Galilee Basin economic and social impact study

Transcription

1 Galilee Basin economic and social impact study MINISTER S MESSAGE The Galilee Basin is gaining significant focus for Queensland in terms of the region s abundant coal resource, which holds substantial employment, economic development and growth opportunities for the regional and state economy. Located 450km west of Rockhampton, it is the last remaining major coal province to be developed in Queensland. In May 2010, several coal mining projects were declared by Hancock Coal Pty Ltd, Waratah Coal Pty Ltd, AMCI Group and Bandanna Energy to be established and potentially inject billions of dollars into the Galilee Basin. The proposed mining projects are to be located around Alpha, a small town of approximately 350 residents located in Barcaldine Regional Council (BRC), between Emerald and Barcaldine. As a result of the potential mining activities, local employment is set to grow significantly, with a substantial number of people being employed on a permanent basis to both operate the mine and provide support jobs, such as suppliers and contractors. This job growth will attract people to move to the region requiring longterm sustainable planning. To assess the future growth needs of the region, the Department of Employment, Economic Development and Innovation (DEEDI), BRC, Central Western Queensland Remote Area Planning and Development Board and Central Highlands Development Corporation funded an independent study to provide economic and social information on the Galilee Basin. The development of the final report Galilee Basin Economic and Social Impact Study was oversighted by a steering committee that, with some reservations about the veracity of the data, has approved its finalisation and release. While some reservations are held about the current applicability of the data, the Galilee Basin study meets the key objectives set out for the report, which was to provide further information about growth in the Galilee area. The report provides useful signposts that act as a general guide for regional bodies, local councils, industry and the state government in the future consideration and development of policy and infrastructure plans for the region. The data is divided into the following categories: main demographic and economic drivers in the region skills base in Barcaldine Regional Council economy links between Alpha and other townships in the region mining projects population and business impacts of mine projects assessment of social impacts and management of social issues outcomes of formal community consultations infrastructure and service requirements for mine projects infrastructure and services for Alpha.

2 The following report is one of a number of information reports that the Government has been considering and will assist to facilitate discussion of the issues arising in the Galilee Basin as a result of imminent mining activity. The Honourable Tim Mulherin MP Minister for Primary Industries, Fisheries and Rural and Regional Queensland

3 Galilee Basin economic and social impact study Final Report August 2010

4 Galilee Basin economic and social impact study Final Report Prepared for: Department of Employment, Economic Development and Innovation Rockhampton Centre Level 1, 149 Bolsover Street, Rockhampton, Qld, 4700 Prepared by: Economic Associates Pty Ltd ACN PO Box 541 Spring Hill QLD 4004 Telephone: (07) Facsimile: (07) August Rev 0 Economic Associates Pty Ltd

5 FOREWARD This project has been developed through a partnership between Department of Employment, Economic Development and Innovation (DEEDI), Central Highlands Development Corporation (CHDC), and the Central Western Qld Remote Area Planning and Development Board (RAPAD). The Barcaldine Regional Council through our membership of RAPAD is pleased to have been able to contribute to the Galilee Basin Economic and Social Impact Study. The proposed resources projects in the Galilee Basin present communities in Central West Queensland with significant opportunities and a number of challenges. The Galilee Basin Economic and Social Impact Study Report was conceived as a preliminary baseline survey of the economic and social opportunities and impacts which may result from the proposed development of mining projects in the Basin and most particularly in the vicinity of Alpha and Jericho. Accordingly, the Study should be read as an initial document informed in part by preliminary data from the mining proponents. Hancock Coal, Waratah Coal and AMCI Group are currently preparing Environmental Impact Statements for their projects and as these statements are yet to be completed, more detailed information about the projects was not available to inform this Study. While every effort was made to identify and use full and accurate data, there are difficulties in obtaining data sets for small communities. Reliance on 2006 census data, along with some significant demographic changes which have occurred since that time, also need to be taken into account. However, these issues are not reflective of the quality of the work produced by Economic Associates, the consultants chosen by the Steering Committee, and do not detract from the Report s analysis or recommendations. I believe that Barcaldine Regional Council and other local governments will definitely benefit from using the findings in developing their responses to resources development in the Galilee Basin. There has been considerable interest in this study as it progressed through its various stages. I believe it is an important first step in enabling communities and organisations to plan for the substantial opportunities and challenges of managing the future growth and development of the Galilee Basin. Cr Rob Chandler Mayor Barcaldine Regional Council Galilee Basin Economic & Social Impact Study ii

6 TABLE OF CONTENTS 1 INTRODUCTION Background and rationale Study objectives The Study Area Primary coal mine projects for impact assessment Methodology 3 2 MAIN DEMOGRAPHIC AND ECONOMIC DRIVERS Town and Regional Council demographics Structure of Regional Council economies Economic performance Unemployment in the region Changes in work opportunities Jobs balance Official labour-force and population projections Summary of main findings 20 3 SKILLS BASE IN THE BARCALDINE REGIONAL COUNCIL ECONOMY Summary of main findings 26 4 LINKS BETWEEN ALPHA AND OTHER TOWNSHIPS IN THE REGION 27 5 MINING PROJECTS Primary coal mine projects for impact assessment Other resource development activity Summary of main findings 37 6 POPULATION AND BUSINESS IMPACTS OF MINE PROJECTS Population impacts Historical perspective Recent experience where new coal mines have been established Springsure, Rolleston and Clermont Preliminary conclusions regarding resident population impacts Business impacts and community contributions Background research Business impacts: indicators from case studies Contributions to community infrastructure Summary 53 7 ASSESSMENT OF SOCIAL IMPACTS Background 55 Galilee Basin Economic & Social Impact Study iii

7 7.2 Non-resident worker accommodation Localised inflation Road crashes Summary of main findings 73 8 FORMAL COMMUNITY CONSULTATION Focus Groups and Integration Workshop Focus Group outcomes Integration Workshop outcomes Murri Community Background Views expressed Mining companies Summary of main findings 87 9 INFRASTRUCTURE REQUIREMENTS FOR MINE PROJECTS Road infrastructure State funded roads Local Government funded roads Rail Alpha Airfield Water supply Electricity Summary of main findings INFRASTRUCTURE AND SERVICES FOR ALPHA Estimation of future requirements Summary ACTION PLAN REFERENCES 105 LIST OF TABLES Table 1: Population and household characteristics Towns and Regional Councils, western area, 2001 and Table 2: Population and household characteristics Towns and Regional Councils, eastern area, 2001 and Table 3: Age and Family characteristics & Table 4: Gender comparison, western and eastern areas, 2001 & Table 5: Economic structure, employment by sector, Table 6: Occupational structure, Table 7: Unemployment rate 2003 to Table 8: Changes in work opportunities for Longreach, Barcaldine and Blackall-Tambo Regional Councils, 2001 to Galilee Basin Economic & Social Impact Study iv

8 Table 9: Changes in work opportunities for Central Highlands and Isaac Regional Councils, and region, 2001 to Table 10: Changes in jobs balance, 2001 and Table 11: Labour-force and population projections prepared in Table 12: Occupational profile of pre-reform LGAs in Barcaldine Regional Council, Table 13: Occupational profile of pre-reform LGAs in Barcaldine Regional Council, Table 14: Labour-force profile by economic sector - pre-reform LGAs, Barcaldine Regional Council, Table 15: Labour-force profile by economic sector - pre-reform LGAs, Barcaldine Regional Council, Table 16: Jobs balance for Jericho LGA, 2001 & Table 17: Coal mines at advanced planning to the north west and south west of Alpha...31 Table 18: Changes in town resident populations in mining areas...41 Table 19: Mine operations and contributions, Springsure & Rolleston...45 Table 20: Changes following commencement of mine operations: Springsure & Rolleston...46 Table 21: School enrolments: Springsure & Rolleston, 2001 to Table 22: Mine contributions Blair Athol and Clermont coal mines, Clermont...48 Table 23: Types of businesses in Clermont servicing coal mining...49 Table 24: Changes following decision to construct the Clermont coal mine project, Clermont...50 Table 25: Non-resident population growth relative to resident population growth in coal areas...57 Table 26: Non-resident accommodation, Bowen Basin, July Table 27: Distribution of support services in western and Bowen Basin towns...58 Table 28: Incidence of offences: Western and Eastern areas, per 1,000 resident population...62 Table 29: Comparison of prices for selected fruits & vegetables, groceries and petrol, June Table 30: Comparison of residential prices, rents and land prices, July Table 31: Road crashes on highway sections between Rolleston & Emerald, 1998 to Table 32: Total road crashes: Rockhampton to Barcaldine, 1995 to Table 33: Potential opportunities from mining projects...77 Table 34: Potential issues created by mining projects...78 Table 35: Murri people living in or connected to the Alpha area...81 Table 36: Selected road projects: Roads Implementation Program to Table 37: Parameter values for estimation of future urban infrastructure & services demands...95 Table 38: Estimation of future infrastructure and service requirements for Alpha township Ten Year Horizon: low, medium & high population scenarios...97 Table 39: Summary: Additional requirements: Low, Medium and High population scenarios Table 40: Action Plan LIST OF FIGURES Figure 1: Coal production and operational employment, existing & proposed mines 35 Figure 2: Resident populations in towns and coal mine employment in locality 42 Figure 3: Resident populations in towns and mine production in locality 42 Figure 4: School enrolment trends: Springsure & Rolleston, 2001 to Figure 5: Offences against the person per 1,000 resident population 64 Figure 6: Offences against property per 1,000 resident population 64 Figure 7: Other offences per 1,000 resident population 64 Figure 8: Total offences per 1,000 resident population 65 Figure 9: Drug offences per 1,000 resident population 65 Figure 10: Breach of domestic violence protection order per 1,000 resident population 65 Galilee Basin Economic & Social Impact Study v

9 Figure 11: Good order offences per 1,000 resident population 65 Figure 12: Traffic and related offences per 1,000 resident population 66 Figure 13: Total road crashes: Rolleston to Emerald, 1998 to Figure 14: Trends for road crashes by highway section 72 Figure 15: Ratio of road crashes: Duaringa to Emerald/Emerald to Barcaldine 72 Galilee Basin Economic & Social Impact Study vi

10 ABBREVIATIONS & ACRONYMS AAGR Annual average growth rate ABS Australian Bureau of Statistics AC Administration Centre (for Local Government) br bedroom BRC Barcaldine Regional Council B-T RC Blackall-Tambo Regional Council CASA Australian Government Civil Aviation Safety Authority CASR Civil Aviation Safety Regulation CHDC Central Highlands Development Corporation CHRC Central Highlands Regional Council CO 2 Carbon dioxide DEEDI Department of Employment, Economic Development and Innovation DIDO Drive-in/drive-out DIP Department of Infrastructure and Planning EPC Exploration Permit (Coal) FIFO Fly-in/fly-out FTEs Full time equivalents (employment) GBESIS Galilee Basin Economic and Social Impact Study IRC Isaac Regional Council JORC Joint Ore Reserves Committee K 1,000 km kilometres KSI Killed and seriously injured LGA Local Government Area LRC Longreach Regional Council LRRS Local Road of State Significance MDL Mineral Development Licence MIA Mining Infrastructure Area ML/a Mega litres per annum ML Mining Lease MLA Mining Lease Application Mtpa Million tonnes per annum MVA megavolt amps MW megawatts N North N/A Not available na Not applicable NK Not known NW North west OESR Office of Economic & Statistical Research p.a. per annum PFS Pre-feasibility study PIFU Planning Information Forecasting Unit POE Place of Employment QAS Queensland Ambulance Service QFRS Queensland Fire and Rescue Service RAPAD Remote Area Planning & Development Board RC Regional Council R.O.M. Run of mine S South SPQ Single persons quarters SS State Strategic Road SW South west ULP Unleaded petrol UPR Usual Place of Residence Galilee Basin Economic & Social Impact Study vii

11 EXECUTIVE SUMMARY Economic Associates was commissioned by the Department of Employment, Economic Development and Innovation to prepare the Galilee Basin Economic and Social Impact Study. A primary purpose of the study was to assess the impacts of proposed coal mine projects to the north-west and south-west of Alpha. Alpha is a small township of about 350 residents, located in Barcaldine Regional Council on the Capricorn Highway between Emerald and Barcaldine. No coal mining has occurred in this area previously. Also, there has been no coal mining to the west of Emerald in central western Queensland. The objectives of the study were as follows: Provide a baseline of data indicators for the region to help the Barcaldine Regional Council (BRC), Central Highlands Development Corporation (CHDC), and the Remote Area Planning and Development Board (RAPAD) and other organisations prepare for and manage the impacts of mining projects in the area; Identify both the area that will be immediately impacted by Galilee Basin coal mining and the broader region where significant effects will be felt; Map the regional drivers and dynamics affecting change in these areas of the region; Provide information to enable BRC, CHDC, RAPAD and their communities to: Develop a shared understanding of the potential impacts; Develop a shared vision for desired outcomes; and Incorporate strategies in their planning to address the potential impacts; Provide a demand and needs analysis for local and regional business growth; and Map the anticipated hard and soft infrastructure requirements to support the resource projects and indicate appropriate timeframes for development of infrastructure. The study area encompasses: Western area; Longreach Regional Council (main town: Longreach Administrative Centre (AC), and townships of Ilfracombe and Isisford); Barcaldine Regional Council (main town: Barcaldine (AC) and townships of Aramac, Muttaburra, Jericho and Alpha); Blackall-Tambo Regional Council (main town: Blackall (AC) and township of Tambo); Eastern area; Central Highlands Regional Council (main town: Emerald (AC), and townships of Blackwater, Capella, Tieri, Springsure and Rolleston); and Galilee Basin Economic & Social Impact Study viii

12 Isaac Regional Council (main towns: Moranbah (AC) and Clermont). Findings from the eastern area where there has been substantial coal mine development over many years were used to inform likely changes which could unfold in the western area, where coal mines have not been developed to date. The main findings were as follows: Main demographic and economic drivers in the region The demographics of 18 towns and five Regional Councils were analysed. In the western area, populations are concentrated in the three Administrative Centres of Longreach, Barcaldine and Blackall. The other towns have small populations of less than 400 residents. In the eastern area, the two main towns are the Administrative Centres, Emerald and Moranbah. There are also a number of towns of reasonable size outside the main Administrative Centres. Throughout the Study Area there was a decline in employment in the agriculture sector between 2001 and This had a much greater impact in the west where the sector accounts for about 27% of the labour-force, as compared with 11% in the east. In the western area, declining employment in agriculture has impacted population and associated industries. In the east, the growth of employment in the mining and construction sectors has more than offset declining employment in agriculture. In the eastern area, local economies have benefitted from the development and operation of coal mines. The area has generally higher household incomes, and the population is younger. There is a higher proportion of males in the resident population, due to a traditional bias toward male employment in mining and construction. However, this is changing. Both areas have recorded low unemployment rates, but for contrary reasons. During the 2001 to 2006 period, the west sustained a low unemployment rate principally because of a declining population and a reduction in the number of non-resident workers. In the east, the unemployment rate remained low because of expanding work opportunities, particularly in mining and construction, which created more work for resident and non-resident workers. In the east, there has been a net inflow of non-resident workers. In 2008, the Planning Information Forecasting Unit projected the labour-force and the resident population in the east would grow by about 2% per annum to This compared to a long run growth rate for the west of 0.3% per annum. The large gap in the population and labourforce growth rates between the two areas broadly reflected growth with and without strong mining and construction sectors. However, if coal mining and other resource projects develop in the western area, it is anticipated there will be a convergence of long run growth rates. Skills base in Barcaldine Regional Council Economy A comparison of the occupational structures of the two areas shows that the east has a substantially higher proportion of technicians and trades workers and machinery operators and drivers, which reflects the relative importance of the mining and construction sectors. In the west, the two largest employment categories are managers and labourers. The high proportion of managers in the west reflects in part a high proportion of grazing property owners and managers in the area. Galilee Basin Economic & Social Impact Study ix

13 In the Barcaldine Regional Council area, in 2006, the numbers employed in the technicians and trades workers and machinery operators and drivers categories were 201 and 125, respectively. By sector, there were less than 20 employed in mining, and about 100 in construction. Due to the low absolute numbers of people in the local economy with the requisite skills for mining and construction, coal mine projects will engage in cross-recruitment from other sectors and occupational categories. Training and strategies to attract more resident workers to settle in the area will be necessary to create more local employment. Links between Alpha and other townships in the region Alpha is a very small township with a population of approximately 350 residents. It was formerly the Administrative Centre for the Jericho Shire. There were limited statistics available for the township. Information for the pre-reform Jericho LGA was used to examine linkages. The statistics show that jobs have been filled by people from other areas in some sectors such as health and education. Services have been drawn from the main centres in the region including Barcaldine, Longreach and Emerald. Junior doctors are also rotated through the Alpha hospital from the Redcliffe and Caboolture hospitals. For the period 2001 to 2006, there were very few people working in mining or construction and commuting to mine or construction projects outside the area. Proposed coal mine projects main projects There are four coal mine projects in planning near Alpha: Alpha and Kevin s Corner projects to the north west of Alpha, proposed by Hancock Coal; China First project also to the north west of Alpha, proposed by Waratah Coal; and South Galilee project to the south west of Alpha, proposed by AMCI and Bandanna Energy Joint Venture EISs are presently being prepared for each project. Pre-feasibility studies (PFSs) have been completed for three of these projects. This summary focuses on the projects whose PFSs have been completed as follows: Tenement areas cover approximately 2,500 km 2. About 495 km 2 would be developed for open cut mining and supporting infrastructure. A further 550 km 2 are planned for underground mining (not under open cut pits), giving a potentially disturbed area of some 1,045 km 2 or about 42% of the tenement areas; Measured coal is approximately 3 billion tonnes and the proponents plan to mine about 100 million tonnes per annum at full capacity; At least one and possibly two heavy gauge railways will be constructed from the Alpha area to port facilities to be constructed at Abbot Point to the north of Bowen; First coal is planned for 2013 and Full capacity would be achieved about three years after commencement of construction; Mine lives have been estimated to be about 30 to 40 years; Galilee Basin Economic & Social Impact Study x

