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AUSTRALIAN VENTURE CONSULTANTS PTY LTD

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Western Australian Resources Industry

Construction to Operations Phase

Workforce Study

An investigation into the workforce dynamics and implications for skills,

training and education as major projects transition from a construction

phase to an operational phase

June 2014


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CONTENTS

Executive Summary ................................................................................................................................... 5

Background and Purpose ...................................................................................................................... 10

Background ........................................................................................................................................... 10

Study Limitations ................................................................................................................................... 12

Current Resource Project Construction Pipeline and Workforce Estimates ................................. 14

Transition from Construction to Operations......................................................................................... 16

Project Development Cycle .............................................................................................................. 16

Impact on Resources Company Workforce ................................................................................... 19

Impact on the Construction Workforce ........................................................................................... 21

Resources Project Construction Workforce Dynamics ..................................................................... 24

Demand and Supply ........................................................................................................................... 24

Nature of the Resources Construction Workforce ......................................................................... 25

Relationship between the Mining and Construction Industry Workforces .................................... 35

Revenue and Employment ................................................................................................................ 35

Demographic Comparison ................................................................................................................ 43

Education and Training Comparison ................................................................................................ 45

Key Occupations .................................................................................................................................. 50

Assessment of Workforce Commonality .......................................................................................... 53

Lessons from the Recent Construction Phase..................................................................................... 55

Implications for Skills, Training and Education .................................................................................... 57

Conclusions ............................................................................................................................................... 58

Appendix 1 – Overview of Western Australian Resources Industry Construction Projects ......... 59

Oil and Gas Projects ............................................................................................................................ 59

Iron Ore Projects ................................................................................................................................... 61

Ammonium Nitrate, Nitrate and Urea Projects ............................................................................... 64

Gold Projects ......................................................................................................................................... 64

Resources Infrastructure Projects ....................................................................................................... 65

Appendix 2: Construction and Operational Workforce Estimate .................................................. 67

Appendix 3: 2012-13 Submissions to Infrastructure Australia ............................................................ 69


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Disclosure and Disclaimer

This document has been prepared by Australian Venture Consultants Pty Ltd (ACN: 101 195 699) (‘AVC’). AVC

has been commissioned to prepare this publication by the Resources Industry Training Council (RITC) and has

received a fee from the RITC for its preparation.

While the information contained in this publication has been prepared by AVC with all reasonable care from sources

that AVC believes to be reliable, no responsibility or liability is accepted from AVC for any errors, omissions or

misstatements however caused. Any opinions or recommendations reflect the judgment and assumptions of AVC

as at the date of the document and may change without notice. AVC, its officers, agents and employees exclude

all liability whatsoever, in negligence or otherwise, for any loss or damage relating to this document to the full extent

permitted by law. Any opinion contained in this publication is unsolicited general information only. AVC is not aware

that any recipient intends to rely on this document or of the manner in which a recipient intends to use it. In preparing

this information it is not possible to take into consideration the information or opinion needs of any individual

recipient. Recipients should conduct their own research into the issues discussed in this document before acting

on any recommendation.


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Interviewees

While this study was based primarily on the review of published data and literature, the

following experts provided key input and guidance to the study.

Andrew Blitz, Business Development Manager, Western Australian Local Government

Association

John Galvin, Executive General Manager, Georgiou Group

Bindi Gove, Government and External Affairs Manager, BHP Billiton Petroleum

Kiersten Gregg, General Manager Human Resources, Rio Tinto Iron Ore

Kapila Karunaratna, GM Technical, Mitsubishi Development

John Phillips, Executive Manager Workplace Business Solutions, Western Australian

Local Government Association

Jeanette Roberts, Australian Chair, Kvaerner

Justin Willis, Practice Leader Rail and Crawler Mounted Mobile Machines, SKM


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Executive Summary

Background

The recent resources industry investment phase has involved a total investment of A$457 billion

(at current prices) in new resources industry capital in Australia since 2004, an average of

approximately A$40 billion per annum over that period. Approximately 55.5 percent of this

investment has been associated with Western Australian resources projects, particularly in the

iron ore and oil and gas sectors. Presently, there remains a pipeline of 48 new resources

projects with an associated capital investment of A$229 billion that are currently under

construction or have been committed to by their proponents.

This has had a dramatic impact on demand for a range of skills from the project proponents,

EPCMs managing the construction of those projects and their contractors, which have been

sourced from construction labour markets across Australia and overseas.

The resources industry is now passing through peak investment phase, with many large

resources industry construction projects transitioning into an operational phase. As such, the

size of the total workforce associated with these projects as well as the occupational structure

of that workforce will change, focusing on the operational human resource requirements.

Transition from Construction to Operations

When a new resources project transitions from the construction phase to the operational

phase the size of the total workforce associated with the project decreases dramatically. The

degree to which the size of the workforce decreases is unique to the nature of the construction

project and the operational specifics of the project. Anecdotally, the operational workforce

can be:

As low as 4 percent of the size of the construction workforce in the case of oil and gas

projects;

Around 35 percent of the size of the construction workforce in the case of iron ore

projects;

Approximately 10 percent of the size of the construction workforce in the case of

ammonium, ammonium nitrate and urea projects;

Around 7 percent of the size of the construction workforce in the case of gold projects;

and

15 precent of the size of the construction workforce for port oriented resources

infrastructure projects.

In most cases, the skills profiles have limited commonality, particularly in the case of the oil and

gas industry. In the mining industry, occupational skills are skewed heavily toward specialist

skills such as drillers and shot-firers, metal fitters and machinists and truck drivers). In

occupational skills where there is commonality such as electricians, the operational resources

industry needs in terms of workforce numbers are very small compared to those of the

construction industry.

It is key to note that the operational workforce is not a subset of the construction workforce.

The construction workforce is comprised primarily of employees and contractors of the

construction industry companies that have been successful tenderers for aspects of the

resources construction project. When the construction project is complete, those construction


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industry employees and contractors remain in the construction industry, moving onto new

projects within the resources industry or more widely. Very few, if any, construction workers

transition to an operational role in a resources project.

This is primarily because, for the following reasons, the construction industry workforces are

culturally and structurally quite different:

Skills in most construction industry occupations are developed to be applicable to a

wide range of construction projects. Whereas, skills in resources industry operational

roles tend to be relatively specialised for the specific task; and

The construction workforce is largely a mobile workforce that selects the projects and

locations in which it works based on personal utility. Workers comprising that work force

are comfortable with geographic and project diversity and often thrive on that

diversity. Whereas, workers that comprise the operational resources industry workforce,

typically seek a higher degree of permanency and stability.

Most of the reduction in project workforce as projects transition to operations is the result of

construction contractors and subcontractors completing their specific tasks and exiting the

project. However, some positions that were created in the resources companies to oversee

and support the construction process also become redundant. The position most affected by

this is the project management role within the resources companies. Individuals in project

management roles are unlikely to transition back into operational roles and will be redeployed

on sustaining capital projects within the companies, or become employed by other

companies executing construction projects or by EPCMs.

During the recent resources industry investment phase, graduate programs have expanded in

many companies as these companies sought to grow the pool of professional staff available

to them. In many cases, the transition from construction to operational phase has seen a

decrease in internal activity, rendering it difficult to find places for these graduates outside of

the graduate program. This may result in a surplus of junior mining executives in the market

place in the short term until the graduate program intakes equalise.

While many companies have expanded apprentice and trainee programs on the same basis,

there is less of a challenge in the market for trade persons, apprentices and trainees. The

relative size of the pool of demand for trade skills within the resources sector and the wider

construction industry means that there is likely to be greater opportunity in the marketplace

for apprentices and trainees that have been trained on resources construction projects.

As resources projects transition to operations, some of the construction labour that is released

from these projects will be absorbed into other resources construction projects such as Roy Hill

and resources projects sustaining capital programs. But the vast majority will likely seek

employment in the conventional residential and non-residential construction sectors and the

infrastructure construction sectors, particularly transport infrastructure. Some opportunities may

also arise from investment by the Australian Defence Force.

Resources and Construction Industry Labour Market Dynamics

Whereas the operation of most resources projects is capital intensive, the construction of those

projects is labour intensive. Unlike most labour intensive enterprise, resources project

construction does not have the luxury of locating most of the labour intensive components of

the exercise in close proximity to the required labour markets. The construction workforce is


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located across most parts of the world, has very versatile skills and is by its nature, a relatively

mobile workforce.

Most Western Australian resources projects are located in remote, isolated regions. If they are

in proximity to a population centre, those population centres have limited civic capacity and

limited employment opportunities beyond the new resources projects and related

infrastructure, rendering permanent relocation of a construction workforce highly unlikely. As

such, the only way that new resources projects in Western Australia can access adequate

supply of workers during the investment phase is through overseas migration and/or domestic

and international long-distance commuting.

Subclass 457 Visas have been a significant source of professional and trade labour for

resources construction projects, and while long-distance commuters comprise only

approximately 2 percent of the total Australian labour force, they are critically important to

the resources industry and resources industry projects evidenced by the fact that:

The Pilbara Region is the second most common destination for long distance

commuters;

The Perth-Pilbara Region route is the most common long distance route in the Nation;

and

Approximately 70 percent of long distance commuters between Perth and the Pilbara

Region are machinery operators and drivers or technicians and trade workers.

Resources and Construction Industries Compared

The wider construction industry is substantially larger than the resources industry. In 2011-12, the

resources industry produced total revenues of approximately $240 billion, approximately 75

percent of which was produced by the coal, iron ore and oil and gas sectors. Whereas, in the

same period, the construction industry produced total revenues of approximately $305.5

billion, of which construction services accounted for approximately 45 percent and building

construction 33 percent. The heavy and civil engineering construction sector, which is the

sector of the construction industry that is most dependent on revenue from mining construction

projects, accounted for only 22 percent of construction industry revenues. Revenue from

mining projects accounts for approximately 38 percent of primary contracting revenue from

trade services in the heavy and civil engineering construction sector, but only 9 and 5 percent

in the building construction and construction services sectors respectively. The heavy and civil

engineering construction sector also operates on lower margins than the other sectors of the

Australian construction industry.

The construction industry also employs approximately 3.5 times as many people as the

resources industry. Of the 263,000 people employed in the resources industry, approximately

75 percent are employed in coal, metal ore and non-metallic mining and exploration and

other mining support roles. Of the 950,000 people employed in the Australian construction

industry, the vast majority (approximately 68 percent) are employed in the construction

services sector, with only approximately 15 percent employed in the heavy and civil

engineering construction sector. Whereas the majority of people working in the construction

services sector work for the approximate 17,500 small businesses in the sector, the majority of

workers in the heavy and civil engineering construction sector work for the approximate 70

large businesses in the sector.

In terms of geographic location, the construction industry workforce in each of the sectors that

comprise the industry is reasonably equally distributed across the larger states of New South


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Wales, Victoria, Queensland and Western Australia. The fact that there isn’t a skew in the

construction industry workforce toward Western Australia and Queensland is probably

reflective of considerable residential and non-residential construction markets in the more

populated states of New South Wales and Victoria, and the long-distance commuter intensity

of the resources project construction workforce.

The gender and age distribution of both the mining and construction workforce is reflective of

the physical nature of work in both industries, with both workforces dominated by males under

45 years of age. A much larger portion of the construction industry workforce is employed in in

capital cities as opposed to the regions.

The level of training and education qualification attained by labourers, technician and trade

workers, equipment operators and drivers and professionals employed in the mining and

construction industries is comparable. However, in the case of the construction industry

substantially more managers have certificate III/IV qualifications than is the case in the mining

industry. In the mining industry more managers have bachelor degrees or higher qualifications

than in the construction industry. This is reflective of the larger number of trade supervisors in

the construction industry and the more specialist technical intensity of an operational

resources project.

In terms of intensity of demand for skills the greatest commonality is in the roles of electricians

and earth moving plant operators, as well as speciality areas of construction and engineering

managers. However, the demand for these skills during the operational phase of the projects

is very limited compared to the opportunities in the wider construction industry for these

occupations.

There is likely to be common demand for other occupations such as structural steel and

welding trades, truck drivers and plumbers. However, the operational resources projects tend

to employ fewer numbers of persons in these roles and many functions such as drillers and shot

firers who comprise a large component of the mining industry workforce are specialist skills.

Furthermore, many of the general trades deployed at operational resources projects have a

specialist focus.

Lessons from the Recent Construction Phase

Over the past decade resources project development costs in Australia, and particularly in

Western Australia, do not compare well with other jurisdictions. A range of factors have

contributed to the unfavourable cost environment in Australia, including the evolution of the

mechanism that resources companies use to manage project construction. Necessary

increased focus on OHS and environment along with a need to integrate effectively with larger

EPCM teams on large projects, means that the internal project management teams within

resources companies have grown considerably in size and cost.

Similarly at the construction site, enhanced supervision and OHS requirements have seen

construction teams grow in size. Fragmentation of OHS training providers across sites often

results in a lack of accreditation of existing OHS training for site induction, resulting in delays of

several hours or more to get new contractors onto site.

