Homeless on 100K: The Boom Digs Into Mining Towns
By Bernard LaganFebruary 6, 2012
In a town built by the mining industry, long-timers are selling up. They can’t afford to live here, or work outside the mines. And the miners? They just fly in and fly out each week, leaving communities in crisis.
Moranbah is a slow town of squat bungalows out on the scrub west of Mackay where the heat mutes life and many dream of the day they can take the Peak Downs highway east to the coast, forever leaving the place shaved out of the bush by the American mining company, Utah, 40 years ago.
Such dreams do come true: In a town where a house purchased a decade ago for $8,000 can be sold quickly for 100 times that figure today, the middle-aged are fleeing in their new 4WDs, cashed up far beyond their expectations by an almost incomprehensibly vast and bountiful mining windfall that has put Moranbah at the epicenter of Australia’s eastern coal boom.
In the last days of December the town’s GP and hospital head for the past 14 years, Dr Johann Scholtz, a rangy South African, lost eight of the families he has long treated.
“They are moving to the coast. I mean, can you blame them?” he says. “They are living in houses that they paid $8,000 or $15,000 for — they’ve probably spent $100,000 over the years, putting a pool in and that kind of stuff — and they are selling for $800,000. You are a bloody fool if you don’t sell now. You’d be a fool, if you are middle-aged, not to sell.”
Even younger families who plan to stay on in town find the lure of what they believe will be once-in-a-lifetime property windfalls irresistible. “John” (he does not want his real name published) is one of Moranbah’s elite — a tradesman able to earn toward $200,000 a year on mine sites. The 38-year-old diesel fitter sold his house on Oxley Street for just under $800,000 in late December; he paid half that sum for it three years ago. A Melbourne property investor who already owns a string of houses in the town was the buyer.
The property frenzy in the town is fueled by the desperation of mining companies to attract mine workers and keep them in the surrounding Bowen Basin, which has Australia’s largest coal reserves, with at least 50 operational mines and scores more planned. The mining companies buy or lease available houses, which they then rent to their workers for as little as $60 a week.
In mid-November, a mining company set a new record weekly rental for a three-bedroom Moranbah house when it agreed to pay the owners $3,200 a week — a sum that stunned the town and quickly brought the concerned Queensland housing minister, Karen Struthers, into Moranbah, promising to find more housing for those not in high-wage mine jobs. The hard evidence in town stung Struthers. There had been sudden restaurant and shop closures caused by a lack of staff; people in less well-paid jobs could no longer afford to stay. Or they left for the mines.
SO KEEN was “John” to collect the profit on his house, he first dumped his employer, Australia’s largest coal miner, the BHP Billiton Mitsubishi Alliance (BMA), fearing that the company which had lent him money to buy his house would claim some of his windfall. That’s meant he has had to take a job at remote mine four hours’ drive away, where he will live in a workers’ camp, returning to Moranbah, his wife and two young children at weekends.
He judges it well worth the separation: “There are so many mines around here, and everybody has heard of at least two or three people who have done what I did,” he says. “You know that every second house is for sale, and I am pretty sure that everybody is taking the money while they can. Who knows? It could crash next week. You don’t know with mining.”
You do not know; three years ago there were sudden mass layoffs in Moranbah when the BMA consortium axed 400 mine contractor jobs as panic over the financial meltdown in the United States rippled around the world. It was worse in the mining downturn of 2000, Dr Scholtz recalls: “There were a lot of people who left town then. About two in five houses were empty.”
The demand back then for housing, even the cheapest, was so low that the Queensland Government leased to mining companies 100 houses it kept in Moranbah for the neediest. It’s a decision officials rue today, as lower-paid workers abandon the town, and as shops, restaurants and garages suddenly close for periods because they have no staff.
POWERED BY Asia’s seemingly insatiable need for coal to run its power stations and steel mills, investment dollars in the tens of billions are pouring into new mines in the surrounding Bowen Basin. Huge international mining conglomerates such as Anglo American and BHP Billiton are ramping up their operations to keep pace with the demand for Australia’s resources.
A Queensland University of Technology study completed in June 2011 estimated that 67 new mining and gas projects in Queensland are lined up for social impact assessments. Some $47 billion will be invested in these projects if they go ahead.