14 Each project would be larger than any coal mine presently being operated in the Bowen Basin by a considerable margin. The total capital costs for mine, rail and port development are in the order of $22.5 billion; The total construction workforce (in FTEs) could not be estimated due to differences in reporting methods, but the peak workforce may exceed 3,000 workers; The total operational employment has been estimated to be approximately 4,500 personnel; It is expected that a high proportion of the workforce will travel to and from the area using FIFO charter services contracted by the mining companies. Most workers would stay in SPQs on mine tenements. However, the proponents will encourage local recruitment and contractors as far as practicable; The Alpha airfield or newly constructed airfields will be used for FIFO purposes. The companies involved have not finalised planning at this stage; Water supplies will be drawn from essentially three sources: de-watering of mines; groundwater resources; and surface water piped from outside the region most likely from the proposed Connors River Dam and/or the Burdekin Dam. Total water demands for these three mines were estimated to be upwards of 31,500 ML/a. A further 3,000 ML/a has been estimated by the proponent for the South Galilee project if it proceeds; Electricity supplies would be drawn from transmission lines constructed directly from Lilyvale or a line connecting to the transmission line between Clermont and Barcaldine. Total demands could not be estimated from the information provided; and The companies propose to progressively rehabilitate the mine sites and to complete rehabilitation following closure of the mines. Various outcomes appear possible including a rehabilitation of disturbed land for grazing or native bushland, or retention of some stabilised voids after mining ceases. Various rehabilitation strategies will be assessed by relevant State and Commonwealth agencies before construction of the mine projects is approved. Other resource activity in the western area The western area is highly prospective for coal and other resources including: Coal seam gas exploration and project development with the most advanced projects being in the Rodney Creek area near Aramac; Coal exploration to the north of the projects near Alpha and to the south of Blackall; Geothermal research in the Rodney Creek area; Possible salt cavern storage to the south of Blackall; and Possible underground coal gasification on tenements to the north and east of Barcaldine. Galilee Basin Economic & Social Impact Study xi

15 Impacts of coal mining on resident populations in local towns The analysis indicates that there is a relationship between mine employment and resident population, notwithstanding various competing influences, particularly the shadowing effect of larger service towns, and the provision of work rosters conducive to long distance travel between rosters (and a growing foot-looseness of workers). There are a number of towns in the Bowen Basin which have retained relatively large populations, having grown from zero or low population bases since coal mining commenced. Case studies were undertaken for Clermont, Springsure and Rolleston. These towns have populations of about 2,000, 800 and 100, respectively. Clermont has experienced a resurgence of mine activity since early 2007, while Springsure and Rolleston had mines established in their localities for the first time in 2004 and The case studies showed the influence of various factors on local resident populations. At the high end, the mine company s policy at Clermont to house personnel locally will create impacts on the local population which exceed 100% of the mine workforce (allowing for flow-on impacts). In Springsure, there has been a dampened local population response so far because of the influence of Emerald, and the single persons quarters (SPQ) at the Rolleston mine. However, there are indicators that the population will increase by about 200 persons which represents an increase of about 36% of the combined workforces of the two mines operating in the area. In Rolleston, the response has been proportionately lower, because the town is not well equipped to accommodate a population influx, and the mine has a SPQ at the mine site. Nevertheless, based on recent and approved house construction to date, the local population response has been about 16% of the mine s workforce. The analysis suggests a possible (unconstrained) medium term resident population range for Alpha in the range of about 500 to 2,000 persons. In the longer term, there is an outside possibility of the resident population rising to a higher level, if Alpha were to follow a development pattern such as that experienced in Blackwater. The key here is infrastructure. Without investment in supporting physical and social infrastructure very little will change. Alpha has already hit some capacity constraints such as water supply and electricity, and there are very few urban services. The town is not nearly as well developed as Springsure for example. Impacts of coal mining on business in local towns Research in Clermont identified a wide range of companies servicing the two coal mines in the district as well as other projects in the region. Activities where there is local involvement with mine projects include the following: Auto electrical services Building construction Concrete batching Electrical contracting Food supplies Fuel supplies Heavy diesel fitting Industrial equipment hire Mechanical workshop services Pipe supplies Plumbing services Road construction and earth moving Steel fabrication Transport overnight and general freight Tyre services Waste recycling (specialist services for mines) In Springsure, one engineering company has extended its operations to service the two mines which have recently established in the area. Previously, it had serviced only rural and extractive industries in the district. Galilee Basin Economic & Social Impact Study xii

16 For small communities, the main initial business impacts in local towns are likely to be associated with needs to expand accommodation land sub-division, construction of houses, establishment of village accommodation for mine sites and contractors, and expansion of commercial accommodation and services at motels and caravan parks. Provision of adequate infrastructure in local towns is essential; otherwise, contractor facilities will be established on mine tenements. Contributions to community infrastructure in local towns Research of impacts in Clermont, Springsure, and Rolleston showed that mine companies are prepared to make contributions to funds managed by community groups or Councils to improve community infrastructure and services. Annual contributions have been provided for improvement works in these towns. Also, direct contributions have been made for specific projects and purposes (eg tree planting, water supplies, sponsorship of a local doctor (in Rolleston), and sporting events) Assessment of social impacts The development of large resource projects in small, remote rural economies leads to a range of positive and negative social impacts. Local communities are expected to benefit from more employment, business and training opportunities. Business generated by mine projects can also counter to varying extents downcycles created by poor seasonal conditions and falls in rural commodity prices, leading to a degree of drought proofing of local businesses and economies. Mine companies can also make substantial contributions to community infrastructure and services, as well as become actively engaged in local community development. On the negative side, there are numerous factors which can substantially disadvantage local communities and tarnish otherwise good relationships between mining companies and local communities including: Potential negative impacts of non-resident workers staying in local towns, which can lead to various anti-social behavioural problems in host communities (eg drug and alcohol abuse, and creation of various good order disruptions); Localised inflation leading to displacement of persons and businesses not benefiting from mining and related businesses; and Higher road trauma as a result of larger numbers of workers driving long distances between work rosters. In the Bowen Basin, about 90% of the non-resident workforce stays in single persons quarters (SPQs) which limits opportunities for social interactive problems. However, a proportion of non-resident workers stay in other forms of accommodation, including shared rental accommodation ( share housing ), an area where problems have been identified. Belyando LGA (14%) and Emerald LGA (11%) had the highest proportions of non-resident workers staying in caravan parks and other accommodation (including share houses). There were no statistics available specifically for share houses. Galilee Basin Economic & Social Impact Study xiii

17 The types of social services and their distribution in specific towns can provide insights into the nature and relative importance of specific social problems. An analysis of the number and locations of services sponsored by the Department of Communities and those provided directly by the Department did reveal some differences between towns in the Bowen Basin and the western area, however, more detailed research would be required to draw definitive conclusions. Social problems can also spill over into various offences recorded by the Queensland Police Service. The statistics show that across broad offence categories and selected offence categories, offence rates per 1,000 resident population in the eastern area were below those in the western area. Drug and good order offence rates, for example, were lower in the eastern area, even though the area has a non-resident population representing about 15% of the resident population. Problems such as prostitution yielded almost nil offences in both areas. There were some offences where the offence rate exceeded that in the western areas in some years, but only for a maximum of 2 of the 5 years in the time series. A summary for specific offences is provided below: Drug offences generally higher rates in the western area and no upward trend in the eastern area; Prostitution offences nil to inconsequential in both areas; Breach of Domestic Violence Protection Order offences higher rates in two of the five years in the eastern area, but no upward trend evident; Good order offences notably much higher rates in the western area; and Traffic and related offences higher rates through most of the period in the western area. Localised inflation The research showed that a major impact of establishing large resource projects near small rural communities is expected to be a significant rise in house prices and rents. This is one of the principal causes of localised inflation. The impacts on non-discretionary product prices such as fruit and vegetables, groceries and fuel are likely to be counter-inflationary, because local suppliers will probably gain buying power if there are increases in local business activity and population. Road crash trauma Time series statistics were analysed for highway sections between Rolleston and Emerald, and also from Duaringa to Emerald, and Emerald to Barcaldine to determine if increases in mining activity and mine related traffic have led to increases in road crash rates. The statistics do not show upward trends in the number of road crashes in areas impacted by mining. Management of social issues There will be social issues, due mainly to higher absolute numbers of people living, staying and travelling to and from areas where large resource projects are being constructed and operated. Social issues are more likely because of greater activity per se rather than increases in the rates of Galilee Basin Economic & Social Impact Study xiv

18 specific incidents. Problems created by workers staying in share houses was highlighted in discussions with Isaac Regional Council and needs to be managed, but most workers will stay in SPQs where social-interactive problems are strictly controlled. A key negative impact is localised inflation caused by sharp increases in property prices and rents. This has the potential to dislocate those members of small communities who are not property owners and will not benefit from higher remuneration rates in the coal mine projects or other sectors that will benefit from mining. Appropriate land release and affordable housing strategies are required to attenuate this problem. Outcomes of formal community consultations Formal consultation was conducted in three phases: Firstly, the conduct of four Focus Groups in Blackall, Barcaldine, Alpha and Emerald, followed by an Integration Workshop; Secondly, consultation with an appointed spokesperson for the Murri community; and Thirdly, consultation with the coal mine project proponents. The Integration Workshop outlined the following agreed guiding principles: Early and regular communication and engagement - between the Local Government Authorities, mining companies and communities, in the provision of timely, transparent and detailed information over the lives of mining and related projects (from cradle to grave i.e from the time exploration permits are granted, through the construction and mining phases to final land restoration and rehabilitation); Growth must be in concert with Council Corporate and Community Plans; Utilise learnings, good practice, knowledge and experiences of like communities; A strong commitment to environmental management and accountability, incorporating significant strategic responses for land restoration and reclamation, while recognising the importance of water quality, quantity, preservation and sustainability; Reach agreement on a percentage of revenues from royalties collected by the State Government and from the proposed Commonwealth Government super profits mining tax to be distributed to local Councils in the regions where mineral resources are mined; and Joint planning and development between Local Governments, relevant communities, other stakeholders and significant projects to identify, develop and achieve equitable outcomes. These guiding principles have been adopted as the strategic objectives for a recommended Action Plan. The agreed visions were as follows: For Alpha: 'Booming district maintains its rural lifestyle and a harmonious relationship exists between the mining companies and the local communities'; and Galilee Basin Economic & Social Impact Study xv

19 For the region: 'A prosperous partnership exists between the respective Councils, the various communities and the mining companies'. The Murri community was consulted separately. They advised that approximately 120 people in their community live in or are connected with the Alpha area. Key points raised included: There are special (confidential) sites in the area requiring protection; The Murri Community and Traditional Owners need to be consulted and should be represented in reference groups; Employment of indigenous persons should occur as legislated and supported by appropriate training and support; Funding from mining companies should be provided for health, education, housing and sporting events; and There should be adoption of good models from other areas, leading to good outcomes for the community, protection of cultural and environmental values, and return of land to its original condition. The coal mine project proponents were also consulted. The main points raised were as follows: The companies will actively support local participation in the projects as far as practicable. However, governments must provide support for local capacity building; There is strong support for developing a fund for financing ongoing physical and social infrastructure needs of the community. Efficient use and direction of funds would be enhanced by the formation of appropriate representative groups to oversee technical and community programs. However, it was noted that it is not the direct responsibility of mining companies to provide a range of social and community services normally the responsibility of government; Various policies and strategies to be implemented by the companies will have important indirect ameliorative impacts on various social issues discussed in section 7. These measures include strategies to ensure all workers are fit-for-work, implementation of fatigue management strategies and random drug and alcohol testing on site, provision of FIFO charter services for workers (and possibly bus-in/bus-out services to discourage workers from driving to mine sites), and provision of SPQs for accommodation; and Land rehabilitation programs will be implemented in accordance with State and Commonwealth Government guidelines. Mining cannot proceed until rehabilitation plans are approved by relevant State and Commonwealth agencies. Physical infrastructure for proposed coal mine projects The main findings were as follows: Road infrastructure. Considerably more funding is likely to be needed for funding road improvements on the Clermont to Alpha Road. Barcaldine Regional Council is evaluating Galilee Basin Economic & Social Impact Study xvi

20 options for improving road access between the Alpha Airfield and mine tenements to the north of the Capricorn Highway. Rail infrastructure. The Central Railway has not been constructed to heavy haul standards. A new line would need to be constructed on the western side of Emerald. The preferred options of Hancock Coal and Waratah Coal are to construct new heavy standard gauge railways to Abbot Point. Alpha Airfield. The Airfield will require Certification in accordance with CASR Part 139 as administered by CASA before air charter companies and airlines can operate aircraft with more than 30 seat passenger capacity into Alpha. Water supply. It was advised there will be insufficient water available to the proposed coal projects from mine dewatering or groundwater. Water will need to be piped to the area, most probably from the proposed Connors River Dam and/or the Burdekin Dam via Moranbah. The indicated total water demand of the four coal mine projects is approximately 34,500 ML/a or some 70% of the estimated annual pipeline delivery capacity of the proposed Connors River Dam of 49,500 ML/a.; and Electricity. Electricity supply to Alpha and its locality is via a 22 kv line from Barcaldine, which is only marginally meeting the needs of Alpha township. Construction of a new transmission line will be required either from Lilyvale to the tenement areas or from the existing transmission line between Clermont and Barcaldine. It might then be possible to extend services to Alpha from sub-stations to the north of Alpha rather than upgrade the existing line from Barcaldine. Infrastructure and service requirements for Alpha Additional requirements for Alpha were estimated based on medium term (10 year) population scenarios of 500, 1,250 and 2,000 residents, respectively. The analysis showed that the most urgent requirements are for additional potable water supplies and electricity distribution, as both services are now at capacity. Also, Alpha is not serviced by a sewerage treatment plant, which would be needed if the town expands. Additional land for residential allotments was estimated assuming new allotments would be serviced by a treatment plant which would allow smaller allotments to be created. Additional residential allotments will be required as the population grows beyond 500. Some 268 dwellings would be required for the medium scenario, rising to 568 dwellings for the high scenario. These estimates do not take into account any needs for relocating houses that have been built in flood zones in the town. Development of land to the west of the town will be required, which lies outside the flood zone. Included in the additional dwelling numbers would be requirements for additional staff accommodation for teachers, health sector workers, police, ambulance and QFRS staff, and other public agency staff, ranging from about 20 to 50 accommodation units. When the population rises to about 500 persons, there will be additional social service requirements for primary school teachers, long day care and family day care places, and doctors in town, police officers, full time ambulance officers. Additional personnel in other areas will be required when the population exceeds 1,000 in all cases except dentists and full time QFRS officers. Rural fire services draw on voluntary staff which reduces the need for a QFRS until the Galilee Basin Economic & Social Impact Study xvii

21 population approaches a size similar to that of Barcaldine. Population growth and greater business activity should underwrite the development of more commercial accommodation including motel guest rooms. For the medium and high population scenarios an additional 30 to 60 rooms would be required. However, these estimates fall into a relatively broad range. Development of a Full Line Supermarket such as Coles or Supa IGA is unlikely until the population approaches 2,000 residents. A lower threshold may be possible if there are relatively high demands from the non-resident population. However, most of their needs would be catered for in SPQs. If Alpha is to benefit substantially from the coal mining projects, a higher self sustaining population is required. The thresholds highlight the importance of strategies to grow the resident population toward 2,000 residents. At this level, the town will support a range urban services which would be more attractive for prospective residents, including families associated with mining and contracting services, and investors. Additional urban infrastructure and service requirements for Alpha for low, medium and high resident population scenarios are shown below. Descriptor Low Medium High Resident population (scenarios) 500 1,250 2,000 Current dwelling capacity (2010) Total dwelling requirement Additional requirements for the following: Dwellings Residential allotment land (ha) Potable water demand (ML/a) ,504 Electricity demand (MVA/a) Primary School teachers Secondary School teachers 4 9 Long Day Care + Family Care places Acute hospital beds 2 6 Doctors at hospital FTEs 1 2 Nurses at the hospital FTEs 1 8 Doctors in town Dentists in town 1 Police Officers Ambulance vehicles 1 2 Full Time Ambulance Officers FT QFRS Officers 2 Motel guest rooms Full Line Supermarkets 1 Note: additional requirements are cumulative not additive Galilee Basin Economic & Social Impact Study xviii

22 Recommended Action Plan An Action Plan (Plan) is provided in the table below. It adopts the Guiding Principles which were agreed by the Integration Workshop participants in Barcaldine on the 8 th of June, The Guiding Principles form the strategic objectives of the Plan. For each strategic objective there are specific actions, key performance indicators, responsibilities and timing. Central to Plan implementation and evolution will be the establishment of a Sustainable Resource Community Officer to be located in Alpha. It is envisaged the Community Officer will have a similar charter to those for other Officers appointed in Queensland. Planning and program implementation will be supported by two reference groups a Technical Group to oversee development and funding of physical infrastructure projects, and a Community & Business Group to oversee selection and funding of specific community projects. It is envisaged specific funds will be established prior to mine construction to enable relevant supporting physical infrastructure and community programs to commence and be sustained. Initially, it is recommended the Technical Group be formed by Barcaldine Regional Council with additional expert members from State Government, mining companies and other Councils as appropriate, and the Community & Business Group be formed by the Integration Workshop participants and representatives of mining companies. Various initiatives will strengthen the Action Plan including: Creation of a fund(s) for developing physical and urban infrastructure and services; A review of current Corporate Plans and Statutory Plans, in light of likely impacts of the proposed coal mine projects; Preparation of new population forecasts for Alpha and the region which factor in the impacts of the coal mine projects and development of urban infrastructure and services; Liaison with groups and Councils in areas where strategies have been successfully developed (to benefit from mining and minimise social and economic costs); and Early identification of projects for diversification of the local and regional economies, and cross-use of new physical infrastructure such as power lines, water pipelines and road infrastructure for local economic development purposes. Galilee Basin Economic & Social Impact Study xix