Implications for Skills, Training and Education

As a result of the structural and cultural differences between the construction workforce and

the operational workforce there is unlikely to be a substantive market for supplementary

training designed to transition resources project construction workers to operational roles in

projects. The main opportunities for training and education are acquiring a deeper


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understanding of the root cause of the productivity penalties associated with the investment

phase over the past decade and integrating those learnings in training and education

programs targeted at the resources and construction industries. Key areas in which learnings

could be gained include investment cycle management, project management, complex

remote project construction and OHS induction.


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Background and Purpose

Background Over the past decade, the Australian, and particularly the Western Australian, economy has

navigated one of the largest waves of private capital investment in its history. The recent

resource sector expansion, has involved a total investment of A$457 billion (at current prices)

in new resources industry capital in Australia since 2004. This equates to an average of

approximately A$40 billion per annum during that period. Approximately 55.5 percent of this

investment has been associated with Western Australian resources projects, particularly in the

iron ore and oil and gas sectors.

Mining industry private gross fixed capital formation as a portion of GDP has grown from a

range of between 1.5 and 2.5 percent during the period 1990 to 2004 to approximately 7

percent in 20121. The historical trend in mining capital expenditure in Australia and Western

Australia is illustrated in Figure 12 below.

FIGURE 1 – TOTAL MINING CAPITAL EXPENDITURE (CURRENT PRICES) – WESTERN AUSTRALIA AND REST OF

AUSTRALIA

The rapid escalation in resources industry capital expenditure over the past decade has

created enormous opportunity for many sectors of the Australian workforce. It has resulted in

significant demand for unskilled, semi-skilled, trade and professional workers across a range of

expertise. Up to now, this demand has been derived primarily from the Engineering

1 Australian Bureau of Statistics (2013), Catelogue 5204. 2 Australian Bureau of Statistics (2014), Private New Capital Expenditure and Expected

Expenditure by Industry: March Quarter Update

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10.0

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Procurement and Construction Managers (EPCMs) and their construction industry contractors

and subcontractors that give effect to the substantial construction projects that have

constituted the recent expansion of the Australian resources industry. As the new and

expanded resources industry project transition to an operational phase, opportunities will be

created for skillsets that are aligned with the operational requirements of these projects.

The recent investment phase has resulted in considerable short-to-medium term labour

migration to locations where the investment in new resources projects is occurring, particularly

Western Australia and Queensland, as well as rapid growth in the domestic Fly-In-Fly-Out (FIFO)

workforce and temporary migrant workers via 457 subclass visas.

As summarised in Table 13 below there is still a total of 48 resources projects with a total capital

investment of $229 billion that have been committed to or are currently under construction,

more than half of which are in Western Australia. Additionally, there is an uncommitted pipeline

of 144 projects with capital investment of $154 billion at feasibility stage.

Project Stage Western Australia Rest of Australia Total

Feasibility No 44 100 144

A$b 58.0 96.5 154.5

Committed No 18 30 48

A$b 115.7 113.2 228.9

Completed No 11 10 21

A$b 19.8 5.9 25.7

TABLE 1 – AUSTRALIAN RESOURCES PROJECT CONSTRUCTION PIPELINE

Some of the projects at feasibility stage may convert to committed projects providing further

construction activity, however:

As illustrated in Figure 1 above, resources project capital expenditure in Western

Australia and the rest of Australia is plateauing; and

As illustrated in Figure 24 below, the number of projects in Western Australia and the rest

of Australia at feasibility and committed stage has decreased over the past 6 months

and the number of projects that have been recently completed has increased.

Collectively, this data indicates that subject to more projects at the feasibility stage converting

to committed projects, the Australian and Western Australian resources industry is currently

approaching or moving through peak construction. This assessment is supported by the

Australian Workforce Productivity Agency5 and the Business Council of Australia6.

3 Bureau of Resource and Energy Economics (2014), Resources and Energy Major Projects,

Australian Government, Canberra 4 Bureau of Resource and Energy Economics (2014), Resources and Energy Major Projects,

Australian Government, Canberra 5 Australian Workforce and Productivity Agency (2012), Resources Sector Skill Needs,

Australian Government, Canberra 6 Business Council of Australia (2013), Securing Investment in Australia’s Future: Report of the

Costs Task Force


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FIGURE 2 – SIX MONTH TREND IN RESOURCE CONSTRUCTION PROJECT PIPELINE – WESTERN AUSTRALIA AND

REST OF AUSTRALIA

Construction activity will continue in the resources industry supported by currently committed

projects, those projects at feasibility stage that progress through final investment decision and

ongoing historically large sustaining capital programs. However, irrespective of this, demand

for resources construction workers will decrease from peak demand in the short to medium

term.

This phenomenon raises a number of questions that are pertinent to the deliberations of the

Resources Industry Training Council (RITC), such as:

What happens to the resources project construction workforce as demand for these

skills eases?

Is there an opportunity to deploy part of this workforce in new operational roles created

by the new projects and if so, is there a need for training and education to support

this?

Are there lessens from the recent construction phase in terms of skills requirements,

productivity and HSE that can be built into training and education programs?

The RITC has engaged Australian Venture Consultants (AVC) to undertake an investigation into

these issues. This paper describes the findings of that investigation.

Study Limitations The original scope of this study had anticipated the development of a detailed quantitative

model that:

Demonstrates the size, occupation and skills segmentation of the workforce associated

with the resources industry investment phase over the past decade;

Demonstrates the workforce requirements in terms of size, occupations and skills

segmentation of new projects as they transition to an operational phase; and

0

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Committed Western Australia Committed Australia

Completed Western Australia Completed Australia


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Identifies any workforce transition relationship between the construction and

operational workforces of these projects.

It was also intended to identify examples in other industries where a major construction

workforce had transitioned to an operational workforce.

For two reasons, the study encountered significant difficulty in developing this model and

providing these examples. Firstly attaining detailed project employment data from companies,

EPCMs and contractors proved challenging. This was likely partly the result of political

sensitivities associated with aspects of workforce transition, but also as a result of the practical

difficulties in collecting and providing this data. Secondly, as discussed throughout this report,

the incidence of worker transition from construction roles to operational roles is very low,

primarily because the culture and lifestyle choices of construction workers is very different to

that of operational workers, as are most of the skills requirements.

The study has endeavoured to address this limitation by providing adequately supported

anecdotal evidence of the observations made in the study and by exploring other issues

associated with the recent investment phase and transition to operations that might be of

interest to the RITC, such as opportunities to focus future training and education on issues that

might improve construction project productivity.


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Current Resource Project Construction

Pipeline and Workforce Estimates

As discussed in the introductory section of this report, there are currently 18 committed new

resources projects in Western Australia with aggregate associated capital expenditure of

approximately A$116 billion. In addition, there are a further 11 projects with an associated

capital expenditure of approximately A$20 billion recently completed. This section of the

report summarises the projects currently under construction in terms of their status, key issues,

and where data is available, the size and nature of their construction and prospective

operational workforces.

Figure 3 below summarises the current and projected status of recent major Western Australian

projects that are committed or approaching commitment as at the commencement of 2013.

FIGURE 3 – CURRENT WESTERN AUSTRALIAN PROJECTS UNDER CONSTRUCTION

Appendix 1 contains a brief description of the projects listed in Figure 3. Appendix 2 contains

a summary of the estimated construction and operational workforce associated with the

projects listed in Figure 3 . It is estimated that the peak construction workforce associated with

current Western Australian resources projects is at least 45,000.

When a resources company commits to constructing a new resources project, it typically

contracts an EPCM to design and contract the construction of the project. The EPCM then

engages a wide variety of contractors to perform the tasks required to give effect to

construction. Those contractors also often engage subcontractors to perform various aspects

of their contracts. Typically, the resource company will establish a dedicated temporary

internal project management team whose task is to oversee and interact with the EPCM and

prepare the resources company for the new addition to its project portfolio.

An analysis of the EPCMs and contractors associated with the projects listed in Figure 3

identified a total of 207 EPCM and contractor companies associated with the projects. As

Browse

Gorgon

Julimar

Macedon

NWS North Rankin Redev.

NWS Greater West. Flank

Prelude

Scarborough

Wheatstone

Karara Expansion

Rio Tinto Pilbara Expansion

BHPB Pilbara Expansion

Chichester & Solomon Exp.

Hope Downs

Sino Iron Project

Roy Hill

Southdown Magnetite

Extension Hill Magnetite

Jack Hills Expansion

West Pilbara Project

Kwinana Expansion

Burrup Industrial Estate

Shotts Industrial Park

Silicon Metal Plant Exp.

Tropicana

Happy Valley

Sharkbay Zircon

Oakajee Port and Rail

North West Infrastructure

Project

Woodside

ChevronApache

BHP Billiton Petroleum

Woodside

Woodside

Shell

ExxonMobil

Chevron

Karara/Gindalbie

Rio Tinto

BHP Billiton Iron Ore

Fortescue Metals Group

Rio Tinto/Hancock Prosp.

CITIC Pacific

Roy Hill Holdings

Grange Resources

Asia Iron

Crosslands Resources

Aquilla Resources

CSBP

Orica/Yara

Perdamen

Simcoa

Anglogold Ashanti

Cristal Mining

Gunson Resources

Mitsubishi

Atlas Iron, Brockman et al

Operator 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Sector Key

Oil and Gas

Iron Ore

Ammonium Nitrate, Nitrate and Urea

Silica

Gold

Heavy Mineral Sands and Zircon

Resources Industry Infrastructure

Project Status Key

Final Investment Decision Delayed

Construction Phase

Operational Phase

Pre Final Investment Decision

Esperance Multiuser Fac.

Mid West Energy Project

WAG

Western Power


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summarised in Table 2 below, contract mining, civil engineering, construction, earthworks, oil

and gas and minerals EPCM, mining and minerals processing, oil and gas engineering and

marine engineering account for almost 50 percent of the total number of contractors

engaged by the projects.

Category of Contractor or Subcontractor Number Percentage

Contract Mining, Civil Engineering, Construction and Earthworks 45 21.7%

Oil and Gas EPCM 21 10.1%

Mining and Minerals Processing Engineering 16 7.7%

Oil and Gas and Marine Engineering 16 7.7%

Fabrication 14 6.8%

ICT, Instrumentation and Control 13 6.3%

Minerals EPCM 11 5.3%

Energy Generation and Distribution 10 4.8%

Electrical Engineering 8 3.9%

Logistics 8 3.9%

Site Accommodation and Offices 7 3.4%

Ventilation 5 2.4%

Environmental Services 4 1.9%

OHS 3 1.4%

Pipelines and Pipeline Services 3 1.4%

Terrestrial Surveying 3 1.4%

Water and Water Systems 3 1.4%

Human Resources 2 1.0%

Marine Survey 2 1.0%

Dredging 1 0.5%

Other 12 5.8%

TOTAL 207 100.0%

TABLE 2 – NUMBER OF CONTRACTORS ENGAGED CURRENTLY IN WESTERN AUSTRALIAN RESOURCES

CONSTRUCTION PROJECTS


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Transition from Construction to Operations

Project Development Cycle Once an in situ resource has been determined by a project proponent to exhibit size, grade,

reservoir (in the case of petroleum), geotechnical, mineralogy, access to infrastructure and

other key characteristics that adequately indicate there is a prima facie case for development

of that in situ resource, the general process for development commences with a feasibility

study (which may be preceded by a pre-feasibility study). A feasibility study will identify,

analyse and compare options for the development of the resource, based primarily on

technical and economic information that is readily available.

Should the feasibility study demonstrate a technically and economically feasible development

option that meets the project proponent’s internal hurdle rate and risk appetite, the project

will likely proceed to the Front-End-Engineering and Design (FEED) phase. If there are numerous

options for developing the project, an interim Basis-of-Design phase may be required to select

the most attractive development options upon which FEED will be based. FEED involves

evaluating technical options for different components of the preferred development

pathway, and the design of an engineering solution that has a cost contingency typically with

a maximum variance of 20 percent.

The end result of FEED is a bankable feasibility study (i.e. an investment case). This bankable

feasibility study then undergoes a rigorous internal decision process based on an exhaustive

range of operational, financial and strategic criteria, the end result of which is Final Investment

Decision (FID). At this point the resources company has committed to the project. The project

development process up to this point is usually primarily an internal process supported by

external expertise (including potentially the EPCM that may be contracted to manage the

construction phase).

The nature and quantum of skills required to construct a major resources project is very different

to the nature and quantum of skills required to operate a resources project. Very few, if any

resources companies have the resources required to construct a major new project. As such,

post-FID, a resources company will typically contract an EPCM to complete final detailed

design and procure the diverse construction goods and services required to complete the

construction project.

During this period, the resources company will establish an internal project management team

that will oversee and liaise with the EPCM throughout the construction phase. This team will be

comprised principally of project managers who are usually engineers with resources project

operational experience as well as human resources, Health Safety and Environment (HSE),

finance, legal/contract and administrative personnel.

As construction approaches completion, the project management team will often gradually

be replaced with an operational readiness team. The operational readiness team typically

includes senior operational, mining, process and HSE personnel who will form the leadership in

these areas for the project when it is operational, as well as leadership from the project

management team, internal technical expertise and corporate human resources functions

who will source the operational workforce from within the company and/or externally.

