Acute shortages of labour and accommodation are crimping growth in the Goldfields more than most parts of WA.

TWELVE months ago, Kalgoorlie business owners Murray Leahy and Tim Topham set about finding a solution to their single biggest problem.

They were constantly battling to find accommodation for the staff they needed for their contracting businesses, MLG Oz and Topdrill, which are among the biggest employers in the city.

They applied to the City of Kalgoorlie-Boulder for approval to build a 300-bed workers’ camp.

After their plans became public, they were approached by other businesses that collectively wanted 2,200 beds to meet their accommodation needs.

In a city with fewer than 30,000 residents and a residential vacancy rate of just 0.4 per cent, this signalled a very large unmet demand.

Despite this, the proponents have battled to secure council support.

The ongoing debate over their plan has come to symbolise broader issues facing the Goldfields, which is enjoying a boom in business activity.

With companies such as Lynas Rare Earths, Northern Star Resources, Liontown Resources, Bellevue Gold and BHP Nickel West making big investments, the region is booming.

The uptick has flowed right through the business community, according to Kalgoorlie-Boulder Chamber of Commerce and Industry chief executive Simone de Been.

“We are buzzing. Everybody I talk to has so much work they can’t keep up with demand,” Ms de Been told Business News.

The chamber has estimated there are about 3,000 unfilled jobs in the Goldfields, but this isn’t the biggest problem.

“The main issue two years ago was labour and now it’s housing,” Ms de Been said. “We can’t get the labour until we get the houses.”

The housing crisis stems from the big miners and mining services companies buying or renting houses to accommodate their workers.

Ms de Been said many companies were offering well above market rents, taking private employees and families out of the market.

Four-bedroom houses are now renting for about $800 per week, an increase of $150 in the past year.

The rental squeeze becomes particularly acute during events, with the biggest being Diggers & Dealers, which attracted 2,600 delegates earlier this month.

Many Kalgoorlie families take a holiday during Diggers because they can rent out their house for $6,000 for just three or four nights.

The keen demand for residential properties has boosted the median house price, though not by the same percentage as rents.

The median house price for Kalgoorlie-Boulder is up by 15 per cent over the past three years, according to data from the Real Estate Institute of Western Australia.

It sits at $335,000 and is moving back towards the record set during the previous boom (see graph, page 6).

The median price in Kalgoorlie Boulder peaked at $350,000 in 2013 after jumping by 55 per cent over the prior years.

Many of the town’s hotels are also fully booked with mining and fly-in, fly-out workers, meaning tourists looking for a place to stay can’t get a room.

A shortage of residential land is another challenge. Development WA released 31 lots last October and they were quickly snapped up.

The agency has stated that sufficient land remains to create a further 1,300 homesites to meet future demand.

Ms de Been is keen to see more of that land released.

She said Kalgoorlie currently needed about 200 new residential lots, although the sudden release of that many lots would exacerbate another problem.

Building companies such as Westralia Homes are battling to keep up because they don’t have enough workers.

Just like in Perth, there has been a spike in building activity in Kalgoorlie after people took up state and federal government incentives such as the Building Bonus.

The number of building approvals in the Goldfields doubled to 73 last year.

The state government has responded by bringing in modular houses that are fabricated in Perth.

The first modular homes were allocated to two families on the Department of Communities’ priority housing waitlist.

This marked the first occasion modular structures have been used for social housing in Kalgoorlie.

Ms de Been welcomed this and other initiatives but said a lot more needed to be done.

She has been particularly critical of the City of Kalgoorlie-Boulder, saying she was surprised and disappointed after it voted against several residential and commercial development proposals.

“The message that is being relayed to the KBCCI by members and groups seeking to invest in the region is that it is becoming simply too hard and there appears to be a strong anti-development stance being taken by council,” Ms de Been said recently.

Mr Leahy believes the council does not appreciate the nature of the current boom.

“It’s very different to the booms we have seen here in the past,” Mr Leahy told Business News.

“It’s not leveraged just to commodity prices, there is a multitude of drivers.”

These include the buoyant gold sector and the global trend toward electrification and decarbonisation, which is boosting demand for metals such as lithium, cobalt, nickel and rare earths.