23 Strategic objectives Specific actions Key performance indicators Responsibilities Timing Early and regular communication and engagement between the Local Government Authorities and communities Creation of a position for a Sustainable Resource Community Officer to be located in Alpha for at least 5 years. Community Officer appointed Councils DEEDI DIP Mining companies Community Officer - to be determined December 2010 (all other actions) Growth must be in concert with Council Corporate and Community Plans Form representative groups in the community. Initially, Council to form the Technical Group with expert members from State Government and representatives of the mining companies, and the Integration Workshop Group initially to form the Community & Business Group plus representatives of the mining companies. Review of Council Corporate and Community Plans in light of changes in the mining industry. Modus operandi for the Technical, and Community & Business Groups to be agreed and evolve group memberships beyond the initial phase. Indicators of specific stresses in Alpha and regional economy land values, rents, proportion of rental homes As above Community Officer Councils DIP Reference groups Mining companies December 2010 Then 12 month cycle Use the Galilee Basin Economic and Social Impact Study as a tool to inform ensuing strategies. Revision and expansion of baseline statistics Community Officer Councils Ongoing Periodic review of Plans Plans amended as appropriate As for initial review of plans Ongoing Seek legislative review for mining company adherence to the Central Western Regional Plan and relevant Local Government statutory plans Conformity with plans As above June 2011 Galilee Basin Economic & Social Impact Study xx

24 Strategic objectives Specific actions Key performance indicators Responsibilities Timing Utilise learnings, good practice, knowledge and experience of like communities Strong commitment to environmental management and accountability Reach an agreement on a percentage of revenues from royalties collected by the State Government and from the proposed Commonwealth Resource Rent Tax Joint planning and development between Local Governments, relevant communities, other stakeholders and significant projects to identify, develop and achieve equitable outcomes Identify suitable models Establish dialogue with representatives of Community and Business Groups in model towns Visits to model towns and reciprocal visits Local review of EISs Formation of links with relevant groups including the Central Queensland Mine Rehabilitation Group. Agreement between parties prior to commencement of mining regarding best practice for rehabilitating surface disturbance and underground voids. Agreements for monitoring of impacts OESR to provide official population forecasts for Alpha and the region after factoring in the impacts of Mining Costing of infrastructure requirements by Council and DIP. Investment program formulated for Alpha and Funds established for Alpha Identification of projects for economic diversification and legacy assets (eg water pipelines).implementation of programs to address social displacement and financial stress caused by localised inflation and other factors Liaison established with model towns Participation of mining companies in community affairs. Number of executive and senior staff living locally. Proportion of workers living locally. Number and extent of business involvement with mine projects Consistency of methods adopted across tenements for ongoing mine rehabilitation and preparations for pit closures. Monitoring systems in place for allowing measurement of cumulative impacts on environmental assets. Community Fund formed and financed annually from State Government and Commonwealth Government Employment in new industries in the region. Comparative rents and other measures for local price structures Council rate base and revenue Community Officer Community & Business Group with the assistance of DEEDI Mining companies Community Officer Technical Group Councils Mining Companies Community Officer Council DIP Queensland Treasury Mining companies Technical Reference Group Community Officer Councils DIP DEEDI Mining companies March 2011 and ongoing (all actions) 2011 (before EISs are approved) and ongoing (all actions) May 2011 and ongoing (all actions) 2010 and ongoing (all actions) Galilee Basin Economic & Social Impact Study xxi

25 1 INTRODUCTION Economic Associates was commissioned by the Department of Employment, Economic Development and Innovation to prepare the Galilee Basin Economic and Social Impact Study. The Steering Committee for the Study comprised representatives from the Department, the Coal Infrastructure Taskforce within the Department of Infrastructure and Planning, the Remote Area Planning & Development Board, representing Local Governments in central western Queensland, Barcaldine Regional Council, and the Central Highlands Development Corporation. 1.1 Background and rationale The main economic base of the western Regional Council areas is the grazing industry, which is supported to by tourism, State and Local Government services, and other services. Due to changing population dynamics, government and private services have rationalised and regionalised concentrating in the Administrative Centres (ACs) of Longreach, Barcaldine and Blackall. From the early 1990s leading up to the early 2000s, there was a substantial shift from wool sheep to cattle. The region has also been significantly impacted by drought. Employment opportunities in the grazing industry declined significantly as properties switched from sheep to cattle (the latter being substantially more capital intensive). This eroded the resident populations on properties and in the towns of the region. Population declines have also left some partially redundant infrastructure in smaller towns. Staffing, in many cases, has been downsized to accommodate for lower demand for services such schooling. To date, the western region has not been significantly impacted by mining, as has occurred in other remote areas such as north west Queensland, or in areas further to the east in the Bowen Basin. Nevertheless, there has been extensive exploration for oil and gas, dating back to at least the 1950s. Drilling logs from this exploration, and water drilling, show coal intersections in many locations, which has allowed coal provinces to be broadly delineated 1 and refined. By extension, this has also allowed potential coal seam gas fields to be outlined. It is now known that the region is highly prospective for coal, coal seam gas (and possibly underground coal gasification), and potentially other energy resources, including geo-thermal energy which lies in the Drummond Basin beneath the Galilee Basin. It is highly likely that the western region will be significantly impacted by coal mining and other resource development in future years. A baseline study is required to provide a foundation for future planning to manage shocks to local economies and provision for new infrastructure and services. 1 The coal tenements held by Hancock Prospecting near Alpha were acquired in the 1970s. Galilee Basin Economic & Social Impact Study 1

26 1.2 Study objectives The objectives of the study were as follows: Provide a baseline of data indicators for the region to help BRC, CHDC, RAPAD and other organisations prepare for and manage the impacts of mining projects in the area; Identify both the area that will be immediately impacted by Galilee Basin coal mining and the broader region where significant effects will be felt; Map the regional drivers and dynamics affecting change in these areas of the region; Provide information to enable BRC, CHDC, RAPAD and their communities to: Develop a shared understanding of the potential impacts; Develop a shared vision for desired outcomes; and Incorporate strategies in their planning to address the potential impacts; Provide a demand and needs analysis for local and regional business growth; and Map the anticipated hard and soft infrastructure requirements to support the resource projects and indicate appropriate timeframes for development of infrastructure. 1.3 The Study Area The study area encompasses: Western area; Longreach Regional Council (main town: Longreach Administrative Centre (AC), and townships of Ilfracombe and Isisford); Barcaldine Regional Council (main town: Barcaldine (AC) and townships of Aramac, Muttaburra, Jericho and Alpha); Blackall-Tambo Regional Council (main town: Blackall (AC) and township of Tambo); Eastern area; Central Highlands Regional Council (main town: Emerald (AC), and townships of Blackwater, Capella, Tieri, Springsure and Rolleston); and Isaac Regional Council (main towns: Moranbah (AC) and Clermont). The Study Area can be broadly partitioned into two sub-regions as shown above. The western area has not been directly impacted by coal mining or other mining activity to date, while the eastern area has hosted coal mining for many years in numerous localities, and has seen significant investment in supporting hard and soft infrastructure. Communities in the eastern area are much more familiar with the main positive and negative impacts of coal mining, and, at Galilee Basin Economic & Social Impact Study 2

27 various levels, are continuously re-shaping their futures to maximise community benefits and reduce costs of mining in their areas. Additionally, their strategies are continuously evolving to improve local supply and employment opportunities. The lessons learned in the east should be valuable for the west. 1.4 Primary coal mine projects for impact assessment At the first Steering Committee meeting, it was agreed the analysis would focus on the impacts of coal mining and related projects proposed to the north-west and south-west of Alpha in Barcaldine Regional Council as set out below. The main projects are as follows: Hancock Coal Pty Ltd Alpha Coal Project, and Kevin s Corner Coal Project Waratah Coal Pty Ltd China First Coal Project; and AMCI Group and Bandanna Energy Limited Joint Venture South Galilee Coal Project. The first two companies propose to construct heavy, standard gauge rail lines from their tenements to Abbot Point to the north of Bowen. In addition, there is a possibility that Waratah Coal might construct a coal fired power station on one of its tenements. However, no commitments have been made to date to proceed with this project. Details of the coal mining projects and other possible resource development projects are provided in section 5. The four coal mine projects listed above are the most advanced resource projects in the Galilee Basin. Pre-feasibility studies have been completed for the first three projects and a study is being prepared for the fourth project. An analysis of their impacts will inform an understanding of what could unfold in other western areas if projects currently under exploration and feasibility study are developed. The terms of reference identified a need for early coordination of government investment and collaboration with BRC, CHDC, RAPAD, and other organisations to identify and address the impacts of these major projects on local communities, to support Councils and local organisations and to enable effective management of growth and realise opportunities that arise 2. This study will also inform planning when other projects are implemented at a later date in the region. 1.5 Methodology The main methodological steps were as follows: Background research of the Study Area demographics and economy; Surveys of Regional Councils, State Government Departments and Agencies, the three main coal mine proponents, and other parties to compile baseline statistics for the Study Area and specific direct impacts on the regional economy; Preparation of an Information Paper; 2 Terms of Reference, p.7. Galilee Basin Economic & Social Impact Study 3

28 Formal consultation with communities in the Study Area by conducting Focus Groups in Blackall, Barcaldine, Alpha and Emerald, and an Integration Workshop in Barcaldine, together with consultation with the Central West Aboriginal Corporation and the main coal mine project proponents; Development of future population scenarios for Alpha based on an analysis of population impacts at other towns influenced by coal mining, using long-series population statistics dating back to 1961 (where available) and case studies of three towns (Clermont, Springsure and Rolleston) where new coal mines have been commissioned in the last six years; Review of specific social impacts, including an analysis of available relevant statistics; Review of specific physical infrastructure requirements for the proposed resource projects near Alpha; Analysis of baseline statistics to determine relationships between resident populations and specific parameter values for specific infrastructure and services; Estimation of future infrastructure and service requirements for Alpha based on resident population impact scenarios and parameter values derived from Study Area baseline statistics; Preparation of an Action Plan based on the Guiding Principles agreed at the Integration Workshop; Presentation of the main findings to the Steering Committee in Emerald; Steering Committee review; and Final reporting. Galilee Basin Economic & Social Impact Study 4

29 Galilee Basin Economic & Social Impact Study 5

30 2 MAIN DEMOGRAPHIC AND ECONOMIC DRIVERS This section provides an overview of the main drivers in the Study Area. It examines the demographics and economics of the three western Regional Councils Longreach Regional Council (RC); Blackall-Tambo RC and Barcaldine RC; and the two eastern regional councils Central Highlands RC and Isaac RC, referred as the western and eastern areas (or in the west and the east). Through this report, information from the eastern area will be used to provide possible guideposts for future changes further to the west where major mining projects have not commenced. 2.1 Town and Regional Council demographics Table 1 provides a summary of 2001 and 2006 census statistics across 18 towns 3 and five regional councils in the Study Area. The towns in the western area are generally small. Six towns have resident populations of less than 400 people. The largest populations are in the three Regional Council Administrative Centres of Longreach, Barcaldine and Blackall. From 2001 to 2006, there was a pervasive decline of town populations in the western area. In contrast, most town populations increased in the east during this period, and the towns are generally larger. Emerald and Moranbah showed the strongest population growth of approximately 2% per annum, which was comparable to the state average. However, Clermont showed a decline in this period, reflecting the impacts at that time of the impending closure of the Blair Athol mine and uncertainty regarding the development of future coal mines to replace the Blair Athol mine. A decision had not been made at that time to develop the Clermont mine. In the case of Rolleston, which has benefitted from the construction and opening of the nearby Rolleston mine, the principal reason for the population decline may have been because of a fall in the surrounding rural population. This has also occurred in other rural areas in the Central Highlands Regional Council area. The statistics show a clear divide between east and west regarding household incomes. In the western area, average weekly household incomes were less than the state averages in 2001 and 2006 in most towns, while they were above the state averages in all towns in the east except Springsure in 2001, and Rolleston in Later analysis will highlight the importance of the mining sector and associated infrastructure investment in raising incomes in the region. Higher incomes have underpinned higher rent and housing cost structures. Rents rose by about 5% per annum in the Central Highlands Regional Council area and by 8% per annum in the Isaac 3 For very small towns such as Rolleston, statistics for Localities are provided, which include persons living on surrounding rural properties. The population of Rolleston township, for example, is probably in the order of 100 persons in comparison with the locality population of about persons. Galilee Basin Economic & Social Impact Study 6

31 Regional Council area, which was comparable to the average increase, state-wide. Average housing loan repayments grew much more strongly at 12% per annum and 19% per annum, respectively compared to a state average of 9% per annum. In the west, average weekly rents and loan repayments were generally lower and rose more slowly than in the east. There are also contrasts between age and family structure of households in the two areas, as seen in Tables 1 and 2. In the east, there have been higher percentages of young families, and proportionately fewer mature aged persons in the resident population, which leads to a lower overall average age of the population. In the west, the average age has been rising marginally. Fewer work opportunities for young adults in the western area may have hollowed out the population to some degree, as young adults have been leaving the area in search of work elsewhere. Galilee Basin Economic & Social Impact Study 7

32 Table 1: Population and household characteristics Towns and Regional Councils, western area, 2001 and 2006 Urban Centres/Localities and Regional Councils in western area Measure: Ilfracombe Isisford Longreach LRC Total Population (UPR): ,632 5, , ,515 1, ,449 Total Population (UPR): ,976 4, , ,264 1, ,012 % growth p.a. -5% -2% -4% -4% 0% N/A -2% 3% -11% -1% -4% 0% -4% Average Age: Average Age: % growth p.a. 1% 3% -1% 0% 1% N/A 0% 0% 5% 0% 2% -1% 2% Average weekly household income: 2001 $908 $883 $939 $947 $789 - $830 $726 $525 $840 $697 $758 $806 Average weekly household income: 2006 $1,050 $782 $1,115 $1,065 $788 $720 $954 $920 $698 $955 $786 $813 $895 % growth p.a. 3% -2% 3% 2% 0% N/A 3% 5% 6% 3% 2% 1% 2% Average monthly housing loan repayment: 2001 $643 $800 $817 $837 $700 - $613 $679 $214 $578 $578 $388 $585 Average monthly housing loan repayment: 2006 $730 $3,750 $1,006 $1,075 $345 $325 $711 $496 $1,793 $852 $675 $397 $782 % growth p.a. 3% 36% 4% 5% -13% N/A 3% -6% 53% 8% 3% 0% 6% Average weekly rent payment: 2001 $90 $58 $117 $114 $58 - $80 $67 $166 $80 $83 $64 $90 Average weekly rent payment: 2006 $100 $58 $124 $110 $54 $63 $95 $66 $164 $75 $111 $71 $84 % growth p.a. 2% 0% 1% -1% -2% N/A 4% 0% 0% -1% 6% 2% -1% Average Household Size: Average Household Size: % growth p.a. -4% -3% 0% 0% -1% N/A 1% 3% -7% 1% 0% 1% -1% Source: ABS (2001, 2006) Aramac Muttaburra Barcaldine Alpha Jericho BRC Blackall Tambo B-T RC Galilee Basin Economic & Social Impact Study 8

33 Table 2: Population and household characteristics Towns and Regional Councils, eastern area, 2001 and 2006 Urban Centres/Localities and Regional Councils in eastern area Springsure Rolleston Emerald Blackwater Capella Tieri CHRC Moranbah Clermont IRC Queensland Total Population (UPR): ,038 4, ,632 27,738 6,380 2,037 18,959 3,585,639 Total Population (UPR): ,000 5, ,680 26,479 7,132 1,853 19,822 3,904,534 % growth p.a. 1% -4% 2% 1% 1% 1% -1% 2% -2% 1% 2% Average Age: Average Age: % growth p.a. 1% 1% -1% 1% 0% 0% 0% 0% 0% -1% 0% Average weekly household income: 2001 $735 $1,042 $1,215 $1,417 $987 $1,705 $1,149 $1,483 $1,042 $1,324 $902 Average weekly household income: 2006 $1,227 $1,141 $1,773 $2,057 $1,436 $2,495 $1,650 $2,273 $1,387 $1,901 $1,202 % growth p.a. 11% 2% 8% 8% 8% 8% 8% 9% 6% 7% 6% Average monthly housing loan repayment: 2001 $844 $680 $976 $472 $721 $700 $855 $395 $615 $526 $962 Average monthly housing loan repayment: 2006 $836 $650 $1,638 $1,133 $1,058 $650 $1,493 $1,308 $1,014 $1,262 $1,446 % growth p.a. 0% -1% 11% 19% 8% -1% 12% 27% 11% 19% 9% Average weekly rent payment: 2001 $82 $73 $141 $90 $82 $37 $105 $91 $80 $72 $162 Average weekly rent payment: 2006 $120 $40 $200 $131 $120 $39 $135 $151 $108 $107 $213 % growth p.a. 8% -11% 7% 8% 8% 1% 5% 11% 6% 8% 6% Average Household Size: Average Household Size: % growth p.a. 0% 2% 1% 3% 2% 1% 1% 2% 2% 2% 1% Source: ABS (2001, 2006) Galilee Basin Economic & Social Impact Study 9

34 Table 3: Age and Family characteristics & years LRC BRC B-T RC CHRC IRC Age: years 21.6% 23.1% 23.4% 22.3% 22.2% 19.3% 25.0% 25.3% 23.9% 25.8% years 13.7% 14.1% 10.5% 11.6% 12.1% 11.3% 13.2% 14.1% 12.4% 12.9% years 14.3% 13.3% 15.0% 11.4% 12.9% 11.6% 16.2% 16.9% 17.0% 17.6% Subtotal years 28.0% 27.4% 25.6% 23.0% 25.0% 23.0% 29.5% 31.0% 29.4% 30.5% years 14.5% 15.0% 14.5% 16.3% 15.0% 13.6% 16.4% 16.3% 18.3% 17.5% years 12.6% 13.4% 12.0% 13.3% 14.0% 14.8% 13.3% 13.7% 15.9% 14.2% Subtotal years 27.0% 28.4% 26.5% 29.5% 29.0% 28.3% 29.7% 30.0% 34.2% 31.6% years 9.7% 8.9% 11.9% 11.3% 10.6% 14.1% 9.0% 8.3% 7.4% 8.2% 65+ years 13.8% 12.1% 12.6% 13.8% 13.2% 15.4% 6.7% 5.5% 5.1% 3.9% Average Age Family Structure: Couple families with children 48.2% 46.3% 51.3% 46.0% 49.4% 44.2% 54.6% 53.4% 57.1% 55.8% Couple families without children 37.8% 38.8% 38.7% 41.0% 40.1% 44.0% 33.8% 36.6% 34.8% 35.3% Single parent family 12.7% 12.8% 8.4% 12.0% 9.5% 10.8% 10.4% 8.9% 7.3% 8.0% Other 1.3% 2.2% 1.5% 1.0% 1.0% 1.0% 1.2% 1.2% 0.7% 1.0% Source: ABS (2001, 2006) Galilee Basin Economic & Social Impact Study 10

