Identifying social and economic issues in the Bowen Basin

John Rolfe Central Queensland University

The focus of this presentation

Provide an overview of the broader issues

Identify some of the key impacts of mining in the Bowen Basin

Explore how they overlap with other social and economic trends

Provide some analysis of the issues

The contribution of the mining industry

In 2002, ACIL Consulting reported that: mining contributed about 10% of Qld economy,

and 17% of construction Coal mining firms directly employed

approximately 16,400 people, and paid them almost $1000 million in salaries

A further 15 – 20% of jobs and salary payments paid to contractors

A further $2,200 million paid to firms that provided goods and services

Up to 60,000 full-time and part-time jobs generated by the mining industry.

The demographic impacts

Most rural and regional areas have lost population in the past 25 years

Western Queensland has lost approximately one-third of its population

How would the Central Highlands look if population had decreased by a third since 1980?

This is one of the only inland regions in Australia to be growing in population Because of mining

The rollercoaster of current expansion

Growth in almost all aspects of coal industry in past 2 years Employment Contractors Construction Output New mining operations

7% growth per annum to 2010 The industry would double production in

less than 10 years

Qld Employment in coal industry

No. of Employees as at June 30

0

2000

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14000

16000

18000

1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05Year

No

. of

Em

plo

yees

Queensland coal production levels

Coking & Thermal Coal Totals

0

20000

40000

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120000

1995

-96

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Coking Coal Total

Thermal Coal Total

Opencut saleable production

Opencut saleable Production

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Northern Central Southern

Underground saleable production

Underground SaleableProduction

0

5000

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25000

1995

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Northern Central

Value of exports

Total Value of Export per Year

0

2000000000

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10000000000

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AU

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Coking Thermal All Coals

Are we making the best of our opportunities in Central Queensland?

At current rates, the coal industry will double in size from 2000 – 2010 Population change in the Bowen Basin ? Wealth in the area ? Developing service industries for coal ? Broadening the support in training and

other activities ? Creating lifestyles that make people

want to stay here ?

Operational changes

Moves to more contract labour Greater flexibility

More efficient and profitable operations Workforce can be downsized more easily

But workforce no longer located in closest town

Spreads economic wealth more regionally More travel, less sense of community

Operational changes

Changes to shiftwork patterns Shiftwork in blocks More drive-in/drive-out operations

Miners have more options about where to live

Bigger blocks of recreation time But loss of community activities

Difficult to run clubs and sporting groups Many people go elsewhere when not on

shift

Industry structure

Mining used to be dominated by large firms Needed scale economies to be able to

build mines and associated towns Range of new entrants

Small companies, contractors Keeps more wealth locally But bigger range of contributors to

social and economic impacts

Growing pains - 1

Dutch Disease – when a growing industry sucks labour and resources away from others

Shortages in skilled labour now widespread

Agriculture, Local Government, etc, find it difficult to retain staff

Attracting staff is difficult

Salary increases needed to attract staff

-$20,000

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

Blackw

ater

Brisban

e

Rockha

mpt

on

Premium forWestern Qldcompared to QldCoast

Premium forBowen Basincompared to QldCoast

Premium forSouth-east Qldcompared to QldCoast

Other factors that affect labour mobility

05000

10000150002000025000300003500040000

Years

of c

omm

itmen

t

Jobs

for f

amily

Health a

nd E

d. Ser

vices

Acces

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cent

res

Socia

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crea

tion

Blackwater

Brisbane

Rockhampton

Growing pains - 2

Housing prices – high rents and shortages make housing too expensive

Economic impacts – hard to develop service and other industries when it is too expensive to live in the town

Social impacts – people on lower incomes may have to shift

Separating impacts of mining from demographic and social changes

The urban attraction – jobs and higher incomes attract people

The regional hub – these develop because of better services Education, jobs for partners, health,

entertainment The lifestyle movers – people move

to the coast

Social and economic impacts have changed over the past 25 years

Changes due to Changes in the way the industry works Changes in demographics and social patterns

Demographic impacts are varied Many employees come from range of locations

Economic impacts much more diffuse Many mines have impacts at regional rather

than local level Social impacts are varying across groups Getting harder to identify who is

responsible for provision of services and infrastructure

The new social impacts

Higher incomes make it easier to move families away from mining towns Also education and other drivers

Greater travel time Loss of services and entertainment

in smaller centres Greater difficulty in providing

services like health

Mobility

People are more mobile – better transport and communications

Don’t need so many service towns that we once did

Shopping and services are concentrating to regional hubs – but the population is not ??

The regional hub argument

Currently growth in all Bowen Basin towns But long-term trends suggest

concentration to regional hubs But prices in Emerald and Moranbah are

hindering this development Perhaps should plan for services and

growth to get these centres to a larger size in longer term

Or else we face fly-in/fly-out from coastal and urban centres

Flexibility

People are more flexible – change jobs and locations more readily

Starting to see specialised communities develop The workcamp model The older workforce model The young families model ?

Should communities focus on catering only to specialised groups?

Dealing with cyclical impacts

High prices stimulate extra production, which can help to bring prices down

Strong exports tend to push the A$ up, and reduce the net value of sales

Current predictions are that the boom may last another 2 – 5 years

Australian Mineral resources prices, ended March quarter 2005

Production per employee is dropping

Saleable Ouput per Employee

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Per Employee Year Total

Communities face choices

Have maximum growth, face population losses in future downturn

Have minimum growth, and ride out the downturns

Locate population in regional hubs to generate flexibility, and perhaps attract service industries

Specialise their attraction to keep core group of population

So what are we doing ……?

Skill shortages ? Housing constraints ? Providing services ? Assessing impacts at regional rather than

local levels ? Getting the economic benefits to stay in

the region ? Attracting new people to region ? Developing regional hubs ? Planning for future downturns ?

The rollercoaster

Industry has been in major expansion phase

… and government and service sector has been scrambling to keep up

To make the best of the opportunities, we need to Identify the key impacts to address Find ways of measuring and analysing them Develop solutions that work Develop processes that allow different players

to work together