The new wave of investment is not confined to mines.

It includes downstream processing, exemplified by Lynas’s $500 million investment in the Kalgoorlie Rare Earths Processing Facility, currently under construction.

This project will employ more than 200 people during the construction phase and 128 people once it becomes operational.

Managing director Amanda Lacaze says Lynas was aiming to fill the operational jobs with local residents.

“It’s going to be mostly residential, that is one of the reasons we came here,” she said.

“It’s our objective to have as much residential as we can.”

However, she admitted Lynas did not have a firm plan for recruiting and accommodating its residential workforce.

“We will cross that bridge when we come to it,” Ms Lacaze said.

“I know there is a lot of discussion on this at the moment.

“The mayor’s view is that houses that are currently being used as de facto FIFO accommodation will become available once the [proposed] camp is built.

“We are in the business of wanting whole families to live here.”

Ms Lacaze cites the company’s track record at its rare earths refinery in Malaysia, where 98 per cent of the staff are locals and it has awarded supply contracts to local businesses.

 “It’s our duty to engage with our local communities,” she said.

“That’s why we have developed this model to share our prosperity with our local community.”

Lynas used this year’s Diggers & Dealers conference to announce more investment in the region, committing to spend a further $500 million expanding the capacity of its Mt Weld mine in the northern Goldfields.

The Mt Weld expansion project is expected to create up to 300 jobs during the construction phase and about 100 once operational.

Ms Lacaze said Lynas was evaluating further expansions, at both the mine and the Kalgoorlie processing facility.

The fundamental driver is increased demand for rare earths elements, notably neodymium and praseodymium (NdPr), which are a key ingredient in the batteries used in electric vehicles and wind farms.

“The rare earths market is growing at pace as the world transitions to new energy technologies,” Ms Lacaze said.

Rapidly growing production of electric vehicles, and the associated demand for long-life batteries, sits behind many other projects in the region.

Covalent Lithium is developing the Mt Holland project, Liontown Resources is proceeding with its Kathleen Valley lithium mine, while Mineral Resources is doubling the capacity of its Mt Marion mine. BHP Nickel West is also stepping up its spending, from exploration through to processing.

When it has a maintenance shutdown at its processing plant, Nickel West needs to bring in 500 people to the Goldfields, and they all need accommodation.

In the gold sector, Northern Star Resources, St Barbara and Bellevue Gold are among the companies investing in growth.

The most significant is Northern Star: its wholly owned subsidiary, Kalgoorlie Consolidated Gold Mines, employs about 1,100 staff and contractors at the Super Pit.

It is aiming to lift production at the Super Pit from about 490,000 ounces last year to 650,000 ounces through a series of incremental improvements.

More significantly, it is undertaking feasibility studies for expanding capacity of the Super Pit mill, with an estimated investment of up to $1.4 billion.

Northern Star will need to employ about 600 construction workers if the expansion proceeds.

These investments are creating tremendous opportunities for contractors such as MLG Oz and Topdrill.

MLG employs about 1,000 people providing a range of mining services across WA and the Northern Territory, with nearly one quarter of its people in the Goldfields.

Topdrill has grown to have 310 people, with 25 drilling rigs working on projects that stretch from Katanning in the south to the Paterson province in the north.

Like MLG, its head office and main operational hub is in the Goldfields.

City councillor and business adviser John Matthew has observed the emergence of companies like MLG and Topdrill and believes they represent a major shift in the local economy.

“It used to be that people looked at the retail vacancies on Hannan Street as a barometer of Kalgoorlie’s economy,” Mr Matthew said.

“Now you look at West Kalgoorlie and all the mining services businesses that have grown out there.”

Mr Topham, who established Topdrill 16 years ago, is convinced Kalgoorlie is a good base for his business.

“This is an amazing place,” he said.

“The land is cheap, there is a competent skilled workforce and all the support services for a drilling company.

“And we are where the action is.

“One of the biggest gold deposits in the world at the end of the main street and other commodities, nickel and lithium, in one of the densest mineral belts in the world.”

Mr Topham cites a long list of successful mining services companies that were founded in Kalgoorlie, including Weir Minerals (which developed the famous Warman pump), engineering contractor Monadelphous and mining contractor Byrnecut.

