China makes Australian miners rich

PORT HEDLAND, Australia (Reuters) - After four days, Jason Manifis is three-quarters of the way through driving his weekly 1,100-mile loop around northwestern Australia, selling more frozen fish than ever to hungry iron-ore miners.

A tipper truck climbs out of an iron ore mine at Tom Price, about 1,300 km (800 miles) north of Perth May 28, 2008. A mining frenzy spurred by a voracious appetite among Chinese steel mills for rich Australian ore has mining companies scrambling to fill orders, flooding this corner of the outback with thousands of highly-paid workers. REUTERS/Tim Wimborne

A day earlier, workers blanketed in rust-red ore dust lined up 20 deep outside the giant Newman mine to buy shrimp, cod, barramundi or any of the dozen or so varieties of seafood Manifis carts around the outback each week in his refrigerated truck.

“Sales are up thirty, forty percent this year alone,” he says. “Everybody here’s cashed up.”

A mining frenzy spurred by a voracious appetite among Chinese steel mills for rich Australian ore has mining companies scrambling to fill orders, flooding this corner of the outback with thousands of highly-paid workers.

“For me, it’s work, then my barbecued shrimp, bed and work again,” says Tom Weld, 31, a chef from Perth, 900 miles to the south, who now hauls ore mined in 600 feet-deep pits by truck to waiting railroad cars 12 hours a day, six days a week.

Internet dating services in far western Australia, such as, target single miners looking for partners willing to tolerate “fly in, fly out” relationships.

About 25 percent of workers in the mines are women and many face the same shortage of suitable partners as men, according to people involved in hiring.

“My boyfriend and I came from England to work in the Tom Price mine together, me as a cook while he drives a truck and make a lot of money quickly to travel,” says Sharon White outside a jobs recruitment centre in Port Hedland.

“But I don’t want to go it alone and neither does he.”

The giant mining pits more resemble excavation sites than most people’s idea of mine camps. Ore is simply churned up by bulldozers and carted in trucks to waiting open-topped rail cars. A typical train is about a mile long and consists of 300 cars hauling 24,000 metric tonnes of ore each hundreds of miles to Port Hedland or Port Dampier to waiting freighters.

On average a trainload leaves a mine every hour 24 hours a day. Starting salaries are advertised at around A$83,000 ($79,200) a year and typically include company-subsidized rent, one week off a month and a free trip home and back on a company plane or commercial jet.

“A young person coming up here is afforded a real opportunity, one that didn’t exist a few years ago before China started buying our ore,” said David Flanagan, managing director of Atlas Iron Ltd, which will make its first shipment of one million metric tonnes of ore to Chinese mills this year.


Most of the ore is dug in the 500,000-sq-km Pilbara region, one of the most inhospitable places in Australia, where hundreds of miles separate the few towns in the region.

Temperatures in the summer can exceed 110 degrees Fahrenheit. Industry giants Rio Tinto Ltd/Plc and BHP Billiton Ltd/Plc accounted for 90 percent of the 300 million tonnes mined overall in the Pilbara last year.

Both companies are earmarking billions of dollars to exploit new lodes and dig existing ones deeper to keep pace with China’s steel-hungry economy. It takes about a tonne-and-a-half of ore to make a tonne of steel.

“China needs the ore and Australia’s got it, it’s that simple,” says James Wilson, a mining analyst for DJ Carmichael & Co.

Ore prices on the world market are up 65 percent or more this year to around $85 a tonne and are likely to keep rising, Wilson and other analysts say, increasing the need for more workers in the mines.

“People looking for work know they are going to forfeit some of the conveniences of the cities, but you can’t make the money there that you can here,” says Andrea Ling, a recruitment consultant for Chandler Macleod, an employment agency in Port Hedland.

“If we can’t guarantee top dollar, people just won’t show up for work. They know they can go elsewhere and get hired in a second,” Ling says.

For some, the ore may as well be gold.

The promise to ship up to 55 million tonnes of ore to China in 2008 and more each year turned Andrew “Twiggy” Forrest, a 47-year-old mining entrepreneur with a tin pot company five years ago into Australia’s richest man, worth more than A$9 billion.

“If you believe in the Australian iron ore story, and I do, then it is easy to see we haven’t even scratched the surface as far as potential goes,” Forrest told Reuters in a recent interview.

Gina Rinehart, whose father Lang Hancock discovered the Pilbara deposits in 1952 when bad weather forced his plane to fly low over the outback, where he noticed deep rust-colored veins of iron running across massive gorges, boasts a fortune of around A$5.5 billion.

However, a government ban on exporting iron ore dating back to 1938 out of fear Japan would use the ore to make steel weapons during World War 11 was in effect until 1961.

Hancock eventually sold his rights to the ore to big mining companies, retaining royalties worth hundreds of millions of dollars a year.

“There wouldn’t have been much of a market for fish out here in the early days,” says Manifis, passing a frozen bag of shrimp to a customer.. “But all that’s changed now.”

Editing by Megan Goldin