August 2016


Bust  in  the  Pilbara

By Hamish McDonald
Image of mining workers flying from Perth

Mining workers flying from Perth. © Jacky Ghossein / Fairfax

A region returns to earth

To get the optimistic view in Port Hedland, 1600 kilometres north of Perth, you go to the little park at the end of Wedge Street and look out to the harbour channel at high tide. That’s when it’s deep enough for ships fully loaded with iron ore. One night recently, tugboats nudged four ore carriers around the sharp turn in the channel and out to the Indian Ocean. Each filled the entire field of vision as it passed.

All four ships were heading to China, loaded with a total of 771,000 tonnes of iron ore. This was a relatively easy night for the harbour crews. Often, ships carrying up to 1.5 million tonnes go out on a single tide.

“Everyone thinks there are tumbleweeds blowing down the streets of the Pilbara,” says Brendon Grylls, who represents the region for the National Party in Western Australia’s lower house of parliament, “[but] this is the biggest bulk export port in the world, breaking export records every month.”

He’s also optimistic about the city of Karratha, down the coast. “Gorgon and Wheatstone [two offshore gas fields west of Karratha] will make Australia the biggest exporter of LNG [liquefied natural gas] in coming years … Every other region in the nation would like to have these economic drivers. Populations of 100,000 are not impossible. We’ve set a target of 50,000 here [in Port Hedland].”

The pessimistic view, or what boosters like Grylls would call a short-term one, comes from looking back down Wedge Street. Most of its shops and former bank branches are empty. Commercial life is ebbing from the town and consolidating at South Hedland, a newer centre 12 kilometres away across a desolate landscape of railway tracks and salt pans.

Between 2013–14 and 2015–16, iron ore prices slumped from an average US$122.80 a tonne to US$50.90. The big miners like BHP Billiton, Rio Tinto and Fortescue now rely on volume and cost-cutting to stay profitable. Smaller operators and newcomers like Gina Rinehart’s Roy Hill acutely need China’s economy to avoid a crash landing. Petroleum prices also crashed, with similar effects. Meanwhile, Chevron has completed the $54 billion Gorgon plant that it’s built with ExxonMobil and Shell, and is completing the $29 billion Wheatstone plant. But new LNG projects are shelved.

The army of temporary tradespeople and support staff, most of them on fly-in fly-out, or FIFO, contracts, has consequently dwindled from a high of more than 20,000. Growth in the resident population of greater Port Hedland has stalled at around 16,500, far below Grylls’ ambitious target. The population of Karratha and nearby Roebourne was holding steady at 26,000 mid last year, but has fallen since. Smaller mining towns such as Newman have seen hundreds of residents depart. The Pilbara region’s population, which had grown strongly from 39,618 in mid 2001 to a peak of 66,304 in mid 2014, has been falling by several hundred a year since then.

At the height of the boom four years ago, houses in Port Hedland and Karratha were renting for up to $3000 a week, with couples often paying $1000 for a bedroom. Garden sheds went for $500 a week, says Port Hedland’s mayor, Kelly Howlett. Now the average house rents for about $400 a week, and hundreds are empty. Houses that once sold for a million dollars go for less than $300,000, if buyers can be found at all. Western Australia’s government didn’t begin constructing new housing estates to ease the housing crisis until 2012, by which time it was too late. Osprey Village, a precinct of 293 tightly packed bungalows and cabins on the edge of South Hedland, is barely 40% occupied.

“The last ten years, it’s been a hundred miles an hour,” says Ray Sampson, who owns the Hedland Harbour Cafe, one of a few businesses still open in Wedge Street. “It’s all done now. So it’s back to before the boom. You only need a handful of people to run it.” Sampson is advertising his cafe for sale, and plans to return to Albany, in the far south of the state.

Across the road, at the Seven Four Seven Supplies fish tackle, snack and souvenir shop, Ileen Reweti wants to sell up too.