You don’t need to enter the mining towns of the 60,000-square-kilometre Bowen Basin to see and feel the effects; these days any traveller is hard-pushed to find a motel room even as far south from the basin as Roma, the cattle and pastoral hub on the central Darling Downs. Mining contractors’ ubiquitous white, Japanese utes with their telltale high, orange safety flags crowd their car parks, a testament to the block bookings that fill the motels for weeks in advance.
Moranbah is but one of the Bowen Basin’s 16 mining towns. But the effects on the town and its permanent population of around 9,000 of such an unprecedented boom in economic activity deftly illustrate the paradox of a resources boom: shops, restaurants and essential businesses such as vehicle repair shops are being strangled because of staff shortages. And not just because people are flocking into the mining jobs; in towns such as Moranbah, those not on mining wages and in employer-subsidised houses are increasingly being driven out of town by the cost of living.
It is a form of what’s been called Dutch Disease — the phenomenon that rose in the Netherlands in the late ’50s (The Economist coined the term in the ’70s), when a natural gas boom sapped the country’s manufacturing base by boosting the currency and funneling labor and resources into the gas industry, away from manufacturing.
Peter Findlay was blindsided by twin forces in one week in mid-December when the two women he employs in his small electronics and cell phone shop in Moranbah told him they’d be leaving. His receptionist, a mother of two, was shell-shocked by a rental hike on her home from $800 a week to $3,000. She was leaving town. And his other employee had been offered a mine administration job on more than Findlay could pay.
“We now have an absolute catastrophe,” he says. “People are leaving this town every week.”
David Clayton owns a vehicle repair shop in Moranbah and has to turn customers away because he’s already booked up with work three weeks ahead. “I can’t take any more work because we are booked out, which means, of course, that the general public get cranky because they can’t get their car in and out,” he laments.
Clayton cannot find the mechanic he desperately needs to help out and he’s had some unhappy experiences with new employees; some he has recruited to Moranbah only to see them quickly disappear into the mines. The maths tell the story: The award rate for a mechanic is around $19 an hour. The mines are paying $50. The best Clayton can manage is $30 an hour.
Says Clayton: “They just use us as a stepping stone. They get into town, get their contacts and get out to the mines. I can’t match the salaries. And everyone is going to kick up a stink when I have to charge double what we charge now in labor to have their car fixed.”
And, for Clayton at least, there’s another emerging issue — the attitude problem among the children of cashed-up mining families. “It’s not so hard finding apprentices, it’s finding the kids with the nous to do it,” he says. “I don’t mean any disrespect, but a lot of the kids out here have been spoon-fed. Mummy and Daddy work in the mines and with the money, they are spoiled little brats, you know."
Restaurants in town, particularly fast food outlets, now close at random because of staff shortages. The staff drought also appears to have encouraged the filling of frontline retail jobs with people whose fitness for the work is questionable. A chain-smoking uniformed worker at a fast-food outlet in Moranbah approached The Global Mail in a distraught state, asking how he might find help with what he said was his deeply depressive state.
At the town’s Drovers Rest motel, the restaurant these days is mostly closed to the public. Staff are so hard to find that the place can barely cope with the guests. Says owner Evan Hartley: “After about three months, if you get somebody from out town, they generally find their way into the mines. And the cost of housing people in this town is astronomical. As a result, you can’t get staff. All of the small businesses around here are experiencing the same thing. None of us can get staff.”
The social hub of the town is the Moranbah Community Workers Club, where patrons can eat and drink until 1am and catch the club’s shuttle bus home. But to keep enough vital staff, such as chefs, the club last year had to spend $1.5 million to build 12 staff apartments. It lets them out to its employees for $120 a week.
Johan Scholtz, the town’s GP, says he becomes embarrassed when he thinks about how much he must pay to attract young doctors to his practice. Around $400,000? “Easy,” he replies. “Sometimes I blush when I see the figures. And it’s still not enough.”
Scholtz and his staff are at the frontline of the most contentious of the mining industry’s efforts, at least for small towns like Moranbah, to extract ever more profit: the advent of the fly in, fly out worker. Or the FIFO as they are called. There are now thousands of FIFO men in mining camps in and around the town each night.
