of jealousy from some commenters here. The chance to earn good money for the support and future of my family is a very good thing IMO.Not to mention the ridiculous taxes I pay ( and must watch being squandered!) Those who think it’s easy are delusional. I suspect many commenting here wouldnt last a swing if they had to actually get off their date and do the hard hot yards.

    The local communities get a lot from mining in their areas, and while some there complain, I dont know ANY who would like to see mining leave. And that would happen if the projects could not get the manpower through FIFO operations.

    Suck it up princesses.

    • +100.

      I think the whole concept of FIFO is so alien to many commenters here it is impossible to get through to some that FIFO works: is financially rewarding, allows worker flexibility, provides extended periods off-work (with family or pursuing personal interests). Most FIFO workers may love the outback but sure as hell don’t want to uproot family and live there. FIFO provides the best of both worlds – working life free from usual distractions and home life free from work constraints. Of course local councils claim all kinds of disadvantage – but as you say, they don’t want to mines to go!

      I’ll elaborate my thoughts in response to Lefty above.

    • GSN,

      You’re a FIFO worker in the Pilbara – good for you.

      I’ve worked in a few remote areas myself – some of them would make the Pilbara look like the Left Bank. Worked hard, got dirty (and lonely) and reckoned I earned every quid I made – just like you.

      But I think you’ve called it a bit wrong on this thread.

      I see no signs of jealousy in the commentary thus far, nor do I see any suggestion that you should not have the opportunity to make good money.

      And I certainly don’t see anyone (delusional or otherwise) suggesting that the work is easy.

      I think your assumption that:

      “I suspect many commenting here wouldnt last a swing if they had to actually get off their date and do the hard hot yards.”

      is just that – one bloody big, unsubstantiated assumption. And perhaps a trifle self-aggrandising.

      There is genuine fear and concern out there in many a hitherto rural community about what is happening around them. They are neither psychologically nor financially prepared for the changes that are being forced upon them.

      When you “Fly out”, they are still there, and have to live with the unintended consequences every hour and day of their lives.

      Most of them, contrary to your supposition, are bloody hard workers, and could probably teach you a thing or two about hard, hot, dirty yakka.

      So, by all means, enjoy your good fortune, and the fruits of your hard labour.

      But remember – everytime you go to the toilet in that FIFO airplane – there is somebody living down below 🙂

      • Mining BoganMEMBER

        I’ll make one comment on this…maybe two. Yes, two.
        1. I’ve worked harder in other industries.
        2. Two people out of three in Oz are considered to be overweight. In the mining industry that jumps to three out of four.
        I don’t have facts to back that second one up. Read it on the notice board at the gym. Looking around it seems correct. I don’t think we’re the hardest working in Oz. World’s best eaters though.

  12. +1000

    Well said Julias. 3d1k and GSM appear to be struggling to understand what this is all about. They think it’s about THEM. They go to great lengths to tell us how great it is to be a FIFO. No doubt. But we don’t care that they earn great money (which most local businesses see little of) or how they have fantastic modern camps etc. We don’t care how good it is to be FIFO, we care that the FIFO phenomonen damages the lives of many who live here. Just why this pair of jokers appear unable to grasp this simple fact is beyond me. We need solutions, not blithe justifactions and boasts about how well they’re doing out of something that is hurting others.

    • And the flip-side to FIFO is what it is doing to Perth. Infrastructure issues abound here.
      This reliance on FIFO represents a lost opportunity to further develop regional centres to a proper vibrant self sufficient appropriately sourced cities.
      Or should I say city? [singular]

      • Wrong. I am in Perth and see no problem with FIFO, it remains a success and the sensible solution to provide a large workforce of fluctuating nature to remote projects.

    • Struggling to understand what it is all about. Seriously Lef-tee? I know exactly what it is all about, particularly here in WA. Tell you what, you visit the location of these massive project and tell me a better way. FIFO works.

      FWIW, I am not FIFO, I am Perth based and have never discussed my remuneration, which is adequate. Making it personal in that way as a means of detraction is not a form of argument I would expect from you.

      • For the massive projects the better way is the Leinster Mt Newman Tom Price way.
        A more permanent style of development of the hinterland.
        Not one of those towns mentioned above would be built today.
        A retrograde result.