Shire of Roebourne Local Planning Strategy · Shire of Roebourne Local Planning Strategy Technical Report A1: Economic Development Strategy 6 1 Introduction 1.1 This paper This Technical

Shire of RoebourneLocal Planning Strategy

Technical Report 1 Local Economic Development Strategy

July 2013

Shire of Roebourne Local Planning Strategy Technical Report A1: Economic Development Strategy

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Shire of Roebourne – Economic Development Strategy Preliminary Paper

Version Control Document History and Status

Status Issued To Qty Date Reviewed Approved

Draft MP 1 26/3/13 JS JS

Draft 2 JSt 1 5/7/2013 JS JS

Report Details

Name: Author: Client: Name of doc: Doc version: Project number:

P1263 SoR EDS Prelim

JS Shire of Roebourne Shire of Roebourne – Economic Development Strategy

Electronic Draft 85029 MPD P1263 SM 3103 PS

Disclaimer: If you are a party other than the Shire of Roebourne, MacroPlan Dimasi: owes you no duty (whether in contract or in tort or under statute or otherwise) with respect to or in connection with the attached report or any part thereof; and will have no liability to you for any loss or damage suffered or costs incurred by you or any other person arising out of or in connection with the provision to you of the attached report or any part thereof, however the loss or damage is caused, including, but not limited to, as a result of negligence. If you are a party other than the Shire of Roebourne and you choose to rely upon the attached report or any part thereof, you do so entirely at your own risk. The responsibility for determining the adequacy or otherwise of our terms of reference is that of the Shire of Roebourne. The findings and recommendations in this report are given in good faith but, in the preparation of this report, we have relied upon and assumed, without independent verification, the accuracy, reliability and completeness of the information made available to us in the course of our work, and have not sought to establish the reliability of the information by reference to other evidence. Any findings or recommendations contained within this report are based upon our reasonable professional judgement, based on the information which is available from the sources indicated. Should the project elements, external factors and assumptions change, then the findings and recommendations contained in this report may no longer be appropriate. Accordingly, we do not confirm, underwrite or guarantee that the outcomes referred to in this report will be achieved.


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Executive summary

The Shire of Roebourne is in an influential position to implement strategic planning and economic growth through:

Shaping the qualities of the community;

Providing assistance and support to business;

Determining how land use and facilities are developed;

Supporting the development of a local workforce;

Communicating the district’s assets, advantages and aspirations;

Establishing policies to align business and community goals;

Allocating funds to key projects and services;

Providing leadership for long term economic success; and

Forming strategic partnerships with the public and private sector to maximise the value of

the strategy and share implementation responsibility.

The current advantages and strengths will take advantage of the economic opportunities to shape the

growth of and diversify the Shire’s economy and population.

Overall strategy:

Encourage expansion of the economic base;

Encourage diversification;

Facilitate expansion of the regional services sector; and

Current Advantages Current Strengths Economic

Opportunities Growth Opportunities

Specialist agri-

business

Mining and resource industry services

Regional administrat-

ion

Adventure and

experience tourism and recreation

Education services

Resource efficient

construction industries

Health and wellbeing services

Strong economic base

Regional economic growth

Main site for regional services

Policy support

Emerging specialist skill base

Economic infrastucture:- Ports- Airport- Industrial land- Services - Transport systems .

Community Services

Development Sites

Expansion of economic base

Diversification projects

Regional services

Tourism


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Facilitate expansion of the tourism sector.

Strategic focus

Provision of enabling infrastructure;

Provision of employment accommodation;

Attend to cost structure:

o Accommodation;

o Labour;

Value chain management and local supply chain management;

Support for micro-enterprises and Small and medium-sized enterprises (SME) sector:

o Skills development;

o Intra-regional and extra-regional expansion;

Capitalise on digital initiatives;

SME support;

Specific measures:

Ensuring there is sufficient zoned and serviced industry and commercial land;

Fostering the further development of SMEs in mining and resources support services and the resources value chain;

Support to small business development programs;

Fostering incubation projects and support services;

Fostering clustering and SME incentives;

Ensuring the needs of agri-business enterprises are accounted for in strategic planning;

Fostering the development of SMEs in agri-business support services;

Health: further expansion of the health campus and incorporation of areas of

specialisation;

Education: actively promoting the establishment of full-service tertiary education facilities

and services in the Shire;

Promoting the expansion of aged care services and facilities in the Shire;

Formulating a digital strategy for the Shire to enable:

o Remote and tele-working;

o Improved viability of basing regional services and administration in Karratha;

o Improved e-health and e-education services;

o Further progress on the Smart Cities initiative.

Tourism: Formulate a comprehensive tourism strategy addressing:

o Product;

o Accommodation;

o Marketing.


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Contents

1 Introduction ............................................................................................................................ 6 1.1 This paper ................................................................................................................................ 6 1.2 History and overview ................................................................................................................ 6 1.3 Economic development & the role of the government .............................................................. 7 1.4 Policy framework ...................................................................................................................... 8 1.5 Economic development strategy .............................................................................................. 9

2 The economy of the Shire ................................................................................................... 10 2.1 Factors of economic growth in the Shire of Roebourne .......................................................... 10 2.2 Employment ........................................................................................................................... 12 2.3 FIFO in the Shire of Roebourne ............................................................................................. 14 2.4 Imports and exports ............................................................................................................... 21

2.5 Pilbara regional economy ....................................................................................................... 23

2.6 The Shire in the Pilbara economy .......................................................................................... 24

3 Growth prospects –the global and regional context ......................................................... 28

4 Competitive Position............................................................................................................ 30 4.1 Institutions .............................................................................................................................. 31 4.2 Infrastructure and services ..................................................................................................... 32 4.3 Macroeconomic Conditions .................................................................................................... 34

4.4 Human Capital ....................................................................................................................... 35 4.5 Labour Market Efficiency ........................................................................................................ 36

4.6 Technological readiness: ........................................................................................................ 38 4.7 Business sophistication .......................................................................................................... 39 4.8 Innovation ............................................................................................................................... 41

4.9 Economic fundamentals ......................................................................................................... 42 4.10 Natural Resources ................................................................................................................. 43

5 Shire growth prospects – the minerals and energy sector .............................................. 44

6 Shire growth prospects – diversification projects ............................................................ 52

7 Shire growth prospects – regional services ...................................................................... 56 7.1 Education services ................................................................................................................. 56 7.2 Tourism .................................................................................................................................. 57 7.3 Administration, producer services, consumer services ........................................................... 59

8 Strategic Analysis ................................................................................................................ 61 8.1 Summary strategic assessment ............................................................................................. 61

8.2 Responding to opportunities - expansion of existing projects and additional resource projects ............................................................................................................................................... 62

8.3 Responding to opportunities – diversification of the economic base ...................................... 63 8.4 The Pilbara Cities ................................................................................................................... 64

9 Strategies and actions - summary ...................................................................................... 66 Figures Figure 1: Vital Cycle of Success ........................................................................................................... 9 Figure 2: Roebourne Shire Employment 2006, 2011 and 2012 .......................................................... 13

.............................................................................................................................................................. 13


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Figure 3: Shire of Roebourne value of imports and exports (major industries) $M ............................. 21 Figure 4: Shire of Roebourne value of imports and exports (other industries) $M .............................. 22 Figure 5: Shire of Roebourne – proportion of Pilbara total: employment ............................................ 25

Figure 6: Shire of Roebourne – value add .......................................................................................... 26 26 Figure 7: Tourism employment in the Pilbara ..................................................................................... 27 Figure 8: Shire of Roebourne: Minerals & Energy Workforce by Type (Incremental to 2011) (‘000s) . 45 Figure 9: Shire of Roebourne: FIFO vs. Residential (Incremental to 2011 – All M&E projects)(‘000s) 46

Figure 10: Shire of Roebourne: FIFO vs. Residential (All Minerals & Energy projects) ..................... 46 Figure 11: Karratha – M&E employment effects on population (incremental to 2011) (‘000s) .......... 47 Figure 12: LNG Project – Output and Investment Value ................................................................... 48 Figure 13: West Pilbara iron ore project ............................................................................................ 50 Figure 14: Aurora Algae Pilot Plant ................................................................................................... 53 Figure 15: An economic model for Roebourne Shire ........................................................................ 66

Figure 16: Shire of Roebourne – potential changes in occupation 2011 – 2021 ............................... 69

Figure 17: Shire of Roebourne - main potential occupation increases .............................................. 70

Figure 18: Shire of Roebourne - main potential occupation decreases ............................................. 71 Tables Table 1: Shire of Roebourne Strategic Community Plan: Outcomes and Responses ......................... 8 Table 2: Value added by industry sector, Shire of Roebourne Modelled data ................................... 10

Table 3: Employment by Industry Shire of Roebourne 2006, 2011 and 2012 (Persons Employed) .. 12 Table 4: Employment Self-Containment Shire of Roebourne 2006 ................................................... 14 Table 5: Population of usual residents............................................................................................... 19

Table 6: Population by place of enumeration on Census night .......................................................... 19 Table 7: Duration of employment – FIFO workers ............................................................................. 20 Table 8: Value of minerals and energy by LGA region (2012 value) ................................................. 23 Table 9: West Pilbara - Selected Committed Resource Infrastructure Projects ................................. 24 Table 10: Prospective employment (operations) .............................................................................. 54

Table 11: Employment multipliers in the Pilbara .............................................................................. 55 Table 12: Regional universities ........................................................................................................ 77 Appendices Appendix 1: Effect of Shire growth scenarios Appendix 2: Small business support Appendix 3: West Pilbara iron ore project Appendix 4: Rio Tinto iron ore in the Pilbara Appendix 5: Gorgon Appendix 6: Examples of regional universities, Australia Appendix 7: Prospective Resources Projects, Pilbara


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1 Introduction

1.1 This paper This Technical report 1: Economic Development Strategy is a preliminary paper in a suite of five reports to inform the preparation of the Local Planning Strategy (LPS) for the Shire of Roebourne. There is planned to be a series of consultations and further information gathering through the course of the formulation of the LPS. The Economic Development Strategy, as a component of the LPS and as a Strategy in its own right, will be refined and finalised in the course of this process. The scope for the five technical reports was identified through an Information Gap Analysis prepared by Mike Allen Planning in June 2012. This means that the Technical Reports do not comprehensively address all of the issues that will affect the Shire’s future; instead they are designed to complement the wide body of research and planning that has already been undertaken.

1.2 History and overview The Shire of Roebourne is located in the Pilbara region of northern Western Australia, about 1,200

kilometres north of Perth. The Shire of Roebourne is bounded by the Indian Ocean in the north and west,

the Town of Port Hedland in the east, and the Shire of Ashburton in the south.

The original inhabitants of the Roebourne area were the Ngaluma and Yindibarndi Aboriginal people. European settlement dates from the 1860s, with land used mainly for pastoral purposes (sheep grazing). Some growth took place in the late 1800s and early 1900s, particularly in Cossack and Point Samson. The population then declined. Significant development did not occur until the late 1960s when iron ore deposits and offshore natural gas fields were discovered. The townships of Dampier, Karratha and Wickham were established to house mining and transport workers, with Dampier established as a port. Growth took place from the 1970s, with the population of the Shire increasing from about 10,000 in 1971 to 17,000 in 1991. This growth was driven by the North-West Shelf Gas joint venture, with Karratha functioning as a service centre for on and off-shore oil and gas facilities. The population declined slightly during the early 1990s, falling to about 15,000 in 1996. From the late 1990s the population increased substantially, rising to about 19,000 in 2006. By 2011 the resident population of the Shire had grown to 23,900. Population growth is expected to continue, particularly in and around Karratha, largely a result of investment in new mining operations and continued global demand for iron ore and natural gas.

The Shire of Roebourne encompasses a total land area of over 15,000 square kilometres. The Shire is predominantly rural, with growing population centres in the township of Karratha and the smaller townships of Dampier, Roebourne and Wickham/Point Samson. The main industries in the Shire are mining (iron ore and gas extraction), salt production, and cattle and sheep grazing, with some fishing and tourism. The key employment sectors are currently mining and construction, and to a lesser extent, retail, transport, education, tourism and property and business services. The major industrial areas are the Dampier and Cape Lambert Ports, with an industrial estate to the south of Karratha. The Shire's main retail area is the Karratha CBD, with a smaller centre at Wickham. Roebourne features one tertiary institution (Pilbara Institute) and a number of primary and secondary schools.


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1.3 Economic development & the role of the government

The purpose of economic development is to build up the economic capacity of the Shire of Roebourne to improve its economic future and the quality of life for all. It is a process by which the Shire will liaise with the public, business, government and not-for-profit sector partners collectively, to create better conditions for economic growth and employment generation. The Shire of Roebourne City of the North Plan identifies the need to explore options for the creation of an economic development model for the Shire. Delivery of the plan cannot be achieved by any one organisation. All stakeholders and partners, both big and small, need to work together to help achieve the vision The Roebourne Shire is in an influential position to implement economic development and current strategic planning aims to be inclusive and expansionary. The Shire and its residents recognise the values and special characteristics which are the foundation of long term planning. The Shire can play the following economic development governance role:

Shape the qualities of the community;

Provide assistance and support to business;

Determine how land use and facilities are developed;

Support the development of a local workforce;

Communicate the district’s assets, advantages and aspirations;

Establish policies to align business and community goals;

Allocate funds to key projects and services1;

Provide leadership for long term economic success; and

Form strategic partnerships with the public and private sector to maximise the value of the strategy and share implementation responsibility.

Underpinning the aspirational target of 50,000 residents for Karratha: City of the North is the need to create over 22,000 jobs and with it substantial economic diversity. Proactive engagement and development of initiatives is needed to facilitate job creation and business expansion. The Shire’s economic development services provide a range of initiatives to enhance economic diversity and business development. This creates a more normalised market and improves the delivery of services to the community.

1 These include community facilities and programs which improve liveability in the Shire and thus have an

economic dimension.


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1.4 Policy framework Strategic Community Plan 2012-2022

Some guidance for the economic strategy is contained in the Shire’s Strategic Community Plan 2012-

2022.

Aspiration: The primary aspiration for the Shire over the next ten years is to grow into a collection

of diverse and sustainable cities supporting a regional population of 40,000 residents,

realising the State Government’s ‘Pilbara Cities’ initiative of transforming Karratha into

a ‘world class City of the North’

Themes involve a quadruple bottom line approach (QBL) to achieving the primary community aspiration. These themes include

‘Our community – Diverse and Balanced’,

‘Our Economy – Well Managed and Diversified’,

‘Our Natural and Built Environment – Thriving and Sustainable’; and

‘Our Leadership – Responsive and Accountable’ in line with community expectations.

The Goal for the Economy Strategic Theme is:

To develop infrastructure and facilities in a sustainable way to support the communities’

needs.

To manage and maximise the benefits of growth in the region while diversifying the

economic base.

Shire of Roebourne Strategic Community Plan: Outcomes and Responses

Outcomes Response

Create opportunities for growth and diversification of the local economy

Develop initiatives, build partnerships and deliver projects to attract and support Small to Medium Enterprises in the region.