“Business is so quiet, [but] when the houses went down in price they never put our rent down,” she tells me. She no longer stays open through the night for shift workers, but is still paying $7000 a month for the shop, plus up to $3500 in electricity bills to keep her freezers and air-conditioners going through summer temperatures above 35 degrees.

Reweti and her late husband, Reuben, both Maori originally from New Zealand, came to the region when Reuben got a job at an immigration detention centre. When that ended, he set up a security business and Reweti the shop, which she’s run alone since he died a year ago.

In a region that spearheaded Australia’s rise towards the top ten of the world’s economies, it’s time for reappraisal. The picture here could be a sobering premonition for the rest of the country, if a global recession is gathering. The Pilbara’s bust may be as exaggerated as its boom, but even a muted version of its 70–80% housing price slump would spell calamity. Like the Pilbara now, we might all be asking about what has been built from the boom.

There’s been a lot of pain, both in the rise and in the fall. Old-time “Nor’westers” on low incomes were forced out if they were renting, or induced to sell if they owned their homes and then found they had to spend most of their new fortune for a house somewhere else. Many whose banks and financial advisers encouraged them to buy investment properties were blindsided by the intensity of the slump. “We’ve got people who are desperate,” says lawyer and Port Hedland councillor Richard Whitwell. “There are a lot of bankruptcies, a lot of companies going under.”

The region gained many new facilities, some donated by the big mining companies. But the boom sucked much of the social life out of the Pilbara. Stephen Dawson, a South Hedland–based Labor member of WA’s upper house, explains that FIFO workers rarely spent time or money here. For resident workers, the prevailing 12-hour work shifts left no time or energy for coaching sports teams or other social activities. “We’ve got great new sporting facilities, new stadiums, new water parks,” he says. “The flip side is some of the councils in the Pilbara are now struggling to pay for the upkeep of those facilities.”

Some attribute this frenetic focus on work, combined with routine drug-testing of staff, to what Dawson says is the highest rate of methamphetamine use in Australia. Ice is the recreational drug of choice for some miners on their days off because it is thought to leave the body’s system within 24 hours. Its use is spreading among all communities.

During the boom of the 1960s, WA politicians such as Charles Court insisted that BHP’s Mt Newman Mining Company and Conzinc Riotinto (CRA) subsidiary Hamersley Iron build new local towns like Newman and Karratha to support their mines. Their mining leases also obliged them to invest in refining their ores, at least to intermediate stages. CRA’s pilot plant for high-intensity smelting, at Kwinana, south of Perth, closed in 2008, and plant equipment was shipped overseas. BHP Billiton spent $2.4 billion on a hot-briquetted iron plant at Port Hedland, which opened in 1999 but closed in 2005 following a gas explosion that killed a worker and severely burnt two others. Obligation fulfilled, the company is now content to operate in the Pilbara as an efficient quarry.

Populating and industrialising the north now seems far from the minds of Perth’s politicians, and that suits the mining companies. “Mining companies have liked having their workforce in FIFO camps,” says Dawson. “They can control what time the lights are turned off, the strength of the beer in the canteen, who the workers can consort with. It keeps them apart from the trade unions.”

Mayor Kelly Howlett agrees. “It probably is a fraction cheaper [than local basing], but I think it’s also about control,” she says. “You have a compliant workforce. If everyone knows that Tim just lost his job then they’re a bit dark against the company, whereas if he disappears back to Perth we don’t know that Tim lost his job.”

Her council is urging companies to rely on staff living locally with their families, both for their own mental health and the social fabric of the region. She finds companies still reluctant, falling back on “employee choice” and other excuses. “A company recently did state at a chamber of commerce breakfast event that they have issues in terms of fatigue management if they have staff living residentially – because they might have to help prepare the family meal or help John with his homework or might have to read a bedtime story.”

