The Wall Street Journal (WSJ) has produced an interesting video (above) on the bust taking place in Moranbah, Queensland – a former boom town, which has seen its fortunes slide on the back of the halving in coking coal prices since 2012:
Two years ago, real-estate agent Bella Exposito said she was selling as many as 25 houses a day as soaring coal prices lured workers and investors to this flyspeck Outback town.
As of May this year, she has sold three.
A cream-and-brown weatherboard house near her office rented for nearly US$7,000 a month when the region’s coal industry was booming; now it has been empty for 12 months. Downtown shops have gone vacant. At Café 17, a local diner serving eggs and baked beans in the morning, visitors could fire a cannon and not hit a soul some days…
“I’ve been living here since ’97, and there has never been such a lack of jobs,” said 38-year-old Benildo Oliveira dos Santos, a mechanic, as he waited in line outside an unemployment office late last year.
Sadly, the downturn in Moranbah could soon be played-out in many mining communities across the nation.
While the surge in export volumes has been great for Australia’s headline GDP, the fact is it employs very few people when compared against the once-in-a-century boom in mining investment. And there’s also the issue of falling commodity prices, which are likely to lead miners to further cut back on operational costs and employment, as has occurred recently with BHP’s iron ore operations.
To get a sense of the employment shift taking place, as well as the likely impact on mining communities, one only needs to consider the below outline of jobs at Gladstone’s three $60 billion-plus LNG plants:
As you can see, construction jobs across the three projects are expected to number some 9,900. However, once the projects are completed, and the LNG plants move into the operational phase, then only around 420 employees are expected to be required. That’s a reduction in jobs of around 95%, not to mention the loss of jobs in functions peripheral to construction (e.g. engineers and mining services in our capital cities), as well as those indirectly affected (e.g. services staff in Gladstone).
