Signing the country's first enterprise migration agreement has caused controversy for Gina Rinehart's Roy Hill Holdings, but chief executive Barry Fitzgerald says more will be necessary if the Australian resources industry is to remain competitive.
Mr Fitzgerald told a conference in Perth yesterday the EMA, which allows the project to import up to 1715 foreign workers, was an essential part to the company's financing efforts for the $10 billion project and controlling cost pressures.
Against a volatile global economic backdrop and signs the likes of BHP Billiton is tapping the brakes on its $80 billion growth plans, Mr Fitzgerald said these measures were particularly crucial for greenfields projects. Without a guarantee of staff to ensure tight construction timeframes were met, he said Roy Hill would have had little chance of attracting debt or equity finance to meet its 2014 target production start date.
His comments came on the heels of confirmation another WA project billed as one of the next generation of iron ore mines had stalled.
One month after Asia Iron revealed its Extension Hill magnetite project in the Mid-West had been caught up in the fallout from a Chinese political scandal, managing director Bill Mackenzie told the conference it could not meet its December 2014 production target.
Mr Mackenzie said the group's Chinese backers would not make a decision on Extension Hill until the political turmoil, which relates to the high-profile arrest of Chinese political leader and Chongqing Municipality Community Party boss Bo Xilai, was resolved. The municipality effectively owns 60 per cent of Extension Hill through Chongqing Chonggang Minerals Development. "As a result, while the project is in very good shape and, while the approvals from China are in very good shape, the owners are in the position of not making decisions," Mr Mackenzie said.
In a nod to Mrs Rinehart's long stated position the north of Australia needs a cheaper, potentially imported, labour force amid rising costs Mr Fitzgerald said Roy Hill was happy to abide by laws requiring imported workers be paid the same as locals, but said the community should not become too focused on the construction phase of major projects.
Long-term local jobs in downstream processing could be created, he said, by using cheaper construction labour to reduce initial Australian capital costs.
"But the Chinese regulatory people, particularly the people in Beijing are saying 'it's all okay as soon as we have the new leadership in Chongqing you'll be off again' so hopefully that will happen soon."
Asia Iron's Chongqing-incurred delays are unique but it is far from the only obstacle the group has had to overcome in its bid to bring Extension Hill into production.
Mr Mackenzie said yesterday it had taken five years "from the day we applied to the day we got it" to secure the environmental tick, via an approvals process he said involved duplications and overlaps.Extension Hill does not depend on the success of the Oakajee port and rail project because it has 10 million tonnes of capacity a year earmarked at Geraldton Port for its stage one development.
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