Each tonne of iron ore on the ships now brings the state government $4.80 in royalties, as against $9.30 at the peak of the commodity price boom in 2011. If the Australian dollar wasn’t floating, it would be much worse – in US dollars the royalty has plunged from US$9.10 to US$3.50 a tonne.

The state’s revenue from iron ore has decreased to around $3 billion a year from the $5.5 billion earned from lower volumes three years ago. But if the wider community feels the state has failed to invest in making this harsh region more liveable and relieving financial pressures, it’s even worse for the Pilbara’s Aboriginal people.

One morning, Kylee Hodder takes me on a tour around South Hedland. She runs the Bloodwood Tree Association, a foundation that helps indigenous people in difficulty, and provides driving lessons and other education for jobs. We drive across a sun-baked area of red dirt on the edge of the shopping centre, littered with empty beer cans and bottles. Under an awning of blue plastic propped up on poles, a few figures sit on the ground. At night, this area, known as Two Mile, sometimes has dozens of Aboriginal people sleeping rough.

The car park and town plaza around the air-conditioned shopping centre are the daytime hangouts for homeless town-dwellers and people coming in from remote settlements. They go in and out of the Liquorland store. Hodder’s patrols collect the hopelessly drunk and take them to Bloodwood’s sobering-up station; sometimes there are too many for its 16 berths. Up to 60 of the floating population come to the free daily breakfast.

Hodder’s hope is that the different welfare agencies focus on overlapping problems like job training, domestic violence and people’s unfamiliarity with modern housing. Port Hedland’s police reported in July that on any day 300 children were absent from school. Hodder says nearly all would be indigenous. Drug use, too, is damaging a second generation now. “There’s DCP [Department for Child Protection] literally waiting for this or that mum to have their baby, and away those children go. It still happens today. Children are being taken off their mothers, because they’re drug users or they don’t have a house.”

Over in old Port Hedland, Aboriginal families cram into squalid housing at a precinct called Three Mile or Tkalka Boorda. Stephen Dawson, the Labor MP, says there is a “massive waiting list” for social housing, with 100 families on the state housing authority’s priority list. “So we’ve been through this massive boom and it’s made the state and the country lots of money, but many people in this town are yet to see any benefit.”

At Warralong, an Aboriginal community about 150 kilometres inland, the state government has installed streetlights but says it has no funds for more housing. In one house, with a single toilet and bathroom, 12 adults and 19 children sleep on mattresses laid wall to wall.

“Why is the Pilbara looking like a third-world country?” Hodder asks. “Why are people living out [at Two Mile] or in overcrowded houses, when a good third of the houses here in South Hedland are empty?”

Federal and state government mechanisms may actually be making the situation worse. Canberra’s Aboriginal Hostels Ltd recently took over accommodation for renal patients at the new hospital in South Hedland, and declared it no longer had funds for Bloodwood’s hostel, which has been providing short-term places for transient Aboriginal people for 30 years. At the end of June, the hostel closed. “It was heartbreaking to go and tell people to move out,” Hodder said. Then a state authority declared it was resuming the hostel’s site for an unspecified purpose, and collected the keys from her.

In September 2014, Tony Abbott’s government told the states it was ending its two-thirds funding for remote Aboriginal communities. In WA’s case, this meant a loss of $45 million a year for 274 communities that are home to about 12,000 of the state’s 90,000 indigenous people. In addition to $28.5 million for the rest of 2014–15, the state would receive $90 million for a two-year transition from July 2015. After that, it would get nothing. Faced with what one state minister called “a gun pointed at our head”, Premier Colin Barnett accepted the deal. Later he said that the state would close between 100 and 150 of the smaller communities in response, and shift about 1000 residents to larger centres.