35 Table 4 compares the proportions of males in the populations of the western and eastern areas. The table highlights a difference between the two areas. The proportions of males in the populations of the two Regional Councils in the east have been consistently above those in the western Regional Councils. A primary reason for this is the influence of mining and related construction activity, which has traditionally employed more males than females. Opportunities for females are nevertheless expanding in these sectors, particularly in response to growing shortages of skilled labour and the introduction of innovative work scheduling to accommodate the needs of young mothers in work positions. Table 4: Gender comparison, western and eastern areas, 2001 & Male Female Total % Male Male Female Total % Male Barcaldine RC 1,810 1,722 3,532 51% 1,679 1,585 3,264 51% Longreach RC 2,605 2,434 5,039 52% 2,019 2,039 4,058 50% Blackall Tambo RC ,404 49% ,161 48% Subtotal 5,100 4,875 9,975 51% 4,257 4,226 8,483 50% Central Highlands RC 15,160 12,836 27,996 54% 14,245 12,234 26,479 54% Isaac RC 10,982 8,032 19,014 58% 10,962 8,860 19,822 55% Subtotal 26,142 20,868 47,010 56% 25,207 21,094 46,301 54% Total 31,242 25,743 56,985 55% 29,464 25,320 54,784 54% Source: ABS (2001, 2006) 2.2 Structure of Regional Council economies The structure of the regional council economies in 2006 is shown in Table 5. In the east, mining accounted for 29% of employment, compared to 1% in the west. By contrast, the largest sector in the western area economy was agriculture which generated 27% of total employment, compared to 11% in the east. The western area was also more dependent on employment in other sectors, particularly in the public administration and health care sectors 4. 4 It is of note that the differences in economic structures of the two areas are not reflected in major differences in the breakdown of businesses in the two areas. In both areas, the largest numbers of businesses are in the agriculture sector. There are some differences in the proportions of family, small; medium and large businesses between the two areas, with the east having some larger businesses employing more than 100 persons, but the proportionate differences are not substantial. Galilee Basin Economic & Social Impact Study 11

36 Table 5: Economic structure, employment by sector, 2006 LRC BRC B-T RC Subtotal % CHRC IRC Subtotal % Total % Agriculture, forestry & fishing ,314 27% 1,731 1,059 2,790 11% 4,104 14% Mining % 3,146 3,973 7,119 29% 7,145 25% Manufacturing % % 863 3% Electricity, gas, water & waste services % % 169 1% Construction % 1, ,871 8% 2,131 7% Wholesale trade % % 744 3% Retail trade % 1, ,935 8% 2,364 8% Accommodation & food services % ,503 6% 1,739 6% Transport, postal & warehousing % ,001 4% 1,218 4% Information media & telecommunications % % 121 0% Financial & insurance services % % 281 1% Rental, hiring & real estate services % % 333 1% Professional, scientific & technical services % % 610 2% Administrative & support services % % 577 2% Public administration & safety % % 1,538 5% Education & training % ,483 6% 1,871 6% Health care & social assistance % % 1,447 5% Arts & recreation services % % 118 0% Other services % % 1,004 3% Inadequately described/not stated % % 750 3% Total 2,158 1,616 1,050 4, % 14,111 10,192 24, % 29, % Source: ABS (2006) Galilee Basin Economic & Social Impact Study 12

37 The occupational patterns of the labour forces in the two areas appear to reflect to a significant degree the relatively high dependence on the grazing industry in the west and mining in the east. In the west, there has been a substantially higher proportion of managers and labourers, while the eastern area had much higher proportions of technicians and trades workers, and machinery operators and drivers. When mining commences in the west, local employment and income generation will depend to a significant degree on attracting persons with these skills to live in the region. There is also a major scale issue because the total labour-force is relatively small (refer - Table 5). Irrespective of how well the local labour force matches the skill requirements of the mining industry in proportionate terms, there are simply not enough people available in the western areas to service the needs of the proposed coal mine projects. Resettlement strategies are therefore of prime importance together with training. Table 6: Occupational structure, 2006 West East Total Managers 26% 15% 16% Professionals 11% 10% 10% Technicians & trades workers 13% 19% 18% Community & Personal Service Workers 9% 5% 6% Clerical & administrative workers 9% 10% 10% Sales workers 6% 6% 6% Machinery operators & drivers 7% 22% 19% Labourers 18% 12% 13% Inadequately described Not stated 2% 2% 2% Total 100% 100% 100% Source: ABS (2006) 2.3 Economic performance 2.4 Unemployment in the region Table 7 shows that unemployment has remained very low across the region, suggesting that there has been very little slack in the regional labour-force to accommodate increases in labour demand. In 2009, there were 185 (3%) persons unemployed in the western Regional Council areas, compared with 655 (2%) in the eastern Regional Council areas. Total unemployed for the region was 841 persons in 2009 or 2% of the labour-force. Galilee Basin Economic & Social Impact Study 13

38 Table 7: Unemployment rate 2003 to 2009 LRC BRC B-T RC Subtotal CHRC IRC Number unemployed LRC BRC B-T RC Subtotal Subtotal CHRC IRC Unemployment rate % Subtotal % 2.5% 1.7% 3% 3.7% 2.4% 3% 3% % 2.2% 1.8% 2% 3.0% 2.2% 3% 3% % 2.0% 1.5% 2% 2.4% 1.5% 2% 2% % 1.7% 1.1% 2% 1.6% 1.0% 1% 1% % 1.3% 0.9% 1% 1.5% 0.8% 1% 1% % 1.7% 2.1% 2% 2.1% 1.0% 2% 2% % 3.0% 3.0% 3% 2.7% 1.3% 2% 2% Source: ABS (2010) 2.5 Changes in work opportunities Although the rates of unemployment have been consistently low across the region, these statistics do not show the substantial differences in employment dynamics which have developed in each area. The following two tables summarise an analysis of changes in work opportunities over the period 2001 to 2006, by selected sectors. Statistics are provided for the numbers of persons resident in a specific area usual place of residence (UPR) (by employment and area), and the corresponding number of persons who work in that area in the same sector place of employment (POE). In cases where POE employment exceeds URP employment, there has been a net importation of labour for that particular sector or area. There would have been a net export of labour when URP employment exceeds POE employment. Jobs balance ratios can also be compiled from this data to determine where there have been net labour inflows and outflows. A jobs balance analysis is provided in section 2.6. Table 8 shows that in the western areas, there was a general erosion of work opportunities across sectors between 2001 and This was particularly pronounced in the agricultural sector, but was also evident in other sectors. The table shows that work opportunities for non-residents declined more substantially than for residents. This, together with a declining population, modified the impact on the unemployment rate of the resident labour-force. Table 9 shows a different picture in the east. There was particularly strong work generation in the mining and construction sectors, which more than offset a large decline in agriculture and a smaller decline in manufacturing. Total Total Galilee Basin Economic & Social Impact Study 14

39 More recent data may, nevertheless, show less pronounced changes than occurred between 2001 and 2006 period, because the region was experiencing a severe drought at that time, which impacted severely on agriculture, while, post 2006, the mining sector experienced the negative impacts of the global financial crisis in 2008 and The introduction of mining nevertheless drought proofs rural economies to some degree. Galilee Basin Economic & Social Impact Study 15

40 Table 8: Changes in work opportunities for Longreach, Barcaldine and Blackall-Tambo Regional Councils, 2001 to 2006 LRC LRC BRC BRC B-T RC B-T RC UPR UPR UPR POE POE POE UPR UPR UPR POE POE POE UPR UPR UPR POE POE POE Diff Diff Diff Diff Diff Diff Ag, For, Fish Mining Manufacturing Construction Other 1,646 1, ,896 1, , Total 2,498 2, ,845 2, ,694 1, ,160 1, ,194 1, ,394 1, Subtotal Subtotal UPR UPR UPR POE POE POE Diff Diff Ag, For, Fish 1,652 1, ,708 1, Mining Manufacturing Construction Other 3,137 3, ,842 2, Total 5,386 4, ,399 4,601-1,798 LRC Longreach Regional Council; BRC Barcaldine Regional Council; B-T RC Blackall-Tambo Regional Council UPR Usual Place of Residence; POE Place of Employment Source: ABS (2001, 2006) Galilee Basin Economic & Social Impact Study 16

41 Table 9: Changes in work opportunities for Central Highlands and Isaac Regional Councils, and region, 2001 to 2006 CHRC CHRC IRC IRC UPR UPR UPR POE POE POE UPR UPR UPR POE POE POE Diff Diff Diff Diff Ag, For, Fish 2,362 1, ,215 1, ,277 1, ,108 1, Mining: 2,353 3, ,405 3,961 1,556 3,302 3, ,451 6,370 2,919 Manufacturing: Construction: 860 1, , , Other 7,192 7, ,309 7, ,122 4, ,102 4, Total 13,354 14, ,385 15,140 1,755 9,621 10, ,441 13,073 3,632 Subtotal Subtotal Total Total UPR UPR UPR POE POE POE UPR UPR UPR POE POE POE Diff Diff Diff Diff Ag, For, Fish 3,639 2, ,323 2, ,291 4,114-1,177 5,031 3,986-1,045 Mining: 5,655 7,104 1,449 5,856 10,331 4,475 5,667 7,139 1,472 5,940 10,344 4,404 Manufacturing: , , Construction: 1,508 1, ,304 2,605 1,301 1,906 2, ,755 2,805 1,050 Other 11,314 11, ,411 11, ,451 14, ,253 14, Total 22,975 24,295 1,320 22,826 28,213 5,387 28,361 29, ,225 32,814 3,589 CHRC Central Highlands Regional Council; IRC Isaac Regional Council UPR Usual Place of Residence; POE Place of Employment Source: ABS (2001, 2006) Galilee Basin Economic & Social Impact Study 17

42 2.6 Jobs balance Jobs balance ratios were derived from Tables 8 and 9. A jobs balance ratio is calculated by dividing Place of Work (POE) employment by the Usual Place of Residence (UPR) employment in the same sector or Regional Council and expressing the ratio as a percentage. Example: Manufacturing jobs balance for LRC in 2001 was = or 131.4% The statistics show that in the western area, there was a general shift toward exporting labour services. This did not reflect, however, a growing self sufficiency but a deteriorating labour market. To the contrary, in the eastern area, the economies became more dependent on labour from other areas. This pattern is especially pronounced in the mining and construction sectors. Table 10: Changes in jobs balance, 2001 and 2006 LRC BRC B-T RC Subtotal Sector: Ag, For, Fish 109.5% 90.2% 102% 97.3% 96.9% 97.4% 91% 95% Mining: ** ** ** ** ** ** ** ** Manufacturing: 131.4% 120.0% 343% 146.2% 140.0% 85.1% 108% 113% Construction: 128.6% 80.4% 127% 85.6% 116.7% 65.9% 86% 80% Total 98.8% 94.8% 128% 96.2% 116.8% 95.5% 119% 95% CHRC IRC Subtotal Total Sector: Ag, For, Fish 93.8% 96.6% 86.8% 99.7% 91% 97.8% 95% 97% Mining: 102.2% 125.8% 104.5% 161.0% 104% 145.4% 105% 145% Manufacturing: 110.4% 107.5% 104.4% 106.0% 108% 107.1% 119% 108% Construction: 94.0% 124.6% 76.5% 164.7% 86% 138.3% 92% 132% Total 100.2% 107.3% 98.1% 128.3% 99% 116.1% 103% 113% ** Numbers too small to yield meaningful results Source: ABS (2001, 2006) 2.7 Official labour-force and population projections The most recent official labour-force and population forecasts were prepared in 2008 by the then Planning Information Forecasting Unit (PIFU) 5 within the Department of Infrastructure and Planning. For the period 2006 to 2031, PIFU projected the long run growth rate for the labourforce and the estimated resident population to grow only marginally at 0.3% per annum in the western area, as compared with 2% per annum for the eastern area. These projections have not factored in the impacts of the proposed mining projects in the western area, even though most of the projects which are now at an advanced stage were in planning at that time. 5 Now the Demography and Housing Research Unit in Queensland Treasury Galilee Basin Economic & Social Impact Study 18

43 Table 11: Labour-force and population projections prepared in 2008 Labour-force projections AAGR Longreach RC 2,803 2,901 3,039 3,071 3,169 3, % Barcaldine RC 2,248 2,327 2,370 2,377 2,327 2, % Blackall Tambo RC 1,403 1,388 1,405 1,413 1,423 1, % Subtotal 6,454 6,616 6,814 6,861 6,919 7, % Central Highlands RC 19,694 22,752 24,987 27,167 29,432 31, % Isaac RC 14,984 17,098 19,124 21,043 22,771 24, % Subtotal 34,678 39,850 44,111 48,210 52,203 56, % Total 41,132 46,466 50,925 55,071 59,122 63, % Population projections AAGR Longreach RC 4,326 4,211 4,376 4,511 4,718 5, % Barcaldine RC 3,462 3,515 3,529 3,516 3,483 3, % Blackall Tambo RC 2,138 2,052 2,100 2,143 2,205 2, % Subtotal 9,926 9,778 10,005 10,170 10,406 10, % Central Highlands RC 28,256 32,359 35,765 39,264 43,053 46, % Isaac RC 21,113 24,131 27,436 30,289 32,432 34, % Subtotal 49,369 56,490 63,201 69,553 75,485 81, % Total 59,295 66,268 73,206 79,723 85,891 92, % Source: Planning Information Forecasting Unit (PIFU), 2008 Galilee Basin Economic & Social Impact Study 19

44 2.8 Summary of main findings Principal findings regarding the main demographic and economic drivers of the Study Area were derived by comparing key statistics for the western and eastern areas. The demographics of 18 towns and five Regional Councils were analysed. In the west, comprising Longreach, Barcaldine and Blackall-Tambo Regional Councils, populations are concentrated in the three Administrative Centres of Longreach, Barcaldine and Blackall. The other towns have small populations of less than 400 residents. By comparison, the eastern area has a number of towns of reasonable size outside the main Administrative Centres of Emerald and Moranbah. The Study Area has a relatively large agriculture sector. In the west it is mainly based on cattle and to a lesser extent, sheep, while in the east the sector has, in addition to grazing, strong dryland and irrigated agriculture and horticulture cropping subsectors. Throughout the Study Area there was a decline in employment in the agriculture sector. This had a much greater impact in the west where the sector accounts for about 27% of the labour-force, as compared with 11% in the east. In the western area, declining employment in agriculture impacted population and associated industries. In the east, growth of mining and construction employment more than offset declining employment in agriculture. Economic performance in the east has been stronger than in the west. The eastern area has higher household incomes. The population is younger, having proportionately more young adults (15-34 years) and a smaller proportion of mature aged persons (65+ years). It also has a higher proportion of families with children due to the creation of employment opportunities. However, there is also a higher proportion of males in the resident population, due to the relative strengths of mining and construction in its economy. Both areas have recorded low unemployment rates, but for contrary reasons. During the 2001 to 2006 period, the west sustained a low unemployment rate principally because of a declining population and a reduction in the number of non-resident workers. In the east, the unemployment rate remained low because of expanding work opportunities, particularly in mining and construction, which created more work for resident and non-resident workers. In the east, there has been a net inflow of non-resident workers. In 2008, PIFU projected the labour-force and the resident population in the east would grow by about 2% per annum to This compared to a long run growth rate for the west of 0.3% per annum. The large gap in the growth rates between the two areas broadly reflected growth with and without a strong mining and construction sector. Since these projections were prepared, it is anticipated there will be greater convergence of the long run growth rates. A comparison of the occupational structures of the two areas shows that the east has a substantially higher proportion of technicians and trades workers and machinery operators and drivers, which reflects the relative importance of the mining and construction sectors. In the west, the two largest employment categories are managers and labourers. The high proportion of managers would reflect in part the high proportion of grazing property owners and managers in the area. Galilee Basin Economic & Social Impact Study 20

45 3 SKILLS BASE IN THE BARCALDINE REGIONAL COUNCIL ECONOMY The ABS in their Census of Population and Housing (2001 & 2006) provide cross-sectional statistics for the skills base in the region by occupational categories and economic sectors. The statistics in each case relate to people in the labour-force whose usual place of residence is within the Barcaldine region. Direct time comparisons across each category are not possible because the ABS changed some of the category definitions in However, the profiles provide sufficient insight into where the main strengths and weaknesses lie at the local government and regional council levels. Within Jericho LGA, where Alpha is located, the main occupational categories were principally managers and labourers, which broadly reflects the influence of the grazing industry. In 2001 and 2006, agriculture accounted for approximately 50% of the labour-force. For the Regional Council area, managers and labourers also accounted for the largest sub categories, but there were relatively high proportions of professionals, service workers, and technicians and trades workers, whose numbers are more concentrated in Barcaldine township. For the Regional Council, the sectors which employed more than 100 persons in each year were agriculture, construction, retailing, public administration (Local Government), education, and health. Across all LGAs, the numbers of mine workers were very low at less than 20 in Thus, if the new coal mining projects near Alpha are to draw personnel from the region, they will draw labour from other sectors. Analysis of the main occupational categories in the coal mining areas shows that the two principal categories are technicians and trades workers, and machinery operators and drivers. In 2006, the numbers in the Barcaldine RC area were 201, and 125 persons, respectively. Most were located in Barcaldine. In total there were less than 100 persons in Jericho LGA in Re-training and cross-recruitment would enable more people to be employed from the Barcaldine Regional Council area. However, the current low absolute numbers in the region will limit the scope for local employment. In 2006, the total labour-force in the Barcaldine Regional Council area was less than 50% of the nominated operational workforce in the four main coal mine projects. A key factor for local employment will be a strategy to encourage greater permanent settlement in the region and alignment of skills generation with the requirements of the mining companies. Galilee Basin Economic & Social Impact Study 21