Develop Initiatives, build partnerships and initiate projects which identify and develop land and accommodation opportunities including facilities for key service workers

Encourage diversification of the local economy through the support of tourism and visitation.

Create opportunities for growth and diversification for local business.

More industrial, commercial and residential land supply and creation of readily developable land banks that can be quickly released to the market.

Facilitate the release of land to cater for growing development opportunities.


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1.5 Economic development strategy

The Economic Development Strategy will provide an “investment blueprint” to attract State and private

sector investment and direct sustainable economic development. The Shire of Roebourne Economic

Development Strategy:

identifies the assets of the community;

identifies economic opportunities arising from the current Shire economy;

determines the extent to which existing local and sub-regional opportunities have been

taken up, and if not, why not; recommends mechanisms to develop any such

opportunities;

identifies future economic growth opportunities and recommendations on further

investigation required to develop the identified opportunities;

recommends a mechanism for the recognition and prioritisation of economic development

opportunities;

recommends what resources are required to take advantage of any economic

opportunities that are identified;

identifies economic development targets and how to measure the achievement of them;

and

informs and complements the Shire’s Local Planning Strategy.

The diagram below symbolises the successful economic development cycle; this cycle is self-supporting. Growth in terms of economy is the essential factor; it supports prosperity, vitality and innovation. Growth in population is also an enabling factor as it supports revenue and vitality; the vital and diverse community which increases its capacity and resources encourages innovation, local businesses and employment which in turn facilitate economic growth. The cycle falters when the economy fails to grow and diversify. Economic and societal growth, rather than population or infrastructure growth, is at the core of economic development.

Figure 1: Vital Cycle of Success

Source: City of San Jose, Economic Strategy 2010-2015

A Vital Community

Increasing Prosperity

and

Revenue Growth for Shire

Growing Economy


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2 The economy of the Shire

2.1 Factors of economic growth in the Shire of Roebourne The economy of the Shire is heavily dependent on the minerals and energy sector. The mining sector accounts for $4,041 million of the $6,894 million total value added (59% of total) in the Shire (2011 estimates) and the oil and gas and iron ore mining make up 57% and 38% respectively of value added in the Shire from the mining sector.2 Construction, the next largest sector measured by value added, is overwhelmingly directly related to mining and resources projects. Table 2: Value added by industry sector, Shire of Roebourne Modelled data

Industry sector (2006 ANZSIC) 2011 $ millions (2008/09 constant prices)

2011 % of total

Agriculture, Forestry and Fishing 63 0.9

Mining 4,041 58.6

Manufacturing 84 1.2

Electricity, Gas, Water and Waste Services 75 1.1

Construction 1,940 28.1

Wholesale Trade 54 0.8

Retail Trade 49 0.7

Accommodation and Food Services 25 0.4

Transport, Postal and Warehousing 148 2.1

Information Media and Telecommunications 16 0.2

Financial and Insurance Services 23 0.3

Rental, Hiring and Real Estate Services 60 0.9

Professional, Scientific and Technical Services 48 0.7

Administrative and Support Services 61 0.9

Public Administration and Safety 84 1.2

Education and Training 56 0.8

Health Care and Social Assistance 43 0.6

Arts and Recreation Services 2 0

Other Services 23 0.3

Total industries 6,894 100

Source: National Institute of Economic and Industry Research (NIEIR) modelling and .id consultants The resources sector is the only one in the Shire selling outside of the Pilbara region in significant volume. It is this which drives wealth into the region. However, the resources sector is highly capital intensive, not labour intensive, and this is likely to become more marked over time. Major companies with capital intensive operations will seek to continually reduce on-site labour costs – remote mining technology is one of the main areas of research for the mining

2 Pilbara Development Commission, Pilbara Regional Economy Version 2, March 2012

http://www.nieir.com.au/


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majors. Much research and technical development is directed towards improving on-site labour productivity and increasing the ability to undertake parts of operations remotely. This technology is under development and is being steadily implemented by the major resource companies. This will serve to dampen regional population growth generally. Some of this is already in place: a current example is the remote control (from Perth) of haul trains. Extensions of technological applications over time will serve to subdue or even reduce regional labour demand from resources projects, even as the volume and value-added measures increase. This will serve to dampen regional population growth generally. Australia is currently positioned at the point of a major transformation in the world’s economic weight from west to east. The rapid industrialisation of structurally large Asian economies, predominantly China, has driven world economic growth over recent times and changed the dynamics of key international resource, product and capital markets. For Australia, this has translated to strong demand and elevated prices for energy and mineral resources, and is underpinning massive investments by the minerals and oil and gas industry in new capacity. The economic advancement in Australia’s region is overwhelmingly positive for Australia, playing to comparative advantages as a secure and reliable energy exporter. The oil and gas industry currently represents around 2.0% of gross domestic product, with direct and flow-on value added of approximately $28.3 billion in 2010-11 (based on total sales of $29.7 billion). Moreover, the industry’s systemic significance is continuing to grow on the back of large LNG export investments, mainly in Western Australia, Queensland and the Northern Territory.

Separately, these represent some of the biggest projects ever undertaken in Australia; and collectively, they account for around 35.4% of all business investment. Further, if all oil and gas investments are realised, they will comprise over 64% of all committed investment.

LNG output is expected to grow by around 250% over the next seven years, with a projected value of over $35 billion in 2017-18.

Importantly, the industry’s economic linkages are broad and deep. Of total industry value added, about $4.3 billion is generated by supplying industries across the economy — including the resource support services, maintenance and construction and professional services sectors. These linkages are particularly visible in the thriving resource service hubs which have emerged in Brisbane and Perth, but also in the supply sectors of resource communities such as in the Shire of Roebourne. Building on these linkages, robust export performance by Australia’s oil and gas industry, and other resource producers more broadly, has provided important income and employment support over the course of the global downturn. This has played a key role in Australia withstanding the more dramatic economic declines which confronted other developed economies.


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2.2 Employment Thus while the mining sector is an important employer, it is not currently the main one. The dominance

of the construction sector as an employer in the Shire is illustrated in the following table and graph:

Employment by Industry Shire of Roebourne 2006, 2011 and 2012 (Persons Employed)

Industry sector (2006 ANZSIC) 2012 2011 2006

Agriculture, Forestry, Fishing 137 100 82

Mining 5,040 4,837 2,367

Manufacturing 950 743 515

Electricity, Water, Waste Services 423 505 252

Construction 5,246 5,017 2,332

Wholesale Trade 434 343 405

Retail Trade 1,209 906 790

Accommodation & Food Services 822 829 559

Transport, Postal, Warehousing 1,286 1,289 865

Information Media & Telecommunications 116 71 94

Financial and Insurance Services 107 65 109

Rental, Hiring and Real Estate Services 426 402 197

Professional, Scientific & Technical Services 1,019 911 506

Administrative and Support Services 743 694 397

Public Administration and Safety 1,431 1,196 609

Education and Training 931 845 634

Health Care and Social Assistance 994 751 422

Arts and Recreation Services 59 53 101

Other Services 610 544 293

Total industries 21,983 20,101 11,529

Source: National Institute of Economic and Industry Research (NIEIR) modelling and .id consultants



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Figure 2: Roebourne Shire Employment 2006, 2011 and 2012

Source: National Institute of Economic and Industry Research (NIEIR) modelling and .id consultants

It shows a very substantial increase in construction-related employment over the period 2006 to 2011, increasing by almost 2,700 over the period, while employment in the mining sector rose substantially, but by 2,470 workers. It is also worth noting the relatively large increases in proportionate terms of administrative categories and of professional, scientific and technical services.

The nature of economic activity in the Shire of Roebourne is different to many mining communities: it has few iron ore mines and none within commuting distance of the main settlement areas. In addition to construction, economic activities driving employment around the main settlement areas are regional services and administration, LNG production, port and port-related transport operations and salt mining.

While major centres in the Shire are not close to operational mines – some FIFO workers may use Karratha, Roebourne and other settlements as a FIFO / DIDO residential base to work elsewhere in the Pilbara. This may partly be the result of the indigenous employment program of Fortescue and Rio. There is some evidence of this – the 2006 census shows in the two big employment sectors of mining and manufacturing, employment self-containment of 85% and 81% respectively, with almost 500 workers in those two industries and almost 1,200 overall with their main residence in the Shire but their place of employment elsewhere. These will have the reverse effect on demand for community facilities to the incoming FIFO workers.

However information provided by Rio shows that the numbers of workers using Karratha as a residential base is far eclipsed by other locations: amongst regional WA, Rio FIFO workers are far more likely to have Busselton, Geraldton and Broome as a home base than Karratha. This is an area of opportunity for the Shire.

0

1000

2000

3000

4000

5000

6000

Roebourne Shire Employment 2006, 2011, 20122006

2011

2012



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Employment Self-Containment Shire of Roebourne 2006

Resident

employees Employed

in Shire

Employed outside Shire

Self-containme

nt %

Agriculture, Forestry and Fishing 31 13 18 41.9

Mining 1,889 1,602 287 84.8

Manufacturing 408 332 76 81.4

Electricity, Gas, Water and Waste Services 134 121 13 90.3

Construction 1,057 848 209 80.2

Wholesale Trade 218 201 17 92.2

Retail Trade 665 621 44 93.4

Accommodation and Food Services 376 334 42 88.8

Transport, Postal and Warehousing 464 392 72 84.5

Information Media & Telecommunications 48 39 9 81.3

Financial and Insurance Services 67 67 0 100

Rental, Hiring and Real Estate Services 206 190 16 92.2

Professional, Scientific & Technical Services 200 163 37 81.5

Administrative and Support Services 295 252 43 85.4

Public Administration and Safety 528 480 48 90.9

Education and Training 589 561 28 95.2

Health Care and Social Assistance 424 394 30 92.9

Arts and Recreation Services 30 30 0 100

Other Services 229 202 27 88.2

Inadequately described 278 109 169 39.2

Total industries 8,136 6,951 1185 85.4

Ref: id consultants and ABS

2.3 FIFO in the Shire of Roebourne

A significant challenge faced together by Pilbara towns and the resources sector is a rapid increase in employees and their families choosing fly-in-fly-out (FIFO) employment in preference to residentially based employment. ‘Long distance commuting’ for work can be traced back to the first half of the 20th century when shearing teams, recruited in Perth, travelled from sheep stations in the Kimberley through to pastoral areas. In the resources sector, long distance commuting has manifested into FIFO and had its beginnings during construction of the iron ore mining and shipping facilities in the Pilbara in the 1960s and 70s. Groups of specialist labour recruited from outside the region were housed in temporary camps while they completed their work. When they were done, some of these workers took permanent jobs in the region, but most returned home.

It remains a significant proportion of the workforce employed in the Pilbara and there is no indication that this will change markedly. It is an entrenched practice for workers and their employers. According to the Chamber of Minerals and Energy:


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“At the most basic level, FIFO is about providing choice for workers. In a competitive labour market, employee choice is paramount. Choice of what job they do, who they work for and, importantly, of where they choose to live.” 3

In the next few years, the majority of FIFO workers in WA will be involved in construction of new resources projects and maintaining existing ones. Construction workforces are typically much larger and transient than operational workforces, as many individual employees or contractors may only be required for a short time. For example, ground surveyors may only be utilised at the start of a construction project, whereas fit-out specialists such as painters will generally be engaged near the completion of the project. Once their specialist task is complete, they then demobilise from the site. Large maintenance workforces are also often employed over short periods to undertake routine maintenance tasks once a project is operational. These workers typically move from one worksite to another across the state and the nation, utilising their specialist skills for a defined period of time. Operational workforces tend to be smaller, and their employment is generally for the longer-term and more stable. In accommodating construction and maintenance staff, facilities typically are less permanent and of varying standards compared with those provided to operational employees, who have ongoing employment, though the facilities may be used for multiple projects. Some facilities are not permanent, as companies, as well as local governments, naturally avoid the provision of accommodation for construction workers that is not suitable for long-term operational employees. This is not only important from an economic point of view, but can also be important for communities, as it avoids the provision of un-needed accommodation that could adversely affect the local market, particularly in times of economic change. It may also be the preference of communities to have construction camps located at site, or outside town, due to the potential disruption that could be created by having a large workforce in the community for a short period of time. Limited research has been undertaken to qualify the impact of a non-resident population on important hard infrastructure that sustains and builds communities i.e. roads, water, sewer, waste and social infrastructure that supports strong local communities i.e. community sport and recreation facilities, libraries, community events. Resource sectors expand and contract rapidly, often with little warning due to volatile commodity prices, which makes it difficult for councils to plan for and supply key community and emergency services. Community services such as general practitioners, emergency rooms, ambulances, hospitals, pharmacies, nursing services, dentists and police confront significantly increased levels of demand as FIFO workers are as likely to use these as local residents. The public benefit nature of many of these services, that is they are available to all participants in the community, results in the perception of the FIFO workforce is acting as “free-loaders”, utilising the services and facilities without being required to contribute to the provision of the services and infrastructure. A resulting situation where these essential services are only provided to the level of “permanent” population benchmarks is that local residents perceive under delivery of service in the local community and may be forced to travel to other larger towns to access these services.

3 The Chamber of Minerals and Energy Of WA, A Matter of Choice: Capturing the FIFO Opportunity in Pilbara Communities, April 2012


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For communities such as the Shire of Roebourne which are routinely subject to cyclones there is a further pressure on emergency centres and increased likelihood of bottlenecks at airports as non-resents rush to leave ahead of an advancing major storm. The location of the workforce is critical in assessing the impact of the FIFO workers on the services and facilities provided by the local government. Some of the resource sector workforce is located on in accommodation villages on site, especially at remote sites. This workforce will consist of both out of region FIFO and local residents (Drive-in, Drive-out, DIDO). Many of these accommodation villages supply their own water, power and sewerage infrastructure, and it is often supposed that there is little impact on the local communities. However this does not account for the impact that they do have local airports and transport systems, emergency services and planning provision for utilities and services. Equally a significant number of the workforce is located within the town area at specific purpose built accommodation camps. The workforce residing in this accommodation is predominately the out of region FIFO workforce. Finally there is a component of the workforce that is located in the “overflow” accommodation of the hotels, motels and caravan parks of the local communities. Similar to the specific accommodation camps, this workforce is predominately the out of region FIFO workforce.

