In outback Australia, "dongas" show costs of mining boom

Wed Apr 20, 2011 9:46am EDT
 
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By Rebekah Kebede

KARRATHA, Australia (Reuters) - Demand for Australian commodities is running white-hot. So too are costs in the country's remote mining towns, to the point where tiny huts or "dongas" can cost as much as a five-star hotel room and backpackers can earn $2,000 a week cleaning them.

Costs are becoming a big headache for Australian miners, including giants Rio Tinto and BHP Billiton, which complain that labor shortages, a strong local currency and rising fuel prices threaten to slow the pace of expansion.

The problem is clearly visible in the remote mining town of Karratha, a gateway to mines in the barren northwest.

"Here the work is very good. You can work 80 hours a week if you want. It's good money," said Pic Segolene, a 25-year-old French backpacker who came to Karratha to earn enough cash to fund the rest of her trip around Australia.

Segolene works about 10 hours a day, earning A$25 ($26) an hour to clean houses in this thin slice of suburbia that serves as an Indian Ocean port and a gateway to the endless and bountiful red deserts of Australia's interior.

Her boyfriend, Eric Gehin, 31, makes A$31 an hour as a gardener. Their plan is to earn enough in two months to pay for the rest of their open-ended trip around the country.

"Definitely we want to stay two months. That's the plan, if it's not too exhausting," said Segolene, who likes to relax the way most people in Karratha do -- drinking beer and barbecuing.

Voracious Asian demand for Australia's commodity riches have lifted the country's terms of trade to near historic heights and fueled a boom in mining investment.   Continued...

 
<p>Pic Segolene, a 25-year-old French backpacker, enjoys a beer with her friends at the community centre in Karratha April 18, 2011. Demand for Australian commodities is running white-hot. So too are costs in the country's remote mining towns, to the point where tiny huts or "dongas" can cost as much as a five-star hotel room and backpackers can earn $2,000 a week cleaning them. REUTERS/Daniel Munoz</p>