only scratched the surface

PORT HEDLAND, Australia (Reuters) -
A mining frenzy spurred by a voracious appetite among Chinese steel mills for rich Australian ore has mining companies scrambling to fill orders, flooding this corner of the outback with thousands of highly-paid workers.

"For me, it's work, then my barbecued shrimp, bed and work again," says Tom Weld, 31, a chef from Perth, 900 miles to the south, who now hauls ore mined in 600 feet-deep pits by truck to waiting railroad cars 12 hours a day, six days a week.

The giant mining pits more resemble excavation sites than most people's idea of mine camps. Ore is simply churned up by bulldozers and carted in trucks to waiting open-topped rail cars. A typical train is about a mile long and consists of 300 cars hauling 24,000 metric tonnes of ore each hundreds of miles to Port Hedland or Port Dampier to waiting freighters.

On average a trainload leaves a mine every hour 24 hours a day. Starting salaries are advertised at around A$83,000 ($79,200) a year and typically include company-subsidized rent, one week off a month and a free trip home and back on a company plane or commercial jet.


Both companies are earmarking billions of dollars to exploit new lodes and dig existing ones deeper to keep pace with China's steel-hungry economy. It takes about a tonne-and-a-half of ore to make a tonne of steel.

"China needs the ore and Australia's got it, it's that simple," says James Wilson, a mining analyst for DJ Carmichael & Co.

Ore prices on the world market are up 65 percent or more this year to around $85 a tonne and are likely to keep rising, Wilson and other analysts say, increasing the need for more workers in the mines.

"People looking for work know they are going to forfeit some of the conveniences of the cities, but you can't make the money there that you can here," says Andrea Ling, a recruitment consultant for Chandler Macleod, an employment agency in Port Hedland.

"If we can't guarantee top dollar, people just won't show up for work. They know they can go elsewhere and get hired in a second," Ling says.

For some, the ore may as well be gold.

The promise to ship up to 55 million tonnes of ore to China in 2008 and more each year turned Andrew "Twiggy" Forrest, a 47-year-old mining entrepreneur with a tin pot company five years ago into Australia's richest man, worth more than A$9 billion.

"If you believe in the Australian iron ore story, and I do, then it is easy to see we haven't even scratched the surface as far as potential goes," Forrest told Reuters in a recent interview.

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