A common theme in the limited academic literature on the effects of FIFO on local communities and regions is that there appears to be no uniform effect across resource based communities (‘host’) or FIFO worker place of origin (‘home’) communities. It has been argued that from an economic perspective FIFO can simultaneously be:

Beneficial to capital cities and large urban or regional centres by adding to their economic diversity;

Destructive to local communities if they are unable to meet the infrastructure and service demands generated by a non-resident workforce;

Erosive to local communities where there has been a shift from a permanent resident workforce to a largely FIFO workforce if it reduces the economic viability of local infrastructure, services and businesses; and

Erosive to communities or regions bordering ‘host’ or ‘home’ communities if workers relocate to take advantage of FIFO work arrangements.4

The FIFO phenomenon has many factors which mean that the result of any study will be at best a good

estimate. They include:

1. FIFO workers live in a variety of accommodation, some remote and close to the construction site or

mine site and some close to town or in town. This accommodation might be formally supplied (for

example in a bespoke FIFO village), or accommodation in general tourist and short stay

accommodation (for example caravan parks, hotels and motels). A study by the Pilbara Development

Commission5 counts 13,048 available beds across these categories in the Shire, with growth of

another 6,526 beds proposed by 2015. The proximity of this accommodation to community facilities

varies greatly. It is expected that remote camps will have little or direct no effect on community

4 Morris, R. (2012) Scoping Study: Impact of Fly-in Fly-out/Drive-in Drive-out Work Practices on Local Government, Australian Centre of

Excellence for Local Government, University of Technology, Sydney 5 Transit Worker Accommodation in the Pilbara, Pilbara Development Commission 2012


17

facilities generally, while those living in camps and accommodation close to or within towns will have

more direct impact. All will impact the local community in some way.

2. The service population at any time for the Shire of Roebourne consists of several main groups:

Permanent residents;

Long term FIFO workers – these tend to be in operational positions;

Short and medium term FIFO workers – these tend to be related to construction projects

and specialist periodic maintenance projects; and

Short stay visitors and tourists – this latter group is estimated to be quite small in the Shire

of Roebourne.

The dominance of the worker market is reflected in two of the seven existing caravan parks within the Shire catering solely to transient workers and an additional two parks catering mainly to transient workers. Only three parks cater solely to tourists. These are located in Point Sampson and Dampier, are smaller in scale and only approach high levels of occupancy in the winter peak season. An estimated 85% of the caravan park occupancy in the shire is generated by workers and this increases to over 95% for the parks in Karratha. This is attributed to the following:

The Shire has a limited history as a tourist destination and it is not promoted as one at the wider state level;

Significant tourist infrastructure and attractions have not been established (or are yet to establish); and

The strength and scale of the resource industries that are driving the demand for worker accommodation.6

The distinction between short- medium term FIFO for construction activity and long term operational FIFO workers is a crucial one. The former have fluctuating numbers, are likely to be more transient and have little or no direct impact on Shire facilities in the long term. Their numbers will rise and fall with the level of construction activity (which may slow markedly towards the end of the decade). They are not part of long term planning. The latter are much more likely to have a longer stay and closer community ties and are generally seen as having some impact and demand on community infrastructure. 7

3. There is a need by the Shire to account for the effect of FIFO on community facilities, but equally a

need to avoid the risk of over-estimating the number. This would lead to over-investment and

premature investment and put the Shire into unnecessary financial hardship.

6 RPS, Shire of Roebourne – Eco Tourist Caravan Park Assessment and Determination of Need, January 2011 7 The community survey by Geographia (Community Needs and Satisfaction Survey, June 2012) which included FIFO workers found:

Over 70% of FIFO workers surveyed were construction workers with the remainder operational staff. In terms of the duration of employment in the Shire, the majority of construction workers have been working for less than 2 years and the operational workers, less than 5 years.

Very few construction workers have been working in the Shire for more than 6 years.

By contrast, one fifth of operational FIFO workers have been working in the Shire for 10 or more years. This compares with 35% of residents having lived in Roebourne for more than 10 years.


18

A survey by the Queensland Department of Treasury of short term accommodation providers in the

Bowen Basin (including the Isaac Region) is likely to give results that are broadly similar to the short

term accommodation situation in the Shire of Roebourne if a similar survey were conducted there.

From the survey, the characteristics of non-resident workers were found to vary, but general

observations upon their disposition were:

Single Persons Quarters (SPQs) are more likely to contain young single people than other

forms of accommodation, but also house unaccompanied non-resident workers whose

partners and dependants live elsewhere. Although the occupants of SPQs are

predominantly male, most larger establishments also cater for female workers. A relatively

small number of workers live in SPQs as their permanent place of residence;

Many motels have a semi-permanent block booking arrangement for companies, catering

largely to sub-contractors and government agencies. Where permanent housing is in short

supply, motels may supply medium-term interim accommodation for mining company

employees and contractors. Motels are the primary providers of short-term accommodation

for visiting executive, managerial and consulting staff;

The number of hotel occupants varies according to location and availability of other dwelling

types. With a few exceptions, hotels are less likely to provide medium-term accommodation

for non-resident workers than motels, caravan parks and SPQs;

Of all accommodation types surveyed, caravan parks have the most diverse range of

occupants, ranging from usual residents to short-term visitors. These parks usually contain

a mix of working age singles, couples and families with children. Compared with the state

overall, local area caravan parks generally have lower proportions of usual residents who

are retirees; and

Head-leased private housing is sometimes used as interim accommodation for newly arrived

workers with families, particularly those awaiting permanent housing in the local area.

Private housing is also rented by groups of unaccompanied workers, either in the form of

private group housing arrangements or as overflow rooming to existing hostels.8

The Scale and Constitution of the FIFO Community A literature review indicates that the data on FIFO workers in the Shire of Roebourne is not definitive and

is incomplete. The recently released AEC report9 provides some information, but does not provide

sufficient detail to make any definitive conclusions. It provides some estimated breakdown on the size

of the FIFO workforce and their possible location, based on the PDC report, but this is not in the form or

detail to inform the Shire’s particular needs concerning the appropriate level and scale of community

facilities.

There is some data available that can give some insights into the FIFO workforce in the Shire:

8 Queensland Treasury, Office of Economic and Statistical Research, Bowen Basin population report, 2009, Full-time equivalent (FTE)

population estimates, July 2009

9 Fly-In Fly-Out Worker Economic Impact Assessment on Services and Infrastructure Delivered by Local Government in the Pilbara Region, AEC Group, June 2012


19

Comparative Data for Shire of Roebourne from 2011 Census:

Place of Usual Residence (Includes people who state they were at home in the Shire on Census night

plus those who were elsewhere but stated a Shire address as usual place of residence)

Table 5: Population of usual residents

Ref: ABS Census 2006, 2011, Cat 2001.0 Table B01

Note the very large increase in the male population. These data will include people living in FIFO

villages and camps who regard it as their usual residence.

Place of Enumeration (The Place of Enumeration count is a count of people based on where they

were located on Census Night. In many cases people are located away from where they usually live.

Census counts by place of enumeration include overseas visitors.)

Table 6: Population by place of enumeration on Census night

2001 2006 2011

Male 8,757 10,922 19,612

Female 7,217 8,430 10,356

Total 15,974 19,352 29,968

Ref: ABS Census 2001, 2006, 2011 Cat 2003.0 Table T01

The difference between the two tables (i.e. approximately 2,929 in 2006 and 7,068 in 2011) gives an

indication of the approximate scale of the FIFO workforce in the Shire.

Note that the very substantial increase between 2006 and 2011 is likely to be predominantly construction-related. The Geographia survey gives an indication (based on a very small sample) that in the order of 73% of FIFO workers may be construction–activity related, indicating a longer term FIFO operational workforce in the Shire of around 2,000 – 3,000. To assist in firming up this estimate, the 2011 Census data indicates that out of a total of 7,407 dwellings in the Shire, 2,390, or 33% of them, were being rented from bodies other than a private landlord or public housing authority. This includes employer-provided housing and accommodation in caravan parks and residential parks. The Geographia survey also confirms the short term nature of the construction non-resident workforce,

compared to the workforce involved in operations. This is shown in the table following.

2006 2011 Change

Male 8,865 13,751 4,886

Female 7,558 9,149 1,591

Total 16,423 22,900 6,477


20

Duration of employment – FIFO workers

Duration of Employment Construction FIFO workers Operations FIFO workers

less than 1 yr 32% 30%

1 to 2 yrs 36% 18%

3 to 5 yrs 27% 16%

6 to 9 yrs 0% 6%

10+ yrs 5% 21%

Total 27.8% 72.2%

Source: Geographia Survey

The Geographia survey also found that while access to health services is very important, the range and

quality of community services is not high on the factors affecting whether or not to relocate to the Shire.

The main factors affecting relocation decisions for FIFO workers in the 2012 survey are:

Cheaper accommodation & more housing choice;

Better hospital & medical services;

Lower cost of living;

More cafes & restaurants; and

Better shopping.

The figures for overall FIFO workforce size above are of the same order of magnitude but at a little variance from those reported in the 2012 AEC Group report10, which estimates a 2012 Shire population of 20,172 and a FIFO workforce of 10,719. This would indicate a current core service population of around 30,900. Of this a large proportion is involved in the construction phase of minerals resources projects. It size and nature will change as the resources projects now under construction move towards an operational phase and if the economy diversifies away from its current resources base. There are good indications that a very high proportion of the current FIFO workforce is in the construction

sector and that the current high rate of short-term accommodation demand is driven by construction

activity for major projects. At some stage in the medium term this activity will decrease substantially and

the construction sector in the Shire will then resemble that found in a relatively stable community.

10 Fly-In Fly-Out Worker Economic Impact Assessment on Services and Infrastructure Delivered by Local Government in the Pilbara Region, AEC Group, June 2012


21

2.4 Imports and exports

Regional Exports data represents the value ($) of goods and services exported outside of the defined region that have been generated by businesses / organisations in each of the industry sectors within the region. Another way of defining exports is as an inflow of money into the region, i.e. Motels have an inflow of money from people who live outside the region’s boundaries thus they are earning export dollars. No distinction is made between domestic and international exports. For instance, so exports of goods and services from Pilbara Region include sales to the rest of the region. Regional Imports data represents the value ($) of goods and services imported into the defined region by businesses / organisations in each of the industry sectors. Another way of defining imports is as an outflow of money from the region, i.e. a local business outsourcing accountancy services to a firm in another region which results in an outflow of money thus they are importing services. No distinction is made between domestic and international imports, and so imports into Pilbara Region include goods and services sourced from the broader region.

The value of the import and export flow of the major industries is shown below, indicating, consistent with the value add data, a net outflow in mining and construction industries.

Figure 3: Shire of Roebourne value of imports and exports (major industries) $M

Data Source: PDC / REMPLAN

When the Shire import and export data for other industries an interesting picture emerges of high levels of import flows compares with export flows from the Shire across a wide range of services. This is shown in the table following:

$0.00 $2,000.00 $4,000.00 $6,000.00 $8,000.00 $10,000.00 $12,000.00

Mining

Construction

Manufacturing

Transport, Postal & Warehousing

Exports Imports


22

Figure 4: Shire of Roebourne value of imports and exports (other industries) $M


Note that the Shire is net importer of many services, including many that service the local economy and local community. Most of these services would be sourced from major administrative and commercial centres, principally Perth, but also other Australian major centres (Sydney, Melbourne, Canberra) and overseas. This points to an area of expansion as the community expands and diversifies. It would also increase as the role of Karratha as the principal service centre for eh Pilbara region expanded. An objective would be for the Shire to be a net exporter of services such as health, education, professional and administrative services and knowledge industries in general to the wider Pilbara region.

$0.00 $20.00 $40.00 $60.00 $80.00 $100.00 $120.00 $140.00

Electricity, Gas, Water & Waste Services

Accommodation & Food Services

Rental, Hiring & Real Estate Services

Public Administration & Safety

Wholesale Trade

Education & Training

Professional, Scientific & Technical Services

Administrative & Support Services

Retail Trade

Agriculture, Forestry & Fishing

Other Services

Arts & Recreation Services

Information Media & Telecommunications

Financial & Insurance Services

Health Care & Social Assistance

Exports Imports


23

2.5 Pilbara regional economy

The Shire of Roebourne is a significant component of the Pilbara Region. The Pilbara is often described as the engine room of the nation because of its significant contribution to the national wealth. Its immense reserves of natural resources provide massive direct export sales and also fuel a thriving economy of support services. Resource sector The Pilbara's economy is strongly dominated by the mining and petroleum industries and is considered to be the State's premier mining region. These industries are growing at a considerable rate. The largest export commodity in Australia is iron ore and approximately 95% of this is produced in the Pilbara. Demand for iron ore principally comes from Japan, China and other rapidly developing Asian nations. In 2010, approximately 400 million tonnes of iron ore were exported from the Pilbara, worth AU$46.5b. New projects are continually being proposed and developed in the region as extensive geological research is uncovering more resources. The region also produces 70% of Australia's natural gas. This is sourced from the Carnarvon Basin off-shore and is serviced and processed onshore from the Shire of Roebourne at Dampier. In addition to iron ore and natural gas, 85% of Australia's crude oil and condensate comes from the Pilbara. The Pilbara also produces a range of other minerals having a total 2011 value of AU$2.4b. This is led by:

gold and silver at $1 billion;

copper at $643 million;

manganese and salt at $585 million; and

other minerals at $131 million. While the Shire of Roebourne is only a small proportion of this, it is one of the region’s major service and extraction hubs where port, rail, government and industry intersect.

Value of minerals and energy by LGA region (2012 value)

Region Value ($)

East Pilbara 29,828,820,725

Ashburton 20,002,483,643

Roebourne 155,782,451

Port Hedland 753,742,294

Total 50,740,829,113

Offshore Petroleum 24,373,312,323

Source: Dept of Mines and Petroleum, Mineral and Petroleum Statistics Digest 2012

Other industries Other industries include manufacturing, tourism, sheep and cattle, fishing and aquaculture. All figure prominently in the economy of the region, providing a diversity of activity - and a range of business


24

opportunities. A number of projects aimed at economic diversification are also currently being trialled, including solar energy production at Marble Bar and algae production for biofuel and protein.

2.6 The Shire in the Pilbara economy

Major resource projects There are three major resource companies operating in the Shire (Rio Tinto, Woodside Energy Ltd and Citic Pacific Mining). Each company is currently operating or rolling out mining and energy extraction infrastructure investments worth an estimated $69 billion (Table 9). The most significant include the Woodside operated North West Shelf Venture, Woodside’s Pluto project, Rio Tinto’s expansion of Dampier Port, Cape Lambert Port and CP Mining plans for Cape Preston. A total of more than 22,000 construction jobs and 4,000 permanent jobs are to be created from these projects.

West Pilbara - Selected Committed Resource Infrastructure Projects

Project Capital

Investment Construction

Workforce Operational Workforce

Devil Creek Development Project Apache Energy/ Santo gas processing

$896m 200 20

Citic Pacific Mining Sino Iron Ore Project US$5.2b 4500 800

Chevron Gorgon Joint Venture offshore gas extraction $43b 3500 600

Woodside Pluto offshore gas extraction $12b 4000 300

Woodside joint venture gas project $7.9b - -

Total $69b 12,200+ 1,720+

(Data source: Prospect)

In addition to this, some $16.8 billion worth of investment is under consideration or at pre-feasibility stage. It is noteworthy from the table above that the total operational workforce represents only around 14% of the construction workforce.

