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An exploration camp at the Roy Hill iron ore project in the Pilbara
An exploration camp at the Roy Hill iron ore project in the Pilbara

UPDATE 2.50pm: Gina Rinehart's $9.5 billion Roy Hill iron ore development in the Pilbara is the first big resources project that will benefit from a new Federal Government initiative to allow skilled migrant workers to be employed temporarily in the resources sector.

Immigration Minister Chris Bowen this morning announced the first enterprise migration agreement (EMA) for Roy Hill during a speech in Canberra.

Mr Bowen said EMAs would help reduce the risks involved with developing “mega” resources projects by allowing mining companies to negotiate upfront their temporary skilled migration needs before work began.

Without EMAs, there was a greater risk that projects would not be completed on time and budget and a further risk that some big projects wouldn’t go ahead at all, he said.

The Roy Hill EMA will allow Hancock Prospecting and its partners to sponsor up to a maximum of 1715 temporary overseas workers for the three-year construction phase through the 457 visa program where they cannot find Australians to fill the positions.

It will cover occupations like electricians, mechanical fitters, scaffolders and boilermakers.

Mr Bowen said the EMA would have specific clauses that would require both Roy Hill and its contractors to continue to prioritise the recruitment of Australians throughout the life of the project.

“The Government will also ensure that visaholders are aware of their workplace rights and obligations through a specific induction program,” he said.

“As part of the agreement, Roy Hill will provide up to 2000 training places for Australians.

“This includes places for more than 200 Australian apprentices and trainees, as well as preparing over 100 indigenous Australians to work in the construction industry.

“Two-thirds of the apprenticeships Roy Hill will offer will go to mature Australians.”

The EMA concept was developed by a taskforce chaired by Special Minister of State Gary Gray in 2010 to help address the need for more than 70,000 skilled workers on major resources projects in Australia over the next five years.

Roy Hill spokesman Darryl Hockey said despite the company’s priority and preference for employing and training Australians, there was insufficient workforce capacity in Australia to meet the surge in construction in the resources industry.

“The temporary overseas workers will make up less than 20 per cent of the construction workforce, and the sooner the construction is finished, the sooner that 2000 permanent jobs will be created for Australian citizens for the next 20 years,” he said.

“We are proud to be the first company in Australia to provide major training commitments under a labour program.”

WA’s peak resources body also welcomed the Federal Government’s first EMA.

WA Chamber of Minerals and Energy director Nicole Roocke said an adequate pool of skilled labour for new projects was vital.

However she said the CME had some concerns with the prescriptive nature of the scheme.

“It is hoped that with the first agreement approved, there will be continued refinement to enable other major projects to access the benefits of EMAs,” Ms Roocke said.

“It’s not about relaxing the provisions but more about making the process more efficient to so that we get the right kinds of skilled people to work in the WA resources sector.”

The WA Chamber of Commerce and Industry said the EMA showed the Federal Government appreciated the scale of the labour challenges facing the State.

However CCIWA economist John Nicolaou said the Federal Government could do more to make it easier for other WA businesses, particularly small and medium sized, to attract skilled overseas workers.

He said research estimated that WA would fall 210,000 workers short by 2020 if it didn’t look to alter the current population and migration trends.

“With shortages across many industries pushing up the cost of doing business for WA enterprises, anything that can improve access to skilled overseas workers is a good thing,” Mr Nicolaou said.

“If projects can’t find the numbers of suitable workers required, that will push up costs and ultimately risk the levels of investment currently earmarked for the State.”

The Association of Mining & Exploration Companies also welcomed the EMA but said it was disappointing that some sections of the community did not recognise the safeguards in place to protect Australian workers and the significant economic and social dividends which would flow from Roy Hill.

AMEC national policy manager Graham Short said there should be no thresholds on triggering an EMA.

The Roy Hill project is 277km south of Port Hedland and is a joint venture with South Korean firms STX Corporation and POSCO, and Japan's Marubeni Corporation.

The project is expected to produce 55 million tonnes of iron ore each year for 20 years, starting in late 2014.

More than 6700 Australians will be employed during the construction phase of the project.

This represents a minimum of 80 per cent of the total workforce, with less than 20 per cent being sourced from overseas under the provisions of the EMA.

A further 17 to 37 projects are expected to be eligible for EMAs depending on final investment decisions.