Abbott then dropped this clanger in support of Barnett: “What we can’t do is endlessly subsidise lifestyle choices.” The resulting outrage hasn’t modified the policy under Malcolm Turnbull. Last month, WA announced it wouldn’t be “closing” any of the settlements; it just wouldn’t be providing any services from next July. It would concentrate $220 million over four years on ten larger communities, turning them into “normal” towns where residents would have to pay rates and utility bills, and guarantee school attendance. Critics such as Greens state parliamentarian Robin Chapple say this repeats a pattern of past assimilationist failure, creating new town slums and stealthily removing Aboriginal people from traditional country.

Kelly Howlett says the prospect of closure is already speeding up the drift of unprepared and homeless people into towns.

It’s not hard to compile a bleak picture of violence, ill-health and distress among the Pilbara’s Aboriginal population. Funerals mark out the year. “It’s an eternal cycle of grief,” says Kate McKenzie, principal of the 80-pupil independent school at the Warralong community, run by the Perth-based Nomads Charitable and Educational Foundation (along with a smaller one at Strelley). “They’re always mourning somebody. From car accidents, suicides, natural causes, but it’s constant.”

These days it’s common for a thousand people to drive hundreds of kilometres to pay last respects. Once it might have taken six months for word of a death to get around, too late for most to attend. Now everyone has a mobile phone and can pack into someone’s car.

A month before I arrived, there’d been a mass turnout for a young mother found hanged, two weeks after she returned home from a women’s refuge in Roebourne. In late July, around 40 people had gathered in a “sorry camp” for two months ahead of a different funeral, at a remote settlement called Kunawarritji. It was for a 23-year-old man living in the Jigalong settlement some 400 kilometres away, who’d been killed by his wife. She’s successfully pleaded self-defence. The deceased’s father had come from Kunawarritji, his mother from Docker River in the Northern Territory. Relatives were driving in from as far away as Alice Springs.

However, not all funerals turn around violent, early death. While I stayed at the Strelley community, 65 kilometres from Port Hedland, some of its young people disappeared for three days. They’d driven 800 kilometres north to Noonkanbah for the funeral of a very old woman from their group who’d married into that region a long time ago. “It was to pay respect,” 27-year-old Anthony Ginger told me on his return.

No one could really explain to me why funerals had got so big, apart from citing material changes. But it’s reasonable to see them as an adaption of old ways and connections to modern circumstances, a form of the large gatherings that used to take place in the wet season, when game and water were plentiful. A reaffirmation of connection to traditional lands and blood ties.

There are happier gatherings too, serving the same purpose. In early July, packed buses stopped at the Kunawarritji store and fuel pump on their way to Kiwirrkurra, an even smaller and more remote settlement some 300 kilometres further east. It was for an Australian Rules football tournament between Aboriginal communities, played around tiny settlements.

At Warralong and Strelley, greybeards Bruce Thomas and Kevin Fred are the carriers of traditional law. Their predecessors took the Pilbara’s stockmen out on strike 70 years ago and then, advised by the late whitefella bush lawyer Donald McLeod, managed to avoid state government efforts at assimilation until the 1970s, when federal funds started flowing for their bilingual schools in English and their Nyangumarta language.

When they call boys and girls out of school for initiation camps at sacred places out in the bush, there’s no refusing. “It’s not just the boys going to different places,” says Kate McKenzie. “Families go along to support them.”

Yet the culture is ceding ground. When I first visited this group of the Nyangumarta in 1971, they strictly banned alcohol and pooled their earnings from collecting surface minerals and pearl shell. Later in the 1970s, they pursued their dream of self-sufficiency by buying up pastoral leases across a large swathe of their traditional territory.

By my next visit, in 1987, the initial settlement and school on the old Strelley sheep station had lost most of its population. It was too close to Port Hedland’s temptations for the young people, who’d figured out how to get their welfare money paid into individual accounts and call a taxi out from the town. The Nyangumarta elders shifted base further out to Warralong. In tacit co-operation with Port Hedland’s police, the then senior law carrier, Snowy Judiamiah, collected the drunkards from town and took them to drying-out camps far inland.