Once operational, most of the operational readiness team will convert into the operational

management team that will manage and lead the recruited operations workforce. The


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project will continue to interact with the construction workforce from time to time for the

purposes of effecting sustaining capital investment, as well as ongoing maintenance.

A typical project development cycle that reflects the relationship between the resources

company’s internal workforce and the contracted construction workforce through the project

development cycle is illustrated conceptually in Figure 4 below.

FIGURE 4 – RESOURCES COMPANY AND CONTRACTED CONSTRUCTION WORKFORCE THROUGH THE PROJECT

DEVELOPMENT CYCLE

When a new resources project transitions from the construction phase to the operational

phase the size of the total workforce associated with the project decreases dramatically. The

degree to which the size of the workforce decreases is unique to the nature of the construction

project and the operational specifics of the project. Table 3 below, estimates the approximate

reduction in workforce as projects transition from construction to operations in different sectors

of the resources industry, based on observations of the construction and operations workforces

associate with Western Australian resources construction projects as listed in Appendix 2.

Type of Resources Construction Project Approximate Size of Operational

Workforce (Percentage of Peak

Construction Workforce)

Offshore Oil and Gas Project with Onshore Downstream

Processing

4 percent

Iron Ore 35 percent

Ammonium Nitrate, Nitrate and Urea 10 percent

Gold 7 percent

Port Oriented Resources Infrastructure 15 percent

TABLE 3 - ESTIMATED SIZE OF THE OPERATIONAL WORKFORCE AS PORTION OF PEAK CONSTRUCTION

WORKFORCE - KEY SECTORS

In all cases the operational workforce is substantially smaller than the construction workforce

in terms of the number of workers. The iron ore sector has the largest operational to

construction workforce ratio, which is skewed by the operational workforce requirements of

the larger iron ore operations. Figure 5 below7 illustrates the approximate workforce profiles of

the different sectors of the Australian resources industry. It should be noted that the survey on

7 Lowry, D., Molloy, S. and Tan, Y. (2006), The Labour Force Outlook in the Minerals Resources

Sector 2005-2015, National Institute of Labour Studies, Flinders University, Adelaide

Feasibility Study

FEED FIDConstruction

(Detailed Design, Civil Works, Fabrication, Installation etc)

Commissioning Operations

Internal geotechnical,

engineering and processing

Internal geotechnical,

engineering and processing

Project Management TeamOperational Readiness

TeamDedicated Operational Workforce

EPCM and/or other contract expertise (geotechnical, process, infrastructure and civil engineering,

commercial, legal, environment etc

CompanyLeadership

EPCM, contractors and subcontractors

Sustainingcapital and

maintenancecontractors

Sustainingcapital and

maintenancecontractors

Project Stage

Resources Company Internal Workforce

Contracted Construction Workforce


18

which this data is based was undertaken in 2006. The workforce structure of recent

commissioned projects may differ slightly to the average illustrated by this dataset.

FIGURE 5 - AUSTRALIAN RESOURCES INDUSTRY OCCUPATIONAL STRUCTURE BY COMMODITY

In most cases, the skills profiles have limited commonality, particularly in the case of the oil and

gas industry (see Figure 6). In the mining industry, occupational skills are skewed heavily toward

specialist skills such as drillers and shot-firers, metal fitters and machinists and truck drivers (see

Figure 33 and Figure 34). In occupational skills where there is commonality such as electricians

(see Table 5), the operational resources industry needs in terms of workforce numbers are very

small compared to those of the construction industry.

It is key to note that the operational workforce is not a subset of the construction workforce.

The construction workforce is comprised primarily of employees and contractors of the

construction industry companies that have been successful tenderers for aspects of the

resources construction project. When the construction project is complete, those construction

industry employees and contractors remain in the construction industry, moving onto new

projects within the resources industry or more widely. Very few, if any, construction workers

transition to an operational role in a resources project.

By virtue of relatively high levels of downstream automation, the reduction in workforce that

results from construction projects transitioning to the operational phase is most dramatic in

sectors that are downstream processing intensive such as the oil and gas industry. For example,

the operational workforce associated with BHP Billiton’s Macedon Gas Project is a total of 25

0

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Coal Iron Ore Bauxite Copper Gold Nickel Uranium Lead and

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Weighted

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forc

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Technicians Tradespersons

Semi-skilled Workers Labourers and Related Workers


19

persons, with only approximately 10 to 12 persons on site at any point in time. This compares to

an operational workforce at Rio Tinto’s Hope Downs iron ore mine of 720. Figure 6 below

summarises the operational workforce at the Macedon gas project.

FIGURE 6 - MACEDON GAS PROJECT WORKFORCE

Impact on Resources Company Workforce Obviously most of the reduction in workforce is the result of construction contractors and

subcontractors completing their tasks. However, the construction phase also results in the

creation of new temporary project based positions within the project proponent resources

company that need to be redeployed or made redundant once the construction project is

complete. Most of the operations readiness team will be deployed into operational roles in the

project or re-assigned back to core functions within the company. However, the project

management team is established exclusively to oversee and liaise with the EPCM through the

construction phase. The role most affected by this dynamic is the project management

positions. Furthermore, in larger resources companies, graduate program intakes have

expanded to meet new roles associated with construction and expanded operations. These

will also likely be affected. This dynamic is discussed in more detail in the following subsections.

Project Management Positions

As projects transition from construction to operation phase, the main job functions affected

within the operators are the project management roles that were established to oversee and

liaise with the EPCM. Project managers are typically employed as contract positions within the

companies for the duration of the construction phase. Project managers usually come from a

resources engineering operational background and have deliberately moved into project

management roles because they seek the dynamic and diverse nature of project

management work. As such, they are unlikely to transition back into operational roles.

0

2

4

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8

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12

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18

Operations

Superintendent

Senior

Operations

Technician

Operations

Technician

Trainee

Operations

Technician

Maintenance

Specialist

Materials

Administrator

Nu

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erso

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20

Some project managers will likely move onto sustaining capital investment projects within the

companies, particularly those who are highly skilled and therefore a target for retention within

the companies. Others will potentially be recruited by project management teams in other

companies, or by the EPCMs seeking experienced project managers that understand project

proponent decision-making dynamics.

Operational Workforce

New projects will require a new operational workforce. Some of the new operational positions

will be filled internally if the company has existing operational projects. However, the vast

majority will likely be newly recruited to the company. Completing a construction project on

time is a key criteria for construction project performance, which in turn partly motivates

deploying the quantum of resources (within cost constraints) that is required to mitigate the

risk of scheduling slippages. However, once a project is operational, productivity becomes a

key performance measure. As a result, resources companies will seek to optimise labour

productivity when recruiting and managing the operations workforce, perhaps more so than

in the case of the construction workforce. This involves ensuring that workers employed in

longer-term operational roles have:

An optimal range and level of skills for the role;

Workplace values and attitudes that are consistent with the company’s and the

project’s culture, particularly with respect to work ethic and OHS;

Values, attitudes and capacity that motivate them to seek longer-term employment in

order to mitigate the productivity penalties associated with staff turnover;

Characteristics that are aligned with the company’s human resources KPIs such as

diversity.

Graduate, Apprentice and Trainee Positions

Many companies in the resources and construction sector have grown graduate,

apprenticeship and trainee programs in response to internal demand generated by the rapid

escalation of construction activity in the resources industry.

During the recent resources industry investment phase, graduate programs have expanded in

many companies as these companies sought to grow the pool of professional staff available

to them. In many cases, the transition from construction to operational phase has seen a

decrease in internal activity, rendering it difficult to find places for these graduates outside of

the graduate program. This may result in a surplus of junior mining executives in the market

place in the short term until the graduate program intakes equalise.

While many companies have expanded apprentice and trainee programs on the same basis,

there is less of a challenge in the market for trade persons, apprentices and trainees. The

relative size of the pool of demand for trade skills within the resources sector and the wider

construction industry means that there is likely to be greater opportunity in the marketplace

for apprentices and trainees that have been trained on resources construction projects.


21

Impact on the Construction Workforce

Managing Workforce Requirements

By virtue of the sheer size of the construction workforce associated with resources project

capital investment since 2004, as the projects transition to an operational phase there will

inevitably be reduction in the demand for skilled and unskilled labour that has been associated

with the construction of these project. This will likely result in a surplus of many construction skills

in the labour market in the short-term. This is most likely not being felt in Western Australia to

any great degree as yet because the more expensive FIFO workers (Eastern States and

Overseas) will naturally be the first to be impacted. However, much of this labour will move

onto other projects within the resources industry, but principally in other sectors of the

economy.

Importantly, increasingly this construction workforce will bring to new projects both within the

resources industry and the wider economy new skills, particularly in remote complex

construction and OHS, enhancing the capability of the Australian construction industry.

Other Resources Industry Projects

The construction of other resources projects such as Roy Hill will absorb some of the

construction workforce as it is released from other projects and other projects in the pipeline

may graduate to construction providing further opportunity in resources project construction.

Additionally, there are significant sustaining capital programs due to commence. For example,

BHP Billiton Iron Ore has an estimated A$2.0 billion of sustaining capital investment in its pipeline.

These programs will also absorb some of the construction workforce as it is released from

projects currently under construction.

Other Construction Market Opportunities

The construction workforce is not resources project specific. As discussed in a subsequent

section of this report, with the exception of the heavy and civil engineering sector, where

mining industry projects account for approximately 38 percent of primary contracting

revenue, mining industry construction projects only account for between 5 and 9 percent of

revenue in other sectors of the construction industry. The Australian construction industry

employs a total of 950,000 people, of which only 16 percent are employed by the sector most

dependent on mining industry projects.

Multi-sector contractors have the luxury of being able to draw employees from sectors where

conditions are softer and redeploy them in sectors where there is stronger demand. This has

been the case with the recent demand for resources project construction. As the resources

project construction market softens, these contractors will redeploy the workforce in markets

where there is growing demand. Interestingly, where this is happening, contractors are

reporting a transfer of improved OHS skills to non-resources projects. As discussed in a following

subsection, the Commonwealth Government’s National Infrastructure Program stands to be a

major beneficiary of this phenomenon.

In terms of civil construction, the main markets where skills will be redeployed are the residential

and non-residential construction markets and the infrastructure construction market. In the

case of fabrication skills, defence force contracts are likely to absorb some of the released

skills.


22

Residential and Non-residential Construction Markets

Based on record low interest rates, the Australian Construction Industry Forum is expecting total

residential building expenditure to grow at an average annual growth rate of 2.3 percent

between 2013-14 and 2022-23, with relatively strong growth in the short term, moderating by

around 2016-17 to 2019-20. Residential starts are expected to peak at approximately 185,000

new dwellings by 2017-188.

Non-residential building expenditure is projected to grow at an average rate of 1.3 percent

per annum from approximately $34 billion in 2012-13 to just below $40 billion by 2022-239.

Increased employment opportunities in both the residential and non-residential construction

market will assist in facilitating the movement of skilled labour.

National Infrastructure Program

The 2013 national infrastructure priority list sets outs priorities for Australia’s infrastructure

investment portfolio. A total of 79 proposals were submitted to Infrastructure Australia by state

and territory governments for inclusion on the 2013 priority list with an estimated cost of

approximately $80 billion. Of these, 34 were included on the priority list with an estimated value

of $24 to $27 billion. Appendix 3 contains a list of projects submitted to Infrastructure Australia

in 2012-1310.

The majority of these projects are major transport projects including road and port projects.

This is supported by a 2014-15 Federal Government budget commitment of A$50 billion for vital

transport infrastructure. Significant investment in, particularly road and port infrastructure by

state, territory and the Federal Government will create construction based employment

opportunities.

Australian Defence Force

Over the next decade, the Australian Government is planning a substantial increase in

Australian Defence Force (ADF) acquisitions across all services, at an estimated cost of more

than $200 billion11. The Defence Materiel Organisation (DMO) estimates that over the next 10

years, approximately 53 percent of its total acquisition and sustainment investment will be

spent in Australia. Over the same period, an estimated 37 percent of capital equipment

acquisition and sustainment will be spent on domestic activity, while approximately 70 percent

of the Australian Defence Force (ADF) sustainment expenditure will be spent in Australia12.

ADF related industries include shipbuilding and repair, boatbuilding and repair, aircraft

manufacturing and repair, fabricated metal product, explosive manufacturing and air space

transport, all of which are fabrication intensive. However, some Defence materiel supply also

comes from the construction sector, including businesses engaged in the construction of

8 Australian Construction Industry Forum (2014), ACIF Forecasts for Residential Building 9 Australian Construction Industry Forum (2014), ACIF Forecasts for Residential Building 10 Infrastructure Australia (2013), National Infrastructure Plan, Australian Government,

Canberra 11 Skills Australia (2012), Defence Industry Workforce Strategy: Background Paper, Australian

Government 12 Skills Australia (2012), Building Australia’s Defence Supply Capabilities: Main Report for the

Defence Industry Workforce Strategy, Australian Government, Canberra


23

buildings and other civil engineering structures, additions, alterations, reconstruction,

installation and maintenance and repairs of other buildings13.