46 Table 12: Occupational profile of pre-reform LGAs in Barcaldine Regional Council, 2001 Aramac LGA Barcaldine LGA Jericho LGA Barcaldine RC 2001 Classifications: 2001 % 2001 % 2001 % 2001 % Upper White Collar Managers and Administrators % 91 11% % % Professionals/ Associate Professionals 45 12% % 63 12% % Subtotal % % % % Lower White Collar Advanced Clerical and Service Workers 3 1% 13 2% 13 3% 29 2% Intermediate Clerical, Sales and Service Workers 23 6% % 34 7% 160 9% Elementary Clerical, Sales and Service Workers 13 3% 56 7% 28 5% 97 6% Subtotal 39 10% % 75 15% % Upper Blue Collar Tradespersons and Related Workers 45 12% % 33 6% % Subtotal 45 12% % 33 6% % Lower Blue Collar Intermediate Production and Transport Workers 29 7% 60 8% 40 8% 129 8% Labourers and Related Workers 75 19% % % % Subtotal % % % % Total % % % 1, % Note: the term Upper White Collar is an ABS term. In remote, rural communities there is a high proportion of grazing property owners and managers who may not be described as such in these communities. Source: ABS (2001) Galilee Basin Economic & Social Impact Study 22

47 Table 13: Occupational profile of pre-reform LGAs in Barcaldine Regional Council, 2006 Aramac LGA Barcaldine LGA Jericho LGA Barcaldine RC 2006 Classifications: 2006 % 2006 % 2006 % 2006 % Upper White Collar Managers % % % % Professionals 18 5% 91 12% 36 7% 145 9% Subtotal % % % % Lower White Collar Community & Personal Service Workers 20 6% 77 10% 31 6% 128 8% Clerical and Admin Workers 21 6% 82 11% 23 5% 126 8% Sales Workers 9 3% 42 6% 23 5% 74 5% Subtotal 50 14% % 77 15% % Upper Blue Collar Technicians & Trades Workers 33 9% % 37 7% % Subtotal 33 9% % 37 7% % Lower Blue Collar Machinery Operators & Drivers 38 11% 38 5% 49 10% 125 8% Labourers 76 22% % % % Subtotal % % % % Total % % % 1, % Note: the term Upper White Collar is an ABS term. In remote, rural communities there is a high proportion of grazing property owners and managers who may not be described as such in these communities. Source: ABS (2006) Galilee Basin Economic & Social Impact Study 23

48 Table 14: Labour-force profile by economic sector - pre-reform LGAs, Barcaldine Regional Council, Categories: Aramac LGA % Barcaldine LGA % Jericho LGA % Barcaldine Regional Council % Agriculture, Forestry and Fishing: % % % % Mining: 0 0% 3 0% 3 1% 6 0% Manufacturing: 12 3% 9 1% 9 2% 30 2% Electricity, Gas and Water Supply: 0 0% 19 2% 0 0% 19 1% Construction: 28 7% % 22 4% 158 9% Wholesale Trade: 3 1% 16 2% 15 3% 34 2% Retail Trade: 13 3% 90 12% 36 7% 139 8% Accommodation, Cafes and Restaurants 7 2% 48 6% 9 2% 64 4% Transport and Storage: 5 1% 39 5% 36 7% 80 5% Communication Services 7 2% 14 2% 6 1% 27 2% Finance and Insurance: 0 0% 0 0% 0 0% 0 0% Property and Business Services: 3 1% 46 6% 9 2% 58 3% Government Administration and Defence: 31 8% 48 6% 30 6% 109 6% Education 17 4% 65 8% 24 5% 106 6% Health and Community Services: 35 9% 72 9% 27 5% 134 8% Cultural and Recreational Services: 3 1% 14 2% 0 0% 17 1% Personal and Other Services: 3 1% 18 2% 3 1% 24 1% Non-classifiable economic units 3 1% 6 1% 3 1% 12 1% Not stated 21 5% 20 3% 19 4% 60 4% Total % % % 1, % Source: ABS (2001) Galilee Basin Economic & Social Impact Study 24

49 Table 15: Labour-force profile by economic sector - pre-reform LGAs, Barcaldine Regional Council, Categories: Aramac LGA % Barcaldine LGA % Jericho LGA % Barcaldine Regional Council % Agriculture, forestry and fishing % % % % Mining 3 1% 6 1% 7 1% 16 1% Manufacturing 3 1% 17 2% 6 1% 26 2% Electricity, gas, water and waste services 3 1% 22 3% 0 0% 25 2% Construction 23 7% 63 8% 25 5% 111 7% Wholesale trade 9 3% 19 2% 11 2% 39 2% Retail trade 14 4% 74 10% 23 5% 111 7% Accommodation and food services 6 2% 50 7% 17 3% 73 5% Transport, postal and warehousing 14 4% 53 7% 24 5% 91 6% Information media and telecommunications 0 0% 5 1% 0 0% 5 0% Financial and insurance services 0 0% 6 1% 3 1% 9 1% Rental, hiring and real estate services 0 0% 0 0% 0 0% 0 0% Professional, scientific and technical services 3 1% 29 4% 0 0% 32 2% Administrative and support services 0 0% 6 1% 0 0% 6 0% Public administration and safety 44 13% 93 12% 47 9% % Education and training 14 4% 70 9% 29 6% 113 7% Health care and social assistance 25 7% 82 11% 43 9% 150 9% Arts and recreation services 4 1% 9 1% 0 0% 13 1% Other services 0 0% 22 3% 8 2% 30 2% Inadequately described 0 0% 14 2% 7 1% 21 1% Not stated 11 3% 7 1% 0 0% 18 1% Total % % % 1, % Source: ABS (2006) Galilee Basin Economic & Social Impact Study 25

50 3.1 Summary of main findings The size of the labour-force of the Barcaldine Regional Council area was approximately 1,600 in Agriculture was the largest sector with 550 persons. All other sectors employed less than 200 persons. There were very few employed in mining (less than 20), and construction (about 100). Two occupational categories which are relatively important in the eastern area where mining and construction are major drivers of the economy are technicians and trades workers and machinery operators and drivers. In the Barcaldine Regional Council area the numbers in these categories were 201 and 125 respectively. It is envisaged the resource projects will engage in cross-recruitment from other sectors and occupational categories. Training and strategies to attract more resident workers to settle in the area will be necessary to create more local employment. Galilee Basin Economic & Social Impact Study 26

51 4 LINKS BETWEEN ALPHA AND OTHER TOWNSHIPS IN THE REGION Job balance statistics were compiled for Jericho LGA as a means of assessing the predominant directions of labour flows. Statistics are not available at an urban centre or locality level and there are no journey-to-work statistics available for this region. On balance, there was a net inward flow of labour in 2001 and The absolute numbers, however, declined in 2006, reflecting a general decline in employment opportunities in agriculture and some other (but smaller) sectors. Observation of the Difference column shows that where there has been a net export of labour to other areas, the numbers have been very small and could easily be as a result of errors in reporting and coding at census. Interestingly, the numbers working outside in the mining industry were very low at 3 in 2001 and 6 in Higher numbers would have been possible, given the relatively close proximity of Jericho LGA to the coal mines further to the east in the Bowen Basin 6. A net inflow of service personnel in 2001 appears to be consistent with current observations. Due to difficulties in attracting permanent staff for the hospital, for example, Alpha Hospital is dependent on visiting doctors from Barcaldine and the Redcliffe (or Caboolture) hospitals. In addition, up to 45% of the nursing staff positions have been filled by external agency staff. Other medical and allied health services are generally delivered from Longreach or Barcaldine. There may be a similar pattern in education with the use of external supply teachers, and visiting specialists 7. The Department of Communities also reports a number of visiting service providers, including youth support from Longreach. In summary, the job balance statistics show the limited extent of activity of the Jericho LGA labour-force in other areas; the main movement has been inward rather than outward. By observation, there has been some interaction with other towns in the region, but primarily the inward provision of specialist services. There have been very small outward movements to industries such as the mining and construction industries. 6 Some people may, however, have chosen to move to the Bowen Basin, rather than commute between rosters. 7 The numbers reported by the ABS working in Jericho LGA in the Health and Education sectors were very high and substantially exceed the staffing numbers at the hospital or the school in Alpha and the clinic and school in Jericho. Galilee Basin Economic & Social Impact Study 27

52 Table 16: Jobs balance for Jericho LGA, 2001 & 2006 UPR POE Difference Job balance Economic Sector Categories in 2001: No. No. No. % Agriculture, Forestry and Fishing: % Mining: % Manufacturing: % Electricity, Gas and Water Supply: Construction: % Wholesale Trade: % Retail Trade: % Accommodation, Cafes and Restaurants % Transport and Storage: % Communication Services % Finance and Insurance: Property and Business Services: % Government Administration and Defence: % Education % Health and Community Services: % Cultural and Recreational Services: Personal and Other Services: % Non-classifiable economic units % Not stated % Total % UPR POE Difference Job balance Economic Sector Categories in 2006: No. No. No. % Agriculture, forestry and fishing % Mining % Manufacturing % Electricity, gas, water and waste services Construction % Wholesale trade % Retail trade % Accommodation and food services % Transport, postal and warehousing % Information media and telecommunications Financial and insurance services % Rental, hiring and real estate services Professional, scientific and technical services Administrative and support services Public administration and safety % Education and training % Health care and social assistance % Arts and recreation services Other services % Inadequately described % Total % Source: ABS (2001, 2006) Galilee Basin Economic & Social Impact Study 28

53 Galilee Basin Economic & Social Impact Study 29

54 5 MINING PROJECTS 5.1 Primary coal mine projects for impact assessment The four primary coal projects and their proponents, as stated in section 1.4, are listed below: Hancock Coal Pty Ltd Alpha Coal Project, and Kevin s Corner Coal Project Waratah Coal Pty Ltd China First Coal Project 8 ; and AMCI Group and Bandanna Energy Limited Joint Venture South Galilee Coal Project. Pre-feasibility studies have been completed for the first three projects. At the time of writing, a pre-feasibility study had not been completed for the South Galilee Coal Project. The table includes information provided by the companies involved. However, environmental impact assessments (EISs) have not been completed and projects have not been approved as yet by the Queensland and Commonwealth Governments. Changes might occur following completion of the EISs, later in 2010 or in In the case of the South Galilee Coal Project, most of the information was drawn from the Initial Advice Statement which was prepared earlier in 2010 by the two joint venture companies. AMCI stressed that some of the estimates provided in the Initial Advice Statement, such as information relating to employment, production and start dates, are theoretical at this stage, and are not necessarily potential estimates. Details for each mine project are provided in Table Waratah Coal may also construct a 900 MW coal fired power station in two 450 MW modules, using reject coal. The power station cannot be constructed unless there is a complementary project component to lock up (sequestrate) the carbon dioxide (CO 2 ) and other greenhouse gases it produces. Consequently, there would also need to be transport (or transmission) of the gases to an underground storage site somewhere in the region. This technology remains unproven. An Initial Advice Statement was published in May 2009, but feasibility studies have not been completed. If the project were to proceed, power would need to be exported to an electricity grid. Galilee Basin Economic & Social Impact Study 30

55 Table 17: Coal mines at advanced planning to the north west and south west of Alpha Name of coal project China First Alpha Kevin's Corner South Galilee Totals Owner Waratah Coal Hancock Coal Hancock Coal AMCI/Bandanna Energy Location of mine 38 km NW Alpha 49 [57] km N of Alpha 67 [76] km N of Alpha 15 km SW Alpha (incl. straight line distance) Location of camp(s) Adjoining mining Probably SE Probably SE Between mine & Alpha lease near NE corner corner of MLA corner of MLA MLs, MDLs, EPCs EPCs 1040 & 1079 MLA MLA EPC 1049, EPC 1180 Approximate land areas km 2 : Tenement areas 1, ,385 3,861 (A) Open Cut (B) Underground (under pits) (C) Underground (not under pits) (D) MIA & other disturbed areas Subtotal (A+D) surf. disturbed Subtotal (A+C+D) area disturbed * 1,453 Type of coal Thermal Thermal Thermal Thermal JORC coal million tonnes 3,680 3,621 4, ,552 Measured million tonnes 1, ,025 Indicated million tonnes 565 1, ,865 Inferred million tonnes 1,140 1, ,662 At date 1/05/2010 June 2010 June 2010 June 2009 Approximate employment Pre-construction: FTEs/p.a. N/A Construction: FTEs or peak 6,000 FTEs N/A N/A Mine 2,500 (3 years) 1,060 (peak) 1,200 (peak) Rail 1,000 (3 years) 1,700 (peak) 1,700 (peak) Port terminal 2,500 (1.5 years) 250 (peak) 250 (peak) Operations: FTEs 1,710 N/A Mine 1,500 1,500 1, ,250 Rail N/A Port terminal N/A Galilee Basin Economic & Social Impact Study 31

56 Name of coal project China First Alpha Kevin's Corner South Galilee Totals Capital cost $ billion $8.80 $7.50 $6.20 Too early Mine N/A $5.90 $4.60 Rail N/A Port terminal N/A or Rail & Port combined N/A $1.60 $1.60 First Year coal Too early Open pit Underground 2015 Year when full capacity reached 2015/ /18 N/A Coal prod n at full capacity mtpa Coal prod n R.O.M mtpa N/A Operational life of project (years) N/A Employees & contractors (%): Construction N/A 20%/80% 20%/80% Operations N/A 80%/20% 80%/20% Project phasing: Planning completed Too early Construction start 2010 Infrastructure Mine Open Pit Underground 2014 Construction completed 2013 Infrastructure 2015 Mine Open Pit Underground 2018 Personnel transport: Pre-construction Unknown N/A FIFO 90% 90% DIDO 10%** 10%** Local Total 100% 100% Construction Unknown N/A FIFO 90% 90% DIDO 10%** 10%** Local Total 100% 100% Galilee Basin Economic & Social Impact Study 32

57 Name of coal project China First Alpha Kevin's Corner South Galilee Totals Operations Unknown N/A FIFO 90% 90% DIDO 10%** 10%** Local Total 100% 100% Personnel accommodation: Pre-construction Camp Unknown 90% 90% In town Unknown 10% 10% Resident Unknown 0% 0% Total 100% 100% Construction N/A Camp Unknown 90% 97% In town Unknown 9% 2% Resident Unknown 1% 1% Total 100% 100% Operations N/A Camp Unknown 95% 97% In town Unknown 4% 2% Resident Unknown 1% 1% Total 100% 100% Properties impacted by project Unknown N/A N/A 3 main properties Mine tenement areas purchased No Purchase planned Purchase planned Not determined Local roads used by the project Degulla Road Degulla Road No local roads State roads used by project Clermont-Alpha Road Clermont-Alpha Road Issues with severance Airstrip(s) for FIFO Type of aircraft for FIFO Working through these at the moment Airstrip adjacent to mine or Alpha airfield Unknown at this stage None identified. Road diversions planned None identified. Road diversions planned No homesteads in mining areas Private or Alpha airfield Private or Alpha airfield Alpha airfield Dash 8 (56 or 76 seat) or possible F 100 (100 seat) Dash 8 (56 or 76 seat) or possible F 100 (100 seat) FIFO originating from: N/A Cairns Townsville Possible Possible Mackay Yes Likely Likely Rockhampton Yes Possible Possible N/A Galilee Basin Economic & Social Impact Study 33

58 Name of coal project China First Alpha Kevin's Corner South Galilee Totals Brisbane Yes Yes Yes Emerald Possible Possible Other Possible Possible Infrastructure & method of transport of coal: Trial shipment No trial shipment Main operations Haulage capacity 450 km standard heavy gauge to Abbot Point 25,000t gross per train 500 km railway link between Alpha Coal mine & Abbot Point Water for mine operations: Source To be determined Pipeline, mine water recovery & water re-use 500 km railway link between Alpha Coal mine & Abbot Point 3 trains per day 3 trains per day Pipeline, mine water recovery & water re-use Common user facilities for rail and port Pipeline from Connors River Dam most likely Quantities ML/a 7,500 up to up to ,000 Electricity: Source To be determined PowerLink to provide new power spur with additional capacity for Alpha & Kevin's Corner mines PowerLink to provide new power spur with additional capacity for Alpha & Kevin's Corner mines Extend 275 kv line from Lilyvale or new mine mouth power station in region. Requirement p.a. To be determined 230 to 280 MW connected 200 to 250 MW connected load MVA per annum load Proposed mine rehabilitation strategies During mining Progressive Staged rehabilitation of open pit mining operations, & ongoing maintenance of water courses End of mine life Grazing Rehabilitation of open cut faces to stable land form, watercourse reparations, civil & structural rehabilitation Staged rehabilitation of open pit mining operations, & ongoing maintenance of water courses Rehabilitation of open cut faces to stable land form, watercourse reparations, civil & structural rehabilitation Progressive rehabilitation Return to native bushland Note: Pre-feasibility study for South Galilee coal project has not been completed. Information provided in the Initial Advice Statement is indicative only. * Potential disturbance area only as advised by proponent. It was advised the area may be reduced. ** 10% for DIDO includes local personnel and bus services. Most recent planning as at July 2010 has 1% Alpha & vicinity; 9% BRC area; 15% Clermont, Emerald, Bowen, Coastal Central Queensland, etc, and 75% rest of Queensland/national. Source: Hancock Coal pers. comm.; Waratah Coal pers. comm.; AMCI/Bandanna Energy JV Initial Advice Statement (2010) & pers. comm. Galilee Basin Economic & Social Impact Study 34

59 These projects are very large by world standards. As shown in Figure 1, the proposed production of the new projects exceeds that of each coal mine in the Bowen Basin. These mines are also planned to be highly capital intensive (as illustrated by comparing the employment/production lines in the graph). If labour-production ratios were adopted for mines such as the Goonyella- Riverside mine, for example, the operational employment of the proposed mines would be higher by a substantial factor. Figure 1: Coal production and operational employment, existing & proposed mines (p) In planning 5.2 Other resource development activity Located further to the north of the Kevin s Corner project, Vale Australia holds coal exploration tenements. The company s plans for development on these tenements are not known at this stage. In addition, further to the north, Linc Energy has delineated a JORC coal tonnage of 7.8 billion tonnes at its Moray Downs Project, which is approximately 160 km to the north of Alpha. Although this project lies in the Galilee Basin it is probably too far from Alpha to have a local impact. An Indian company, Adani Enterprises, is negotiation purchase of the project. The coal projects listed in Table 17 are located at the eastern edge of the Galilee Basin on a coal belt which runs in a north westerly direction from near Rolleston into north western Queensland. The main coal seams in this belt dip gently to the west and ultimately become too deep to mine. Large areas in the region have Authorities to Prospect (ATPs) for coal seam gas as well as oil and conventional gas but the main drilling activity appears to be focusing in areas to the north of Longreach and Barcaldine. Also, further west, coal occurs close to the surface in some areas in the Eromanga Basin. These coal deposits are, however, a considerable distance from rail infrastructure. A 900 km 2 tenement is being explored by East Energy Resources some 60 km to the south of Blackall. An inferred coal tonnage of approximately 1.2 billion tonnes has been reported by the company. Until recently, there has been a general perception that coal mines would not be developed in the Galilee Basin until factors change in the Bowen Basin, where projects are much closer to the Galilee Basin Economic & Social Impact Study 35