Scale The Shire contains a very high proportion of the Pilbara economy – around 33 % of all employment and between 30% and 60% of most services. It has only 19% of all Pilbara employees in the mining sector. It has a higher proportion than the Pilbara average of employment in the following sectors:

Electricity, Gas, Water & Waste Services;

Public Administration & Safety;

Construction;

Professional, Scientific & Technical Services;

Retail Trade;

Rental, Hiring & Real Estate Services;

Financial & Insurance Services;

Manufacturing;

Transport, Postal & Warehousing;

Information Media & Telecommunications;

Education & Training;

Wholesale Trade;

Health Care & Social Assistance;

Administrative & Support Services; and

Other Services.


25

This is illustrated in the following graph.

Figure 5: Shire of Roebourne – proportion of Pilbara total: employment


Interestingly it has a lower than average employment in arts and recreation services. This is an area that will need to be supported to provide the lifestyle values that will be expected by new residents if the population is to expand to those anticipated in the higher level scenarios. Note also that the proportion of workers in the construction industry is likely to decline from 2014 unless major new projects are announced.

Mining activities in the Shire produce over $6,000 m of value add, but this is only 23% of the Pilbara total. The Shire provides 40% – 50 % of value add in the region as a whole in a large number of service categories, with the highest proportions in:

Electricity, Gas, Water & Waste Services;

Manufacturing;

Construction;

Public Administration & Safety;

Professional, Scientific & Technical Services;

Retail Trade;

Rental, Hiring & Real Estate Services;

Financial & Insurance Services;

Transport, Postal & Warehousing;

Information Media & Telecommunications;

Education &Training;


26

Wholesale Trade;

Tourism; and

Health Care & Social Assistance. These generally mirror the employment data and indicate the strengths of the Shire in a regional context.

Figure 6: Shire of Roebourne – value add


Tourism Tourism is a category of economic development that would have an expansion objective and requires separate analysis. The Tourism category is an amalgam of activities across various industry sectors such as retail, accommodation, cafes & restaurants, cultural & recreational services. The tourism industry sector services the activities of persons travelling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes not related to the exercise of an activity remunerated from within the place visited.

$-

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20%

30%

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50%

60%

70%Shire of Roebourne - Value Add

Value Add

Proportion of Pilbara total


27

It currently employs 750 people in the Shire of Roebourne and accounts for 5.1% of total employment in the Shire. This is a much lower proportion than in tourist-oriented localities such as the Shire of Augusta-Margaret River where one sub-category of tourism employment (accommodation and food services) accounts for over 13% of Shire employment.

Figure 7: Tourism employment in the Pilbara

Source: Australian Bureau of Statistics National Accounts Tourism Satellite Account.

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

0

100

200

300

400

500

600

700

800

Ashburton (S) East Pilbara (S) Port Hedland(T)

Roebourne (S)

Tourism employment

Proportion of LGA totalemployment


28

3 Growth prospects –the global and regional context

The demand for iron ore is expected to grow; one of the biggest drivers of demand is the growth of China. The Bureau of Resources and Energy Economics forecasts that iron ore world demand will continue to grow up to nearly 2000 mtpa by 2025.11

In 2011 approximately 410 million tonnes of iron ore was exported from the Pilbara at a value of AU$60.3b, approximately 45% of world iron ore exports.

Iron Ore: Based on data provided from the Bureau of Resources and Energy Economics and the WA Department of State Development, the current identified figures for additional jobs required in the Pilbara between 2012 and 2018 are:

27,300 construction jobs;

15,870 operational jobs.

Primary risks to the growth of the Pilbara iron ore industry are:

Change in the Chinese economic outlook;

Cost pressures;

Lack of skilled workers;

International competition from Brazil and West Africa; and

Infrastructure constraints, ports, roads, housing, power, water.

The Pilbara LNG industry is experiencing major growth simultaneously with the iron ore industry and looking to expand to 30 mtpa by 2015 and 60 mtpa by 2020.

LNG: In 2011 the world LNG trade measured 238 million tonnes of LNG. Due to location, the growth in the Asia pacific region is most important to the Pilbara and this trade in 2011 was measured at 147 million tonnes annually. Demand for LNG in the region is expect to continue to increase at a 6% yearly average.

Based on data provided from the Bureau of Resources and Energy Economics and the WA Department of State Development, the current identified figures for additional jobs required in the Pilbara between 2012 and 2018 are:

11,330 Construction jobs;

708 Operational jobs.12

Primary risks to the growth of the Pilbara liquefied natural gas industry are:

Demand for skilled labour will outstrip supply;

Increase in capital and labour costs;

Development of alternative fuel sources; and

Competition from other suppliers.

11 (Resource and Energy Quarterly March 2012 BREE) 12 WA Chamber of Minerals and Energy


29

Other minerals: Based on data provided from the Bureau of Resources and Energy Economics and the WA Department of State Development, the current identified figures for additional jobs required in the Pilbara between 2012 and 2018 are:

2,176 construction jobs;

915 operational jobs.

Given the current investment detailed across all categories of minerals and petroleum in the Pilbara it is estimated by the WA Chamber of Minerals and Energy that an additional workforce of approximately:

40,000 construction workers and;

17,493 operational workers; will be needed between 2012 and 2018.


30

4 Competitive Position

To get a better idea of how to achieve the Pilbara Cities vision, an investigation of the competitive position of the Pilbara and of the Shire is instructive. A range of factors largely explain differences in regions’ economic prosperity and growth patterns. These include differences in resource endowments, the size of markets, demography and population dispersion, levels of human capital, the extent and incidence of taxation and the level and quality of public expenditure, as well as competition and market settings. It is therefore useful to investigate prospects for the region through the prism of its economic performance and competitiveness relative to other regions or wider areas. A competitiveness index developed by the Regional Australia Institute and drawing on the World Economic Forum’s Global Competitiveness Report provides some guidance13. The 10 themes of regional competitiveness are distinguished between:

Those that are essentially fixed in nature and cannot easily be adjusted (such as the presence of natural resources or market size); and

Those that can be changed by policy decisions, either directly through a decision to build, invest or change (such as institutions and infrastructure), or at least influenced by policy (such as human capital and labour market efficiency).

An assessment of the Pilbara on these parameters provides an indication of the areas of comparative

strength in the region and those that need attention or strategies to deal with them.

13 Regional Australia Institute: Insight Regional Australia,

http://insight.regionalaustralia.org.au/#


31

In the following section graphs for selected parameters show the relative comparative rankings for the Pilbara Region against all 55 Australian Regions identified by Regional Development Australia and using the data measures utilised in the Insight project. Note that this includes regions within capital cities. The graphs show relative distance from the median rank; 1 represents the highest ranking and -1 the lowest ranking amongst the regions.

The section also includes comparative rankings for each of the Pilbara local government areas against all 560 local government areas in Australia. These are displayed with similar measures as for the regional comparisons. This gives information of the ranking of the Shire of Roebourne against other Pilbara local government areas as well as giving an Australia–wide comparison.

4.1 Institutions

Competitiveness Index

Element

Pilbara Situation

Regional government

influence at state and

national level

The Pilbara is a high profile regional location and has very good

exposure at the state government level and, to a lesser extent,

nationally.

Clear roles and

responsibilities in regional

governance

At the development level there is quite a lot of crossover between

individual local governments and state agencies and at

development policy level there is some duplication across all

three tiers of government.

Financial burden of local

government

The local governments have very high financial commitments for

the provision of infrastructure and services for a rapidly

expanding population, with a limited rate base and are under

constant financial pressure.

The local and regional

assistance available for

businesses.

The local and regional bodies have limited funds available for

direct business assistance, but it ranks amongst the highest

amongst Australian regions.

Regional government

independence (Councils with

more autonomy are more

able to respond to local

needs/demands)

Compared with some other Australian jurisdictions, there is a

high reliance on government decisions made outside of the

region, particularly at State government level.


32

Overall: In comparative terms the Pilbara is in a strong institutional position: its influence at state and

national level is comparatively high and regional governance is relatively transparent with

reasonable clarity of roles However, regional autonomy is quite low: local capabilities are

highly dependent on continuing influence and good relations with the state government (in

particular) and national government for resources; there is limited ability to raise funds locally

for expansion projects. The relatively low proportion of people working in the public sector

has positive and negative aspects to it: there is reduced understanding amongst the various

levels of the bureaucracy of regional conditions, but a higher reliance on private sector

activity to drive the economy.

4.2 Infrastructure and services


Element

Pilbara Situation

Road infrastructure The region contains part of the intrastate regional road network - given

the relative remoteness of the Pilbara it is a high quality connection.

Aviation infrastructure The region has several large airports, including two that have regular

interstate connections and are capable of expansion to regular

international operations.

Access to higher

education.

There is only limited access to higher education – the Pilbara Institute

provides a range of vocational education and training courses, but

there is virtually no access to tertiary education

Port infrastructure The region contains some of the largest and busiest bulk ports

anywhere. It has no or limited capacity for general cargo. A common

user facility is planned but not yet executed. This would enable

-1 -0.75 -0.5 -0.25 0 0.25 0.5 0.75 1

Public service: % of workforce employed in thepublic service

Financial burden of local government

Transparency of local government policy

Clear roles and responsibilities in regionalgovernance

Local government assistance for businesses

Regional government influence at state/nationallevel

Regional Relative Strengths: Institutions

Relative Strength


33


Element

Pilbara Situation

servicing of new projects outside of the region, either off-shore or in

the Canning Basin.

Land cost Land cost generally is very high for all classes of accommodation. The

median cost of buying a house in December 2012 was $747,000 in

Karratha; $844,000 in Port Hedland; $840,000 in Newman and

$890,000 in Onslow. It was $495,000 in Perth.

Access to hospital

services and to allied

health services

With the establishment of the Nickol Bay Hospital in Karratha and the

South Hedland Health Campus, there are good quality district and

regional hospitals, but limited specialist services. There is evidence

that people need to leave the region for long periods for specialist

treatment. There is limited aged care available.

-1 -0.75 -0.5 -0.25 0 0.25 0.5 0.75 1

Access to allied health services: % of workforce employedin health services (excl hospitals)

Access to technical or further education (% of working agepopulation attending)

Access to GP services: Number of per capita

Access to hospital services: Number of people employedin hospitals in a region per capita

Access to tertiary education services: (% of working agepopulation attending)

Police services: Number of people employed in policeservices per capita

Regional Relative Strengths: Essential Services

Relative Strength


34

Overall: The region has good transport connections and infrastructure. However it ranks poorly in all

aspects of access to health services and education services. These are critical areas if the

population is to be to retained and expanded. Extended GP, specialist and aged services

are required to service population growth and to meet Pilbara Cities objectives. There is a

critical need for vastly expanded access to tertiary education and also technical and further

education.

The Shire of Roebourne matches the regional pattern across all measures, with low rankings

for all essential services except police services. On a per capita basis, Port Hedland ranks

much higher than The Shire of Roebourne for access to health services.

4.3 Macroeconomic conditions


Element

Pilbara Situation

Population churn The population turnover is high. This makes it difficult to develop a

large and consistent group of regional ‘champions’.

Stability of the local

economy (local inflation)

Local inflation is high – local costs generally are high compared

with elsewhere in the country.

Building approvals – value

of new investment

The rate of building approvals is generally high, showing good

evidence of business willingness to invest in the local community.

Total income per person The average income is much higher than the national average,

with a very high proportion of individual workers earning very high

incomes.

-1 -0.75 -0.5 -0.25 0 0.25 0.5 0.75 1

Access to GP services: Number of per capita

Access to allied health services: % of workforceemployed in health services (excl hospitals)

Access to tertiary education services: (% of workingage population attending)

Access to technical or further education (% ofworking age population attending)

Access to hospital services: Number of peopleemployed in hospitals in a region per capita

Police services: Number of people employed inpolice services per capita

LGA Relative Strengths: Essential Services

East Pilbara

Ashburton

Port Hedland

Roebourne ShireRelative Strength


35

Overall: Average incomes are high, meaning there is wealth in the community and latent demand

for new business initiatives; however the cost base is very high.

4.4 Human capital


Element

Pilbara Situation

Median age of the

workforce

Generally the workforce is younger than the national average, with

a high proportion in the 25 to 44 year age groups.

Workforce education levels The region has a lower proportion of people with tertiary education

in the workforce, even compared with other resources regions in

Australia.

-1 -0.75 -0.5 -0.25 0 0.25 0.5 0.75 1

English proficiency: % population with English as firstlanguage or speaks English well

Early childhood performance: % of childrendevelopmentally vulnerable

School performance - Primary: % students in top 2 Bands(literacy and numeracy)

School performance - Secondary: % students in top 2 Bands(literacy and numeracy)

University qualification: % of working age population withuniversity qualifications

Technical qualification: % of working age population withcertificate and diploma qualifications

Lifelong learning: % of working age population participatingin education and training

Health: Adults with none of the risk factors of smoking,harmful use of alcohol, physical inactivity, obesity

Early school leavers % of adult population that completedyear 12

Regional Relative Strengths: Human Capital

Relative Strength


36

Overall: The region has a relatively young, healthy and energetic workforce. However, the region

ranks comparatively poorly on other measures of human capital, with a lower than average

incidence of trade qualifications and of tertiary education amongst the workforce. The high

proportion of FIFO workers limits the ability of this part of the workforce to contribute to

regional expansion beyond the specific project on which they are working. Of particular note

is the relatively low school performance scores at both primary and secondary level. This is

a key factor that must be improved if population retention and growth is to be achieved.

At the LGA level, both the Shire of Roebourne and Port Hedland have higher than average

rankings in population health measures and lifelong learning and the Shire of Roebourne

has good scores on early childhood performance. These are good signs that there is a level

of comparative attraction on some key measures in Karratha.

4.5 Labour Market Efficiency


Element

Pilbara Situation

Wage/labour costs Very high

Unemployment rates in the

region

Generally low

Levels of labour force

participation in each region

Generally high

-1 -0.75 -0.5 -0.25 0 0.25 0.5 0.75 1

English proficiency: % population with English as firstlanguage or speaks English well

Early childhood performance: % of childrendevelopmentally vulnerable

School performance - Primary: % students in top 2 Bands(literacy and numeracy)

School performance - Secondary: % students in top 2Bands (literacy and numeracy)

University qualification: % of working age population withuniversity qualifications

Technical qualification: % of working age population withcertificate and diploma qualifications

Lifelong learning: % of working age populationparticipating in education and training

Health: Adults with none of the risk factors of smoking,harmful use of alcohol, physical inactivity, obesity

Early school leavers % of adult population that completedyear 12

LGA Relative Strengths: Human Capital

East PilbaraAshburtonPort HedlandRoebourne Shire

Relative Strength


37

Youth unemployment Generally low

Skilled labour Generally very low

Welfare dependence Generally low (except for indigenous community)

Overall: In comparative terms the labour force is relatively engaged, flexible and mobile.

However, the participation rate is quite low, possibly partly reflecting the indigenous

population , but also possibly reflecting the lower than average participation of partners

of people working in major projects who might regard their time in the Pilbara as relatively

short term and not have employment that meets their needs or expectations. The level

of skilled labour (i.e. people employed as managers and professionals) is amongst the

lowest in the country.