There is significant commonality between some of Australia’s largest defence contractors and

contractors that played a prominent role in the recent Western Australian resources industry

construction phase14 and it is highly probable that workers from these contractors will be

transitioned to defence contracts related employment.

Transition to Operational Roles

Very few resources project construction workers transition to operational roles with projects.

While there is some commonality of skills and that commonality could potentially be widened

through additional supplementary training, the structure and culture of the construction

workforce is such that most construction workers do not desire operational roles. This is

discussed in more detail in a later section of this report.

13 Skills Australia (2012), Defence Industry Workforce Strategy: Background Paper, Australian

Government 14 Skills Australia (2012), Defence Industry Workforce Strategy: Background Paper, Australian

Government


24

Resources Project Construction Workforce

Dynamics

Demand and Supply Not surprisingly, the mining and construction industries have experienced among the highest

employment growth of all sectors of the Australian economy over the past decade. The trend

in employment growth in these industries is illustrated in Figure 715 below.

FIGURE 7 – TREND IN EMPLOYMENT – AUSTRALIAN MINING AND CONSTRUCTION INDUSTRIES

As illustrated in Figure 816 below employment growth in the mining and construction industries

is more profound in Western Australia.

15 Australian Bureau of Statistics (2014), Labour Force, Australia Employed Persons by Industry

Seasonally Adjusted, Cat. 6291.0.55.003, Australian Government, Canberra 16 Australian Bureau of Statistics (2014), Labour Force, Australia, Employed Persons by State

and Industry, Cat. 6291.0.55.003, Australian Government, Canberra

0

1000

2000

3000

4000

5000

6000

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

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2007

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2010

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(3

Qtr

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)

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mp

loy

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'000

)

Australian Mining Industry Australian Construction Industry


25

FIGURE 8 – TREND IN EMPLOYMENT – WESTERN AUSTRALIAN MINING AND CONSTRUCTION INDUSTRIES

Up until the early 2000’s, in both an Australian and Western Australian context, the growth in

construction industry employment has been relatively independent of growth in mining

industry employment. From the early 2000’s onward, growth in the mining industry has clearly

had significant impact on growth in the employment in the construction industry in Western

Australia, and Australia more broadly. Employment growth in the construction industry is more

highly correlated to employment growth in the mining industry in Western Australia (r=0.89)

compared to the rest of Australia (r=0.8).

Nature of the Resources Construction Workforce Unlike the operation of resources projects, which are capital intensive, the construction of

resources projects is labour intensive. In most other industries labour intensive enterprise either

has the luxury of being able to consider the location of the required labour force as a key

component of the decision process pertaining to where the labour intensive enterprise is

geographically located, or the labour intensive enterprise naturally occurs in close proximity

to a population centre by virtue of the markets it serves.

In the case of resources projects, there is very limited scope with respect to making a decision

to locate the construction activity near the required workforce because most of the

construction activity must occur near the in situ resource or geographic location of

downstream processes. Most certainly, some design and management functions can be

located near the required workforce, and advances in modular construction technology

means that much of the actual manufacturing of project components occurs in close

proximity to the required workforce. However, core construction functions such as earthworks,

head works, installation and commissioning tasks must take place at the project site.

This phenomenon is presents a particular challenge in Western Australia because of the remote

and isolated nature of many projects, and the small population and limited civic amenities

0

100

200

300

400

500

600

700

1990

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Western Australian Mining Industry Western Australian Construction Industry


26

that exist in most population centres that are in proximity to projects. The only significant

exception to this is the Darling Ranges bauxite-alumina industry, which is in close proximity to

the Perth Metropolitan, Peel and South West regional centres.

It is this relatively unique labour market dynamic that has resulted in a dramatic increase in the

mobility of the construction workforce in Australia. Whereas resources projects are limited with

respect to optimising the location of construction activity for workforce access, construction

workers reside in most parts of the world and have relatively versatile skills that can be

deployed on construction projects in a wide range of industries. As such, most construction

workers can make decisions as to where they live, the industries they work in and how they

interact with the projects they work on, on the basis of personal utility.

Resources projects have limited options with respect to sourcing construction skills from small

labour markets that are in proximity to the projects, meaning that labour working on those

projects must relocate. Opportunities for the construction workforce to permanently or semi-

permanently relocate to a location in close proximity to resources projects is in most cases

constrained by the absence of a civic centre, or adequate civic centre in proximity to the

project and/or the lack of a sustained construction market in a civic centre that might be in

proximity to the project. As such, a well-managed Fly-in-Fly-out (FIFO) construction workforce

program is the only realistic option for the construction of many Western Australian resources

projects.

This, in turn, means that the only way that resources projects can access adequate supply of

construction workers is through overseas migration and/or domestic and international long-

distance commuting. This is illustrated conceptually in Figure 917 below.

FIGURE 9 – LIMITED CONSTRUCTION WORKFORCE SOURCING OPTIONS FOR WESTERN AUSTRALIAN

RESOURCES PROJECTS

17 Adapted from: Productivity Commission (2014), Geographic Labour Mobility, Australian

Government, Canberra

Demand for Resources ProjectConstruction Workers

Location of employment fixed by locationof in-situ resource and downstream capital

Demand for Resources ProjectConstruction Workers

Relative flexibility in terms of where they work andthe projects they work on

Resource ProjectConstructionWorkforce Demandand Supply Dynamics

Hire local workers who already have necessary

skills or train them if required

Workers migrate from another region within

the country

Workers migrate from overseas

Workers commute long distance (including

FIFO/FIDO)

Firms shift the physical location of the job or workers telecommute

Local Labour Labour Relocation Job Relocation

Resources Industry Construction Projects

Very limited opportunity by

virtue of the remote nature of Western

Australian resources projects

Small due to limited civic amenities in close proximity to

most Western Australian resources

projects

Facilitated in significant volumes by 457 Visas until

2011

Most common source of

construction labour

Limited scope for most resources

construction roles

Resources ProjectConstructionWorkforce SupplyOptions

Resources ProjectConstructionWorkforce SupplyOption Limitations

Local Labour Markets Inter and Intra StateMigration

Overseas Migration Long DistanceCommuting

Relocation ofOperations


27

While operational resources projects face a similar dilemma, the scale of the problem is

somewhat mitigated by the fact the operational workforce is much smaller in terms of number

of workers required and in some cases narrower in terms of breadth of skills. Furthermore, the

increased deployment of automated systems at operational resources projects means that

the oversight of those ICT enabled systems can be conducted from remote operations centres

located in regional population centres. This is particularly the case in the oil and gas industry,

and while only a few mining operations operate substantive remote operating centres, this will

likely be an increasing trend across the Australian resources industry.18

The following subsections describe the dynamics of the different sources of construction

workforce available to resources projects as summarised in Figure 9.

Local Labour Market

For resources projects that are not in practical proximity to a regional population centre, hiring

construction skills from a local market is not an option. However, many resources projects are

in close proximity to Western Australian regional centres and towns such as Kalgoorlie,

Meekatharra, Newman, Tom Price, Karratha, Port Hedland and, more recently, Onslow,

Broome, Ravensthorpe and Geraldton. Indeed many of these towns have developed and

grown as a result of resources project activity. Regardless, skilled workers are generally scarce

in regional population centres.

Where a resources construction project occurs in close proximity to a small local contractor

and/or labour market, there will likely be a propensity for that local contractor and/or labour

market to seek contracts with the resources industry construction project. Where a project

engages this labour this may create a short term labour and/or service shortage in that local

market. However, it is often the case that local labour and/or contractors that have worked

on resources construction projects receive significant economic benefits and develop a

higher level of skills and capabilities from having worked on the project, particularly with

respect to OHS, which they are then able to offer their local market. In many cases, it is likely

that the opportunity created by the resources project has been the catalyst for the expansion

of local service businesses.

In smaller local communities, local government shires are often the main employers and

contractors of a range of engineers, tradespeople and machinery operators. Where this

workforce is attracted to opportunities on resources construction projects, it will typically return

with a more developed skillset and service offering that can be deployed on civic works and

maintenance. While demand for local shire employed or contracted skills from resources

construction projects has created some tension between resources companies and some

local shires, it is probable that once the projects are operational, labour market pressures will

decrease and a higher quality of skills and capabilities will be available to the shires.

Inter and Intra State Migration

Historical commentaries have criticised the Australian population for an apparent low

propensity to relocate to employment markets. However, a recent study by the Australian

18 Australian Venture Consultants (2012), Rise of the Machines? Adoption of Automation

Technology in the Australian Resources Industries and its Implications for Vocational

Education and Training and Higher Education, Resources Industry Training Council


28

Productivity Commission19 indicates that the Australian population is actually relatively mobile

with respect to migrating interstate for the purposes of work.

While Australian capital cities have continued to experience the nation’s highest levels of

population growth, population growth has also been very strong in the resources intensive

regions of the Pilbara in Western Australia, northern- Northern Territory and parts of Queensland.

This is illustrated in Figure 1020 below.

FIGURE 10 - POPULATION GROWTH BY STATISTICAL AREA - 2001 TO 2011

Over the past decade there has been ongoing net interstate migration to Queensland and to

a lesser extent, Western Australia. Arguably, the dominance of Queensland as a recipient of

interstate migrants is a function of resources project activity in Queensland together with its

relative close proximity to major eastern states population centres, more substantial regional

civic infrastructure and a climate and environment that is more widely appealing than that in

which many Western Australian resources projects are located.

It is important to note that while some interstate migration may include construction industry

workers, this is likely to be limited to management roles within EPCMs and major contractors

that are seeking to establish longer term corporate functions in major resources markets. The

19 Productivity Commission (2014), Geographic Labour Mobility, Australian Government,

Canberra 20 Australian Bureau of Statistics (2012) IN: Productivity Commission (2014), Geographic

Labour Mobility, Australian Government, Canberra


29

short-term nature of most resources project construction contracts means that workers will

migrate on a short-term basis or engage through a FIFO program.

The fact that approximately 10 percent of the total Australian mining industry workforce moved

residence between labour markets prior to the last census date, whereas only 4 percent of the

construction industry workforce did the same21 suggests that permanent inter-state migration

is driven by new operational roles or longer term project management roles within mining

companies that result from the expansion of the mining industry, rather than permanent

relocation of construction workers associated with the mining industry.

Overseas Migration

Compared to Queensland, the Western Australian labour market has been more dependent

on overseas migration to meet its growing workforce needs, which is most likely the result of

workers located in the Eastern States reluctant to relocate to Western Australia, which often is

perceived as relatively remote22.

While international migration has always played an important role in Australia’s population

growth, the vast majority of migrants have traditionally settled in the Nation’s capital cities.

Over the past decade, there has been a substantial increase in overseas migrants settling in

regional areas23. This has at least in part been the result of Australian, state and territory policies

designed to attract skilled migrants to regional Australia to address the regional skills deficiency

discussed in a previous section of this report.

Many migrants working in the Australian resources industry have come to Australia on Subclass

457 Visas, which allow skilled persons to come to Australia to work for an approved employer,

accompanied by their immediate family for a period of between one day and four years.

Operational mining companies, EPCMs and contractors involved in resources construction

projects have used the 457 visa program to address skills shortages in both professional and

trade areas. However, they have not been the main users of the 457 visa program, with

accommodation and food services, health care and social assistance, information media and

telecommunications and other services sectors each routinely accounting for over 10 percent

of 457 visa applications24.

Figure 11 below illustrates the trend in Subclass 457 visas granted to individuals with professional

occupations relevant to the resources industry.

21 ABS IN: Productivity Commission (2014), Geographic Labour Mobility, Australian

Government, Canberra 22 Productivity Commission (2014), Geographic Labour Mobility, Australian Government,

Canberra 23 Productivity Commission (2014), Geographic Labour Mobility, Australian Government,

Canberra 24 Department of Immigration and Border Protection (2014), Subclass 457 Quarterly Reports,

Australian Government, Canberra


30

FIGURE 11 - SUBCLASS 457 VISAS GRANTED TO PROFESSIONAL OCCUPATIONS RELEVANT TO THE RESOURCES

INDUSTRY - 2005-06 TO 2010-11

Figure 12 below illustrates the trend in Subclass 457 visas granted to individuals with trade

occupations relevant to the resources industry.

-

200

400

600

800

1,000

1,200

1,400

1,600

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

Nu

mb

er o

f V

isas

Surveyors and Spatial Scientists Architects and Landscape Architects

Electronics Engineers Chemical and Materials Engineers

Medical Laboratory Scientists Other Natural and Physical Science Professionals

Environmental Scientists Electrical Engineers

Mining Engineers Geologists and Geophysicists

Other Engineering Professionals Industrial, Mechanical and Production Engineers

Civil Engineering Professionals


31

FIGURE 12 - SUBCLASS 457 VISAS GRANTED TO TECHNICAL AND TRADE OCCUPATIONS RELEVANT TO THE

RESOURCES INDUSTRY - 2005-06 TO 2009-10

The significant decline in subclass 457 visa grants in 2009-10 was the result of major changes to

the program that came into effect on 14 September 2009.

