Portable accommodation hit by mining slump

Caravan maker Fleetwood has felt the brunt of the mining downturn with its profit sliding and its shares falling 17 per cent.

It comes after the company cautioned demand for its worker camps has dwindled.

Fleetwood started developing caravan parks for workers on Western Australia’s mega-pits and large gas-export projects when commodity prices increased.

But with the mining slump, the company is having to go back to its roots of targeting holiday goers, The Australian reported.

“The significant drop in commodity prices during the year caused delays and cancellations to resources projects that flowed through to demand for manufactured accommodation,” Fleetwood’s CEO Stephen Price said.

The company’s net profit for the year to June lowered by 77 per cent to $12.5 million.

The China-driven mining boom has been a boon and a curse for Australian communities. On one side, it led to jobs and infrastructure development as companies like Rio Tinto and Woodside Petroleum invested heavily in towns.

But as workers flooded towns, community faced housing scarcity and increased expenses.

The mining camps were a solution for this, but as the mining boom fades, companies like Rio Tinto cuts up to $US5 billion in costs and jobs disappear, the company faces tenancy and rent price problems, particularly in WA.

Merill Lynch senior economist Saul Eslake said recently WA is edging towards a recession as unemployment climbs.

Woodside’s $16.3 billion gas-export venture near Karratha also fell through when it could not find sufficient reserves.

Rio mine workers use Fleetwood’s caravan park at Searipple in Karratha. It is now only 65 per cent full.

Rio Tinto and Fleetwood signed a deal last year for accommodation at the Searipple village. The village was to be updated under the new contract, Fleetwood said.

Earlier last year Rio extended its accommodation services contract with a six-month extension and 350 more rooms.

Karratha is facing its smallest population growth since 2005. In 2011, half of the 12,000 workers living in and near Karratha were in the mining or construction sector.

This means the town cannot ramp up other industries to fill the mining void.

"If you had a room in Karratha 12 months ago you'd have filled it in a second," managing director of Ausco Modular Anthony Walsh said.

Rental rates have slumped by 20 per cent, with one in five units remaining empty, he added.

The company is also having second thoughts of a mining camp with a capacity of 1000 in Gladstone in Queensland as there is no certainty if projects will proceed there.

Fleetwood won a contract from Gladstone Council to build a 1000 person accommodation camp in the area.

Another company in WA, Brighthouse, which focuses on caravan parks, focused specifically on mining accommodation in 2008 as the industry boomed.

This comprised half of its business when the industry boomed but it has fallen by 30 per cent.

The company’s chief strategist David Holland concurs with Fleetwood’s strategy and said there is a better market for tourism and retirement villages.

“The boom in that kind of (resources) work is over,” he said.

“There is a progression from temporary units to a smaller, more permanent operational workforce.”

Another industry to feel the mining slump is regional aviation, which has slowed down as commodity prices dip

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