At the LGA level both the Sire of Roebourne and Port Hedland have lower than

average levels of welfare dependency.

-1 -0.75 -0.5 -0.25 0 0.25 0.5 0.75 1

Skilled labour: % of workforce employed asmanagers and professionals

Participation rate: % working age population in thelabour force

Welfare dependence: % of population usingGovernment support main source income

Unemployment rate

Young unemployment

Regional Relative Strengths: Labour Market Efficiency

Relative Strength

-1 -0.75 -0.5 -0.25 0 0.25 0.5 0.75 1

Skilled labour: % of workforce employed asmanagers and professionals

Participation rate: % working age population in thelabour force

Welfare dependence: % of population usingGovernment support main source income

Unemployment rate

Young unemployment

LGA Relative Strengths: Labour Market Efficiency

East Pilbara

Ashburton

Port Hedland

Roebourne Shire

Relative Strength


38

4.6 Technological readiness:

Regional business and individual effectiveness using information and communication technologies

(ICT); Preparedness for technological development


Element

Pilbara Situation

Government IT investment Karratha and Port Hedland are served by the Telstra fibre optic

trunk cable

High-speed broadband

availability

Large parts of the major centres already have NBN commenced

or are on the three-year rollout program

Mobile phone coverage Adequate in the major centres

Businesses in technology

related industries

Average for a regional centre

-1 -0.75 -0.5 -0.25 0 0.25 0.5 0.75 1

Businesses in technology and related industries: % ofworkforce employed by technology related businesses

Internet connection: % of households with internetconnection

Workers in ICT and electronics: % employed as ICT andelectronics specialists

Broadband connections: % Households and businesseswith broadband internet

Regional Relative Strengths: Technological Readiness

Relative Strength


39

Overall: There is coming to be good access to high speed broadband in most parts of the region and

particularly in the main settlements. This is not a barrier to growth. There is no particular

expertise amongst the business community for technology related industries.

At the LGA level, the Shire of Roebourne has the highest relative proportion of workers in

ICT occupations than other Pilbara shires, except for the much smaller Shire of East Pilbara.

4.7 Business sophistication


Element

Pilbara Situation

Quality of region’s overall

business networks

Small business networks and local chambers of commerce exist

and can be expanded.

Dominance of large

employers - number of large

firms in the region.

Economy is dominated by a very small number of very large

employers

Exports High proportion of imports in all sectors (except for mining),

particularly services

Economic diversification Low

Access to local finance All channelled through Perth and elsewhere

Income source – own

business

Relatively small SME sector

-1 -0.75 -0.5 -0.25 0 0.25 0.5 0.75 1

Businesses in technology and related industries: % ofworkforce employed by technology related…

Internet connection: % of households with internetconnection

Workers in ICT and electronics: % employed as ICTand electronics specialists

Broadband connections: % Households andbusinesses with broadband internet

LGA Relative Strengths: Technological Readiness

East PilbaraAshburtonPort HedlandRoebourne Shire Relative Strength


40

Overall: The region is dominated by very large employers and has a small and underdeveloped small

and medium business sector. With several exceptions there is not a tradition of new

enterprise creation.

The Shire of Roebourne shows the most diverse and sophisticated business environment in

the Pilbara, with the highest level of income sourced form own business, the highest levels

of economic diversification and reasonable access to local finance.

-1 -0.75 -0.5 -0.25 0 0.25 0.5 0.75 1

Dominance of large employers

Exporters, importers, wholesalers: % employed

Access to local finance: Number of banks/lendinginstitutions as a share of total businesses

Economic diversification

Income source - Own business

Exports: % business sales revenue earned from exports

Regional Relative Strengths: Business Sophistication

Relative Strength

-1 -0.75 -0.5 -0.25 0 0.25 0.5 0.75 1

Dominance of large employers

Exporters, importers, wholesalers: % employed

Access to local finance: Number of banks/lendinginstitutions as a share of total businesses

Economic diversification

Income source - Own business

LGA Relative Strengths: Business Sophistication

East PilbaraAshburtonPort HedlandRoebourne Shire Relative Strength


41

4.8 Innovation


Element

Pilbara Situation

Human resources in science

and technology

Comparatively low

Presence of research

organisations

Very low

Patents Very low

Expenditure on research and

development

Very low, except for within major companies as part of their

operations research; this explains the high overall ranking.

Overall: Amongst the major minerals and resources companies the level of leading edge research

and development is very high and its application in the region is widespread, resulting in

continuous innovation and globally competitive operations. This presents an opportunity for

the future of the region. It provides a level of skill and expertise that can be applied to other

regional enterprises and also opportunity for supply chain and spin-off enterprises.

-1 -0.75 -0.5 -0.25 0 0.25 0.5 0.75 1

Research and development managers: % employed

Human resources in science and technology

Presence of research organisations: % of researchorganisations out of all businesses

Expenditure on research and development:Average expenditure on R&D per business

Regional Relative Strengths: Innovation

Relative Strength


42

4.9 Economic fundamentals


Element

Pilbara Situation

Size of local market There is a substantial and growing population base, although it is

relatively small compared with most other Australian regions. A key

strategic advantage is the presence of very large purchasers in the

form of the major mining companies – local businesses able to

supply to them will develop skills and expertise in selling to world-

class purchasers, which will increase their viability for expansion

outside of the region, including international expansion.

Number of businesses

relative to population size

There is a relatively small business sector – this might be explained

by the presence of very large employers and the high cost base

Proximity to markets Main metropolitan markets are distant and will have high freight cost

to service them. This will affect the viability of some potential agri-

business diversification projects

Overall: While the region currently has a relatively small local market, it is coming to a scale

that it can support a greater range and diversity of business and services; the presence

of world-class purchasers provides a substantial opportunity.

-1 -0.75 -0.5 -0.25 0 0.25 0.5 0.75 1

Net primary productivity

Wage/labour costs: Average wage and salaryincome

Size of economy: Value of business turnover

Population: Number of working age residents

Building approvals: Value of building approvals percapita

Regional Relative Strengths: Economic Fundamentals / Market Size

Relative Strength


43

4.10 Natural Resources


Element

Pilbara Situation

Regional access to natural

resources

There are abundant mineral resources but very limited water

resources.

Physical attributes of a

region, and whether they

are conducive to industry

The climate is not conducive to agriculture, except for some potential

specialist and technology-intensive applications. There is CO2 feed

stock and good conditions for intensive algae farming. There are

high-value heritage sites, giving tourist potential.

Overall: There is opportunity for several main classes of expansion to the externally-oriented sectors

of the Pilbara economy:

Expansion of the economic base – the probability of development of the main minerals

and energy projects has been addressed and analysed in the Chamber of Minerals and

Energy report. This shows some expansion, but a general slowing of new construction

and a fairly quick transition to an operational phase overall. However, there are new

prospects that may arise and become viable over time and be either located in or

serviced from the Pilbara. These include Canning Basin gas projects and the Balmoral

South magnetite project.

Diversification projects: several of these are possible and are addressed below.

Exportable services: at the moment the services base of the Pilbara is small and

underdeveloped. However research institutes and tertiary education focussing on further

development of the region’s base minerals and energy industries and spin-offs form

technology-based diversification projects would provide a services sector with output

applicable outside of the region. This is an area of great opportunity for the region and

is one key to achievement of the Pilbara Cities vision.


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5 Shire growth prospects – the minerals and energy sector

Regional growth is primarily driven by major projects in the M & E sector. A recent report released by the Chamber of Minerals and Energy14 investigates all resources projects currently underway, committed or in planning (up to a stage of preliminary feasibility study) and uses a weighting methodology incorporating the probability of any individual project proceeding to provide estimates of labour demand from resources projects. It also uses indirect employment multipliers and family population multipliers to arrive at estimates of population change in Pilbara LGAs arising from resources projects. The report recently released by the Chamber of Minerals and Energy indicates only limited likely expansion of resource projects within the Shire itself.15 The CME/PWC report investigates all resources projects currently underway, committed or in planning (up to a stage of preliminary feasibility study) and uses a weighting methodology incorporating the probability of any individual project proceeding to provide estimates of labour demand from resources projects. It also uses indirect employment multipliers and family population multipliers to arrive at estimates of population change in Pilbara LGAs arising from resources projects. Continuing growth for the regional economy is forecast: the CME report estimates that the workforce required to meet current growth plans for the resources sector in the Pilbara is expected to peak at just over 65,500 in 2014, up from over 51,000 in 2011 - an increase of 28.4 per cent. The overall employment outlook is a function of construction and production activity. The construction workforce will begin to fall after 2012, but will remain above 2011 levels until 2015. The operations workforce will see sustained growth to 2020. The net effect is minerals and energy sector employment for the region peaking at just over 65,500 in 2014, up from over 51,000 in 2011, with minerals and energy employment settling at around 55,000 from 2018. The overall conclusions for the Shire of Roebourne are:

The Shire of Roebourne will see a decline in the overall workforce directly related to

minerals and energy projects. This decline will commence in 2014 and increase through to

2018;

A major driver of the decline is the large construction workforce already employed in the

area in 2011. This workforce will decrease as the current set of projects is completed; and

Although there will be a corresponding increase in the operations workforce, it will not be

large enough to offset the decline in construction personnel.

14 PricewaterhouseCoopers, Pilbara Population and Employment Study, Chamber of Minerals and Energy of WA, November

2012 15 PricewaterhouseCoopers, Pilbara Population and Employment Study, Chamber of Minerals and Energy of WA, November 2012


45

The expectation is therefore for some increase in operational workforce to 2020 (around 2,100 increase over 2011), but for a very substantial decrease in construction workforce (up to 10,600 by 2020) as projects are completed. This would only change if new projects not yet at a stage of preliminary feasibility study were to arise before 2020 and if major infrastructure projects, for example Anketell Port were to commence within that time. If this were to occur it would likely extend the duration over which the construction FIFO workforce was a significant factor in the economy of the Shire (for example extending demand period for short stay and TWA accommodation), but the end outcome would be similar to that described here.

The expected change in minerals and energy projects workforce is shown in the graph below.

Figure 8: Shire of Roebourne: Minerals & Energy Workforce by Type (Incremental to 2011) (‘000s)

Source: PricewaterhouseCoopers 2012

The expected impact of these changes on the FIFO and residential workforce population is shown in the following graphs. The first shows quite substantial decreases in the FIFO construction workforce and small increases in the operational FIFO workforce and residential workforce:


46

Figure 9: Shire of Roebourne: FIFO vs. Residential (Incremental to 2011 – All M&E projects)(‘000s)


The second graph shows the proportionate changes over time, with almost no construction workforce

for minerals and energy projects in the Shire after 2018.

Figure 10: Shire of Roebourne: FIFO vs. Residential (All Minerals & Energy projects)


Therefore the FIFO proportion noted above for 2011 for metal or mining and oil and gas extraction is likely to be fairly constant in number, but construction FIFO likely to decline to almost zero. This correlates with previous discussions with Woodside, the main oil and gas sector employer in the Shire, who advise a total stable operational workforce of around 1,000 in the Shire, of whom around 300 are FIFO.

This will be accompanied by a corresponding reduction in demand for camp beds in the Shire of Roebourne, although the CME study does study show a significant increase in demand in the Shire of East Pilbara – requiring over 17,000 additional camp beds by 2017). This shows the volatile nature of demand when major construction activity is driving it. It also is a source of potential business for Karratha firms that are able to service remote transient communities.


47

The third graph includes the population multipliers and shows the expected maximum impact of the increases in the residential workforce on the population of Karratha. The expectation is for minerals and energy projects overall to drive fairly modest increase in the Karratha population, an increase of around 1,300 from 2011 to 2021.

Figure 11: Karratha – M&E employment effects on population (incremental to 2011) (‘000s)


Note however, there is a long list of prospective resources projects, some of which are accounted for in the CME analysis above, but some which may become viable in the medium and longer term. A full list of prospective projects is attached as Appendix 7. These new prospects that may arise and become viable over time and be either located in or serviced from the Pilbara and these would re-ignite the construction sector. These include Canning Basin gas projects and the Balmoral South and Balla Balla magnetite projects. However, there are several threats facing Australia‘s LNG market. High project costs, scarce labour supply, a strengthened Australian dollar, infrastructure bottlenecks and tight environmental regulations could combine to delay the timing of some LNG projects coming on stream. The graph below illustrates various LNG facilities globally based on their output and investment value. This data indicates that new Australian LNG facilities have a relatively high capital costs basis when compared to projects in other countries. The Sabine Pass project in Texas is the first export LNG facility to be constructed and available data indicates that its capital costs are substantially lower than most Australian projects. This gives the prospect of US-sourced LNG competing directly with Australian product and puts a cloud over new LNG projects in Australia in the short and medium term.


48

Figure 12: LNG Project – Output and Investment Value

Source: MacroPlan Research Report

Nevertheless there is substantial activity in the Australian LNG projects and iron ore projects under construction already. Most have long term contracts attached to them. The proximity, low political risk and available resources will enable Australia to maintain a key role in supplying the Asian market. By 2018, global LNG trade will be heavily dominated by Qatar and Australia, with a combined total of approximately 50% of the global market. This outcome would generate a very substantial pricing power for these two countries. The base economic activity for the region is strong. The economy of the Pilbara, particularly the contribution from the resources sector, is the major driver of growth in the region. The Pilbara has impacts on the economic progress of the State, and in turn, is impacted by developments in the State and Australia, including policy settings and competition for inputs needed for large-scale expansion and diversification. Expansion projects in advanced planning include infrastructure that will strengthen the capacity of the Pilbara region overall. These include the Anketell Port project and the Lumsden Point Maritime Common User Facility in Port Hedland. The latter, in particular, will provide infrastructure to service the oil and gas, resources, defence, housing and construction industries. It could provide the capability for the region to play a significant role in newer on-shore and off-shore gas and other resources projects and will have spin-off activity for Karratha businesses.

Possibility of Anketell Port

The Anketell Port project is for the establishment of a bulk ore port at Anketell Point, near to Cape Lambert. It would have a full capacity of 350 mtpa. Stage 1 of the project would be for a 115 mtpa


49

capacity. This would employ 950 in its construction phase for a 6-month period and employ 150 in the operational phase16. The construction of Anketell Port primarily depends on the API West Pilbara project. The Project is a substantial iron ore export operation proposed for the Pilbara region, south of Pannawonica, shown on the map below. Stage 1 of the Project is based initially on pisolite iron ore deposits located 30 km to 85 km south west of Pannawonica.

16 Advice: Dept of State Development


50

Figure 13: West Pilbara iron ore project

There is potential for growth in subsequent stages based on the prospective and extensive tenement

portfolio in the west Pilbara, as well as tenements in the east Pilbara.

API completed the Pre-Feasibility Study for Stage 1 of the Project in May 2008 with the following

primary Project outcomes:

Iron ore mining and export at a rate of 25 million tonnes per annum;

Simultaneous mining of multiple pisolite deposits located on the western region of the

Hamersley Ranges;


51

A heavy haul railway from the mine area to a port location at Cape Preston;

Iron ore stockpiles, processing, blending and ship loading facilities at the port location; and

Capital investment in the order of $A4.0 billion.