60 coast and power stations, and are much better serviced by infrastructure. Also, there is a large gap between the nearest mines in the Bowen Basin and the projects near Alpha. This, together with capacity constraints in the Queensland Rail network, may rule out an extension of a branch line from the existing heavy rail net work to Alpha, such as has occurred recently from south of Blackwater for the development of the Xstrata Coal mine near Rolleston. Nevertheless, the identified projects near Alpha are so large as to make development of new dedicated rail infrastructure potentially feasible. It is now highly likely that some of the Galilee Basin projects will leapfrog projects in the Bowen and Surat Basins, which could foster additional development within the Alpha area, and possibly projects further to the south west. Development of gas resources is similarly constrained by the lack of gas transmission infrastructure. There is a trunk pipeline that branches from the main Ballera to Roma line and links to the power station at Barcaldine. It was originally built to service the Gilmore field and the power station. Other gas pipelines lie at considerable distance to the east (to the south of Emerald) and to the west (the Ballera to Mount Isa pipeline). If the gas fields are sufficiently large, then their size may underwrite development of new trunk pipelines to connect to the gas grid, or to power stations or to LNG plants on the coast. AGL in joint venture with Eastern Corporation, for example, is developing a pilot plant for gas on a tenement in the Rodney Creek area near Aramac. They aim to achieve gas reserve certification later in In regard to underground coal gasification, Carbon Energy has signed a Heads of Agreement with Liberty Resources Limited to establish a joint venture to develop deeper coal seams on tenements held by Liberty Resources Limited. The tenements lie mainly to the north of the Capricorn Highway and to the north east of Barcaldine 9. There are potentially other resource developments, including geo-thermal energy which lies at relatively shallower depths in the Drummond Basin beneath the Galilee Basin. Research is being undertaken by the Queensland Geothermal Energy Centre of Excellence at the University of Queensland regarding the use of supercritical CO 2 in lieu of water to generate power at a geothermal power plant. The Centre reports drilling logs showing down-hole temperatures in the Rodney Creek area as being anomalously high (up to approximately 78 degrees centigrade at 1,077 metres 10. In addition, very recently, a proposed salt cavern storage project has been publicised by Innovative Energy Consulting. The tenements are located 35 km to the south of Blackall and 35 km to the east of the Gilmore gas pipeline 11. The proponents are proposing various storage applications in salt caverns, including cyclic storage for coal seam and traditional gas, and permanent storage for various wastes including carbon dioxide. This project is very close to the East Energy coal project and may offer synergies if a mine-mouth, coal-fired power station were considered for the region. 9 Dash (2010) 10 Waratah Coal (2009a) shows a possible site for geo-sequestration to the north west of Aramac which is in the same area where this research is being undertaken. Details of the work being undertaken by the Centre are reported in Purnell (2010). 11 Innovative Energy Consulting (2010), pp Galilee Basin Economic & Social Impact Study 36

61 5.3 Summary of main findings There are four coal mine projects in planning near Alpha. EISs are presently being prepared for each project. Pre-feasibility studies (PFSs) have been completed for three of these projects. This summary focuses on the projects whose PFSs have been completed. Salient details include the following: Tenement areas cover approximately 2,500 km 2. About 495 km 2 would be developed for open cut mining and supporting infrastructure. A further 550 km 2 are planned for underground mining (not under open cut pits), giving a potentially disturbed area of some 1,045 km 2 or about 42% of the tenement areas; Measured coal is approximately 3 billion tonnes and the proponents plan to mine about 100 million tonnes per annum at full capacity; At least one and possibly two heavy gauge railways will be constructed from the Alpha area to port facilities to be constructed at Abbot Point to the north of Bowen; First coal is planned for 2013 and Full capacity would be achieved about three years after commencement of construction; Mine lives have been estimated to be about 30 to 40 years; Each project would be larger than any coal mine presently being operated in the Bowen Basin by a considerable margin. The total capital costs for mine, rail and port development are in the order of $22.5 billion; The total construction workforce (in FTEs) could not be estimated due to differences in reporting methods, but the peak workforce may exceed 3,000 workers; The total operational employment has been estimated to be approximately 4,500 personnel; It is expected that a high proportion of the workforce will travel to and from the area using FIFO charter services contracted by the mining companies. Most workers would stay in SPQs on mine tenements. However, the proponents will encourage local recruitment and contractors as far as practicable; The Alpha airfield or newly constructed airfields will be used for FIFO purposes. The companies involved have not finalised planning at this stage; Water supplies will be drawn from essentially three sources: de-watering of mines; groundwater resources; and surface water piped from outside the region most likely from the proposed Connors River Dam and/or the Burdekin Dam. Total water demands for these three mines were estimated to be upwards of 31,500 ML/a. A further 3,000 ML/a has been estimated by the proponent for the South Galilee project if it proceeds; Electricity supplies would be drawn from transmission lines constructed directly from Lilyvale or a line connecting to the transmission line between Clermont and Barcaldine. Total demands could not be estimated from the information provided; and Galilee Basin Economic & Social Impact Study 37

62 The companies propose to progressively rehabilitate the mine sites and to complete rehabilitation following closure of the mines. Various outcomes appear possible including a rehabilitation of disturbed land for grazing or native bushland, or retention of some stabilised voids after mining ceases. Various rehabilitation strategies will be assessed by relevant State and Commonwealth agencies before construction of the mine projects is approved. The region is highly prospective for coal and other resources in the Alpha area and other localities in the Study Area. Activities include: Coal seam gas exploration and project development with the most advanced projects being in the Rodney Creek area near Aramac; Coal exploration to the north of the projects near Alpha and to the south of Blackall; Geothermal research in the Rodney Creek area; Possible salt cavern storage to the south of Blackall; and Possible underground coal gasification on tenements to the north and east of Barcaldine. Galilee Basin Economic & Social Impact Study 38

63 Galilee Basin Economic & Social Impact Study 39

64 6 POPULATION AND BUSINESS IMPACTS OF MINE PROJECTS 6.1 Population impacts Historical perspective Historical series for resident population statistics were analysed for towns which have been influenced by major mining activity. The formative periods when major new mines were being established are highlighted in the table. Time series for the period 1961 to 2006 were employed for this purpose. The analysis shows that relatively large populations can be established reasonably rapidly. This occurred in the towns that were built by the mining companies (Tieri, Moranbah, Glenden, Dysart, and Middlemount), and in towns which were formerly very small rural towns, notably Blackwater and Moura. By contrast, there are some towns where the populations did not increase or declined. These included Springsure, Rolleston, Clermont, Collinsville and Cloncurry. Key factors appear to be the maintenance of long term mine sustainability, and provision of high quality infrastructure and urban services suited to the needs of relatively high income individuals and families. Towns such as Collinsville, Clermont and Cloncurry did not expand significantly in the 2001 to 2006 period, because mining activity was winding down. Also, for Collinsville, part of the resident mine population was absorbed in the 1980s by Glenden which was constructed near Collinsville in At the time, Glenden was developed as a modern, purpose-built mining town. Towns such as Blackwater and Dysart have retained relatively high populations albeit below their peaks, despite being located near larger service towns, and during a period when the workforce has become more footloose. Others such as Emerald and Moranbah have extended their service catchments and populations are growing. Galilee Basin Economic & Social Impact Study 40

65 Table 18: Changes in town resident populations in mining areas Comments Tieri ,324 1,977 1,632 1,680 Commenced in 1981 to serve Oaky Creek mine & 400 workers Springsure Coal mines opened in 2004 and 2006 Rolleston Rolleston mine and railway opened in 2005 Emerald 2,029 4,628 6,557 10,038 11,000 Major service town for agriculture and mining throughout the period. Gregory mine (1979) established most of its workers in housing in Emerald. Capella Oaky Creek open cut mine opened in 1982, and underground mine in Also impacted to some extent by the establishment of Gregory mine in Blackwater 77 1,984 5,434 7,029 6,760 5,931 4,904 5,030 Blackwater mine commissioned in 1967 by the Utah Development Company. Cook (1970), Curragh (1983), Jellinbah (1989). Blackwater and South Blackwater mines amalgamated in 2001 and renamed Blackwater mine. Clermont 1,659 2,037 1,853 Clermont became main town for Blair Athol mine in 1972, when Blair Athol township was closed (population 240). Railway constructed from Blair Athol mine to Dalrymple Bay in Clermont mine not opened until Impacts of expected closure of Blair Athol mine were occurring in Moranbah 0 0 1,050 4,053 6,883 6,380 7,132 Construction of the town began in 1970 to service Utah's Moranbah mine. Mines have been continually opening around Moranbah since then. Glenden ,264 1, ,112 Construction began in 1982 to service Newlands mine. Dysart ,535 3,257 4,039 3,917 3,444 2,463 3,137 Construction began in Dormitory town for Saraji and Norwich Park mines. Middlemount ,503 2,611 2,132 2,057 2,038 Dormitory towns for German Creek and Foxleigh mines. Lake Lindsay mine opened in Moura 213 1,093 2,694 2,808 2,367 1,980 1,802 1,774 First coal contracts in 1962, which were extended to the late 1970s. An ammonium nitrate plant was opened in The area is also a major grain and cotton producing area. Collinsville 2,147 2,786 2,013 2,063 Town established in the 1920s to service local coal mines servicing rail demands in northern Queensland. Power station opened in Rail lines built from Newlands and Scottville mines to Abbot Point for export in Population impacts of coal mining reduced with the opening of Glenden in 1982 by Mount Isa Mines. Cloncurry 1,961 2,199 2,156 2,459 2,737 2,384 Most recent mining boom commenced in the late 1990s with the opening of Ernest Henry mine in Cloncurry has also serviced to varying degrees other large mines including Cannington and Century mines. No new major mines have opened since the late 1990s. Source: Centre for the Government of Queensland, University of Queensland (web page); Mining Support Unit, DEEDI, pers.comm.; Economic Associates research Periods of recent formative mine impact Galilee Basin Economic & Social Impact Study 41

66 Further analysis was undertaken to assess the relationship between resident populations of mine service towns and total employment of mining companies in the localities of these towns. Current employment and 2006 census population census statistics were used for this purpose. Figure 2 shows the relationship between resident population and mine employment for selected towns. It indicates a strong relationship in most cases. The only major outlier is Emerald which has a much larger service catchment for mining, agriculture and other industries. It is evident from this analysis that there is potential for a rural town to adopt a similar resident population to that of the local mining workforce. Figure 2: Resident populations in towns and coal mine employment in locality The relationship between annual coal production and the resident town populations in the localities of the coal mines studied is shown in Figure 3. There is potential for a strong relationship to exist here, because the number and size of local contractor workshops would be partly a function of the equipment populations of mine projects, which in turn would be a function of production levels. However there can also be inverse relationships, such as the need to use specialist workshops outside the region, particularly in Mackay, to service larger, more complex equipment. The analysis shows a highly variable relationship between production and resident population. Production does not appear to be a good predictor of resident population. Figure 3: Resident populations in towns and mine production in locality Galilee Basin Economic & Social Impact Study 42

67 6.1.2 Recent experience where new coal mines have been established Springsure, Rolleston and Clermont Further research was conducted in three towns to assess the impacts of new coal mines on population and other activities (which will be discussed in a later section). Springsure and Rolleston are rural towns with no previous direct experience with coal mining in their districts 12. Clermont has had a long experience with coal mining, but until recently was facing the prospect of having no new coal mines in the area to replace Blair Athol mine when it closes. Mine development impacting Springsure and Rolleston Springsure is located 66 km to the south of Emerald, with a resident population of about 800 people. Rolleston is 71 km further to the south east or some 137 km from Emerald. It is a village of about 100 residents 13, within a locality having a population of less than 300 people. Since the early 2000s, these communities have experienced for the first time the impacts of major coal mine construction and operations at two mines: Firstly, the Minerva coal mine, which is located between Springsure and Emerald. It was commissioned in 2004 and employs about 240 personnel; and Secondly, the Rolleston coal mine which began operations a year later in It is located to the north west of Rolleston and south of Springsure, and employs about 310 personnel. Information is provided in the following three tables to broadly outline the types of impacts of these projects. Since commissioning, these mines have been expanding production to near full capacity. The workforce at Minerva mine is unlikely to increase further, but there will be additional employment at the Rolleston mine. Neither mine provides fly-out/fly-out (FIFO) transport arrangements for their workers. The Minerva Mine Joint Venture has set a work roster which largely precludes FIFO or drive-in drive-out from long distances such as coastal Queensland. Most of the Minerva mine workforce live in Emerald, and village style (single persons quarters (SPQ)) accommodation is not provided at the mine site In contrast, Rolleston mine operates a traditional 7 day on 7 day off roster which enables workers to travel long distances in their off work periods. It has a SPQ at the mine site, for its employees and permanent contractors. It is not known what proportion of the workforce lives outside the region, but it is significant. To date, the direct impact of these mines on the resident population of Springsure has been limited, but there is evidence that various flow-on impacts are unfolding. There have been competing factors which have dampened initials impacts. The Minerva mine is close to the larger service town of Emerald. Most of the senior staff and workers live in Emerald. For Rolleston mine, the provision of a 7 day on 7 day off roster allows more personnel to choose to live further 12 Gas production wells and a gas pipeline were constructed some years ago, but operations have very minor local employment impacts. 13 Rolleston town population is cited here based estimates provided by Central Highlands Regional Council Springsure office. The smallest geographical area for official statistical compilation is the locality population of 217 persons (2006 Census). The locality estimate is used elsewhere in the report for time series analysis. Galilee Basin Economic & Social Impact Study 43

68 from the mine, but travel is at their own expense. Direct impacts on the Springsure residential population have occurred because of the provision of housing for executives and senior staff of the mining companies and major contractors such as Hasting Deering, as well as the attraction of new employees to the town. The numbers have been small to date, as indicated by Council, and various statistics. The population statistics for Bauhinia Shire LGA (which encompass both Springsure and Rolleston) show the resident population rose marginally from 2,252 persons in 2001 to 2,352 persons in 2009 (up 103). School enrolments in Springsure actually declined from 2002 to In 2008, OESR projected the resident population for Bauhinia LGA to rise by about 9% or 200 persons over a ten year period from 2006 to It is assumed OESR took account of the impact of the two mines, when preparing these projections. A further indicator of population change is the number of residential allotments which have been created. Since the mines were opened, there have been about 70 town, rural residential and small rural lots created. These lots would accommodate about 180 residents, if houses are built on each lot 15. At this stage, it would appear that the medium term resident population impact will be about 200 persons or approximately 36% of the mine operational workforce. Rolleston-specific impacts There is very limited information available for Rolleston. It is too small for the ABS to publish urban centre census statistics. Council s best estimates of population indicate that Rolleston had about 80 residents prior to the mine being constructed. There had been very little building activity in the town prior to the new mine being established. However, there are now about 20 houses in the development pipeline (constructed, under construction or approved for construction), which gives an indicator of a potential population increase of about 50 persons. This represents a population increase of about 16% of the Rolleston mine workforce, and 63% of the town population. The local population expansion has been supported by the installation of new potable water and waste water treatment systems. To date, school enrolments remain below those in 2001, but the decline has been less pronounced than in Springsure. These figures may have masked the offsetting impact of mining in the area on school enrolments, if there has been a decline in the numbers of students travelling to the local school from rural properties. 14 OESR (2008). Over a 30 year period to 2031, OESR projected the cumulative resident population increase to be about 26% or 610 persons. 15 Based on an average household size of 2.6 persons per household for Springsure (Urban Centre) as at the 2006 Census. Galilee Basin Economic & Social Impact Study 44

69 Table 19: Mine operations and contributions, Springsure & Rolleston Mine name: Minerva Rolleston Springsure Commencement of mine operations Mine employment (operations) Mine production at full capacity (Mtpa) Mine Life > 2020 > 2020 SQL for operations No Yes Location of SQL na At mine Size of SQL (number of rooms) na 340 c Roster (days on and off work) 11 on of 21 a 7 on 7 off Fly in Fly out No b No Bus from Springsure for workers Commuter Coach Executives/senior technical staff housed in: Springsure (approximate numbers) ~ 3 ~ 12 Rolleston (approximate numbers) 0 N/A Emerald (approximate numbers) ~ 27 Other employee locations in: Springsure (approximate numbers) ~ 35 ~ 70 Rolleston (approximate numbers) 0 NK Emerald (approximate numbers) ~ 170 NK Contributions to Council (excluding rates): Springsure Year 1 NK $400K Year 2 NK $200K Year 3 NK $200K Other (but not exhaustive) NK $200K d Contribution to community (general) Springsure Year 1 NK $50K Year 2 NK $20K Year 3 NK $20K Year 4+ per year NK $20K Other (but not exhaustive) NK $8K e Rolleston Contributions to Rolleston community (not exhaustive): Sponsorship for doctor in town na $75K f New water supply and sewerage treatment system na NK Notes: Minerva mine located between Springsure and Emerald, and Rolleston mine near Rolleston a Includes a carer s shift which allows child minders to begin work at 9am and finish at 2pm b Small number for specialist maintenance work only c Mainly for employees and permanent contractors. Preference of Rolleston community not to have the camp in town. d Tree planting program e Golf Club sponsorship f Doctor only stayed for 3 years Source: Central Highlands Regional Council Springsure Office pers. comm.; Economic Associates research. Galilee Basin Economic & Social Impact Study 45

