06/10/2012 03:59 pm ET Updated Aug 10, 2012

Australia Mining Boom Faces Housing Shortages In Small, Remote Towns

* Australian mining boom pits small towns against growing here-today-gone-tomorrow workforce

* Big salaries boost food prices, strain health services

* Housing in otherwise sleepy towns soars, forcing some to share a single bed

By James Regan

MORANBAH, Australia, June 11 (Reuters) - Despite a six-figure salary, Russel Wise is worried he will soon be homeless after receiving an eviction order from the one-room trailer he has rented since taking a job in an Australian coal mine in 2009.

"There aren't too many options around," says Wise, who like thousands of other Australians, was lured to the little town of Moranbah in the coal-rich northeast by high-paying jobs and in the process triggered a housing crisis of big-city proportions.

"The owner wants to build more modern, multi-dwelling units to house more people the mining companies can bring in and out on rotation, so I've got to go. Simple as that," says Wise.

The property crunch engulfing Moranbah and other communities peppering the Bowen Basin, a 60,000-sq-km (23,200-sq-mile) moonscape of open pit mines supplying most of the world's coal for steel making, is one of a swelling number of downsides associated with the Australian mining boom.

Add to the list rising food prices, constant truck traffic, outbreaks of sexually transmitted diseases and near-non-existent health care to name a few, according to town residents, health professionals, mine workers and community advocates interviewed by Reuters.

Jetting in employees on charter flights from mostly large cities to work 12-hour shifts for two weeks straight and then fly them home for a week off has long been commonplace in Australia's remote mining locations, where no towns exist.

But the growing demand for commodities in Asia is encouraging mining companies to dig deeper and faster than ever before near established communities like Moranbah, requiring thousands more workers than local townships can supply.

Mining company executives say they are trying to attract more employees to move permanently to the towns with their families to alleviate some of the problems associated with mobile work forces, but it is proving a hard sell.

A recent survey of mine workers suggested at least half have no interest in relocating permanently to mining towns, which can be lacking in social outlets much beyond a local pub and fast-food restaurants.

"This place is okay when you're working, but on a pyjama day I'm bored stiff," says Richard Spaffey, who is sub-contracted to a mining company based in his hometown of Perth, 3,600 km (2,200 miles) away, referring to a day off. "I'll head into town and the ratio of men to women will be fifty to one."


A prostitution advocacy group, called the Scarlet Alliance, is appealing to the government for help in servicing the mining communities, promoting regulated sex work as a safe alternative to unsupervised liaisons that can cause the spread of disease.

By one government estimate, Australia will need an extra 89,000 mine workers over the next five years.

As a result, mining towns like Moranbah are bracing for even greater population growth around the mines.

One of Australia's richest people, Andrew Forrest, who made billions mining iron ore, is heading a group aiming to train 50,000 Australian Aboriginals to work the mines.

Also, despite opposition from unions, Prime Minister Julia Gillard last month said more than 1,700 foreign workers could be brought in to work constructing one mine alone under special visas, underscoring the sector's dire need for labour and opening the door to further jobs immigration.

In the United States and across Europe, jobs fairs promoting work in Australia's resources sector already draw thousands of attendees.

"What this says loud and clear is that it is important for resources sector companies to be able to offer accommodation options," says Michael Roche, chief executive of the Queensland Resource Council, which lobbies on behalf of coal mining.

Australia is also easing immigration rules for farm workers applying for visas from Pacific islands like Papua New Guinea and Fiji to compensate for an exodus of workers from sugarcane fields to better paying mining jobs.

A programme is even under way to pay unemployed people to move to rural mining communities to work jobs indirectly connected to mining.

These too can be lucrative. In Moranbah, the local Dominoes pizza shop can't find enough drivers to pay A$25 per hour to make deliveries. On the outskirts of town, a billboard advertises electricians' jobs starting at A$60 an hour. The currency is roughly the same value as the U.S. dollar.


John Wood, a property manager for Moranbah Real Estate, says many of the town's long-term residents had sold their homes by mid-2011 for hefty profits to investors now renting rooms for as much as A$1,800 a week.

"In many cases, the mining company subsidises the rent, so someone might only pay A$65 of that each week," he says. "It's actually got kind of slow. There's not much left out there to sell."

According to the Queensland Resources Council, 72 percent of workers renting accommodation receive subsidies.

In some instances, this has led to "hotbedding" or sharing of a single bed by up to three workers who stagger their shifts to keep out of each other's way.

Mining companies are trying to keep up with the population explosion by erecting thousands of modular workers' "villages" around the towns, but are seen doing little else to alleviate burdens on the community.

"Almost universally, people have noticed that FIFO (fly in, fly out) workers have increased levels of mental stress and mental illnesses (and) quite significant increases in alcohol and other drugs," Dr David Mountain, of the Australian Medical Association, told a parliamentary hearing in April.

Dr Reyno Nieuwoudt doubts few if any of the four doctors working at his private clinic on a Moranbah side street will be around by the end of the year, driven away by the workload.

"On average, we'll see up to 70 patients a day each and that's way too many," Nieuwoudt says. "That's way above the healthy average and quite frankly impossible to sustain."

Last week, the doctor who ran Moranbah's only other medical clinic closed and moved away. The town has been without a dentist for more than a year.

"At this pace, I won't be here much longer either," Nieuwoudt says.

As more mines are dug, there is a growing belief in Moranbah that mining companies prefer mobile work forces because it relieves the company of a responsibility to provide housing.

But Stephen Dumble, asset president of BMA, a joint venture between BHP Billiton and Mitsubishi which operates six coal mines, says BMA is constantly trying to recruit permanent residents. They are cheaper in the long run, because non-resident employees mean higher turnover, boosting costs for recruitment and training.

A survey by the regional council of Isaac, which takes in the Bowen Basin, suggests non-resident workers on average last about 18 months before becoming "tired" and quitting.

"Over the next two years, we will build 383 houses and townhouses across Central Queensland and we are spending A$54 million refurbishing a further 450 family homes," Dumble says. (Editing by Nick Macfie)