On this latest visit, it is clear this battle has almost been lost. Young and middle-aged people drive into Port Hedland, bringing back loads of alcohol. One has just lost his licence for three years and copped a $4000 fine for repeated drunk driving. A man who I first saw as a toddler in the group’s old camp at the Nine Mile creek bed outside Port Hedland is now a regular member of the crowd of drunks shouting and lurching in the plaza at South Hedland. He is one of several who’ve been to jail.

“If they get money, they buy grog and they fight: we hear this coming out of mouths of primary school kids,” observes McKenzie, who sees alcohol as an escape from “disconnection” with the world around. “Once we had eight kids who came over with their grandmother, saying, ‘My dad’s mad with drink,’ so we put them all to bed in the library. Maybe they have to sink to the bottom with all these influences and then they can rise above it.”

But some of the Pilbara’s Aboriginal people have joined the boom, on their own terms. “If you were a blackfella in Port Hedland up to the 1980s, you’d never be employed by the mining companies for as long as your arse points to the ground,” says George Lil, a Greek migrant who came to Port Hedland in 1971 and now owns a Retravision store in South Hedland. He attributes a wave of recent Aboriginal employment to an initiative by Fortescue magnate Andrew Forrest. While South Hedland’s shopping centre has its homeless drunks squabbling outside, other indigenous workers in high-vis company uniforms bring families in for the supermarket shop. “They’re coming out of the slums,” Lil says. “The next generation [are] getting apprenticeships.”

The Nyangumarta’s job agency, Birra, co-owned by elder Kevin Fred and labour agent Rod Anthony, has placed two or three dozen of its men and women in jobs at the mines. Fred’s wife, Delores French, drove a truck for Fortescue. Anthony Ginger made his visit to the funeral up in the Kimberley between week-long shifts at Newcrest’s Telfer gold mine, 200 kilometres from Strelley, where he earns about $400 a day.

“None of the Martu [community members, literally “you and me”] had worked before, but it’s changed now,” says Ginger. “They want to work. The only time not is if there’s a big funeral on or if they’re in Law [initiation], which is mostly in November. We can handle that. We have a pool of people who can take their place.”

Nothing is ever so simple, of course. As Bloodwood Tree’s Hodder points out, mining companies fill their indigenous quotas from all over Australia, and some locals were among the first laid off. Nor do all persevere. At Warralong I met 25-year-old Mark, who’d quit his job at Telfer. “I just want to be here with my family,” he said. Sleeping alone in a mining camp donga (prefabricated unit) and surrounded by whitefellas can be distressing for indigenous youngsters used to constant family contact. “The more Martu out there, the more comfortable they are,” Ginger tells me.

As the mine construction boom disappears, it seems the communities of the Pilbara are striving to figure out what living together in this ancient landscape means. On the whitefella side (now actually a multiracial mix), where there’s more respect for Aboriginal culture, it means thinking beyond the fastest possible exploitation of its resources. Leaders such as Kelly Howlett say they’re hoping to develop a society beyond the old, mostly male pioneering one – a society that accepts and adapts to its summers of searing heat and cyclones. On the indigenous side, it’s about saving their cultures and families while taking up the opportunities of Australia at their own pace.

At the latest races day in Marble Bar, the number of punters was down to about 1500 from the 2500 who attended during the boom. The crowd of mostly long-time Pilbara residents, from the towns and cattle stations and Aboriginal settlements, mingled easily and civilly. The horses were all unknown to me. After some losing bets I came across one called Our Shakira. The day before, a child welfare official came out to Strelley looking for a girl called Shakira, but she’d disappeared up country with her family, probably to one of the funerals. Their elusiveness suggested mobility and resistance. The bookies gave Our Shakira the longest odds, but I put $5 on it, and it bolted home a winner.

Hamish McDonald

Hamish McDonald has been a correspondent and editor for the Far Eastern Economic Review, The Sydney Morning Herald and The Saturday Paper.

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