70 Table 20: Changes following commencement of mine operations: Springsure & Rolleston Changes in Town Springsure Changes (pre to post mine operations) Comment Existing motel 6 rooms Additional rooms 14 x 2 room New Motel units Hotel/motel approval 63 rooms No progress, may lapse Existing hotel 6 apartments Redeveloped house opposite into 6 apartments Existing caravan park Dongas (new) 12 to 14 Cabins (new) 3 Powered sites (new) Nil Additional residential accommodation: Duplex units (3 bedroom) 2 Triplex units (2 bedroom) transportable 3 Units (2 bedroom) transportabe 2 Development applications: Units (2 & 3 bedroom) 14 Duplex units (2 bedroom) 2 Subdivision Residential Old town blocks subdivided into 4 lots Rural residential (1 ha with town water) ~ 15 Rural residential (2-5 ha with town water) ~ 8 Rural residential (5-7 ha without town water) ~ 8 Rural blocks near town (80 ha) ~ 4 Commercial land No change Industrial land Some vacant industrial land remains. Council clearing Native Title for 8ha site Businesses established 1 1 motel Businesses closed 5 Cafe, hairdresser, tyre service, car dealership, clothes/gift shop Loss of Council staff to mines (of 75 staff numbers) Other employment changes in town Rolleston Population in town (not locality) Pre mine 80 Post mine NK Caravan park Donga rooms 16 On site vans 15 New houses (constructed) 8 New houses approved 12 5 Admin 5-10 plant operators (17-20%) Lost more due to retirement than because of mines. Other rationalisation has been significant including: loss of 5 railway staff, 1 stock inspector, reduction of Ergon Staff by 1-2 staff, Westpac Bank closed in ~2000, BoQ agency NK closed, saleyards have not operated for last 3-4 years New commercial developments Nil New industrial developments 1 Industrial shed New residential allotments Businesses established 1 Cafe Businesses closed 1 Cafe Other Source: Central Highlands Regional Council Springsure Office pers. comm.; Economic Associates research. Galilee Basin Economic & Social Impact Study 46

71 Table 21: School enrolments: Springsure & Rolleston, 2001 to 2010 Springsure Rolleston Source: Department of Education Figure 4: School enrolment trends: Springsure & Rolleston, 2001 to 2010 Galilee Basin Economic & Social Impact Study 47

72 Clermont Clermont is 106 km to the north of Emerald. The town was established after copper and gold were discovered in the district in the 19 th century. Clermont has become an important rural service centre for cropping and grazing. It was the Administrative Centre for Belyando Shire until Clermont has been the primary service town for the Blair Athol mine since the early 1970s. Blair Athol mine is expected to close by about The census statistics for the Clermont urban centre indicate that the prospect of closure was having a depressing effect on the town s population. This was also evident from discussions in Clermont and with Isaac Regional Council. Over the period 2001 to 2006, Clermont s resident population (based on urban centre census statistics) declined by about 180 persons. Rio Tinto Coal Australia announced in January 2007 approval for the development of the Clermont mine. Construction commenced in 2007, and the mine was commissioned in early Based on OESR 16 statistics (albeit preliminary), the 2001 resident population has probably been restored. Table 22: Mine contributions Blair Athol and Clermont coal mines, Clermont Measures: Clermont Blair Athol Commencement of mine operations s b Mine employment (operations) Mine production at full capacity (Mtpa) Type of operation OC OC Mine Life Mine camp for operations No No Roster NK NK Fly in Fly out No No Bus from Clermont to mine for workers NK NK Executive and employee housing in Clermont (a) (a) Contributions to Council (excluding rates): NK Community fund Contribution toward the community (not exhaustive): $1.5 m Fully equipped gymnasium & indoor sports facility NK Pool complex NK 6 fully lit tennis courts with flexipave surfaces NK Lighting over sports oval NK (a) Company policy for operational employees to live locally (b) Modern Open Cut phase only following closure of Blair Athol township in 1972 to make room for mine operations OC Open cut NK Not known Source: Clermont & Community Business Group; Isaac Regional Council; Economic Associates research In the long term the direct impact of the new mine on the resident population (excluding the negative impact of losing the Blair Athol workforce) should be about 100% of the mine s 16 OESR (2010). Due to discrepancies between the place of usual residence census statistics and the estimated resident population statistics of OESR, it is not possible to draw strong conclusions on the likely net impact of the new mine, after allowing for a declining workforce at Blair Athol mine. Galilee Basin Economic & Social Impact Study 48

73 operational workforce as most of the workforce will live locally. Flow-ons to other industries in the town would have additional impacts on the local population. Table 23 provides an indicative list of the businesses in and near Clermont which are servicing coal mines. It was reported by community representatives that the main positive impacts so far of the new mine have been on existing businesses. To date, the new mine has had a very small attractor impact on new businesses. Table 23: Types of businesses in Clermont servicing coal mining Type Servicing coal mines Comment Auto Electrician Yes Rural and mining Bakery Yes Early morning smokos etc for shift workers Building construction Yes Mine and Town maintenance Bulk fuel Possible In town Bulk fuel Possible Out of town Concrete batching plant Yes Local and mining Electrical business Yes Mainly town maintenance and some site work with rural work Heavy diesel fitting Yes Mining and local contractors Industrial equipment hire (new) Yes Hire of industrial equipment eg welders, hydraulic lifts etc Mechanical workshop Yes Mainly heavy general transport with mine work Plumbing business Yes General and mining Road construction business Yes Civil engineering services and provision of water trucks to mines Sand & gravel and earthmoving business Possible Includes backhoe & dump truck business Service station Yes Out of town Service station Yes In town Service station Yes Out of town Steel fabrication Yes Mining and gas pipeline work Steel fabrication Yes Mining and manufacture of rural products Australia wide Stock & Station Agent Yes Steel and polypipe supplies Transport Possible Overnight and general freight Truck bodies, trailers & tyres Possible General transport industry and rural Tyre business Yes Rural and mining Waste recycling Yes Main base for the region. Recycles waste from coal mines. Source: Clermont & Community Business Group; Isaac Regional Council; Economic Associates research Galilee Basin Economic & Social Impact Study 49

74 Table 24: Changes following decision to construct the Clermont coal mine project, Clermont Measure: Change Comment New Motel 1 x 19 rooms Houses constructed 40 Some old houses pulled down and rebuilt. 6 house builders operating in town. Affordable housing complex (proposed) 8,000m2 land area In town, 1 to 3 br units, rent set at maximum of 30% of gross HH income Subdivision Residential (developed) 1 x 11 allotments Residential (approved) 250 allotments Waiting for need Industrial land 2 projects (25 allotments) Industrial land - approval 40 ha Businesses established 2 Rural supplies, Industrial equipment hire. Less than 10 employees. Businesses closed NK Other activity New ambulance centre Loss of Council staff to mines Administration staff NK Plant operators NK Source: Clermont & Community Business Group; Isaac Regional Council; Economic Associates research Preliminary conclusions regarding resident population impacts The analysis indicates that there is a relationship between mine employment and resident population, notwithstanding various competing influences, particularly the shadowing effect of larger service towns, and the provision of work rosters conducive to long distance travel between rosters (and a growing foot-looseness of workers). There are a number of towns in the Bowen Basin which have retained relatively large populations, having grown from zero or low population bases since coal mining commenced. The case studies show the influence of various factors on local resident populations. At the high end, the mine company s policy at Clermont to house personnel locally will create impacts on the local population which exceed 100% of the mine workforce (allowing for flow-on impacts). In Springsure, there has been a dampened local population response so far because of the influence of Emerald, and the SPQ at the Rolleston mine. However, there are indicators that the population will increase by about 200 persons which represents an increase of about 36% of the combined workforces of the two mines operating in the area. In Rolleston, the response has been proportionately lower, because the town is not well equipped to accommodate a population influx, and the mine has a SPQ at the mine site. Nevertheless, based on recent and approved house construction to date, the local population response has been about 16% of the mine s workforce. The analysis suggests a possible (unconstrained) medium term resident population range for Alpha in the range of about 500 to 2,000 persons. In the longer term, there is an outside possibility of the resident population rising to a higher level, if Alpha were to follow a development pattern such as that experienced in Blackwater. The key here is infrastructure. Without investment in supporting physical and social infrastructure very little will change. Alpha Galilee Basin Economic & Social Impact Study 50

75 has already hit some capacity constraints such as water supply and electricity, and there are very few urban services. The town is not nearly as well developed as Springsure for example. 6.2 Business impacts and community contributions Background research A Mining and Major Projects Supply Chain Gap Analysis has been conducted for the Fitzroy and Central West regions in Central Queensland 17. The focus of the analysis has been to profile six major projects, including Hancock Coal s Alpha Coal Project, and Waratah Coal s China First Coal Project. The analysis identified each project s profile of work and investigated strategies for creating effective links for local suppliers into their supply chains. The capability of approximately sixty companies was audited and their tier rating identified (refer to tier level descriptions tabulation on the following page). Details of the types of companies and the numbers by tier level rating in Emerald that were positioned to service the new projects are set out below. Identified local suppliers by type and Tier level: Emerald Core business Number Tier Environmental survey/consulting 1 4/5 Surveyors/planners/project managers 1 3 Engineering manufacturing/machining 1 3 Electrical/refrigeration 1 3 Electrical engineering & contracting 1 3 Mining welding/fabrication 1 4/5 Builder - domestic/commercial/industrial 1 4/5 Source: DWC Services et al (2010) various The construction, operation and maintenance phases of the six projects reviewed in the report and numerous other mining, minerals and gas major projects in the pipeline will present significant supply opportunities for Central Queensland businesses. The Mining and Major Projects Supply Chain Gap Analysis report states, Maximising opportunities for local suppliers needs to be addressed at a broader scale than just individual marketing of firms or forming bid teams. While these approaches are essential, their success can be greatly improved by adding an early contractor involvement strategy for local suppliers. 18 The strategy of early contractor involvement is based on the early establishment of relationships with senior representatives of the major project and their Tier 1 supplier/s. This allows for lifting of the profiles of local suppliers and advocating for their greater involvement in major project supply chains. In response to a key recommendation of the Mining and Major Projects Supply Chain Gap Analysis, DEEDI has established a steering group to coordinate all programs affecting the development of local supply chains to the numerous major projects in Central Queensland. 17 DWC Services et al (2010) 18 ibid, p.3. Galilee Basin Economic & Social Impact Study 51

76 Tier level descriptions Tier 1 suppliers Tier 2 firms Tier 3 firms Tier 4 firms Engineering. Procurement and construction management (EPCM) firm Firms that typically manage major areas of work e.g. Engineering design, civil construction Subcontractors supplying large work packages in key areas or specialist providers of technology, equipment or services. These firms often have experience in working with major projects and have the capacity to form bidding teams for larger work packages. Capable subcontractors to Tier 2 and Tier 3 firms. These firms may or may not have experience in working with major projects. Typically these firms are too small to bid on and win larger work packages. However, they have potential to participate in bidding groups. Smaller firms that operate in the supply chain to Tier 3 and Tier 4 firms. This group also includes suppliers of materials and services. Firms inthis group do not have the capabilities or focus to move up the chain but they are an Tier 5 firms essential layer in the supply chain. Source: DWC Services et al (2010), p Business impacts: indicators from case studies In Clermont, the local survey indicated that interaction with mining has developed over some years. Many businesses have extended their activities from servicing primarily local population and rural clients (eg concrete batching, diesel fitters and steel fabrication) to service mine projects. Other specialist companies have entered the town such as a waste recycler. The Clermont example shows that there is a maturation period, and a strong rural equipment base is advantageous. Where mining activity is occurring for the first time, the main initial impacts are likely to be accommodation-related, including construction of new housing, mine villages, and commercial accommodation, and expansion of motel and caravan park operations. In Springsure, only one engineering business is servicing the coal mines. It initially lost workers to the mining companies and contractors, but has subsequently restored its workforce to pre-mine levels. In Rolleston, the main impacts have been an expansion of the caravan park and new house construction. Also, one industrial shed has been constructed recently. These case studies provide a possible spectrum of business impacts, ranging from significant impacts in a relatively well developed and expanding local support base at Clermont to small (absolute) impacts so far at Springsure (but with some business linkages), to minimal impacts at Rolleston Contributions to community infrastructure The case studies show that at least two of the mining companies have been actively involved in supporting community infrastructure. In Clermont, contributions are made by the mining company to a community fund. The fund is used for local projects including, for example, recent upgrading of a Child Care Centre. The company also makes direct contributions to specific projects such as a pool complex and sporting facilities. In Springsure, there have been direct contributions to Council as well as for specific projects such as tree planting and sporting facilities. Galilee Basin Economic & Social Impact Study 52

77 In Rolleston, the mining company has contributed to various initiatives, including the installation of a local water supply and treatment systems and the sponsorship of a local doctor 19. Information regarding contributions to physical infrastructure construction, upgrades and maintenance was not available for this study Summary Business impacts DEEDI has commissioned research to strengthen local supply chain strategies in Central Queensland entitled the Mining and Major Projects Supply Chain Gap Analysis. This included capability auditing of sixty companies and identification of tier ratings of sixty companies in Central Queensland. The study identified seven companies in Emerald with tier ratings ranging from 3 to 5. There were no companies in Emerald with the higher Tier 1 and Tier 2 ratings. DEEDI has established a steering group to coordinate all programs affecting the development of local supply chains. Case study research for this study identified a wide range of companies in Clermont servicing the two coal mines in the district as well as other projects in the region. Activities where there is local involvement with mine projects include the following: Auto electrical services Building construction Concrete batching Electrical contracting Food supplies Fuel supplies Heavy diesel fitting Industrial equipment hire Mechanical workshop services Pipe supplies Plumbing services Road construction and earth moving Steel fabrication Transport overnight and general freight Tyre services Waste recycling (specialist services for mines) In Springsure, one engineering company has extended its operations to service the two mines which have recently established in the area. Previously, it had serviced only rural and extractive industries in the district. For small communities, the main initial business impacts in the towns are likely to be created by needs to expand accommodation land sub division, construction of houses, establishment of village accommodation for mine sites and contractors, and expansion of commercial accommodation and services at motels and caravan parks. Provision of adequate infrastructure in local towns is essential; otherwise, contractor facilities will be established on mine tenements. Contributions to community infrastructure Mine companies are prepared to make contributions to funds managed by community groups or Councils to improve community infrastructure and services. Annual contributions have been provided in Clermont and Springsure. Also, direct contributions are made for specific projects and purposes (eg tree planting, water supplies, sponsorship of a local doctor (in Rolleston), and sporting events). 19 The doctor stayed for three years. Galilee Basin Economic & Social Impact Study 53

78 Galilee Basin Economic & Social Impact Study 54

79 7 ASSESSMENT OF SOCIAL IMPACTS 7.1 Background There have been numerous studies of the impacts in coal mining areas in Queensland and NSW. Many of the findings can be drawn from first principles and observation. There is a general recognition that large resource projects lead to a number of benefits, even when there is substantial use of fly-in fly-out and drive-in drive-out rosters and SPQs. The statistics and the literature point to various social benefits associated with: Greater employment and wealth generating opportunities; Drought proofing local businesses hitherto highly impacted by the vagaries of agricultural prices and the weather; More opportunities for local businesses; and Provision of substantial monetary contributions for local services, hard and soft infrastructure, organisations and events. On the negative side, there are numerous factors which can substantially disadvantage local communities and tarnish otherwise good relationships between mining companies and local communities. Key areas appear to be the following: High non-resident workforce leading to specific social problems in some cases relating to poor social inclusiveness and anti-social behaviour in host communities; Localised inflation leading to displacement of persons and businesses not benefiting from mining and related businesses; and Higher road trauma as a result of larger numbers of workers driving long distances between work rosters. There are other issues which have more socio-environmental characteristics including potential impacts on water supplies and quality, loss of productive and conservation values of landscapes disturbed by mining, and downstream problems when mines are rehabilitated differently and landholders are impacted differentially. In many cases, it is necessary to examine the total and cumulative impacts of all projects being constructed and operated in the area, as there can be specific threshold effects which are not obvious when projects are examined individually. It was outside the scope of this study to examine environmental issues. However, they are highlighted in section 8 which reports the findings of the Focus Groups and the Integration Workshop. Provision is also made to address these issues in the Action Plan in section 11. Where possible, statistics are used in this section to test various observations and provide more context to the issues highlighted. Galilee Basin Economic & Social Impact Study 55

80 7.2 Non-resident worker accommodation The methods of accommodation for mine workers can have important positive and negative social impacts. It has been observed from the Clermont example that active participation of mine workers and their families living in the local community (eg by sending children to local schools, forming local social networks, and participating in local community projects) is highly beneficial for the community and all concerned. In addition, their local expenditure flow has a significant direct and flow-on economic impact on the local economy. There is a negative side if workers living in the community (either permanently or on rosters) cause various disturbances. Discussions highlighted problems relating to drug and alcohol abuse, particularly in share houses. The share-house syndrome is not peculiar to mining areas and recurs in many guises (eg near university campuses). However, it can be very disruptive to small, settled rural communities where there are common bonds of trust and social mores. Whether people are living permanently or temporarily in a community, social inclusiveness appears to be an important goal to strive for. Also, some workers experience poor connectedness both at home and in the host community, due to frequent absences and other factors. In such circumstances various social problems may become more acute. Table 25 provides a breakdown of resident and non-resident populations in the Bowen Basin, using statistics for the pre-reform LGA s. In 2006, the non-resident population represented about 15% of resident population, ranging from 7% in Bauhinia LGA to 20% in Belyando LGA. In most areas, the non-resident population has grown much more rapidly than the resident population. From 2006 to 2009, the growth rates were 3.2% and 1%, respectively. The LGAs that stood out in this regard were Duaringa LGA (based on Blackwater 10.1% p.a.) and Emerald LGA (5.7%). Galilee Basin Economic & Social Impact Study 56