Long Distance Commuting

Long distance commuting is undertaken through Fly-in-Fly-out (FIFO) and Drive-in-Drive-out

(DIVO) operations, and is a substitute for permanent or semi-permanent residential relocation.

While long-distance commuter workers are estimated to comprise only approximately 2

percent of the total Australian workforce, FIFO in particular plays a critically important role in

resources industry construction and operational workforces25. Indeed, as illustrated in Figure 13

25 KPMG IN: Productivity Commission (2014), Geographic Labour Mobility, Australian

Government, Canberra

-

500

1,000

1,500

2,000

2,500

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

Nu

mb

er o

f V

isas

Precision Metal Trades Workers Automotive Electricians

Toolmakers and Engineering Patternmakers Metal Casting, Forging and Finishing Trades Workers

Telecommunications Trades Workers Safety Inspectors

Airconditioning and Refrigeration Mechanics Electrican Distribution Trade Workers

Electronics Trades Workers Sheetmetal Trades Workers

Electronic Engineering Draftpersons and Technicians Aircraft Maintenance Engineers

Civil Engineering and Draftpersons and Technicians Other Building and Engineering Technicians

Metal Fittters and Machinists Electricians

Electrical Engineering Draftpersons and Technicians Architectural, Building and Surveying Technicians

Structural Steel and Welding Trades Workers Motor Mechanics

Mechanical Engineering Draftpersons and Technicians


32

below, as at 2011 the Pilbara region of Western Australia was the second most common

destination for long distance commuters in Australia26. It should be noted that FIFO and other

forms of long-distance commuting form a significant portion of the workforce in other labour

markets. For example, as illustrated in Figure 13 below, Sydney is the most common destination

for long distance commuters in Australia. Long distance commuting is common to many large

commercial centres around the globe and is a function of the breadth and depth of

organisations that comprise those centres, the breadth of depth of skills that are required by

those organisations, limited capacity of the employment market in those centres to deliver

those skills, limited residential options in those centres and the lifestyle choices of knowledge

workers.

FIGURE 13 – MOST COMMON DESTINATION FOR LONG DISTANCE COMMUTERS

Similarly in the Perth – Pilbara route is the most common long distance commuting route. This

is illustrated in Figure 1427 below.


Canberra 27 Productivity Commission (2014), Geographic Labour Mobility, Australian Government,

Canberra

-

5,000

10,000

15,000

20,000

25,000

Nu

mb

er o

f P

erso

ns

2006 2011


33

FIGURE 14 – MOST COMMON LONG DISTANCE COMMUTING ROUTES

As illustrated in Figure 1528 below, the majority of this workforce tends to be either technical

and trade workers or machinery operators and drivers, the vast majority of which are working

on either operational resources projects or resource construction projects.


Canberra

-

2,000

4,000

6,000

8,000

10,000

12,000N

um

ber

of

Per

son

s

2006 2011


34

FIGURE 15 – PROFILE OF LONG DISTANCE COMMUTERS – PERTH TO EAST PILBARA (2006)

Managers

5%

Professionals

11%

Technicians and Trade

Workers

32%Machinery Operators

and Drivers

35%

Community and

Personal Service

Workers

3%

Clerical and

Administrative

Workers

4%

Labourers

10%


35

Relationship between the Mining and

Construction Industry Workforces

In considering what happens to the resources project construction workforce as the industry

passes through peak construction and whether there are opportunities for that workforce in

the operational resources industry, the commercial, demographic and skills profiles of the

construction and resources industry workforces need to be considered.

Revenue and Employment

Mining Industry

During the year 2011-12, the mining industry produced total revenues of approximately $237.4

billion29. As illustrated in Figure 16 below, the coal mining, oil and gas extraction and iron ore

mining sectors accounted for approximately 75 percent of this revenue.

FIGURE 16 – DISTRIBUTION OF MINING INDUSTRY REVENUE

Over half of the 263,000 people employed in the mining industry are employed in the coal,

metal ore and non-metallic mineral mining roles. Just over a quarter are employed in

29 Australian Bureau of Statistics (2013), Mining Operations Australia

Coal Mining

27%

Oil and Gas Extraction

18%

Iron Ore Mining

31%

Copper Ore Mining

3%

Gold Ore Mining

6%

Mineral Sands Mining

1%

Silver-Lead-Zinc Ore

Mining

2%

Bauxite, Nickel and

other Metal Mining

2%

Non-Metallic Mineral

Mining

3% Exploration and Other

Mining Support

Services

7%


36

exploration and other mining support roles. The oil and gas extraction sector accounts for only

8 percent of employment in the industry. This is illustrated in Figure 17 below.

FIGURE 17 – DISTRIBUTION OF EMPLOYMENT ACROSS SECTORS OF THE AUSTRALIAN MINING INDUSTRY

Construction Industry

During the year 2011-12, the construction industry produced total revenues of approximately

$305.5 billion30. As illustrated in Figure 18 below, the construction services sector, which includes

the land development and site preparation, building installation, building completions and

other construction services sub-sectors, accounted for the majority of this revenue.

30 Australian Bureau of Statistics (2013), Private Sector Construction Industry, Australia

Coal Mining

18%

Oil and Gas

Extraction

8%

Metal Ore Mining

28%

Non- Metallic

Mineral Mining and

Quarrying

5%

Exploration and

Other Mining

Support Services

25%

Other

16%


37

FIGURE 18 – DISTRIBUTION OF CONSTRUCTION INDUSTRY REVENUE (2011-12)

In terms of primary contracting income from trade services, the heavy and civil engineering

construction sector accounts for approximately 48 percent. As illustrated in Figure 1931 below

the mining industry accounts for 38 percent of primary contracting revenue in the heavy and

civil engineering construction sector, but only 9 and 5 percent in the building construction and

construction services sectors respectively.


Building

Construction

33%

Heavy and Civil

Engineering

Construction

22%

Construction

Services

45%


38

FIGURE 19 – SECTOR SOURCES OF CONSTRUCTION INDUSTRY PRIMARY CONTRACTING INCOME

As illustrated in Figure 2032 below the heavy and civil engineering construction industry

operates of lower net margin that the other sectors.

FIGURE 20 – AUSTRALIAN CONSTRUCTION INDUSTRY OPERATING MARGIN (2011-12)


-

10,000

20,000

30,000

40,000

50,000

60,000

Building Construction Heavy and Civil Engineering

Construction

Construction Services

A$

(mil

lio

n)

Mining Manufacturing Electricity, Gas, Water and Waste Telecommunications Other

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Building Construction Heavy and Civil

Engineering

Construction

Construction Services Construction Industry

Average


39

The construction industry in Australia employs approximately 950,000 people, which is four

times as many people as the Australian mining industry. Approximately, 68 percent of this

workforce is employed in the construction services sector, the vast majority of which work in

small businesses employing less than 20 people. The heavy and civil engineering construction

sector employs approximately 16 percent of the total construction industry workforce, the

majority of which work in large businesses employing more than 200 people. Table 433 below

summarises the nature of business and employment in the Australian construction Industry.

Building

Construction

Heavy and Civil

Engineering

Construction

Construction

Services

Industry Total

SME Businesses 31,251 5,722 17,624 209,597

Large Businesses 46 67 73 186

Employment 160,000 154,000 636,000 950,000

Percentage

Employed by Small

Business (0-19

Persons)

59.4% 16.9% 73.7% 62.1%

Percentage

Employed by

Medium Business

(20-199 persons)

24.4% 15.6% 18.9% 19.3%

Percentage

Employed by

Large Business

(>200 persons)

16.25% 67.5% 7.4% 18.6%

TABLE 4 – AUSTRALIAN CONSTRUCTION INDUSTRY BUSINESS TYPE AND EMPLOYMENT DEMOGRAPHICS

Figure 2134 below illustrates the geographical distribution of the Australian construction industry

workforce. Interestingly, the workforce in each sector of the Australian construction industry is

reasonably equally distributed across the larger states of New South Wales, Victoria,

Queensland and Western Australia. The fact that there isn’t a skew in the construction industry

workforce toward Western Australia and Queensland is probably reflective of considerable

residential and non-residential construction markets in the more populated states of New South

Wales and Victoria and the long-distance commuter intensity of the resources project

construction workforce.

33 Australian Bureau of Statistics (2013), Private Sector Construction Industry, Australia 34 Australian Bureau of Statistics (2013), Private Sector Construction Industry, Australia


40

FIGURE 21 – GEOGRAPHICAL DISTRIBUTION OF THE AUSTRALIAN CONSTRUCTION INDUSTRY WORKFORCE

Figure 2235 below illustrates the differences in income, wages and salaries and other expenses

in the building construction sector across the various States and Territories. In this sector, wages

and salaries and other expenses as a percentage of income in the resource project intensive

states of Western Australia and Queensland are within 1 percent of the national average.


0

100

200

300

400

500

600

700

Building Construction Heavy and Civil Engineering

Construction

Construction Services

Nu

mb

er o

f P

erso

ns

('00

0)

New South Wales Victoria Queensland

South Australia Western Australia Tasmania

Northern Territory Australian Capital Territory


41

FIGURE 22 – BUILDING CONSTRUCTION SECTOR INCOME AND EXPENSES BY STATE AND TERRITORY

Figure 2336 below illustrates the difference in income, wages and salaries and other expenses

in the construction services sector across the various States and Territories. Similarly, wages and

salaries wages and salaries as a portion of total income in the resource project intensive states

of Western Australia and Queensland are comparable to the national average.


-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

New South

Wales

Victoria Queensland South

Australia

Western

Australia

Tasmania Northern

Territory

Australian

Capital

Territory

Wages and Salaries Other Expenses Income


42

FIGURE 23 – CONSTRUCTION SERVICES SECTOR INCOME AND EXPENSES BY STATE AND TERRITORY

However, in the case of the heavy and civil engineering construction sector, wages and

salaries as a portion of income in Western Australia are the highest in the nation at five percent

above the national average. Interestingly, Queensland is comparable to the national

average. Figure 2437 below illustrates income, wages and salaries expense and other expenses

for the heavy and civil engineering construction sector across the states and territories.


-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

New South

Wales


Australia

Western

Australia

Tasmania Northern

Territory

Australian

Capital

Territory



43

FIGURE 24 – HEAVY AND CIVIL ENGINEERING CONSTRUCTION SECTOR INCOME AND EXPENSES BY STATE

AND TERRITORY

Demographic Comparison Both the construction and mining industries face gender balance issues. As illustrated in Figure

2538 below, both are male dominated industries.

FIGURE 25 – GENDER BALANCE OF THE MINING AND CONSTRUCTION WORKFORCES

38 Australian Workforce and Productivity Agency (2012)

-

5,000

10,000

15,000

20,000

25,000

New South

Wales


Australia

Western

Australia

Tasmania Northern

Territory

Australian

Capital

Territory


-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

Construction Mining

Nu

mb

er o

f P

erso

ns

Male Female


44

As illustrated in Figure 2639 below, while both are young workforces, the construction industry

workforce is a younger workforce than the mining industry. This is most likely reflective of the

higher proportion of roles that are physically intensive in the construction industry.

FIGURE 26 – AGE DISTRIBUTION OF THE CONSTRUCTION AND MINING INDUSTRY WORKFORCES

Reflective of the significant size of the urban commercial, industrial and residential construction

market that is serviced by the construction industry, a much larger portion of construction

industry employment is located in capital cities than is the case in the mining industry. This is

illustrated in Figure 2740 below.

39 Australian Workforce and Productivity Agency (2012) 40 Australian Workforce and Productivity Agency (2012)

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

Construction Mining

Nu

mb

er o

f P

erso

ns

45 Years or Older Younger than 45


45

FIGURE 27 – LOCATION OF EMPLOYMENT OF THE CONSTRUCTION AND MINING INDUSTRY WORKFORCES

Education and Training Comparison This section discusses the difference in training and education qualifications across labourer,

technicians and trade workers, machinery operators and drivers, professionals and managers

in the resources and construction industries.

The level of training and education qualifications attained by labourers in both industries is

comparable. Similar portions of labourers both the construction and mining industry

workforces having no post school qualifications, Certificate I, II, III or IV, diploma or advanced

diploma and higher education degree qualifications. This is illustrated in Figure 2841 below.


-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

Construction Mining

Nu

mb

er o

f P

erso

ns

Regional Employment Capital City Employment


46

FIGURE 28 – TRAINING AND EDUCATION PROFILE OF LABOURERS IN THE MINING AND CONSTRUCTION

INDUSTRIES

There is also strong similarity in the level of training and education qualifications attained by

technicians and trade workers in both industries. This is illustrated in Figure 2942 below.


0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%P

ort

ion

of

the

To

tal

Wo

rkfo

rce

Construction Mining


47

FIGURE 29 – TRAINING AND EDUCATION PROFILE OF TECHNICIANS AND TRADE WORKERS IN THE MINING

AND CONSTRUCTION INDUSTRIES

Similarly, the level of training and education qualifications attained by equipment operators

and drivers is consistent between the mining and construction industries. This is illustrated in

Figure 3043 below.


