Australia acts to protect lucrative outback mines from virus outbreak

The vast landscapes of north-west Australia seem as distant as it is possible to be from large cities such as Sydney and Melbourne, which are in the grip of Covid-19 lockdowns.

But this remote region is home to Australia's largest mines that, however, are not immune to the coronavirus pandemic.

While they are still functioning, all is far from normal at the mines.

Strict safety measures have been introduced for the workers, as Australia tries to do all it can to protect its mining sector, which accounted for A$290 billion (S$262 billion) worth of exports last year.

The thriving sector was the key to Australia avoiding a recession in the 2009 global financial crisis. State and federal governments hope it will again help to cushion the economy from the Covid-19 downturn.

The measures include staggering meal times and keeping workers at remote sites for longer periods to avoid the need to bring in fresh teams of outside staff.

Firms are also forcing staff to sit apart from one another on chartered flights and buses, and have introduced temperature checks at airports and work sites. Staff at mining camps have also been banned from visiting local towns.

The state of Western Australia, which has the world's largest known reserves of iron ore, shut its borders late last month but labelled mining a critical service and exempted mine workers from the compulsory 14-day self-isolation for new arrivals.

But the number of interstate fly-in-fly-out employees - people who fly in to work - has been reduced.

The chief executive of the Chamber of Minerals and Energy of Western Australia, Mr Paul Everingham, said the industry, which hires 120,000 people in the state, wants to remain open but this would depend on avoiding breakouts of the coronavirus.

"We've agreed to massively reduce our footprint, but (to) keep open critical operations on mine sites and in oil and gas facilities," he told ABC News.

In recent years, soaring demand from China has led to surging growth in Australia's mining sector. Last year, Australia's three biggest exports were iron ore, with exports worth A$77 billion; coal, worth A$70 billion; and natural gas, worth A$50 billion.

Australia's next largest exports were international education and tourism, which together were worth A$60 billion, but both sectors are likely to suffer a massive decline owing to the recent curbs on international travel.

Since the Covid-19 outbreak, the mining sector in Australia has remained relatively strong, owing to higher than expected iron ore prices, continued demand from China, shutdowns of mines in countries such as South Africa and Canada, and a sharp decline in the Australian dollar.

According to a report in The Australian, mining revenues this year are on track to reach a record A$299 billion. Mr Chris Salisbury, iron ore chief executive at mining giant Rio Tinto, told the newspaper that China's recovery was leading to increased economic activity and greater demand for commodities.

"(Our) business is running more or less normally," he said.

"Certainly, China is turning, which is good news for our industry and the resources sector overall."

Still, some miners have scaled back production or expansions in the light of the current volatility in the global economy.

Most analysts expect the mining sector to take a big hit from the pandemic and almost all believe a recession in Australia is inevitable.

An analysis by the National Australia Bank earlier this week forecast a 16 per cent fall in commodity prices this year.

It said the global downturn caused by Covid-19 was likely to "far exceed the global financial crisis" and this would lead to lower demand for commodities.

Federal Resources Minister Keith Pitt said that the pandemic is likely to change permanently the way miners operate and will force them to reduce their reliance on large cohorts of fly-in-fly-out workers.

"The way our workforce is distributed and located post-coronavirus will be very different from the pre-coronavirus environment," he told The Australian Financial Review.

"You will have a lot more residential workers in the future."