Technical report

Remote mining operations: economic impact on automated mining operations

Mining Automation Employment Population Rural and remote communities Economics Australia
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This report has been prepared in response to a request by the Centre for Social Responsibility in Mining (CSRM) at the University of Queensland. In conjunction with a number of other universities and the CSIRO, CSRM has been engaged to conduct research into the impacts on regional communities of remote operation and automation of mining activities.

A change in workforce structure of the mining industry due to a move towards the automation and remote operations of key functions may not only impact on the number of residential workers, it may also have an affect on population driven services and the local industry base. Research conducted by CSRM suggests that there is potential for 50% of in-pit roles (for an open-cut iron ore mine) to be converted into automated operations. This may lead to an overall contraction of the mine site employment by approximately 34%. The change in workforce structure may have a flow through effect on other industries of employment in mining towns, creating employment, economic and social impacts.

Employment figures and workforce structure were profiled for all operational open-cut iron mines in the Pilbara. Due to the difficulties faced with collecting this data, an exemplar mine site provided by the CSRM was applied to each of the operating open-cut iron ore mines. The automation of haul trucks would lead to a change in the current employment structure, leading to a conversion of job type for the residential and FIFO workforce.

Under all scenarios and options modeled there is a net change in direct employment. The change in employment in each of the scenarios is a combination of first, second and third order jobs lost at each of the mines within a 75km radius of the selected town, due to automation and remote operations. The scenarios that result in a positive impact on residential employment are Scenario 2: Smart Regions and Scenario 4: Regions Fight Back, with the remote operations centre located in town.

Under all scenarios and options modeled there is a net change in the town population and the number of occupied households. The results show that there is a positive change in population and number of occupied households when the remote operations centre is located in the town. The scenarios that have a positive impact on residential population are scenario 2: Smart Regions – town and scenario 4: Regions flight back - town. This would be expected as they are also the scenarios that results in a positive change in residential employment. The results show that the greater the change in employment, the greater the change in population. A loss or addition of one job in town does not result in a decrease or increase in town population by one. The model has been constructed to represent the household structure of two regional towns in the Pilbara shire of Ashburton, “Town A” and “Town B”. The residential workforce is made up of families, group households and lone persons. The change in residential workforce results in a change in population of entire families as well as group households and lone persons.

Under all scenarios and options modeled there is a net change in convenience retail expenditure captured in town. The scenarios that have a positive impact on retail expenditure captured in town are scenario 2: Smart regions and scenario 4: Regions fight back, with the remote operations centre located in town. The less expenditure leaked from town, the greater the chance of town business survival. A population change due to a change in the workforce structure may impact upon the population driven community services in town.

A change in the residential workforce due to automation may lead to a change in population driven community services and funding (in particular, services relating to health and education). Metal ore mining and school education are the top two industries of employment in both Town A and Town B. The automation of key mining operations may have a significant economic and employment effect on the Shire of Ashburton.

Indicative data provided by the CSRM suggests that 8% of the total workforce (for Rio Tinto mine sites) is indigenous. Approximately 50% of these personnel are residentially based workers living in the Pilbara.

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