API completed the Feasibility Study (FS) for Stage 1 of the West Pilbara Iron Ore Project in June 2010.

The FS reports the technical and financial viability of API’s proposed 30Mtpa Stage 1 development.

However, Aquila Resources has put the West Pilbara iron ore project in abeyance, reportedly due to

funding difficulties.

The West Pilbara Iron Ore project has won state environmental approval for the proposed Anketell Port,

but still needs rail and port construction approvals, key to its plans for exporting 30 million tonnes a year

of ore.

The West Australian state government has said it will not approve construction of Anketell Port until it is

certain the project's backers have the funds to build a mine, a 282 km rail line and the multi-user port,

which will depend on what has become an increasingly volatile iron ore market. The port project therefore

has some uncertainty, although it is possible that API could have it operational by 2015 if funding is

available.

However, it is possible that the State Government will seek an alternative route to development of stage

1 of the project, with a view to operations by the end of 2015.


52

6 Shire growth prospects – diversification projects

A common theme amongst the numerous planning and economic studies for the Pilbara17 and for the Shire of Roebourne is the need to diversify the local economy if the labour force and therefore the population is to expand.

Other base and driver industries have been suggested. For example, a report by Worley Parsons on the land requirements for the establishment of an algae industry in the Pilbara18 notes the Pilbara has a number of characteristics that provide the potential for the future development of sustainable, commercial scale algae industries. The sunny weather conditions, the vast tracts of non-arable land, matched with the proximity of both sea water and world scale sources of concentrated CO2, provide the ideal inputs for high volume algae production. The Pilbara also houses a number of major industries that are significant consumers of diesel, and these industries provide a natural market for regionally produced algae based biofuels.

The report includes a preliminary assessment of potential locations and identifies a site in the Shire of Roebourne south of Dampier as being amongst the most viable, although there are constraints and risks to address.

The report notes, however, that while the Pilbara has many attractive attributes for the development of algae industries, it also has a high cost operating environment. There are a number of other areas around the world that offer similar potential to the Pilbara in terms of attractive attributes for algae production, but which currently offer cheaper operating environments. Such areas include parts of the Middle East, Southern USA, and North Africa. Global competition from these (and other) areas could materially impact the likelihood of the Pilbara becoming a future site of major algae industry developments. Therefore the establishment of this industry could be regarded as possible, but by no means certain in the Shire. Similar factors working against industry establishment are likely to be relevant in many of the other non-mining sector diversification industries that arise for consideration. The labour resources required to operate a full scale 5,000 ha facility would see the employment of in the order of 200 people. Although a high degree of automation is possible, the efficiency of biological processes such as algae production is highly dependent on operator input and expertise. As such, many of these people would require a biological background, and/or a strong understanding of algae production.

17 For example:

Development Australia Pilbara: • Pilbara Report 2012 • Pilbara Regional Plan 2012 – 2017 Pilbara Development Commission / Pilbara Cities Office: • Pilbara Cities Vision document • Karratha City of the North Plan • Pilbara Planning and Infrastructure Framework • Pilbara Regional Council Plan for the future • Pilbara Regional Economy

18 WorleyParsons, Pilbara Algae Industry Study, Pilbara Cities Office, June 2012


53

A further spin-off could be the building of a research institute, using the technical input and technical workforce requirements for algae production facilities as a basis for such an institute. However, this could prove difficult. The effectiveness of research institutes of this type is determined by both the long term commitment of major funding of infrastructure and its ability to attract high calibre researchers. This is long term commitment in a highly competitive and high risk environment. Are more likely path is the establishment of negotiated and managed relationships with existing and internationally recognized research organisations. This would result in a modest number of researchers on site. (As an aside a local example of the difficulty of generating anything more than modest local employment from specialist research and education bodies can be found in the Margaret River Centre of Wine Excellence and Margaret River Education Campus, which despite being located in a region of high quality wine production and in one of the most attractive places to live now has a high proportion of its research and education activities and staff located in Perth.) Aurora Algae have a pilot plant now underway south of Dampier. Subject to the results of the pilot plant the company’s plan is to expand the scale of the plant over time.

Figure 14: Aurora Algae Pilot Plant

Source: Aurora Algae Other potential non-mining export sector projects arise for consideration. Those currently identified by Regional Development Australia Pilbara19 include:

19 Regional Development Australia Pilbara, Pilbara Report 2012


54

Prospective employment (operations)

Project: Skilled professional Skilled technical and semi-skilled

Bio-fuels Project 5 - 10 20 - 30

Hi-Tech Greenhouse 5 - 10 20 - 30

Aquaculture fish farm 4 10

Fish processing factory 2 10 - 20

Source: RDA Other projects will arise for consideration; for example a pilot high intensity horticulture facility in South Australia using seawater desalinated on site shows promise and may represent a technology which could be utilised in the Shire at some stage in the future. Some or all of these, or variation of them have some prospects of implementation and will be important for the economic diversification of the Shire. However, it is important to retain a sense of scale for each of these projects: even a very large project (e.g. the algae farm) in full production provides only a modest contribution to employment growth. Assuming all employment multipliers are applied locally and with minimal FIFO employment the full scale algae farm or 200 workers might account for a population increase in the Shire of only around 500 people. A large number of these projects are therefore required to achieve significant economic diversification of the export driver sections of the economy away from its current resources base and to significantly increase the population to the levels anticipated in the Pilbara Cities program. Direct and Indirect Effects Expenditure or local employment leads to further activity in the economy. The extent to which extra activity circulates and stays in the economy depends upon a number of factors including fly-in fly-out and the size and capacity of the local economy. The following employment multipliers have been calculated by Compelling Economics and are specific for the Pilbara. The multipliers include the industrial and consumption effect of direct employment in the Pilbara Regional Economy.


55

Employment multipliers in the Pilbara

Pilbara industry sector Employment multipliers using 2006/07 national input/output

tables

Employment multipliers updated to 2007/08 national input/output

tables

Agriculture, Forestry and Fishing 1.27 1.27

Mining 1.94 1.97

Manufacturing 2.17 2.04

Electricity, gas, water & waste services

1.5 1.46

Construction 1.73 1.78

Wholesale trade 1.55 1.52

Retail trade 1.16 1.14

Accommodation & food 1.19 1.18

Transport, postal & warehousing 1.5 1.45

Information media & telecommunications

1.49 1.45

Financial & insurance 1.47 1.46

Rental, hiring & real estate services 1.68 1.66

Professional, scientific and technical services

1.42 1.38

Admin & support services 1.42 1.42

Public admin & safety services 1.34 1.32

Education & training 1.22 1.2

Health care & social assistance 1.18 1.18

Arts and recreation services 1.26 1.22

Other services 1.22 1.2

Source: Pilbara Development Commission, Pilbara Regional Economy Version 2, March 2012

Additional jobs in manufacturing have the strongest impact on employment in the Pilbara. With a multiplier of 2.04, a single manufacturing job leads to 1.04 new jobs in the Pilbara regional economy. A high proportion of manufacturing in the Pilbara, both current and prospective activity, is connected to the resources industry, and much current manufacturing activity is likely to be connected to the construction phase of resource projects and will be vulnerable to fluctuations in construction activity.


56

7 Shire growth prospects – regional services

The Population Report identifies the prospect of an increased regional role for Karratha as the main

service centre for the Pilbara, becoming the primary centre in the Pilbara for high-end and specialist

services, particularly in meeting demand for:

Education services;

Health services; and

Administration (private sector and public sector).

It is well placed for this:

It has the largest regional airport, with a capacity for expansion to international operations

under the Airport Master Plan.

It has a substantial health campus.

It has good secondary and some tertiary education facilities.

It is the location of the regional office for a number of government agencies.

It has a good variety of lifestyle attractions around the Nickol Bay area generally; and

It is the largest town in the Pilbara and most likely to contain the mix of community, cultural

and social facilities that will keep attract and keep a wider population mix.

7.1 Education services The provision of high quality tertiary education is a critical requirement for the future of the Pilbara. There are a number of precedents for a substantial regional university in a town of the scale of Karratha and larger.

Institution Students Location / population

James Cook University Townsville

11,500 including 1,500 international

Townsville – 175,000

University of New England, Armidale NSW

Students 17,000, including 12,500 on-line students

Armadale - 26,000

Charles Sturt University:

Multi-campus Bathurst - 37,000 Goulbourn - 30,000 Orange - 38,000 Port Macquarie - 44,300 Dubbo - 39,500 Wagga Wagga - 58,000

Further examples are shown in the appendices to this report. One possible model for the establishment of a university in the Pilbara is the Geraldton Universities Centre. This is an independent, not-for-profit, incorporated body, supporting university courses in Geraldton on behalf of a range of universities including CQUniversity, Charles Sturt University and the University of Southern Queensland. It was generated by initiatives from within the Geraldton community.


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The Geraldton Universities Centre's objective is to facilitate, deliver, promote and provide access to university education for people residing in the Mid-West. It was established in 2002, has been in its own facilities since 2006, and has 187 graduates and 180 current student enrolments. The population of the wider Geraldton region is around 44,000; the Pilbara population is around 63,000 people. The University of Western Australia is examining the possibility of establishing facilities in the Pilbara to bolster research, professional development and undergraduate outreach and support. A UWA Pilbara Taskforce is assisting UWA’s Energy and Minerals Institute (EMI) to examine the many areas of the University’s research, professional development and outreach capabilities that could be delivered through UWA Pilbara. Some potential areas include energy and minerals, the Centre for Rock Art Research and Management, the School of Indigenous Studies, the Oceans Institute, the Centre for Social Impact, the Rural Clinical School of WA and Aspire UWA.

The Regional Australia Institute regional comparisons show that the Pilbara has some way to go in the overall level of its secondary education if it is to be competitive and resilient. The recent expansion of Karratha Senior High School upper school facilities gives promise. The increasing size of this school and of Hedland Senior High School gives opportunity to develop a wide range of programs and develop areas of excellence in secondary education in the Pilbara. An objective is to get these schools to rank amongst the highest in WA in key educational areas; this would help make the two main Pilbara cities a residential place of choice, similar to Perth suburbs with high ranking secondary schools. Boarding facilities for at least one of these schools would further widen their appeal and enable them to fill a wider regional role. An objective for the Shire is for the Karratha Senior High School to increase its size to over 1,000 students (it is currently around 630) and to become the highest standard regional secondary school in WA. A boarding facility at the school would assist his aim.

7.2 Tourism

The growth of the tourism sector will be an urgent action for the Shire from around 2014 on as the construction phase of major projects winds down. Demand for informal FIFO accommodation has underpinned the viability of many of the short-stay establishments in the Shire. There is likely to be capacity and need to change orientation to tourist demand to maintain business turnover. Note that this will spill over to many other areas of economic activity in the Shire, including retail and food services in the same period.

There are many opportunities to increase tourism as a proportion of the total economy from its current

fairly low base. In investigating how this might be achieved it is useful to look at the five ‘A’s of tourism,

namely: attractions, amenity, access, accommodation and activities.

Attractions:

A number of tourist attractions are identified in the Shire or directly accessed through the Shire, including:

Cossack;

Old Roebourne Gaol;

Yaburara Heritage Trail;

Millstream;

Karijini;

Mt Herbert, Wittenoom Road, Chichester Ranges, Roebourne;


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Burrup Peninsula;

Stairway to the Moon from Hearson's Cove;

The Dampier Archipelago; and

The Montebello Islands. Many of these are world-class. The Shire has attractions that can form the basis of a viable and larger tourist industry. Amenity: Tourist amenity is variable across the shire – it is not as advanced or comprehensive as some of its competitor locations. Access: In comparative terms accessibility to the Pilbara is very good – it has good regional road connections and, importantly, a busy airport with a range of interstate and intrastate connections and prospects of international connections. Airfares are comparatively high and if a discount airline were to operate the route it would be a tourist advantage. Accommodation: The Shire is not a major established tourist destination in the way that, for example, Broome or Exmouth are. There are a number of reasons why this might be the case:

Accommodation has been difficult to get and expensive - a FIFO effect;

The region is not prompted as a tourist destination the same way that certain other regions are; and consequently; and

There are few tourist –oriented resorts and facilities, with a small ‘resort’ and caravan parks at Point Samson being the notable exception – but these are a small fraction of the range and scale of tourist accommodation that is available in other similar localities. By comparison, Broome has a wide and extensive range of tourist accommodation and therefore gets much more attention.

There is some evidence that accommodation shortage has led to a major component of the northern tourist market, namely the ‘grey nomad’ caravan and camping trade, to by-pass Nickol Bay and travel direct from Broome to Exmouth20. Activities: Tourist activities are comparatively underdeveloped in the Shire. In large measure they have ben crowded out by the activities of the resource industries. An example is the very low availability of boats for tourist operations to off-shore islands in preference for resources off-shore work. This is an opportunity for expansion. The Shire already undertakes or sponsors a range of events which are becoming drawcards, including Cossack Art Awards, Rd Earth Arts Festival’ NAIDOC week, Karratha Community Celebration plus the FeNaCLNG festival. Opportunity: There are many opportunities for an expansion of the tourism sector:

20 TNS Social Research, Study of Caravan Park Development in Western Australia, 2006


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Better and more facilities for caravan and camping segment. There is an opportunity to examine the possible re-use or re-orientation of existing TWA camps or, at least, the various short stay accommodation facilities which are in and around the major centres in the Shire;

Expansion of adventure tourism – fishing and diving – in the Dampier Archipelago and Montebello Islands. This would be based out of Dampier and Samson;

Industrial tourism; and

Burrup rock art. There are several requirements to facilitate and enable this: Immediate requirements:

An overall coordinated Shire tourism strategy – this could expand to a regional strategy for the Pilbara with the involvement of the PDC and RDA Pilbara;

Skills development;

Promotion;

Link with other areas (e.g. Broome, Exmouth) for packages; and

Accommodation. Longer term expansion of infrastructure capability:

Dampier marina – base for adventure tours ; and

International airport – direct links to Asian capitals.

A measure of success for the tourism industry in the Shire would be for it to be able to regularly house industry and academic conferences, including international conferences, of some size. If it could do this it wold demonstrate that it has the requisite accommodation, facilities and transport connections to also appeal to a wider tourist market. This is an objective of a Shire tourist strategy. An expansion of Karratha airport to include regular international services – particularly from business centres in China, Singapore or India is a good medium term objective. The good interstate connections from Karratha means that such a route need not have Karratha as a primary destination, but possibly a stopover on the way to or from Sydney, Melbourne or Perth.

