FIFO jobs at a crossroads

If new projects aren’t given the go ahead Queensland’s FIFO and DIDO workforce will drop about 4000 positions by 2015, new state government population data suggests.

The state’s non-resident population forecasts for the Bowen and Galilee Basins shows there will be 3000 less FIFO and DIDO workers in 2014 and another 1000 less in 2015, The Daily Mercury reports.

Since last year the number of non-resident employees has jumped by about 1000 people.

Projections expect the number of workers to stabilise after 2015 for at least four years.

But if proposed projects get the go ahead, and do go ahead, the state could be faced with a different set of circumstances.

The Bowen Basin’s population could jump from 25000 to more than 30000 by 2016.

GVK Hancock’s major Alpha coal project in the Galilee Basin is scheduled to come online in 2016, expected to create 1500 jobs during construction, and an estimated 800 positions during operation.

But mounting pressure from activists groups, a lower coal price, and increased cost of doing business in Australia is seeing the number of projects being shelved or scrapped all together on the rise.

Newly merged miner Glencore last week announced it would shelve its $7 billion Wandoan coal project in Queensland.

Glencore’s bearish outlook on thermal coal which it said is suffering from effects of coal prices falling below $80 a tonne and higher costs saw Wandoan listed as “on hold” with seven other Australian coal prospects also added to the basket.

''Current price levels are unsustainable in the medium term, with close to 30 per cent of seaborne thermal production being cash-cost negative,'' the company said.

Feasibility studies and government approvals processes for the Wandoan thermal coal project which was originally an Xstrata asset were already underway, with the Greenfield asset billed to be the largest open-cut coal mine in the Southern Hemisphere expected to yield 30 million tonnes of coal per annum over three decades.

But GlencoreXstrata boss Ian Glasenberg said the company would no longer be investing in new projects when returns are not assured, explaining projects need to be economically sound to go ahead.

"We are fearful of greenfield projects," Glasenberg said, adding that research demonstrates major resources projects experience cost blow outs of about 35 per cent on average.

Doubts were originally cast over the Wandoan project in March, with Glasenberg telling investors he was in favour of less risky investment decisions.

With growth in Australian mining investment slowing, the resources sector is shifting towards operational management and existing resources rather than new investment. 

Queensland Premier Campbell Newman recently told newly elected Prime Minister Tony Abbott to "get out of the way" in the Galilee Basin.

"[Mr Abbott]…asked me what the blockers were for my government and I said without any hesitation the need to see the massive Galilee Basin coal projects approved as soon as possible,” Newman told ABC Radio.