On most of those nights, Dr Scholtz feels the effects. They get him out of his bed.
“In the past five days I’ve been called out every night, sometimes twice a night. Usually at 1am or 2am. Youngsters pissed, getting into fights, smoking this fucking synthetic weed that they buy over the counter these days in this wonderful country of ours,” he says.
“And it’s not local people. It is people that come here from wherever. They earn good money, they work 12 hours. And for the next 12 hours when they are supposed to rest, they get up to all kinds of mischief. And that is putting a huge load on our hospital and the workers here at the practice.”
Until the late 1970s mining leases tended to be issued by Australian state governments with strict conditions that required mining companies to build or substantially pay for houses, streets, transport, schools, hospitals and community swimming pools. That is how Utah came to build Moranbah.
But over the past 30 years mining companies have moved to an expeditionary strategy. They operate an around-the-clock production cycle involving 12-hour shifts, even 14 hours. Mine workers are flown or driven en masse to mine sites, where they work seven days on and are then transported out for seven days off at home. These fly in/fly out and drive in/drive out (DIDO) workers are housed in huge mining camps, often on the outskirts of communities and of varying quality. Some are no more than collections of shipping containers or demountables. Others are landscaped and equipped with a shop, a bar and a gym. But they all can be a volatile presence, these corrals of thousands of men, many of them young, with money in their pockets and time on their hands.
The fly in/ fly out (FIFO) model for mining operations has boomed throughout Queensland and Western Australia as mining companies look to reduce costs and rapidly build up work forces.
Mining companies no longer, as they once did, build whole towns to accommodate miners and their families.
Kelly Tudehop, a spokesperson for the residents' lobby group in Moranbah, United Mining Communities — which strongly opposes the dominant use of fly in/fly out workers — claims the Queensland Government's decision to no longer require mining companies to build new communities in mining areas flies in the face of evidence that providing housing so mining families can live locally is better for local economies, families and individuals.
She says: "As the resource industry booms, mining companies continue to cut costs by using the short-term FIFO method, without a long-term vision for their workforce and the communities in which they operate. This is despite overwhelming evidence that fly in/fly out practices, particularly when they are forced on employees, lead to higher staff turnover, less employee job satisfaction and increased family breakdown."
Presently there are estimated to be between 6,000 and 7,000 men housed in mining camps in around Moranbah, a number that already is close to overwhelming services in the town.
But what is coming — and its pace — has many in Moranbah deeply worried. Within the next six months the number FIFO and DIDO workers housed in camps in and around Moranbah is forecast to explode, with at least 11 new mines in Bowen Basin on a fast-track construction program. Of the 24,765 resource-sector workers in the region, 14,613 (or 59 per cent) are estimated to be non-residents according to one FIFO/DIDO inquiry submission.
Among the most worried is Doctor Scholtz. “The FIFO component, at the moment, we can deal with, albeit with difficulty, “ he says. “My concern is that over the next 12 to 18 months as we have this huge influx, if we can’t manage to increase our doctor numbers, the younger doctors here are just going to say, ‘Why am I busting my gut in Moranbah when I can make the same money somewhere else?’”
KPMG, using the normal optimal ratio of essential services for Australian towns, has forecast huge gaps will occur in the next year as the coal rush in Bowen Basin accelerates to warp speed. The Isaac Regional Council area, which takes in many of the basin’s mining towns, will warrant another 44 doctors, 235 nurses, 72 police offices, 105 hospital beds and nearly 1,000 hotel beds. It also will need another 12 pharmacists and four more landfill sites.
Vast new mining camps are about to be constructed on the fringes of Moranbah and it is likely that many of new mines will have 100 per cent FIFO an DIDO worforces — despite the vociferous objections of various community groups in Moranbah.
Community activists such a Kelly Vea Vea, married to a miner and from a well-known Bowen Basin mining family, argue that because the public services in towns are funded by the Queensland Government based on a town’s permanent population, the funds never increase despite the huge demands of FIFO workforces.
“We need an increase in permanent residents to balance out this influx of new workers,” she says. “Our services are increasingly under strain, but there is no increase in funding.