0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%P

ort

ion

of

To

tal

Wo

rkfo

rce

Construction Mining


48

FIGURE 30 – TRAINING AND EDUCATION PROFILE OF EQUIPMENT OPERATORS AND DRIVERS IN THE MINING

AND CONSTRUCTION INDUSTRIES

Nor does the level of training and education qualifications attained by professionals in either

industry differ substantively. This is illustrated in Figure 3144 below.


0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%P

ort

ion

of

To

tal

Wo

rkfo

rce

Construction Minining


49

FIGURE 31 – TRAINING AND EDUCATIONAL PROFILE OF PROFESSIONALS IN THE MINING AND CONSTRUCTION

INDUSTRY WORKFORCES

However, in the case of the construction industry, substantially more managers have

certificate III/IV qualifications than is the case in the mining industry. In the mining industry more

managers have bachelor degree or higher qualifications than in the construction industry. This

is illustrated in Figure 3245 below and is reflective of the larger number of trade supervisors in

the construction industry and the more specialist technical intensity of an operational

resources project.


0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%P

erce

nta

ge

of

To

tal

Wo

rkfo

rce

Construction Minining


50

FIGURE 32 – TRAINING AND EDUCATION PROFILE OF MANGERS IN THE MINING AND CONSTRUCTION

INDUSTRY WORKFORCES

Key Occupations In the construction industry, the ten most common occupations account for approximately

52.5 percent of total employment in the construction industry. These ten most common

occupations and the number of people employed in these occupations in the construction

industry are summarised in Figure 3346 below.

46 Australian Workforce and Productivity Agency (2012), Construction Industry Snapshot

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%P

erce

nta

ge

of

To

tal

Wo

rkfo

rce

Construction Mining


51

FIGURE 33 - NUMBER OF PEOPLE EMPLOYED IN THE TOP 10 OCCUPATIONS IN THE CONSTRUCTION INDUSTRY

In the mining industry, the ten most common occupations account for approximately 55

percent of all persons employed in the mining industry. These top 10 occupations and the

number of people employed in these occupations in the mining industry are summarised in

Figure 3447 below.

47 Australian Workforce and Productivity Agency (2012), Mining Industry Snapshot

0

20,000

40,000

60,000

80,000

100,000

120,000

Carpenters

and Joiners

Electricians Plumbers Construction

Managers

Painting

Trades

Workers

Concreters Building and

plumbing

Labourers

Earthmoving

Plant

Operators

Architectural,

Building and

Surveying

Technicians

Plasterers

Nu

mb

er o

f P

erso

ns

Em

plo

yed


52

FIGURE 34 - NUMBER OF PEOPLE EMPLOYED IN THE TOP 10 OCCUPATIONS IN THE MINING INDUSTRY

Table 548&49 below lists other specialist skills that are relevant to the construction and mining

industries.

48 Australian Workforce and Productivity Agency (2012), Construction Industry Snapshot 49 Australian Workforce and Productivity Agency (2012), Mining Industry Snapshot

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

Drillers,

Miners and

Shot Firers

Metal Fitters

and

Machinists

Truck Drivers other

Building and

Engineering

Technicians

Electricians Earthmoving

Plant

Operators

Production

Managers

Mining

Engineers

Structual

Steel and

Welding

Trades

Workers

Other

Stationary

Plant

Operators

Nu

mb

er o

f P

erso

ns

Em

plo

yed


53

Construction Industry Mining Industry

Construction mangers Construction managers

Engineering managers Engineering managers

Land economists and valuers Production managers

Architects and landscape architects Chemical and material managers

Surveyors and spatial scientists Electrical managers

Urban and regional planners Electronics engineering

Civil engineering professionals Industrial, mechanical and production

engineers

Bricklayers and stonemasons Mining engineers

Carpenters and joiners Other engineering professionals

Floor finishers Occupational and environmental health

professionals

Painting and trade workers Electrical engineering draft persons and

technicians

Glaziers Structural steel and welding trade workers

Plasterers Metal fitters and machinists

Wall and floor tilers Plumbers

Plumbers Electricians

Electricians Air conditioning and refrigeration mechanics

Wood machinists and other wood trade workers Electrical distribution trade workers

Electronics trade workers

Fire and emergency workers

TABLE 5 – COMMON SPECIALIST OCCUPATIONS IN THE CONSTRUCTION AND MINING INDUSTRIES

Assessment of Workforce Commonality

Skills

The analysis in this section of the report indicates that there is considerable commonality in the

level of training and education qualifications attained by various categories of workers in both

industries. In terms of intensity of demand for skills, the greatest commonality is in the roles of


54

electricians and earth moving plant operators, as well as speciality areas of construction and

engineering managers. However, in all cases, the demand for these skills from operational

resources projects will be far less than demand from the construction industry simply by virtue

of the comparative size of the sectors and the much smaller overall operational resources

workforce.

There is likely to be common demand for other occupations such as structural steel and

welding trades, truck drivers and plumbers. However, the operational resources projects tend

to employ fewer numbers of persons in these roles. Many functions such as drillers and shot

firers who comprise a large component of the mining industry workforce are specialist skills with

limited application outside of the resource industry. Furthermore, many of the general trades

deployed at operational resources projects develop specialist skills peculiar to their

operational resources project role.

Structure and Culture

As discussed above, there is some scope for transition of roles in the resources industry

construction workforce to operational roles in those projects, particularly in the case of

electricians and earth moving plant operators. However, the number of opportunities for

electricians and earth moving plant operators to transition to operational roles will be

substantially limited by the much smaller size of the operational resources industry workforce.

The construction and resources industry workforces demonstrate similar demographics in terms

of age and gender profile. However, for the following reasons the construction industry

workforces are culturally and structurally quite different:


wide range of construction projects, across many sectors of the economy. Whereas,

skills in resources industry operational roles tend to be relatively specialised for the

specific task.


locations in which it works based on personal utility. Workers that comprise that

workforce are comfortable with geographic and project diversity and often thrive on

that diversity. Whereas, workers that comprise the operational resources industry

workforce, typically seek a higher degree of permanency and stability.

As such, even where a construction industry worker’s skills could be deployed on an

operational resource project, or where they could be further developed through additional

training to be deployed on an operational resources industry project, it is highly unlikely that

many construction industry workers will seek a permanent operational role.


55

Lessons from the Recent Construction Phase Resources project development costs in Australia, particularly in Western Australia, over the

past decade do not compare well with other jurisdictions. For example, it has been estimated

that when compared to the Gulf Coast of the United States, Australian sustaining capital

projects are 40 percent more expensive, iron ore and coal developments 38 percent more

expensive and large complex downstream projects 50 percent more expensive50. Additionally,

it has been widely cited that in the case of Western Australian iron ore projects, the cost per

expansion tonne has increased from A$10 per expansion tonne to between A$28 and A$48

per expansion tonne.

These higher costs are a function of a number of factors including the remote location of

projects, particularly in Western Australia, the sheer number and scale of projects under

construction at the same time, more significant capital investment associated with recovery

from lower quality deposits (resource depletion effect) and the workforce constraints discussed

in this paper. These are structural issues associated with the Australian economy that will not

change dramatically in the short to medium term.

Another cited contributor to the escalation of costs is the mechanism through which resources

construction projects are managed. The engagement of an EPCM to manage the detailed

engineering, procurement and construction of a resources project allows resources

companies to develop projects without maintaining an internal construction group, which in

the case of most, if not all, resources companies would not be sustainable. However,

anecdotally, the size of the internal project management team that is required to oversee and

effectively liaise with the EPCM has grown dramatically. Two factors have driven the growth in

the project management function:

Increased focus on OHS and Environment

Increased awareness and action on managing OHS and the environmental impact of

projects has created management positions associated with these functions within the

EPCM that need to be integrated with the resources companies OHS and environment

policies. This requires OHS and environment functionality within the internal project

team.

Man-matching

The sheer scale of the projects means that the EPCM management teams have grown

as well. In order to effectively liaise with the EPCM, the internal project management

teams have expanded. This is necessary to ensure construction projects remain on

schedule.

Construction productivity challenges are also occurring at the construction sites. This is primarily

a result of growing supervisory and safety requirements. A typical trade team is now comprised

of three trade workers, a lead-hand and a supervisor. OHS induction processes can result in it

taking up to two hours from a worker who is not accredited with the resources company’s

safety training contractor to enter a site. The fact that companies use different safety training

contractors causes significant cost where contractors are moving from project to project as

most resources companies will only accept accreditation from their specific OHS training

50 Business Council of Australia (2013), Securing Investment in Australia’s Future: Report of the

Costs Task Force


56

service provider. For example, it has been estimated that on a $30 million construction project,

approximately $1.0 million will be associated with induction and safety training.

Furthermore, the change in construction worker FIFO rosters from 3 weeks on and 1 week-off

to 2 weeks on and 1 week off is resulting in lower productivity, as workers don’t have adequate

time to settle in and focus.

While OHS and environmental management is obviously critical, there seems scope to

substantially improve the efficiency through which this is managed. The solution is likely to

revolve around standardisation and harmonisation of induction programs where possible

across industry and the application of enhanced ICT solutions for integrating with EPCMs and

conducting project induction. It should be noted that the standardisation of induction

programs has been trialled previously by industry. The Mining and Resources Contractors Safety

Training Association (MARCSTA) is a not-for-profit organisation established in 1996 to provide

safety inductions for organisations contracting to the mining industry and industry in general.

The key product is a basic safety induction and subsequent refresher program that was

designed to ensure currency of knowledge of essential safety legislation, regulatory

requirements and fundamental industry safety practices. This is delivered by a network of

training providers. This program does not replace site specific induction program, but rather

provides and introduction to OHS fundamentals in the mining industry.

As at February of this year, MARCSTA ceased offering nationally accredited units of

competency and has relinquished its RTO status. In order to have a material effect on

productivity, a standardised OHS induction program would have to substantially reduce

individual site specific requirements.


57

Implications for Skills, Training and Education

While it is prima-facie rational to expect that supplementary training could play a role in

transitioning some of the construction workforce to operational roles in new resources industry,

the analysis in this study strongly indicates that for cultural and structural reasons, there would

be a limited market for such training.

The most important observation from this study is the identification of productivity issues

associated with the recent investment phase. There were clearly significant productivity

penalties associated with the EPCM model of resource project construction management that

was used ubiquitously over the past decade. While there is no alternative to a contracted

construction model, there may be scope for improving the efficiency of that model. This would

require deeper research into issues such as the following so that learnings could be

incorporated into current and future training and education programs targeted at both the

resources and construction industries:

Investment Phase Cycle Management

A generally deeper understanding of the recent investment phase cycle in terms of skill

requirements and timing of those skill requirement could better inform future training

and resourcing requirements.

Project Management

Clearly a significant portion of the productivity penalty associated with the recent

investment phase was the project management structures used to manage the

construction projects. Research into this phenomenon and alternatives may inform a

more efficient future investment phase.

Complex Remote Project Construction

The recent investment phase revolved around a relatively large number of complex

construction projects in remote isolated locations. The workforce that undertook that

construction will have learnings associated with performing their specific functions in

these conditions that could be captured and incorporated into education and training

programs so that future investment phases are better informed. These learning may

range from optimal FIFO rosters to performing specific technical tasks in infrastructure

deficient locations.

Occupational Health and Safety Induction

One implication for training and education from this report is in the harmonisation of

OHS and environmental training across trades and industries to reduce induction cost.

While each project is unique and as such will have unique OHS and environmental risks,

the cost of safety training in particular could be substantially reduced if a significant

component of the fundamentals could be delivered as part of worker training and

education and that this was recognised within and across industries. Historical attempts

to achieve this have proved challenging and as such, an assessment of the reasons

historical attempts have failed should be undertaken.


58

Conclusions

The expansion of the Australian resources industry over the past decade has seen a total of

A$457 billion of new resources industry capital, more than half of which has been expended

in Western Australia.

The peak construction workforce associated with the Western Australian projects is at least

45,000. These workers have been employed or contracted by approximately 210 EPCM and

contractor companies engaged by resources project proponents to give effect to

construction.

When a resources project transitions from the construction phase to an operational phase the

size of the workforce associated with that project substantially reduces. The degree to which

the size of the workforce decreases is a function of the nature of the project and its operational

workforce requirements. Nevertheless, the size of the workforce decreases by at least

approximately 65 percent in the case of iron ore projects and by as much as 96 percent in the

case of oil and gas projects. The skills and occupation profiles of the construction and

operational workforces are also markedly different. Many functions such as drillers and shot

firers who comprise a large component of the mining industry workforce are specialist skills with

limited application outside of the resource industry. In the limited areas of expertise where

there is overlap, such as electricians, the demand from the operational resources industry for

these skills is far less than the demand for these skills from the much larger construction industry.

