FIFO vs residential hire: A tug of war

New Century MD Patrick Walta with Resources Minister Matt Canavan at the Century reopening.

Not only are companies constantly faced with hiring decisions throughout the course of a mine life, they must also contend with the FIFO debate in Australia’s mining regions. Vanessa Zhou reports.

The mining industry is encountering mounting demands to buy and employ local, despite the efforts of socially-responsible companies to satisfy increasing pressure on both accounts.

Kalgoorlie-Boulder mayor John Bowler goes as far as saying that a number of mining companies are bludging on their “good” peers – those mining companies which are doing the right thing.

The so-called bludgers are not incentivising against fly-in, fly-out (FIFO), buying local or contributing enough to the local economy, according to Bowler.

While a lot of Australia’s regional towns perceive FIFO as “a mountain that can’t be moved” and “the elephant in the room,” Bowler begs to differ.

In fact, if the mining sector can convert 10 to 20 per cent of FIFO workers coming in and out of the Western Australian mining city, he admits he’ll be “a very happy man.”

“I’m not a fool. I recognise there is a place for FIFO, particularly for isolated mine sites and those which don’t have a long mine life,” Bowler tells Australian Mining.

“You’re not going to rebuild a town. But we already have a town, a regional centre such as Kalgoorlie-Boulder, Mt Isa, Broken Hill. It is immoral for companies, and even governments to allow them to go out of their way and engage FIFO rather than encouraging residential employment.”

Bowler blames part of the FIFO concern in Kalgoorlie-Boulder on Canberra’s “immoral” tax system, which he believes encourages Australians to live away from their families.

While there are cases where FIFO is the only answer, there are long-standing regional cities which make great places to live and have extensive infrastructure, he says.

In Queensland, the state government controls FIFO employment by prohibiting large resource projects that are nearby a regional community from having a 100 per cent FIFO workforce.

The legislation aims to increase local employment in towns like Middlemount, Blackwater, Clermont, Moranbah, Cloncurry, Mt Isa, Nebo and others.

This ruling stands over 69 large resource projects across Queensland (at the time of writing), affecting operations such as Century (New Century Resources), Bauxite Hills (Metro Mining), Moranbah North (Anglo American) and Peak Downs (BHP Mitsubishi Alliance).

The legislation, however, has minimal impact on New Century’s historic Century zinc mine. The company employs the majority of its workforce from the northern Queensland region.

This is not limited to only the bigger cities such as Townsville and Cairns, but also Charters Towers and the Gulf communities of Doomadgee, Karumba, Normanton and Mornington Islands, according to New Century’s head of corporate affairs and social responsibility Shane Goodwin.

New Century is enjoying the fruits of a successful community engagement program that was built over 16 years before it acquired the site, and is still sustained today.

The company’s operational plans intend to deliver an even higher proportion of the site’s workforce from local communities once a mine expansion is under way, according to Goodwin.

He says when the Queensland Government extended a 100 per cent FIFO workforce ban to the mine, the operation couldn’t be less affected. The FIFO ban came at zero cost and impact to any of New Century’s activities.

“New Century has maintained 15–20 per cent of Gulf communities’ employment throughout the operational life of its mine,” Goodwin tells Australian Mining.

“There was no period of adjustment at all when the 100 per cent FIFO ban was introduced to us. We were consulted by the government on the legislation when it was being developed, so we were well across with what was being introduced, and very comfortable with it when it was introduced.”

What Goodwin deemed the “most significant” change for New Century was a need to articulate its encouragement of applicants who come from the local communities stated in the legislation.

The Century mine is now significantly smaller than when it was at full flight under previous ownership. The peak workforce during those days was around 1000 people, according to Goodwin.

With a workforce of around 230–240 people at any one time now, New Century negotiated for more employment training opportunities across the Gulf communities.

New Century is delivering on-site training, funding a teachers’ assistance program and employing mentors at a Townsville boarding school where it’s seeing improved attendance.

New Century Resources processes tailings at Century mine.

 

The initiatives are designed according to what the communities express as their needs to back the region’s sustainable development, as opposed to being dictated by New Century.

“Companies provide local recruitment, training and education programs, dedicated procurement programs to maximise local supplier engagement and investments in community and regional infrastructure and initiatives to support liveability and inclusion,” Minerals Council of Australia chief executive Tania Constable tells Australian Mining.

“Working arrangements should be based on locational issues and factor in transport options, shift requirements, job vacancies and their expected duration. In a competitive labour market, mining companies need to offer a variety of workforce arrangements to attract and retain employees.”

Constable believes that labour mobility is also critical to ensuring a diverse workforce.

Companies should be able to use a range of alternatives including FIFO, bus-in bus-out (BIBO) and drive-in drive-out (DIDO), with suitable accommodation arrangements and locally sourced labour, Constable says.

Bowler argues, “Some of them may only be able to employ FIFO workers, but what we want to see is the best efforts are made to try and encourage families to come to these regional towns so there’s encouragement for workers to live with their spouse and children.

“The simple thing is children should be tucked in to bed every night by their parents. Because if mining companies do have their workforce living in regional cities, they’ll have a happier, more stable workforce, and they’ll be helping the town with the profits being made.”

The City of Kalgoorlie-Boulder has appointed multinational firm Pricewaterhouse Coopers (PwC) to speak with various mining companies, drilling companies and supply firms to establish gold standards for the sector.

PwC will particularly be seeking feedback in respect to employment (FIFO versus residential hire), local procurement (buy-local policy) and community engagement (contribution to sporting events and special groups in the City of Kalgoorlie-Boulder).

The investigation and findings will be shared with the sector by the end of the year to urge for improvement and keep mining companies up to standard, according to Bowler.

“We’ll continue to talk to the federal and state governments and the mining industry, and appeal to their better nature. Because there are mining companies in Kalgoorlie-Boulder that are trying to do the right thing,” Bowler concludes.

This article also appears in the October edition of Australian Mining.

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