81 Table 25: Non-resident population growth relative to resident population growth in coal areas AAGR % p.a AAGR % p.a Bauhinia Resident 2,252 2,325 2,373 2,339 2, % 0.6% Non-resident na % na Full time equivalent na 2,471 2,438 2,507 2, % na Belyando Resident 9, % 2.1% Non-resident na 2,119 1,881 3,194 2, % na Full time equivalent na 13,268 13,283 14,784 14, % na Duaringa Resident 6,608 7,214 7,070 6,894 6, % 0.7% Non-resident na 749 1,028 1,036 1, % na Full time equivalent na 7,963 8,098 7,930 8, % na Emerald Resident 13, % 3.2% Non-resident na % na Full time equivalent na 16,028 16,553 17,466 17, % na Peak Downs Resident 3,145 3,383 3,412 3,451 3, % 1.3% Non-resident na % na Full time equivalent na 4,107 4,035 4,180 4, % na Subtotal Resident 35,009 39,405 40,174 40,834 41, % 2.1% Non-resident na 4,432 4,233 6,033 5, % na Full time equivalent na 43,837 44,407 46,867 46, % na Other Resident 36,823 38,671 38,933 39,484 39, % 1.0% Non-resident na 6,331 6,842 7,623 7, % na Full time equivalent na 45,002 45,775 47,107 47, % na Bowen Basin Resident 71,832 78,076 79,107 80,318 81, % 1.6% Non-resident na 10,763 11,075 13,656 12, % na Full time equivalent na 88,839 90,182 93,974 93, % na Source: OESR (2010), various In cases where workers are staying in SPQs, then there would generally be less scope for negative social interaction, compared with cases where workers stay in other forms of rotational accommodation. The table below provides a breakdown of the different types of accommodation. However, there are no statistics for the number of non-residents staying in rental houses per se. The percentages for caravan park and other accommodation, the closest proxy, are reported in the right-hand column of the table. The LGA which has had a relatively high absolute number and proportion of non-residents staying in caravan parks and other accommodation is Belyando LGA. In 2009, there were 323 non-residents staying in this form of Galilee Basin Economic & Social Impact Study 57

82 accommodation (some 14% of non-residents in the LGA) 20. Table 26: Non-resident accommodation, Bowen Basin, July 2009 Statistical Local Area SPQs Hotels/ Motels Caravan Parks, Other Total SPQ % Caravan Parks, Other % Bauhinia % 7% Belyando 1, ,350 80% 14% Duaringa 1, ,101 93% 6% Emerald % 11% Peak Downs % 0% Subtotal 4, ,032 82% 10% Other 6, ,196 95% 3% Bowen Basin 10, ,228 90% 6% Source: OESR (2010), p.14. It is noteworthy that Isaac Regional Council highlighted problems being experienced in Moranbah, which coincidently has had the largest number of non-resident workers staying in caravan parks and other accommodation. The impacts of non-resident populations may be evident by comparison of the types of community services offered in coal areas and non-coal areas, and by comparison of relative offence rates. Community services that are partly funded by the Department of Communities and those provided directly by the Department are categorised and enumerated in Table 27. Information in the table points to some possible differences notably child safety services in the west and domestic violence services in the east. More information is, nevertheless, required (across all agencies) before conclusions can be drawn regarding the types of issues which might become more prominent once coal mining commences in the Galilee Basin. Table 27: Distribution of support services in western and Bowen Basin towns Service a : In town Western towns* From another centre Total % In town Bowen Basin towns From another centre Total % Child care % % Youth support % % Family support % % Community support % % Child safety % % Domestic violence % % Accommodation support % % Emergency accommodation % % Disability support % % Gambling crisis support % % Aged care % % Victims Counselling % % Total % % a Funded by or delivered directly by Department of Communities 20 Isaac Regional Council noted the numbers staying in share houses has been under enumerated by OESR. Galilee Basin Economic & Social Impact Study 58

83 * In Longreach, Barcaldine and Blackall-Tambo Regional Councils Source: Department of Communities Galilee Basin Economic & Social Impact Study 59

84 Various social stresses can spill over into crime. Table 28 provides a comparison of offence rates per 1,000 resident population in the western and eastern Regional Council areas for the period to Statistics have been combined for the three western Regional Councils (Longreach, Barcaldine and Blackall-Tambo), and for the two eastern Regional Councils (Central Highlands and Isaac). The table provides statistics for the three main offence categories and selected other offences as follows: Main offence categories: offences against the person; offences against property; and other offences; and. Selected other offences: Drug offences Prostitution offences Breach of Domestic Violence Protection Order Good Order offences Traffic and related offences Offence rate ratios are provided in the table. Also, offence rates are compared graphically in Figures 5 to 12. It is evidenced from the statistics that offence rates per 1,000 resident population are generally lower in the eastern area than the western area. This applies across the three main categories, as well as the selected other categories. This has occurred despite making no allowance for the substantially higher non-resident population in the eastern area. Observations relating to selected other offences are summarised below: Drug offences generally higher rates in the western area and no upward trend in the eastern area, despite a significant increase in the non-resident population during this period; Prostitution offences nil to inconsequential in both areas; Breach of Domestic Violence Protection Order offences higher rates in two of the five years in the eastern area, but an upward trend is not evident; Good order offences notably much higher rates in the western area; and Traffic and related offences higher rates through most of the period in the western area. In summary, over a five year period, when the non-resident population in the eastern area was growing much more strongly than the resident population, offence rates in this area remained Galilee Basin Economic & Social Impact Study 60

85 generally below those in the western area. This also applies to specific offences of interest, including drug, good order, and traffic and related offences. Galilee Basin Economic & Social Impact Study 61

86 Table 28: Incidence of offences: Western and Eastern areas, per 1,000 resident population Offence/area 2004/ / / / /09 Offences Against the Person Western area Eastern area Ratio (Eastern/Western) Offences Against Property Western area Eastern area Ratio (Eastern/Western) Other offences: Drug Offences Western area Eastern area Ratio (Eastern/Western) Prostitution Offences Western area Eastern area Ratio (Eastern/Western) Breach Domestic Violence Protection Order Western area Eastern area Ratio (Eastern/Western) Good Order Offences Western area Eastern area Ratio (Eastern/Western) Traffic and Related Offences Western area Eastern area Ratio (Eastern/Western) Subtotal - selected other offences Western area Eastern area Ratio (Eastern/Western) Remaining other offences Western area Eastern area Ratio (Eastern/Western) Total Other Offences Western area Eastern area Ratio (Eastern/Western) Total offences Western area Eastern area Ratio (Eastern/Western) Western area = Longreach Regional Council; Barcaldine Regional Council; Blackall-Tambo Regional Council Eastern area = Central Highlands Regional Council; Isaac Regional Council Source: Queensland Police Service Galilee Basin Economic & Social Impact Study 62

87 Galilee Basin Economic & Social Impact Study 63

88 Figure 5: Offences against the person per 1,000 resident population Figure 6: Offences against property per 1,000 resident population Figure 7: Other offences per 1,000 resident population Galilee Basin Economic & Social Impact Study 64

89 Figure 8: Total offences per 1,000 resident population Figure 9: Drug offences per 1,000 resident population Figure 10: Breach of domestic violence protection order per 1,000 resident population Figure 11: Good order offences per 1,000 resident population Galilee Basin Economic & Social Impact Study 65

90 Figure 12: Traffic and related offences per 1,000 resident population 7.3 Localised inflation Large resource projects can push demand well ahead of supply for a range of goods and services, leading to localised inflation. Those who remain outside the mining industry or industries servicing mining can seriously lose out, because of a wide range of affordability issues (e.g. unaffordable rents and housing, higher costs and poor availability of services, and a loss of skilled labour to sectors offering much higher remuneration). Research was undertaken to test for significant differences in the prices of common nondiscretionary consumer lines (selected fruits and vegetables, dry groceries and petrol), and for differences in housing prices across towns in the coal mining areas and western towns. It was beyond the scope of this study to survey a full list of items as undertaken to prepare consumer price indexes. Prices of non-discretionary consumer lines Comparative prices are set out in Table 29, with a summary showing the number of cases where prices in Brisbane and in eastern area towns prices were lower than in Alpha, Barcaldine and Longreach respectively. Table 29: Comparison of prices for selected fruits & vegetables, groceries and petrol, June 2010 Item Quantity Brisbane Emerald Springsure Clermont Moranbah Blackwater Alpha Barcaldine Longreach Fruit & vegetables Brown onions (loose) 1 kg $2.49 $2.50 $1.49 $2.99 $2.84 $2.49 $2.20 $1.99 $2.49 Carrots (loose) 1 kg $1.98 $1.99 $2.49 $2.59 $2.34 $1.88 $1.90 $2.29 $2.49 Oranges (loose) 1 kg $2.96 $1.85 $2.49 $3.99 $2.98 $2.98 $2.90 $3.99 $3.99 Potatoes, unwashed (in bag) 3 kg $0.97 $2.00 $3.50 $1.25 $2.26 $1.62 $2.27 Groceries Chicken (large) > 1 kg $4.76 $4.00 $1.50- $1.75 $2.00 $4.04- $6.45 $6.42 <$5.99 $5.99 $6.68 $6.58 $6.65 Coca Cola (single bottle) 1.5 L $1.83 $1.79 $1.37 $1.66 $1.79 $1.60 $2.40 $1.83 $1.45 Ice-cream (Peters) Vanilla 4 L $1.75 $2.32 $2.90 $2.62 $2.32 $1.74 $3.10 $2.57 $2.32 Galilee Basin Economic & Social Impact Study 66

91 Meadowlea margarine 1 kg $4.96 $4.96 $5.54 $4.99 $4.96 $5.32 $5.60 $5.48 $4.99 Milk full cream 3 L $1.52 $1.22 $1.46 $1.45 $1.22 $1.52 $1.84 $1.22 $1.49 Rice (white long grain) 2 kg $2.48 $2.48 $3.12 $1.86 $2.04 $2.47 $4.55 $3.29 $2.63 T-bone steak (prepacked) > 1 kg $14.98 $15.99 $16.99 $22.99 $15.95 $14.98 $15.99 $18.99 $13.99 White bread (sliced) price per 1 loaf 700 g $2.69 $2.50 $3.99 $1.49 $2.95 $3.89 $3.99 $1.49 $1.59 Petrol (ULP) at Roadhouse on highway 1 L $1.29 $1.25 $1.43 $1.39 $1.36 $1.32 $1.43 $1.35 $1.38 Note: prices collected in June 2010 at the largest supermarkets in each town and a suburban supermarket in Brisbane Petrol prices obtained from major highway roadhouses or service stations near or in towns, and suburban service station in Brisbane. Petrol prices are highly variable and can vary by about ±10%. Source: Economic Associates research Galilee Basin Economic & Social Impact Study 67

92 Summary: Cases where prices are less than in Alpha, Barcaldine or Longreach Alpha Barcaldine Longreach Cell number Brisbane 10 (0) 9 (1) 8 (1) 13 Eastern area towns 48 (2) 35 (6) 30 (8) 65 Alpha Barcaldine Longreach Cell number Brisbane 77% 69% 62% 100% Eastern area towns 74% 54% 46% 100% Note: percentages are unweighted ( ) Additional cases where the prices were the same In a majority of cases, prices were lower in Brisbane than in the three western towns. Also, the eastern area towns had prices which were generally lower than those in Alpha in more than 70% of cases. However, when the eastern area town prices were compared with those in Barcaldine and Longreach, the proportions were less at 54% and 46% of cases, respectively. The data does not support the hypothesis that creation of a mining population would lead to a general uplift in prices of non-discretionary items. However, specific consumer price indexes would need to be compiled over a number of years before such an hypothesis could be fully tested. Residential property prices and rents Residential property prices and rents were compared for the following: 3 bedroom and 4 bedroom houses on town residential land allotments median prices in 2001 and 2010, and currently advertised range in July 2010 Residential allotments median prices in 2001 and 2010, and currently advertised range in July 2010 Current weekly rents for 3 and 4 bedroom houses, and 2 bedroom units Although there may be qualitative differences between properties, a comparison of current pricing structures shows that house prices are considerably higher in the eastern area towns (plus Dysart). This is also the case for residential allotments and rents for 3 bedroom houses. However, there was insufficient information available to prepare a comparison for 4 bedroom houses or 2 bedroom units. Property prices and rents are exceptionally high in Dysart, Moranbah and Blackwater, which may reflect supply shortages and speculation 21. In Emerald, prices and rents are also higher than those in the western towns, but are more in line with modern urban benchmarks. This would suggest that land releases and approvals are probably accommodating the growth in demand to a reasonable degree. 21 They would also reflect to an unknown degree a much higher risk-return requirement of developers and financiers, who have memories of the last major coal recession when property prices fell sharply in the main coal mining towns. The coal recession was impacting property prices in 2001, as evidenced by the median prices in towns such as Dysart, Moranbah and Blackwater. This factor is probably less acute in Emerald which services a more broadly diversified economy, where impacts have a greater likelihood of being counter-cyclical. Galilee Basin Economic & Social Impact Study 68

93 Table 30: Comparison of residential prices, rents and land prices, July 2010 Longreach Blackall Tambo Barcaldine Alpha Emerald Springsure Capella Clermont Dysart Moranbah House Prices- 3 br 2001-med $81,500 $39,000 $60,000 $35,000 N/A $117,000 $93,000 $45,000 $37,500 $25,000 $22,284 $38, $239,000 - $395,000 $175,000- $350,000 $165,000 Blackwater $185,000- $365,000 $219,000- $369,500 $230,000- $410,000 $165,000- $289,000 N/A $245,000- $385,000 $369,000- $498,000 $418,000- $665,000 $200,000- $425, med $250,000 $81,000 N/A $325,000 $232,000 $336,500 N/A N/A N/A $416,750 $430,000 $295,000 AAGR % p.a. 13% 8% 28% 12% 37% 39% 25% House Prices- 4 br 2001 med N/A $66,500 N/A $55,000 $10,110 $155,000 $97,000 $85,000 N/A $38,000 $16,397 $40, $295,000- $495,000 $205,000- $300,000 N/A $205,000- $320,000 $359,000 $370,000- $559,000 $239,000- $300,000 N/A $266,000- $570,000 $415,000- $519,000 $354,000- $749,000 $320,000- $475, med N/A $237,500 N/A N/A $186,000 $425,000 N/A $325,000 $265,000 N/A $450,000 $312,500 AAGR % p.a. 15% 38% 12% 16% 44% 26% Res Lot Price 2001-med $29,000 $7,150 $1,700 $20,000 $7,000 $47,000 N/A $7,500 $35,000 N/A $15,503 N/A 2010 $45,000- $149,00 $25,000- $55,000 $38,000- $45,000 $99,000 N/A $139,000- $229,000 $55,000- $140,000 N/A $60,000- $250,000 $460,000 $274,000 $85,000- $310, med $86,000 $51,500 $5,417 $50,000 $102,500 $135,000 $105,000 $147,500 $100,000 N/A $166,285 $111,000 AAGR % p.a. 13% 25% 14% 11% 35% 12% 39% 12% 30% House Rent- 3 br Current $250-$280 $150-$170 $150-$170 N/A $160-$170 $330-$565 $230-$350 N/A $280-$420 $550-$700 House Rent- 4 br Current $285-$400 N/A N/A N/A $230 $430-$600 $360 N/A 300* $950 $620- $1,000 $375-$850 $690 - $1,200 $650-$800 Unit - 2 br Rent Current $140-$185 N/A N/A N/A N/A $210-$450 N/A N/A N/A $500 N/A N/A Source: Price Finder; realestate.com.au Galilee Basin Economic & Social Impact Study 69

94 7.4 Road crashes In discussions with Queensland Health, Queensland Ambulance Service and the Queensland Fire and Rescue Services (QFRS) 22, the view that was consistently put forward was that development of large mines near Alpha would lead to a greater number of traffic accidents and occupant trauma, which would increase the demands for medical, paramedic and QFRS services. They expected the number of road crashes and the road crash rate (eg KSI per 100 mvkt 23 ) to rise. Higher crash rates are anticipated because of fatigue caused by, for example, more people driving long distances during off-work rosters, and driving after long work shifts. In addition, there will be more people driving who do not have the experience of road hazards such as kangaroos and livestock crossing roads, particularly at night or at dawn and dusk. These reasons appear highly plausible, but it is unclear if they have been borne out in road crash statistics. Road crash statistics were obtained for the Dawson Highway between Rolleston and Springsure and the Gregory Highway from Springsure to Emerald for the period 1998 to During this period, the Minerva and Rolleston mines were constructed. The mines commenced operations in 2004 and 2005 respectively. Most mine workers in this area would drive on at least parts of these highway sections. Road crash data is provided by type and year in the following table, and shown graphically in the figure below the table. These statistics do not show an upward trend or spikes in accidents around the times the mines were commissioned in 2004 and Road crash statistics were also analysed for Capricorn Highway sections between Rockhampton and Barcaldine for the period 1995 to During this period, coal worker and mine equipment traffic would have increased significantly to the east of Emerald, particularly between Duaringa and Emerald. To the west of Emerald there has been very little mine related traffic. Again, the statistics do not show an upward trend. Also, the ratio of accidents on the Duaringa to Emerald section to those for the Emerald to Barcaldine section (ie comparing a section with high mine impact to a section with a very low mine impact) does not show an upward trend. 22 The Queensland Fire and Rescue Service reported that about 50% of their time is taken up with attending road accidents and assisting to remove injured persons from crashed vehicles. 23 Killed and seriously injured per 100 million vehicle kilometres of travel Galilee Basin Economic & Social Impact Study 70

95 Table 31: Road crashes on highway sections between Rolleston & Emerald, 1998 to 2007 Springsure to Emerald Fatal accidents 3 1 Admitted to hospital Received medical treatment Minor injury 1 3 Property damage only Subtotal Rolleston to Emerald Fatal accidents Admitted to hospital Received medical treatment Minor injury Property damage only Subtotal Total Fatal accidents Admitted to hospital Received medical treatment Minor injury Property damage only Total accidents Source: Department of Transport and Main Roads, ARMIS Database, 2008 Figure 13: Total road crashes: Rolleston to Emerald, 1998 to 2007 Galilee Basin Economic & Social Impact Study 71

96 Table 32: Total road crashes: Rockhampton to Barcaldine, 1995 to 2007 Rockhampton to Duaringa Duaringa to Emerald Emerald to Barcaldine Total accidents Ratio (1) (2) (3) (4) (2) (3) Approximations only from Figure 12 Source: Department of Main Roads (2009), p.42 Figure 14: Trends for road crashes by highway section Figure 15: Ratio of road crashes: Duaringa to Emerald/Emerald to Barcaldine Galilee Basin Economic & Social Impact Study 72