7.3 Administration, producer services, consumer services

The analysis in section 2 shows that the Shire houses a large proportion of the regions services and administration, including:

Public administration & safety;

Construction services;

Professional, scientific & technical services;

Retail trade;

Rental, hiring & real estate services;

Financial & insurance services;

Manufacturing and manufacturing services;

Transport, postal & warehousing;

Information media & telecommunications;

Education & training;

Wholesale trade;

Health care & social assistance; and


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Administrative & support services. These have capacity for expansion to form a wider regional role, and for the specialist resources –related skills and services, for export outside of the region. This would take advantage of any relative agglomeration economies that there already are in Karratha and will rely on very high quality communications ability. The NBN is crucial to this.

An example of the way in which this might develop is the Pilbara Development Commission / IBM Smart City concept. This uses broadband and big data to optimise water, power and transport networks, to connect and integrate key services to minimise risks and gain efficiencies. It uses the cloud, shared services, and wi-fi to enable teleworking, smarter education, E-health and connection with remote communities Through this, the Pilbara can realistically aim to be:

a leader in renewable energy and the conservation of water and other resources;

amongst the world’s top industrial and environmental tourism destination;

a trading and technology leader; and

enable connected and integrated communities.


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8 Strategic Analysis

8.1 Summary strategic assessment

A summary strategic assessment of the economic strengths, weaknesses, opportunities and threats informs the development of specific programs: Strengths

The Shire contains large world-class economic activity;

This provides world-class purchasers, which means that local businesses selling to the main economic base (i.e. the minerals and resources sector and to any agri-business diversification projects that may become established) will have the skills and experience of marketing to major purchaser and may have exportable goods or services applicable to in other similar international markets;

It is the biggest centre in the region, housing the greatest diversification, scale and range of regional services, including a substantial health campus, one public and one private high school and a TAFE centre with remote university facilities. It is the location of the regional office for a number of government agencies;

As the largest town in the Pilbara it is most likely to contain the mix of community, cultural and social facilities that will keep attract and keep a wider population mix. There is a good variety of lifestyle attractions around the Nickol Bay area generally; and

There is forecast continuing expansion for the local and regional economy. Weaknesses

Labour costs are high, on all national and international comparisons;

General costs of doing business are high, including high utilities and services costs;

Costs of commercial and residential accommodation remain relatively high, although these are starting to moderate;

Local market is still small (Scale not yet there);

There is ‘crowding out’ of tourism activity by FIFO worker demand – this is expected to reduce fairly quickly from 2014;

Human capital rankings (educational attainment, skilled labour) are relatively low compared with other Australian regions; and

High proportions of services are imported from other centres, principally Perth.

Opportunities There are opportunities in:

Expansion of the economic base;

Diversification projects;

Tourism expansion;

Services expansion; and

Expansion of the small business sector.

Threats Threats to economic growth include:

An unexpected slow-down in mining activity possibly caused by substantial reductions in commodity prices due to reduced economic activity in major markets, particularly China;


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Reduced or delayed infrastructure investment, possibly caused by budgetary constraints at both state and federal level;

Failure to address weaknesses in the local economy, particularly labour and accommodation costs; and

Uncertainty of the future of significant government funding (e.g. via the Royalties for Regions scheme) for necessary infrastructure projects.

8.2 Responding to opportunities - expansion of existing projects and additional resource projects

Situation summary:

The prospects are for strong growth in operations expansion in for iron ore and other minerals in the

Pilbara and wider region. However, very few of these new projects are in the Shire.

Opportunities will therefore be in value chain goods and services to both construction and operational

phases. Karratha is already a centre for this, with a god number of small and medium enterprises

marketing into the Resource sector value chain.

This requires support.

Similarly LNG generally shows very high growth prospects. However, the extent to which this will flow on to specifically to the Shire of Roebourne is uncertain. There are prospects for on-shore support to future Processing of Browse Basin gas on-shore at Dampier is one of the options for the Browse Basin gas (along with James Price Point at Broome and a floating LNG platform), and there is a small chance that this will occur. However, this is likely not to lead to very large increases in operational labour demand. With a solid and expanding LNG industry the opportunities for businesses in the Shire are likely to be to use the existing skill base in LNG and offshore servicing to expand to other areas. However, it is noteworthy that the current preferred site for a common user facility that might be a focus for the expansion of businesses servicing the off-shore industry is at Port Hedland. There is likely to be quite rapid increase in the level of knowledge of FLNG technology and capturing this in the Shire, possibly via some specialised research projects, to the extent it is possible will provide a knowledge base that can be applied elsewhere.

Consequences for Shire EDS:

Expansion of the existing economic base is largely out of the direct control of the Shire. The Shire can

therefore help with facilitation and seek to maximise local content, for example in:

Fabrication;

Marine services; and

Services (admin, food/catering).

It can achieve this by:


Fostering the further development of SMEs in mining and resources support services and

the resources value chain.


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Fostering incubation projects and support services, including small business incentives;

Fostering small business networking, clustering and skills development.

8.3 Responding to opportunities – diversification of the economic base

Situation summary:

A number of opportunities for diversification have been identified. Principal ones are:

Specialised agri-business;

Tourism;

Regional services;

Education services;

Health services;

Administration (private sector and public sector); and

Knowledge industries, including research on regional specialties.

The highest proportion of services employment in the Pilbara is located in the Shire. However, a high proportion is imported from outside of the region. There is opportunity to increase the range and scale of services offered locally in all categories.

A recent study for the Small Business Centre West Pilbara21 identifies the provision of affordable accommodation as the most significant barrier to entry to the small business sector. It found that the lack of affordable residential accommodation is the single biggest obstacle to normalising the local economy. As a means of partially addressing this barrier, it proposes that subsidised business incubator premises matched with affordable residential accommodation be provided across the West Pilbara to encourage business growth and diversity.

Its recommended incubator model for Karratha is:

18 commercial/retail/incubator units in the Town Centre;

10 light industry incubator units in either the Karratha or the Gap Ridge light industry estates;

28 accommodation units of one, two and three bedroom configurations.

The report notes that the recommended incubator development model for the Karratha Business Park is unlikely to succeed without the 1:1 provision of residential accommodation matched to the subsidised business accommodation, and success for the businesses installed in the incubator will be largely dependent upon the level of support and expertise provided to the tenants. Adequate resources to empower the SBCWP in this regard are essential including skilled personnel and access to appropriate and affordable training and meeting spaces.

Communications: Karratha is due to be connected to the Australian Government’s National Broadband Network via optic fibre cable, with most work to commence from March 2015. The rollout will include Karratha, Karratha Industrial Estate, Gap Ridge, Dampier and Roebourne. Construction in new developments in some of these areas has commenced. Horizon Power has an agreement with the NBN Co help install NBN conduits in Karratha in conjunction with its power undergrounding program.

21 CCS Strategic, Business Case for the Establishment of Karratha Business Park and Transferability of model to Tom Price and Onslow, Report prepared for SBCEP, August 2012


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Very high quality tele-conferencing facilities, with general availability through digital hubs22 or a resource centre is essential to the further expansion of general administration and regional services from Karratha. The NBN is crucial to the growth of this industry (and very beneficial to the growth of other industries) and it will be important for the Shire to be NBN ready.

A digital strategy should identify the opportunities for the local workforce, home based and small businesses and students, training, up-skilling requirements and collaborative workspace or business incubator space options.

Consequences for Shire EDS:

The growth of diversification projects can be facilitated by:

Ensuring the needs of agri-business enterprises are accounted for in strategic planning.

This is particularly important for the algae farm which potentially is a very large land user;

Fostering the development of SMEs in agri-business support services;

Fostering incubation projects and support services;


specialisation;



Promoting the expansion of aged care services and facilities in the Shire;


o Remote and tele-working

o Improved viability of basing regional services and administration in Karratha



o Product – attractions and activities

o Amenity

o Access

o Accommodation

o Marketing

8.4 The Pilbara Cities

There is a danger of some duplication of roles between the two large Pilbara settlements of Karratha and

Port Hedland. Each is planned to reach a population of 50,000. At this scale each would warrant

substantial and high level education, cultural and health services to support its population. However the

essence of the economic task to support this population is to for the communities to encompass activities

22 A Digital Hub is a community-based computer training and internet access point containing a number of internet

ready computers. Each Digital Hub is run by staff that provide training and assistance to explain the benefits of

participating online, to drive greater digital literacy skills and to demonstrate the possibilities of using the NBN.


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and enterprise that extend beyond the local region and are capable of either replacing imports – including

services imports from other Australian regions – or exporting goods and services outside of the region.

To be viable in this endeavour a focus on competitive advantages and the special capabilities of each

location is required. This will ensure the activities which emerge are viable over the long term, in other

words, sustainable. The leading edge activity that is required to support an expanded Pilbara population

is best focussed in one location.

This requires the respective roles of each of the major Pilbara centres to be identified and articulated.

These will emerge over time but already the key elements of the distinction are beginning to be apparent.

While there is room for much discussion in this area, an initial assessment indicates that Port Hedland,

with expanded port operations and the Lumsden Point Common User facility with a general cargo

capacity will have the circumstances for development of a range of industrial, maintenance and support

activities, particularly by small and medium size industrial firms. These would service not only off-shore

gas and oil ventures, but also be available to support any new shale gas developments in the Canning

Basin This might include an emerging freight and logistics hub for consumer goods. While these activities

would also be in the Shire of Roebourne, they are likely to become rather more prominent in Port Hedland

and would start to set the tone of the community.

In contrast, Karratha already has substantial education, administrative, business, financial and technical

and professional activity. These will expand. It could emerge as the major centre for these services for

the entire northern region. The consequence for planning is that Karratha should allow for:

Substantial upgrades to the urban environment, with the full completion of the town centre

precinct, to ensure liveability aspects of the main centre are maximised;

A substantial education centre, including tertiary education and research facilities and an

expanded secondary school, including boarding facilities;

Expanded health facilities, including allowance for specialist services;

Tourist and business tourist accommodation, including conference facilities;

Implementation of the airport masterplan (as revised), including regular international

services; and

Accommodation for expanded government services.


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9 Strategies and actions - summary

Figure 15: An economic model for Roebourne Shire

Overall strategy:

Encourage expansion of the economic base

Encourage diversification

Facilitate expansion of the regional services sector

Facilitate expansion of the tourism sector

Strategic focus

Provision of enabling infrastructure

Provision of employment accommodation

Attend to cost structure

o Accommodation

o Labour

Value chain management and local supply chain management

Support for micro-enterprises and SME sector

o Skills development

o Intra-regional and extra-regional expansion

Capitalise on digital initiatives

SME support

Specific measures:

Current

Advantages Current Strengths Economic

Opportunities Growth Opportunities

Specialist agri-

business

Mining and resource industry services

Regional administrat-

ion

Adventure and

experience tourism and recreation

Education services

Resource efficient

construction industries

Health and wellbeing services

Strong economic base

Regional economic growth

Main site for regional services

Policy support

Emerging specialist skill base

Economic infrastucture:- Ports- Airport- Industrial land- Services - Transport systems .

Community Services

Development Sites

Expansion of economic base

Diversification projects

Regional services

Tourism


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Fostering the further development of SMEs in mining and resources support services and the resources value chain.

Support to small business development programs

Fostering incubation projects and support services

Fostering clustering and SME incentives

Ensuring the needs of agri-business enterprises are accounted for in strategic planning.

Fostering the development of SMEs in agri-business support services


specialisation;



Promoting the expansion of aged care services and facilities in the Shire


o Remote and tele-working

o Improved viability of basing regional services and administration in Karratha

o Improved e-health and e-education services



o Product

o Accommodation

o Marketing


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Appendix 1 Effect of Shire growth scenarios

The potential changes in the Shire’s economy include:

Decline in construction activity

Increases in services activity

Diversification of the economy

The effect on the composition of the workforce of these changes is outlined below.

Composition – Occupation Potential changes in the occupation mix can be investigated by comparing the current mix in the Shire

with those in the average of Kalgoorlie-Boulder, Mt Isa, Geraldton-Greenough and Mackay, under the

scenario that the Shire economy evolves between 2011 and 2031 to resemble that mix.

The graph below shows the Shire’s current worker population (including FIFO workers) and the potential

mix of resident worker population 2031. The forecast changes reflect the expectation from the CME

report for a substantial decrease in construction activity and consequently for construction labour

demand.


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Figure 16: Shire of Roebourne – potential changes in occupation 2011 – 2021

Source: ABS Census 2011, Syme Marmion The main increases in occupation by number would be as in the graph below, with high increases in the

retail, education services and health services sectors.

- 500 1,000 1,500 2,000

Automotive and Engineering Trades Workers

Construction and Mining Labourers

Design, Engineering, Science and Transport Professionals

Engineering, ICT and Science Technicians

Machine and Stationary Plant Operators

Electrotechnology and Telecommunications Trades…

Specialist Managers

Road and Rail Drivers

Construction Trades Workers

General Clerical Workers

Office Managers and Program Administrators

Health Professionals

Other Labourers

Hospitality, Retail and Service Managers

Other Clerical and Administrative Workers

Cleaners and Laundry Workers

Other Technicians and Trades Workers

Sales Assistants and Salespersons

Education Professionals

Mobile Plant Operators

Business, Human Resource and Marketing Professionals

Protective Service Workers

Numerical Clerks

Carers and Aides

Food Trades Workers

Inquiry Clerks and Receptionists

Storepersons

Sales Support Workers

Hospitality Workers

Technicians and Trades Workers nfd

Food Preparation Assistants

Legal, Social and Welfare Professionals

Factory Process Workers

Skilled Animal and Horticultural Workers

Chief Executives, General Managers and Legislators

Clerical and Office Support Workers

Health and Welfare Support Workers

Sports and Personal Service Workers

Sales Representatives and Agents

Personal Assistants and Secretaries

Machinery Operators and Drivers nfd

Managers nfd

Labourers nfd

Arts and Media Professionals

Farm, Forestry and Garden Workers

2011

2031


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Figure 17: Shire of Roebourne - main potential occupation increases

Source: ABS Census 2011, Syme Marmion The following graph shows the occupations in the Shire workforce likely to decline in number, with the

greatest losses in the construction sectors.

- 100 200 300 400 500 600 700 800 900

Sales Assistants and Salespersons

Carers and Aides

Education Professionals

Hospitality, Retail and Service Managers

Health Professionals

Numerical Clerks

Business, Human Resource and Marketing…

Machine and Stationary Plant Operators

Road and Rail Drivers

Inquiry Clerks and Receptionists

General Clerical Workers

Farmers and Farm Managers

Hospitality Workers

Health and Welfare Support Workers

Sales Support Workers

Sales Representatives and Agents

Food Preparation Assistants

Legal, Social and Welfare Professionals

Cleaners and Laundry Workers

Farm, Forestry and Garden Workers

Sports and Personal Service Workers

Storepersons

Personal Assistants and Secretaries

Change 2011 - 2021

Change 2011 - 2031


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Figure 18: Shire of Roebourne - main potential occupation decreases

Source: ABS Census 2011, Syme Marmion

(800) (700) (600) (500) (400) (300) (200) (100) -

Professionals nfd

Machinery Operators and Drivers nfd

Other Clerical and Administrative Workers

Technicians and Trades Workers nfd

Mobile Plant Operators

Other Technicians and Trades Workers

Construction Trades Workers

Electrotechnology and Telecommunications TradesWorkers

Engineering, ICT and Science Technicians

Design, Engineering, Science and TransportProfessionals

Construction and Mining Labourers

Change 2011 - 2031

Change 2011 - 2021


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Appendix 2: Small business support

The Small Business Centre West Pilbara (SBCWP) provides a range of support services and skills development for small business:

Home Based Business Support.