“At the moment in Moranbah we have crippling rents, skyrocketing FIFO work forces, huge mining camp developments, housing unaffordability and unavailability and businesses struggling to retain staff,” she says.
For young people in a mining town, particularly women, seeking a start that will lead them into a high pay-bracket, the costs are crippling. They’re not keen on staying any longer than they need to in male-dominated mining camps.
Ellie Taborsky is 23 years old and came to Moranbah from Adelaide in the hope of turning her life around with a well-paid mining job. After numerous knockbacks, in mid-December she was offered a ticket into a long-term, high-paying mining gig: a position as a trainee plant operator. But, as it is a training position, Taborsky will have to give up her tiny room in a mining camp that comes with her present, modestly paying clerical job in a mine office.
She will need to find her own room and bed in Moranbah before she can take up the training position she has long sought.
She is eager to get out of the mining camp, which is predominantly male, causing her to spend much of time alone in her small single room.
“Coming back to small mining camp room every day? That is very basic. And living and working in the same place isn’t very good for me. I personally try not to associate with the miners while I am not working. I don’t think that is a very good situation to be in,” she says.
But Taborsky, like many other young people, finds herself trapped; she cannot afford even a single room in Moranbah, yet cannot take up her traineeship until she does.
“The cost is unbelievable, absolutely unbelievable,” she says.
Whether she gets to take up her traineeship to become a well-paid mine plant-operator now depends on whether she can find a bed she can afford. “To be able to work in the mines, that would set me up for life,” she says.
Soaring rents for accommodation within the town and the proliferation of the huge mining camps outside lead to peculiar pressures in small towns such as Moranbah.
Kell McKenzie married a miner and came to Moranbah seven years ago. Strong and direct, she’d worked with street kids in Victoria and soon found herself running the town’s Emergency and Long-Term Accommodation Bureau, a welfare oganisation that traditionally has helped those in crisis.
Used to dealing with the drug-addicted, the unemployed and the homeless on inner Melbourne streets, McKenzie recalls thinking when she arrived in Moranbah, “How do you become homeless out in an area where people are earning $100,000 a year?” But an early, and personal, introduction to the town’s rabid property market come shortly after McKenzie arrived. She and her husband purchased a block of land in town, intending to build. Within the first six months of the purchase, they turned down four offers from a local land agent to buy it — the last at $70,000 above their purchase price.
In the past few weeks she’s noticed a shift in the makeup of her needy clientele; she is now seeing well-paid mining families in trouble.
“As the rents have started to creep up, we’re now having contact with people that work for mining companies,” she says. “Because they are in situations where they don’t know what is going to happen, they don’t know whether their company is going to subsidise their rent increase or not. And these are people we haven’t really seen before. And in some them are families in their second or third generation in Moranbah. And this is their home, this is where they grew up, their families have been here since time began. Now they have to make a decision: Do they go or do they stay?”
Her organisation’s nine emergency houses in Moranbah are full and the waiting list now has a record 30 families. There are special problems in dealing with Moranbah women who are victims of domestic violence, on the rise as the finances of some families deteriorate amid the fast-rising rents.
But there is nowhere for them to go. Says McKenzie: “We’ve got a lot of — we know there is a percentage of women and children in this town who are living in unsafe conditions because they’ve got nowhere to go and they can’t leave because they don’t have an income.”
And, after learning of the violence perpetrated in the town by drunken miners from the camps outside, McKenzie is no longer an advocate of encouraging greater integration between Morandah’s permanent population and the FIFO workforce.
Very recently a single mother in emergency housing was picked up and speared into the ground when she went outside to plead with revelers to quiet down.
“All I know is that things in this town have got to change. The town is at boiling point and something has to give,” McKenzie says.
For a small town with conservative values, the influx of thousands of well-paid men — single at least for their working week — has brought more new challenges, not least of which is prostitution.
Evan and Joan Hartley, of the Drovers Rest Motel, became suspicious when single woman booked a room for the 13th time. Believing she was conducting a prostitution business, they asked her to leave.
The woman, however, took an anti-discrimination case against the motel’s owners to the Queensland Civil and Administrative Tribunal, claiming $30,000 to compensate for her lost income.
She lost. It was a rare victory for the permanent residents of Moranbah over the mining juggernaut which has hit their town.