Identifying social and economic issues in the Bowen Basin

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Identifying social and economic issues in the
Bowen Basin

• John Rolfe
• Central Queensland University

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The focus of this presentation

• Provide an overview of the broader issues
• Identify some of the key impacts of mining in the
  Bowen Basin
• Explore how they overlap with other social and
  economic trends
• Provide some analysis of the issues

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The contribution of the mining industry

• In 2002, ACIL Consulting reported that
• mining contributed about 10 of Qld economy, and
  17 of construction
• Coal mining firms directly employed approximately
  16,400 people, and paid them almost 1000 million
  in salaries
• A further 15 20 of jobs and salary payments
  paid to contractors
• A further 2,200 million paid to firms that
  provided goods and services
• Up to 60,000 full-time and part-time jobs
  generated by the mining industry.

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The demographic impacts

• Most rural and regional areas have lost
  population in the past 25 years
• Western Queensland has lost approximately
  one-third of its population
• How would the Central Highlands look if
  population had decreased by a third since 1980?
• This is one of the only inland regions in
  Australia to be growing in population
• Because of mining

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The rollercoaster of current expansion

• Growth in almost all aspects of coal industry in
  past 2 years
• Employment
• Contractors
• Construction
• Output
• New mining operations
• 7 growth per annum to 2010
• The industry would double production in less than
  10 years

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Qld Employment in coal industry
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Queensland coal production levels
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Opencut saleable production
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Underground saleable production
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Value of exports
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Are we making the best of our opportunities in
Central Queensland?

• At current rates, the coal industry will double
  in size from 2000 2010
• Population change in the Bowen Basin ?
• Wealth in the area ?
• Developing service industries for coal ?
• Broadening the support in training and other
  activities ?
• Creating lifestyles that make people want to stay
  here ?

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Operational changes

• Moves to more contract labour
• Greater flexibility
• More efficient and profitable operations
• Workforce can be downsized more easily
• But workforce no longer located in closest town
• Spreads economic wealth more regionally
• More travel, less sense of community

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Operational changes

• Changes to shiftwork patterns
• Shiftwork in blocks
• More drive-in/drive-out operations
• Miners have more options about where to live
• Bigger blocks of recreation time
• But loss of community activities
• Difficult to run clubs and sporting groups
• Many people go elsewhere when not on shift

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Industry structure

• Mining used to be dominated by large firms
• Needed scale economies to be able to build mines
  and associated towns
• Range of new entrants
• Small companies, contractors
• Keeps more wealth locally
• But bigger range of contributors to social and
  economic impacts

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Growing pains - 1

• Dutch Disease when a growing industry sucks
  labour and resources away from others
• Shortages in skilled labour now widespread
• Agriculture, Local Government, etc, find it
  difficult to retain staff
• Attracting staff is difficult

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Salary increases needed to attract staff
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Other factors that affect labour mobility
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Growing pains - 2

• Housing prices high rents and shortages make
  housing too expensive
• Economic impacts hard to develop service and
  other industries when it is too expensive to live
  in the town
• Social impacts people on lower incomes may have
  to shift

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Separating impacts of mining from demographic and
social changes

• The urban attraction jobs and higher incomes
  attract people
• The regional hub these develop because of
  better services
• Education, jobs for partners, health,
  entertainment
• The lifestyle movers people move to the coast

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Social and economic impacts have changed over the
past 25 years

• Changes due to
• Changes in the way the industry works
• Changes in demographics and social patterns
• Demographic impacts are varied
• Many employees come from range of locations
• Economic impacts much more diffuse
• Many mines have impacts at regional rather than
  local level
• Social impacts are varying across groups
• Getting harder to identify who is responsible for
  provision of services and infrastructure

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The new social impacts

• Higher incomes make it easier to move families
  away from mining towns
• Also education and other drivers
• Greater travel time
• Loss of services and entertainment in smaller
  centres
• Greater difficulty in providing services like
  health

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Mobility

• People are more mobile better transport and
  communications
• Dont need so many service towns that we once did
• Shopping and services are concentrating to
  regional hubs but the population is not ??

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The regional hub argument

• Currently growth in all Bowen Basin towns
• But long-term trends suggest concentration to
  regional hubs
• But prices in Emerald and Moranbah are hindering
  this development
• Perhaps should plan for services and growth to
  get these centres to a larger size in longer term
• Or else we face fly-in/fly-out from coastal and
  urban centres

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Flexibility

• People are more flexible change jobs and
  locations more readily
• Starting to see specialised communities develop
• The workcamp model
• The older workforce model
• The young families model ?
• Should communities focus on catering only to
  specialised groups?

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Dealing with cyclical impacts

• High prices stimulate extra production, which can
  help to bring prices down
• Strong exports tend to push the A up, and reduce
  the net value of sales
• Current predictions are that the boom may last
  another 2 5 years

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Australian Mineral resources prices, ended March
quarter 2005
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Production per employee is dropping
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Communities face choices

• Have maximum growth, face population losses in
  future downturn
• Have minimum growth, and ride out the downturns
• Locate population in regional hubs to generate
  flexibility, and perhaps attract service
  industries
• Specialise their attraction to keep core group of
  population

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So what are we doing ?

• Skill shortages ?
• Housing constraints ?
• Providing services ?
• Assessing impacts at regional rather than local
  levels ?
• Getting the economic benefits to stay in the
  region ?
• Attracting new people to region ?
• Developing regional hubs ?
• Planning for future downturns ?

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The rollercoaster

• Industry has been in major expansion phase
• and government and service sector has been
  scrambling to keep up
• To make the best of the opportunities, we need to
  
• Identify the key impacts to address
• Find ways of measuring and analysing them
• Develop solutions that work
• Develop processes that allow different players to
  work together