Development of business case for a Pilbara Virtual Office, to include: o Professional business address o Personal mail box o Local telephone number and call handling o Live professional reception services o Call forwarding o Meeting facilities o Free Wi-Fi o Video conferencing services o Administrative support as needed o Furnished office access or Hot Office o Copy services

An audit of capabilities is currently being performed. A business case model will then be developed with the aim of obtaining start-up funding for capital improvements and a full time receptionist.

West Pilbara Business Park The West Pilbara Business Park project is an initiative of The Small Business Centre West Pilbara and supported by other agencies involved in the West Pilbara Economic Development Alliance. These agencies include the Pilbara Development Commission, Shire of Roebourne, KDCCI, Pilbara Institute, LandCorp, RDA Pilbara and others. The concept is to provide for start-up small businesses, incubator style facilities that offer:

o Easy-lease accommodation o Access to training rooms and board rooms o Access to Small Business Centre West Pilbara staff and services o Networking opportunities with other tenants o Other business services

Pilbara Business Development Series The Pilbara Business Development Series consists of the Pilbara Women’s Network – Women in Business Luncheon and two Business Development Workshops aimed at assisting small business and employees in the Pilbara with networking and skills development.

BIZFIT Pulse Checks The BiZ FiT Pulse Checks are free 90 minute sessions for existing small businesses, with up to 3 follow up sessions to help identify which areas of the business can be improved. The SBCWP then assists the small business owner with these areas for improvement or refers to a specialist in that area.


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Appendix 3: West Pilbara iron ore project

The Project is a substantial iron ore export operation proposed for the Pilbara region of Western Australia (Figure 1). API is currently developing Stage 1 of the Project, which is based initially on pisolite iron ore deposits located 30 km to 85 km south west of Pannawonica. There is potential for considerable growth in subsequent stages based on the prospective and extensive tenement portfolio in the west Pilbara, as well as tenements in the east Pilbara. API completed the Pre-Feasibility Study for Stage 1 of the Project in May 2008 with the following primary project outcomes:

Iron ore mining and export at a rate of 25 million tonnes per annum;

Simultaneous mining of multiple pisolite deposits located on the western region of the Hamersley Ranges (Figure 2);

A heavy haul railway from the mine area to a port location at Cape Preston (approximately 160km);

Iron ore stockpiles, processing, blending and ship loading facilities at the port location; and

Capital investment in the order of $A4.0 billion

API completed the Feasibility Study (FS) for Stage 1 of the West Pilbara Iron Ore Project (the “Project”) in June 2010. The FS reports the technical and financial viability of the proposed 30Mtpa Stage 1 development.

Aquila Resources has put its $7.4 billion West Pilbara iron ore project on hold at least through June 2013 due to funding difficulties.

Aquila and its partners AMCI, a mining investment firm, and South Korean steel giant Posco, effectively froze the project last September, when iron ore prices hit a three-year low. They had failed to agree on a budget for the year to June 2013 and sent the dispute into arbitration.23 The West Pilbara Iron Ore project has won state environmental approval for its proposed Anketell Port, but still needs rail and port construction approvals, key to its plans for exporting 30 million tonnes a year of ore.

23 http://www.smh.com.au/business/mining-and-resources/aquila-puts-74b-iron-ore-project-on-ice-20130204-

2dthi.html#ixzz2MvQQ7CCa (SMH 3 Feb 2013)

http://www.apijv.com.au/default.aspx?MenuID=18

http://www.apijv.com.au/default.aspx?MenuID=18

http://www.smh.com.au/business/mining-and-resources/aquila-puts-74b-iron-ore-project-on-ice-20130204-2dthi.html#ixzz2MvQQ7CCa

http://www.smh.com.au/business/mining-and-resources/aquila-puts-74b-iron-ore-project-on-ice-20130204-2dthi.html#ixzz2MvQQ7CCa


74

The West Australian state government has said it will not approve construction of Anketell Port until it is certain the project's backers have the funds to build a mine, a 282 km rail line and the multi-user port, which will depend on what has become an increasingly volatile iron ore market.


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Appendix 4: Rio Tinto iron ore in the Pilbara

Rio Tinto iron ore operations in the Pilbara have a current annual capacity of 237 million tonnes, with advanced plans to increase capacity to 290 million tonnes by 2013, on a pathway to 360 million tonnes by 2015. With a network of 14 mines, three shipping terminals and the largest privately owned heavy freight rail network in Australia, its Pilbara operations make up a major part of the company’s iron ore activities globally. Operations began in 1966 and are well positioned to meet the growing needs of the world's iron and steel industry.

Strongly underpinning this goal is the roll out of Autonomous Haulage Systems (AHS) across its Pilbara mines. The next operation to venture into driverless trucks will be Rio Tinto’s latest development B2/Nammuldi, which will see the world’s largest roll out of autonomous fleet.

In the Pilbara, Rio Tinto wholly own Hamersley Iron's eight mines and also operate the Hope Downs mine (50:50 joint venture between Rio Tinto and Hancock Prospecting Pty Limited), the Channar mine (Rio Tinto: 60 per cent) and the Eastern Range mine (Rio Tinto: 54 per cent). Iron ore operations in the Pilbara also include a 53 per cent interest in Robe River Iron Associates' three mines: Mesa J, Mesa A/Warramboo and West Angelas.

Port facilities are located at Dampier and Cape Lambert.

Pastoral stations: Rio Tinto holds six pastoral stations in the Pilbara - Karratha, Hamersley, Rocklea, Juna, Yalleen and Yarraloola, and self-manage five.

Rio Tinto has recently won approval from the state to expand its Nammuldi mine and build a 130 megawatt power station, a $3 billion iron ore project that is part of its plans to increase annual capacity to 360 million tonnes by 2015.


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Appendix 5: Gorgon

The Gorgon gas project involves the development of the Greater Gorgon gas fields, subsea gas-gathering infrastructure, and a liquefied natural gas (LNG) plant on Barrow Island. The project also includes a domestic gas component. It is currently under construction and once completed, will become Australia's fourth LNG export development.

LNG sales agreements have been reached between the joint venturers and customers in China, India, Japan and South Korea.

Chevron Australia has executed Sale and Purchase Agreements (SPAs) with Osaka Gas (1.375Mtpa for 25 years and 1.25 percent equity in the Gorgon Project), Tokyo Gas (1.1Mtpa for 25 years and 1 percent equity), Chubu Electric Power (1.44Mtpa for 25 years and 0.417 percent equity in the Gorgon Project) and GS Caltex of South Korea (0.5Mtpa for 20 years from Gorgon and Chevron system gas). Chevron Australia also has Heads of Agreements with Korea Gas Corporation (KOGAS) (1.5Mtpa for 15 years); Nippon Oil Corporation (0.3 Mtpa for 15 years) and Kyushu Electric (0.3 Mtpa for 15 years).

Shell has entered into long-term LNG sale and purchase agreements with PetroChina International Company Limited and BP Singapore Pte. Limited and also has secured capacity at LNG receiving terminals including the terminals at Energia Costa Azul in Baja California, Mexico and Hazira in Gujarat, India.

An Australian subsidiary of ExxonMobil has signed long-term sales and purchase agreements with Petronet LNG Limited of India and PetroChina International Company Limited for the supply of LNG from the Gorgon Project. The agreement with Petronet LNG is for the supply of approximately 1.5 Mtpa of LNG over a 20-year term while the agreement with PetroChina is for the supply of approximately 2.25 Mtpa over a 20-year term. Together, these two sales and purchase agreements commit the ExxonMobil subsidiary's share of LNG from the 15 Mtpa Gorgon LNG Project.

Under the provisions of the Barrow Island Act (2003), the joint venturers are required to reserve 2000 petajoules of gas for delivery into the domestic market. The Gorgon Joint Venture announced plans to establish a domestic gas project, including plans for progressive expansion to enable delivery of 300 terajoules of gas per day into the domestic transmission system. Chevron have indicated that deliveries of Gorgon domestic gas will commence around the time of start-up of the third LNG train.


77

Appendix 6: Examples of regional universities, Australia

There are a number of precedents for a substantial regional university in a town of the scale of Karratha

and larger. Examples include: Regional universities

Institution Students Location /

population

Notes

James Cook

University

Townsville

11,500

including

1,500

international

Townsville –

175,000

Major research themes:

Tropical Ecosystems, Conservation and Climate Change

Industries and Economies in the Tropics

Peoples and Societies in the Tropics

Tropical Health, Medicine and Biosecurity

University of New

England,

Armidale NSW

Students

17,000,

including

12,500 on-line

students

26,000 (Armidale

Dumaresq Shire)

Research priorities:

Food and water security; smart science, smart

technology;

Climate change and environmental sustainability;

protecting biodiversity, effective policies;

Health and wellbeing in rural communities; social

exclusion, health inequity, mental health, social policy;

Australia’s regional history, regional memory, regional

identity; protection and promotion of cultural heritage;

Regional and rural development, sustainability,

prosperity and peace.

Charles Sturt

University, Multi-

campus:

Bathurst

population :

37,000

Goulbourn

30,000

Orange: 38,000

Port Macquarie

44,300

Dubbo: 39,500

Students on CSU's Dubbo Campus have access to:

networked library

wireless internet connection

clinical laboratory

Nursing laboratory

interactive video studio

Interactive Learning Centre (state of the art

computing laboratory),

Wagga Wagga

58,000

CSU's Wagga Wagga Campus facilities include:

state-of-the-art veterinary science clinical centre

and laboratories

equine centre


78

Institution Students Location /

population

Notes

commercial winery

television production studio

state-of-the-art dental clinic

medical centre and nutrition clinic

networked library

animation studio

wireless internet connection

Edith Cowan

University

Bunbury

campus

The range of courses offered on campus includes nursing,

primary and early childhood education, social work,

accounting and business.

CQUniversity

Multi-campus

MacKay

Emerald

Gladstone

Bundaberg

Noosa

Geraldton

University of

Ballarat

Multi-campus

Ballarat

Ararat

Horsham

Stawell

Pilbara Institute –

Curtin Domestic

Study Centre

10 students

(ref: Good

Universities

guide)

Karratha


79

Appendix 7: Prospective Resources Projects, Pilbara

Project Company State Location Type

Estimated Start Up

Pu

blic

ly

An

no

un

ced

F

easi

bili

ty S

tag

e

Co

mm

itt

ed

Co

mp

let

ed Estimated

New Capacity

Capacity Unit

Resource Indicative

Cost Estimate $m

Construction Employment

Estimate

Operating Employment

Estimate

Anketell Point port Fortescue Metals Group / MCC / Aquila WA Pilbara New project n/a y 350000 ktpa Iron Ore 2500-5000

Balla Balla project (phase I) Forge Resources WA 90 km E of Karratha New project n/a y 6000 kt Magnetite 1000

Balla Balla project (phase II) Forge Resources / Todd Capital WA 90 km E of Karratha New project n/a y 4000 kt Magnetite 500-1000

Balla Balla slurry pipe and port infrastructure Forge Resources WA Port Hedland New project n/a y 6000 ktpa Iron Ore 310

Balmoral South magnetite project (stage 1) Australasian Resources WA 100 km NE of Onslow New project 2017 y 12000 kt Magnetite 3300

Balmoral South magnetite project (stage 2) Australasian Resources WA 100 km NE of Onslow Expansion n/a y 12000 kt Magnetite 2500-5000

Balnaves Development Project Apache Energy / KUFPEC WA 180 km NW of Dampier new project 2014 y 30 kbpd Oil 429

Buckland Project Iron Ore Holdings WA Pilbara New project 2015 y 8000 kt Hematite 500-1000

Burrup ammonium nitrate plant Orica / Yarra / Apache WA Burrup Peninsula New project 2015 y 330 kt Ammonium nitrate 775 600 65

Cape Lambert port and rail expansion Rio Tinto / Hancock Prospecting WA 40 km N of Karratha Expansion 2013 y 60000 ktpa Iron Ore 5166

Cape Lambert port expansion Rio Tinto / Hancock Prospecting WA 40 km N of Karratha Expansion 2015 y 70000 ktpa Iron Ore 3100

Coniston Oil Field Project Apache Energy / Inpex WA 50 km N of Exmouth expansion 2014 y 22 kbpd Oil 526

Dampier–Bunbury gas pipeline (DBNGP) expansion (stage 5C)

DBP WA Dampier to Bunbury Expansion n/a y 100 PJ pa Gas 800

Equus Hess WA 300 km W of Dampier new project 2018+ y n/a Gas/LNG 1500 - 2500

Fletcher-Finucane Santos / KUFPEC / Nippon Oil / Tap Oil WA Carnarvon Basin new project 2013 y 15 kbpd Oil 490

Greater Western Flank - Phase 1 Woodside Energy / BHP Billiton / BP / Chevron / Shell / Japan Australia LNG

WA Carnarvon Basin expansion 2016 y n/a Gas 2300

Hamersley Iron Brockman 4 project (Stage 2) Rio Tinto WA Pilbara Expansion 2012 y 18000 kt Hematite 1070

Hardey Aquila Resources WA 180 km SW of Pannawonica

New project 2016 y 10000 kt Hematite 1500-2500

Iron Valley Project Iron Ore Holdings WA Pilbara New project n/a y 15000 kt Hematite 250 - 500

Julimar Development Project Apache / KUFPEC WA 180 km NW of Dampier new project 2016 y 2.1 tcf Gas 1200

Koodaideri Project Rio Tinto WA Pilbara New project 2016 y 70000 kt Hematite 7000

Marandoo Rio Tinto WA Pilbara Expansion 2014 y n/a Hematite 1070 700

Marda Southern Cross Goldfields WA 122km N of Southern Cross

New project 2014 y 35000 oz Gold 25

Nammuldi expansion Rio Tinto WA Pilbara Expansion 2014 y 26000 kt Hematite 2140

NWS North Rankin B Woodside Energy / BHP Billiton / BP / Chevron / Shell / Japan Australia LNG

WA 150 km NW of Dampier expansion 2013 y 967 PJ pa Gas 5000

Sherlock Bay Australasian Resources / Metals Australia WA 100 km E of Karratha New project na y 9 kt Nickel 0-250

Sino Iron Project CITIC Pacific Mining WA Cape Preston New project 2013 y 24000 kt Magnetite 8400 4500 800

Spar 2 Apache Energy / Santos WA 120 km N of Onslow new project 2015 y 18 PJ pa Gas 117

West Pilbara Aquila Resources / AMCI WA Pilbara New project n/a y 30000 kt Hematite 7400

Western Turner Syncline II Rio Tinto WA 30 km W of Tom Price Expansion 2012 y 9000 kt Hematite

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