Economic Impact Analysis in a Resource Industry Boom

Abstract

In Western Australia in recent decades mining companies have increasingly relied on long-distance commuting (LDC) over the creation of special purpose mining towns. A considerable body of literature now examines the socio-economic issues and challenges for ‘host’ communities associated with the use of fly-in/fly-out (FIFO) arrangements in remote regions, where workers live in company facilities at mine sites during regular block work rotations, and reside during furlough within the Perth metropolitan area, or less frequently, in regional centres offering high lifestyle amenity (Haslam McKenzie 2011, Acil Tasman 2009). A similar body of work documents and analyses economic and social impacts associated with drive-in drive-out (DIDO) arrangements in Queensland (Rolfe et al. 2007). Limited formal assessment has been undertaken of the local and regional economic or social impacts of mine sites in inner regional Western Australia that rely heavily on LDC, with particular focus on a DIDO arrangement. This chapter will use traditional techniques to explore the effect of economic multipliers generated by the resource sector on regional economies. It will discuss economic leakage, why it occurs, what impact it has on those economies, and what trends in the minerals sector need to be taken into account so that the true economic impacts of an operation are recognised.