The late Ron Sayers established Ausdrill in Kalgoorlie while Peter Bartlett founded Barminco, with these two businesses now the core of ASX-listed Perenti Global.

RCT (formerly Remote Control Technologies), Pacific Energy and CPC Engineering are other success stories that started in the Goldfields.

Mr Topham has been investing in the growth of his business, establishing a new depot and workshop. He has also been investing in new back-end systems, digitising the business to provide better insights into its performance.

“That has totally changed my management style and my understanding of the business and the numbers,” he said.

Like many businesses, the digitisation process has required Topdrill to call on expertise far and wide.

Mr Topham’s commercial manager is based in the NSW central western city of Orange, his lead data analyst is in Perth, and other team members are in Brisbane and The Philippines.

He said the automated systems they put in place had greatly improved efficiency in the business, with rig utilisation increasing from 68 per cent to 90 per cent.

Mr Topham cites staff retention as one of the biggest challenges he faces.

He believes the quality of secondary schools and social issues in the community are contributors to this.

But he said there were plenty of people keen to move there, chasing the same opportunity he saw as a young backpacker from New Zealand.

“It’s an amazing community of like-minded people, and that’s what appeals to me,” Mr Topham said.

Mr Leahy has also seen an increase in people wanting to relocate to Kalgoorlie.

“We’re seeing a desire for more people to live regionally than we ever have before,” he said.

However, the big roadblock, especially for families, was the difficulty they faced finding accommodation.

That’s what prompted the two men to pursue their plans for a workers’ accommodation camp.

They have been joined by diversified contractor Rangecon, which among many other projects built the 283-room Ford Bayley Karlkurla Camp near Coolgardie.

Originally used by Northern Star Resources to service nearby mining operations, the camp now assists with transient workers’ accommodation needs.

The consortium has achieved some progress with its plans after going to the State Administrative Tribunal, which ordered a mediation process.

The council voted by a slim majority last month to approve a temporary camp, with a term of just five years.

That was after the consortium managed to overcome objections related to land use and design.

The consortium is going back to the SAT seeking a term of 10 years.

Mr Leahy said this reflected his belief that there would be long-term sustained demand from operational workers for accommodation in Kalgoorlie, not just a temporary spike tied to construction projects.

The proposed $6.5 million facility in South Boulder will comprise 76 buildings, including laundry buildings, a dry mess building, an administration and gymnasium, plus 39 on-site car parking bays and 54 street bays.

Mr Matthew was one councillor in favour.

“We’ve heard of some reasons why we shouldn’t be voting for this but to me, this sounds like those objections are on commercial grounds rather than what is good for the future of the City of Kalgoorlie Boulder,” Mr Matthew told Business News.

Councillor Mandy Reidy echoed Mr Matthew’s comment, saying the availability of accommodation for people was “critically in crisis”.

“We’re stuck in a hard place, and I think without approving more accommodation or more rooms for people we’re going to find ourselves in a state of turmoil with no accommodation, no people to come and live in it and no projects getting off the ground,” Ms Reidy said.

Mayor John Bowler was also supportive.

“If we don’t approve this, they’ll go to Kambalda or Coolgardie–they already are going in big numbers, they’ll just go in bigger numbers–and our community, our businesspeople, will not get one cent benefit from this city,” Mr Bowler said.

According to the council meeting agenda, the city has spent about $10,000 in legal and consultant fees to date, having engaged McLeods Barristers and Solicitors and Altus Planning during the SAT process.

In June, the council resolved that workforce accommodation may be a consistent use under the service light industry zoning.

Four councillors remained opposed to the application, including Wayne Johnson, who said the proponent had not included economic reports or details relating to the workforce accommodation policy the council passed in June.

“What is included in this is a nine-page document showing a schematic of a site. That’s it; no more, no less,” he said.

“There’s lack of information all over the place.”

The year-long saga of seeking approval for the proposed camp in Kalgoorlie-Boulder has left Mr Leahy feeling frustrated by decision making at the local council level.

“The big issue is a local government authority that doesn’t do the work, doesn’t understand all sides of the argument,” he said.