Very importantly, the operational workforce is not a subset of the construction workforce as

very few, if any workers employed by construction contractors transition into operational roles

with the projects. This is primarily because for the following reasons, the construction industry

workforce is culturally and structurally very different to the operational mining industry

workforce:


wide range of construction projects, across many sectors of the economy. Whereas,

skills in resources industry operational roles tend to be relatively specialised for the

specific task.


locations in which it works based on personal utility. Workers that comprise that

workforce are comfortable with geographic and project diversity and often thrive on

that diversity. Whereas, workers that comprise the operational resources industry

workforce, typically seek a higher degree of permanency and stability.

As such, while supplementary training in some areas could create opportunity for transition of

some roles from the construction workforce to the operational workforce, there is unlikely to

be a substantive market for such courses. The main implication for training and education is to

better understand the sources of productivity penalties associated with the resources industry

investment phase over the past decade and to build key learnings from that work into future

education and training programs targeted at both the resources and construction industries.


59

Appendix 1 – Overview of Western Australian

Resources Industry Construction Projects

Oil and Gas Projects

Browse, Woodside (FID Delayed/Pre-FID)

Woodside’s Browse Basin interests are located approximately 425 kilometers off the north of

Broome, Western Australia. It was initially proposed that gas would be transferred to a shore

based LNG plant at the Western Australian Government’s proposed James Price Point Natural

Gas Precinct. However, further development of this option was suspended, when studies

demonstrated that the option would prove uneconomic. Currently, Woodside is seeking to

enter into FEED for a floating LNG option, with FID targeted for the second half of 2015.

Gorgon, Chevron (Under Construction)

The Gorgon Project is developing the Gorgon and Jansz-lo gas fields, located between 130

and 220 kilometers off the northwest coast of Western Australia. The project includes the

construction of a 15.6 MTPA LNG export plant as well as a domestic gas plant with a supply

capacity of 300 terrajoules per day on Barrow Island. The first LNG shipment and domestic gas

delivery is expected in 2015.

Julimar, Apache (Under Construction)

The Julimar and Brunello gas fields were discovered by Apache and Kuwait Foreign Petroleum

Exploration Co. (KUFPEC) in 2007 and are located approximately 180 kilometres west-northwest

of Dampier in Western Australia. In 2009, Apache and KUFPEC agreed to supply gas from the

fields to the Chevron operated Wheatstone LNG project.

Macedon, BHP Billiton Petroleum (Recently Commissioned)

The Macedon Gas Project comprises the development of the Macedon gas field, a subsea

gas pipeline and an onshore gas treatment and compression plant located at Ashburton

North, approximately 17 kilometres southwest of Onslow. The plant produces gas for sale into

the domestic market via the Dampier to Bunbury Natural Gas Pipeline. The project

commenced operations in August 2013.

North West Shelf, Rankin Redevelopment, Woodside (Recently

Commissioned)

In March 2008 the North West Shelf Project participants approved funding of the A$5 billion

North Rankin Redevelopment which will recover remaining low pressure gas from the North

Rankin and Perseus gas fields, and extend the field life to around 2040. The project has involved

the installation of a new second platform- North Rankin B- with gas compression facilities, low

pressure separators, utilities and accommodation. It also included the necessary connections

to North Rankin A and some refurbishment of the North Rankin A platform. The project

commenced sending gas to the Karratha Gas Plant in October 2013.


60

Northwest Shelf Greater Western Flank, Woodside (Under Construction)

The broader Greater Western Flank (GWF) area consists of 16 fields located to the south west

of the Goodwyn A (GWA) platform, and are estimated to contain gross (100%) Proved plus

Probable (2P) reserves of 3.1 Tcf of dry gas and 99 million barrels of condensate. In December

2011, Woodside, as Operator of the North West Shelf Project, announced the North West Shelf

Project participants had approved the development of the first phase of the Greater Western

Flank Project off the north-west coast of Australia with a total estimated capital expenditure of

approximately A$2.5 billion. The project is expected to commence production in 2016.

Prelude, Shell (Under Construction)

The Prelude FLNG project achieved FID in May 2011. The field is currently under development

and the FLNG facility under construction. Once operational, the Prelude FLNG facility will

produce at least 5.3 million tonnes per annum (mtpa) of liquids, 3.6 mtpa of LNG, 1.3 mtpa of

condensate (equivalent to 35,000 bbl/d) and 0.4 mtpa of LPG.

The project is expected to create around 350 direct and 650 indirect jobs. Recruitment of staff

to operate the facility will ramp up during 2013 and 2014.

Scarborough, ExxonMobil (Pre-FID)

ExxonMobil's affiliate, Esso Australia Resources Pty Ltd, is the operator of the Scarborough gas

field in a 50:50 joint venture with BHP Billiton Petroleum. Scarborough, discovered in 1979, is

located approximately 220 kilometres northwest of Exmouth in 900 metres of water. It is one

of the most remote Carnarvon Basin gas resources. Development of the project will include:

o Drilling of approximately 12 production wells drilled in two phases, with

approximately seven wells being drilled between 2018 and 2019 (Phase 1) and

approximately five wells to be drilled within approximately 15 years following

Project start up (Phase 2).

o Installation of subsea infrastructure including umbilicals, risers and flowlines and

tie-back of the production wells to the FLNG facility. Offshore installation and

commissioning is scheduled to occur during 2019-2020.

o Installation and operation of the FLNG facility that will be permanently moored

on location and is expected to be approximately 495 m long and 75 m wide.

The FLNG facility will combine the requirements for gas treatment, liquefaction,

storage and transfer of LNG to carriers for delivery to market. Production is

expected to commence during 2020-21. The Scarborough gas field has an

expected producing life of approximately 25-35 years.

The Project is currently in the pre-front end engineering design (pre-FEED) phase. Given that

the Project is currently in an early phase, the Project timings provided are indicative only.

Following completion of FEED, a final investment decision (FID) is expected during 2014-2015.

Wheatstone, Chevron (Under Construction)

Chevron discovered the Wheatstone gas field in August 2004 and in March 2008 announced

an intention to develop the gas resource as a greenfield onshore LNG and domestic gas


61

project. A final investment decision to proceed with the Wheatstone Project was made in

September 2011, with construction commencing in December of the same year. The

Wheatstone Project will include an onshore facility located at Ashburton North Strategic

Industrial Area (ANSIA), 12 kilometres west of Onslow in Western Australia’s Pilbara region. The

foundation project includes two LNG trains with a combined capacity of 8.9 million tonnes

per annum (MTPA) and a domestic gas plant.

Iron Ore Projects

Karara Expansion, Karara/Gindalbie Metals (Under Construction)

Located in the Midwest region of Western Australia, approximately 200 kilometres east of

Geraldton, the Karara DSO and magnetite operation commissioned in 2011-12 producing

approximately 8.5 mtpa of DSO and magnetite, exporting through the Port of Geraldton.

Karara’s plans to expand to 16 mtpa in the medium term, requiring an export port alternative

(ultimately Oakajee) as the Geraldton Port is at capacity.

Rio Tinto Pilbara Expansion (Under Construction)

Under its Rio Tinto 353 Expansion plan, Rio Tinto is endeavouring to achieve annual production

from its Pilbara operations of 333 mtpa by 2015. This expansion program is being conducted

over two phases. Phase 1 was completed in the third quarter of 2013 and increased production

to 290 mtpa. Phase 2 will see production capacity grow to 360 mtpa by 2015. By 2015, it is

expected that Rio Tinto will have spent more than A$18 billion on this expansion program.

Phase I and Phase II have and will involve a number of brownfield expansions at existing mines

including Nammuldi, Marandoo, Western Turner Syncline, Brockman 4 and Yandicoogina, as

well as significant upgrades to processing and rail facilities. It also includes the development

of the Hope Downs 4 mine (see below).

A significant component of the expansion is a major expansion of Rio Tinto’s Port Lambert

export facilities. The development at Cape Lambert will cost approximately A$200 million and

will increase Cape Lambert’s capacity by 53 million tpa. The project includes a tandem car

dumber facility, a stockyard (including two stackers) and two bucket wheel reclaimers, a

screenhouse and surge bin facility, 1.4 kilometre jetty and a double-sided iron ore wharf with

two shipping berths and a ship-loader.

BHP Billiton Pilbara Expansion (Under Construction)

BHP Billiton Iron Ore’s expansion plans will see production from its Pilbara operations grow to

220 mtpa. This will involve a number of brownfield expansions and increased processing and

rail capacity. Originally the expansion plans involved the development of an ‘outer-harbour’

capacity and stockyard facility at Port Hedland. However, these plans have been suspended

in favour of a more modest development of the inner-harbour.

A major component of BHP Billiton’s expansion plans has been the development of the

Jimblebar Mine, located 43 kilometres east of Newman. With a total capital investment of

US$2.6 billion and a construction workforce of 2,500, the mine commenced production in 2014

and will immediately scale to 35 mtpa by the end of the 2015 financial year. Production at

Jimblebar is ultimately expandable to 55 mtpa.


62

Chichester and Solomon Expansion, Fortescue Metals Group (Recently

Commissioned/Under Construction)

Chichester Hub

The Chichester Hub is located 263 kilometres south of Port Hedland and 150 kilometres north of

Newman. It encompasses the Cloudbreak and Christmas Creek mines, as well as a smaller

amount of ore feedstock provided under a under a joint venture with BC Iron.

The Cloudbreak mine was commissioned in 2008 and currently processes approximately 40

mtpa. Christmas Creek is located 50 kilometres east of Cloudbreak and commenced

production in 2009. It has been the subject of expansions in 2011 and 2012. As a result the

projects have a combined processing capability of approximately 50 mtpa.

Solomon Hub

The Solomon Hub is located 120 kilometres west of the Chichester Hub. The Solomon Hub

services approximately 3 billion tonnes of iron resource associated with the Firetail and Kings

mines. Early earth works commenced in 2011, followed by significant greenfields construction

work to develop a 60 mtpa capacity. The development comprises two stages, with Firetail

coming on stream first at 20 mtpa, followed by production from the Kings mine at 40 mtpa.

Mining production from the Firetail mine commenced in 2012 with the train load-out facility

commissioned in late November 2012. Stage 1 of the US$3.2 billion facility was opened in May

2013. The Kings mine is currently under construction and will be officially opened in 2014.

In December 2012, the 129 kilometre Solomon Railway that connects the Solomon Hub to

FMG’s main line and ultimately to the Company’s Herb Elliot Port was commissioned.

Capital investment at the Solomon site has totalled US$3.5 billion to date comprising two OPFs,

three crushing hubs, a 125MW power station and airstrip and three camps housing 3,000

people.

Iron Bridge Project

The Iron Bridge Project holds iron ore projects at North Star and Glacier Valley approximately

100 kilometres south of Port Hedland.

FMG Iron Bridge is jointly owned by FMG (88 percent) and a subsidiary of China’s Shanghai

Baosteel Group Corporation (12 percent). In August 2013, FMG announced that Taiwan’s

largest private company, Formosa Plastics Group would invest US$1.5 billion in the Iron Bridge

Project. Formosa has invested in the construction of the largest steel mill in the world at Ha Tinh,

Vietnam that will process 22 mtpa.

Stage 1 construction is currently underway and expected to take approximately 12 months

and US$527 million to complete, with first production of 1.5mtpa of 66 percent magnetite-

haematite ore commencing in early 2015. The 9.5 mtpa Stage 2 expansion will commence in

2015 at FMG’s option and subject to feasibility study.


63

Hope Downs 4, Rio Tinto and Hancock Prospecting (Recently

Commissioned)

The Hope Downs 4 mine is located approximately 200 kilometres east of Tom Price and forms

a component of Rio Tinto’s 333 Expansion plan (see above). The project is a A$1.2 billion joint

venture between Rio Tinto and Hancock Prospecting and is Rio Tinto’s largest greenfield iron

ore site. First ore was shipped from the project in 2013.

Sino Iron Project, CITIC Pacific (Under Construction)

The Sino Iron Project is owned and operated by CITIC Pacific, a Hong Kong listed diversified

company with interests in special steel, iron ore, mining and property development in mainland

China. CITIC Pacific is 58 percent owned by CITIC Group, a large diversified Chinese state-

owned enterprise established in 1979.

The Sino Iron Project is located 100 kilometres south west of Karratha and is the largest

magnetite mining and processing operation in Australia. Production of magnetite

commenced in late 2012 and processing lines 1 and 2 is scheduled to commence in 2014. The

associated port is the first new port site developed in the Pilbara for 40 years.

The project also involves the construction of a 70 megalitre seawater desalination plant and a

450 megawatt combined cycle gas fired power station,

Approximately 4,000 people were employed at peak construction. There will be between 800

and 1,000 permanent roles once the project is fully operational.

Roy Hill, Roy Hill Holdings (Under Construction)

Situated approximately 115 kilometres north of Newman, Roy Hill will be a 55 mtpa mining, rail

and port project. A 334 kilometre railway will be constructed to transport processed ore from

the mine to a dedicated port stockyard facility located to the south of Port Hedland. It will also

involve a purpose built iron ore port facility at Port Hedland with a wharf designed to

accommodate vessels of 206,000 to 320,000 tonnes.

The peak construction workforce is expected to be 3,600, with an operational workforce of

approximately 2,000 staff and contractors.

South Down Magnetite, Grange Resources (FID Delayed)

This project is located 90kms north east of Albany. The proposed $2.9 billion iron ore project

was suspended in mid-2013 as a result of a deteriorating iron ore price.

Extension Hill Magnetite Project, Asia Iron (FID Delayed)

The Extension Hill Magnetite project is located approximately 280 kilometres south east of

Geraldton. The project’s decision-making timetable was initially delayed in June 2012 as a

result of political changes in the City of Chongqing potentially affecting the Chinese

Government approvals to invest in and develop the project. Since then, it has been confirmed

by the Company that the approvals remain valid. The Company is now engaged in discussions

with the China Development Bank with respect to the debt financing component of the

project.


64

Jack Hills, Crossland Resources (FID Delayed)

The operator of the Jack Hills Project, Crossland Resources, is well advanced with the feasibility

study for the expanded project. However, its progress is dependent on the development of

the Oakajee Port and Rail Project (see below).

West Pilbara Iron Ore Project, Aquilla Resources (FID Delayed)

The West Pilbara Iron Ore Project is located 30 kilometres West of Pannawonica. A pre-

feasibility study was completed in 2008 and feasibility study in 2010. The project proposes

investment in a 282 kilometre heavy haul railway and a new deep water port at Anketell.

Ammonium Nitrate, Nitrate and Urea Projects

Kwinana Ammonium Nitrate Facility Expansion (under Construction)

This project is located in Kwinana, approximately 35 kilometres south of Perth. The technical

feasibility study for the CSBP ammonium nitrate plant was completed in 2005 and the

Wesfarmers Board formally approved the Ammonium Nitrate Expansion Project in the same

year. The ordering of long lead equipment items such as the Nitric Acid Absorber Column,

Boiler and Man Turbo-Compressor was made in mid-2005. The project was completed in 2010,

increasing production capacity by 260,000 tpa to 780,000 tpa.

Burrup Industrial Estate, Orica and Yara (Recently Commissioned)

This $775 million joint venture will produce 330,000 tpa of ammonium nitrate. The plant is

located adjacent to the existing Yara Pilbara fertiliser plant and Burrup. The project is expected

to be completed by mid-2015 and will employ approximately 400 people during construction

and 60 people once operational.

Shotts Industrial Park Urea Project, Perdaman Chemicals (Under

Construction)

Perdaman Chemicals and Fertilisers (formally North West Chemicals and Fertilisers), which is

part of Perdaman Industries, has plans to develop a US$3.5 billion urea manufacturing plant at

Collie, Western Australia. Using innovative and clean coal gasification technology, the plant

will transform sub-bituminous coal into urea. The plant has a 2 million tonnes per annum

capacity, and most, if not all of the urea produced at the plant will be exported for global use.

Gold Projects

Tropicana, AngloAshanti Gold (Recently Commissioned)

The Tropicana Gold Project is located on the northern end of the Tropicana Joint Venture

tenements, and is centred on the Tropicana and Havana deposits. The Tropicana deposit was

discovered in 2005 after AngloGold Ashanti Australia followed up an unexplained gold in soil

anomaly. The Havana deposit, just to the south of Tropicana, was discovered in 2006.

Construction commenced in the June quarter of 2011 and first gold was poured in the

December quarter of 2013.


65

Resources Infrastructure Projects

Oakajee Port and Rail (FID Delayed)

Oakajee Port and Rail (OPR) has been developing a greenfields infrastructure and supply

chain business to transport iron ore from Western Australia’s mid-west to customers across the

globe. The deepwater port, proposed for a site 24 km north of Geraldton, will cater to the

world’s largest ore carriers. The 570km rail network will service operating and emerging mining

projects across the region.

Project planning, evaluation, engineering and regulatory approvals are well advanced,

independent peer reviews, including value engineering assessments, have identified OPR’s

port and rail design as the optimal solution to meet the government’s scoping requirements.

OPR is owned by Mitsubishi Development Pty Ltd, a wholly-owned subsidiary of Mitsubishi

Corporation, one of the largest trading and investment companies in Japan. OPR is

developing the OPR project under a State Agreement with the Western Australian

Government. Development of the project is currently suspended as a result of uncertainty with

respect to the iron ore price.

North West Infrastructure, Atlas Iron, Brockman Mining and FerrAus

(Under Construction)

North West Infrastructure (formerly the North West Iron Ore Alliance) is an incorporated joint

venture company that represents the interests of its three shareholder companies, Atlas Iron,

Brockman Mining and FerrAus.

North West Infrastructure (NWI) is developing a port facility with an iron ore export capacity of

50 mtpa from the South-West Creek location in the Inner Harbour at Port Hedland, Western

Australia. The Western Australian Government has made this 50 mtpa allocation to support the

development plans of emerging iron ore miners in the Pilbara region.

Esperance Multi-user Facility (FID Delayed)

The Esperance Port Authority, trading as Esperance Ports Sea and Land, has commenced a

process to identify a proponent to design, finance, build and operate a Multi User Iron Ore

Facility (MUIOF) at the Port. The facility will cater for the export needs of a number of iron ore

mining companies with tenements in the Yilgarn Region of Western Australia. The MIOUF has

the objective of increasing Esperance Port’s iron ore handling capacity from the current 11.5

million tonnes a year to more than 20 million tonnes a year.

It is anticipated work on the new facility will begin in 2014 and be completed in 2015, subject

to the proponent achieving financial close and project contractual close. The MUIOF is

expected to be in operation by 2015 and will be operated by the proponent.

Midwest Energy Project (Under Construction)

The Mid West Energy Project (MWEP) will provide energy capacity to meet increasing demand

for electricity, and facilitate the connection of power generators and loads to the South West


66

Integrated System (SWIS) network, strengthening the reliability and security of the SWIS and

extending its reach north.

It is proposed that the MWEP will be delivered in the following two stages:

o Southern Section

Connects Neerabup (Perth) to Three Springs with a 330kV double circuit

transmission line. This will enable the connection of a number of mining projects

in the Mid West (including Karara Mine) and provides additional support to the

existing 132kV network in the region by establishing a new 330/132 kV Terminal

substation at Three Springs.

o Northern Section

Connection through to Moonyoonooka (Geraldton). Key drivers for the

Northern Section are prospective load growth in the Geraldton area (from

existing customers and new block loads associated with the port and industrial

estate developments at Oakajee and Geraldton Port), potential load growth

from new iron ore mines north east of Geraldton, and new generators seeking

connection (predominately wind). A number of options to meet future

requirements have opened up and Western Power is conducting a detailed

planning assessment in consultation with key stakeholder and the community

to determine the best method and timing to meet future requirements. An

Infrastructure Australia funding submission has been made.

Construction of the 330kv line commenced in March 2013 and is expected to be energized in

the 3rd quarter of 2014.


67

Appendix 2: Construction and Operational

Workforce Estimate

Project Operator Peak

Construction

Workforce

Operational

Workforce

Browse Woodside n.a. n.a.

Gorgon Chevron 10,000 n.a.

Julimar Apache n.a. n.a.

Macedon BHP Billiton Petroleum 600 25

NWS North Rankin Redevelopment Woodside n.a. n.a.

NWS Greater Western Flank Woodside n.a. n.a.

Prelude Shell n.a. 350

Scarborough ExxonMobil n.a. n.a.

Wheatstone Chevron 6,500 n.a.

Karara Expansion Karara/Gindalbie 1,500 500

Rio Tinto Pilbara Expansion Rio Tinto 1,500 700

BHP Billiton Pilbara Expansion BHP Billiton n.a. n.a.

Chichester and Solomon Expansions Fortescue Metals Group n.a. n.a.

Hope Downs Rio Tinto/Hancock

Prospecting

2,100 720

Sino Iron Project CITIC Pacific 4,000 800

Roy Hill Roy Hill Holdings 3,600 1,600

Southdown Magnetite Grange Resources 2,000 600

Extension Hill Magnetite Asia Iron 1,000 350

Jack Hills Extension Crossland Resources 2,000 1,200

West Pilbara Project Aquilla Resources 3,500 1,000

Kwinana Plant Expansion CSBP 300 n.a.

Burrup Industrial Estate Orica/Yara 400 60


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Project Operator Peak

Construction

Workforce

Operational

Workforce

Shotts Industrial Park Perdaman 2,000 200

Silicon Metals Plant Expansion Simcoa 120 40

Tropicana Anglogold Ashanti 700 45

Happy Valley Cristal Mining 100 n.a.

Sharkbay Zircon Gunson Mining 170 110

Oakajee Port and Rail Mitsubishi 2,000 300

North West Infrastructure Atlas Iron, Brockman,

FerrAus

n.a. n.a.

Esperance Multiuser Facility Western Australian

Government

n.a. n.a.

Midwest Energy Project Western Power n.a. n.a.


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Appendix 3: 2012-13 Submissions to

Infrastructure Australia

Program Project Government

Proponent

Transforming our cities Brisbane TransitWays – Northern and Eastern QLD

Ipswich Motorway (Rocklea to Darra) QLD

Brisbane Inner Rail QLD

Pacific Motorway – Gateway Motorway to Tugun

Upgrade

QLD

Pacific Motorway – Mudgeeraba to Varsity Lakes

Capacity Upgrade

QLD

Queensland National Managed Motorways – Bruce

Highway Carseldine to Caboolture

QLD

Queensland National Manged Motorway: Gateway

Motorway to Tugun

QLD

New South Wales National Managed Motorways – M4

Motorway

NSW

Western Sydney Bus and Road Upgrades – North West

Integration Package

NSW

Inner Sydney Regional Bike Network NSW

Sydney Light Rail NSW

Western Sydney Road Upgrades – West and South West

Accessibility

NSW

Transport Plan for West New South Wales NSW

Victorian National Managed Motorways – Monash

Freeway, High Street to Warrigal Road

VIC

Victorian National Managed Motorways – Monash

Freeway, Warrigal Road to Clyde Road

VIC

Melbourne Metro VIC

Dandenong Rail Capacity VIC

Growth Areas Transport Package VIC


70


Proponent

Removing Level Crossings VIC

Avalon Airport Link VIC

Airport Rail Link WA

Perth Rapid Transport WA

Thornlie Line to Mandurah Line WA

Adelaide East – West Bus Corridor SA

South Road Upgrade SA

Adelaide Public Transport Plan SA

City to Gungahlin Transit Corridor ACT

Competitive

International

Gateways

Gateway Motorway Upgrade North QLD

Newcastle Port – Kooragang Island Connectivity NSW

Port Botany and Sydney Airport Transport Improvement

Plan

NSW

Western Interstate Freight Terminal VIC

Port of Hastings VIC

Bunbury Outer Ring Road WA

Port Hedland – Great Northern Highway Overpass WA

Northern Connector SA

A National Freight

Network

Toowoomba Second Range Crossing QLD

Warrego Highway Upgrade Program – Helidon to Morven QLD

Landsborough to Beerburrum Rail Duplication QLD

Mount Isa to Townsville Rail Corridor Upgrade QLD

Bruce Highway Road Safety QLD

Bruce Highway Flood Immunity Bridges QLD

Bruce Highway Pavement Strengthening QLD

Bruce Highway Caloundra Road to Sunshine Motorway QLD


71


Proponent

Cunningham Highway QLD

Bruce Highway – Yeppen Floodplain QLD

F3 Widening – Tuggerah to Doyalson NSW

Automatic Train Protection and Automatic Train

Operation

NSW

WestConnex NSW

Scone – Rail Level Crossing NSW

Singleton – Gowrie Gates Underpass NSW

Moorebank Intermodal Supporting Infrastructure NSW

Princes Highway – Gerringong to Nowra NSW

Second Bridge over Clarence River at Grafton NSW

Bridges for the Bush Program 1 NSW

Bridges for the Bush Program 2 NSW

New England Highway – Belford to Golden Highway NSW

M80 Ring Road Upgrade VIC

East West Link VIC

High Productivity Freight Vehicles Upgrade Package VIC

High Capacity Test Line Signalling – Pilot Project VIC

Outer Metropolitan Ring Road VIC

Murray Basin Transcontinental Rail Link VIC

Shepparton Bypass VIC

Western Highway Ballarat to Stawell VIC

Princes Highway East Duplication – Traralgon to Sale VIC

North West Coastal Highway – Minilya to Barradale WA

Leach Highway/High Street Upgrade WA

Great Northern Highway – Muchea to Wubin WA


72


Proponent

Perth Darwin National Highway – Swan Valley Bypass WA

Metropolitan Grade Separation WA

Fremantle Integrated Transport Bridge WA

Albany Ring Road WA

Northern Rail Corridor Capacity Improvements SA

Burnie to Hobart Freight Corridor TAS

Tasmanian Rail Revitalisation Program TAS

Adaptable and

Secure Water Supplies

Tasmanian Irrigation TAS

Water and Sewerage Reform TAS

Essential Indigenous

Infrastructure

Tanami Road Upgrades NT

Anangu Pitjantjatjara Yankunytjatjara Lands Road

Upgrade

SA

Creation of a True

National Energy

Market

No Proposals Submitted

Digital Infrastructure No Proposals Submitted

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