Lovesick Miners Seeking More Than Gold Swell Rio, BHP Costs

Ten minutes’ walk from Australia’s largest open-pit gold mine, 35-year-old driller Matt Brown swigs a beer in the bar of the Rock Inn Hotel and laments one of the biggest problems of the mining boom: a shortage of girlfriends.

“You get lonely,” says Brown, who explores for gold and iron ore with Westralian Diamond Drillers Pty, based in the dust-coated town of Kalgoorlie, 600 kilometers (373 miles) from Perth. “Relationships are the hardest thing about mining.”

The heartache in places like Kalgoorlie and the Queensland coal town of Glenden, where there are 23 unmarried men in their 40s for each single woman, is a headache for companies like Rio Tinto Group that are trying to attract workers. The biggest commodities boom since the 1850s Gold Rush has sapped the supply of Australians willing to adopt Brown’s lifestyle, even with wages that are double the national average.

To persuade workers to join, companies offer extras such as seven-hour, round-trip flights to cities every few weeks, satellite phones to keep miners connected with loved ones, counseling services, and even flying in families for employees who keep mines going over the Christmas holiday.

“It’s a wonderful life for many people, but for many people there’s a crippling isolation,” said Gervase Greene, a Perth-based spokesman for Rio Tinto’s iron-ore operations. “You’ve got to think outside the square to access workers and keep them in the workforce. There’s still a labor shortage.”

Feeding Inflation

Higher labor expenses are raising expansion costs, Rio Tinto, the world’s second-largest mining company, said this month after reporting first-half profit that missed analyst estimates. The company’s workforce more than doubled in five years to 76,894 at the end of 2010. Australia’s unemployment rate was 5.1 percent in July, almost half that of the U.S., Bloomberg data show.

Rising wages are feeding inflation, forcing the central bank to keep its benchmark interest rate at 4.75 percent, the highest in the developed world, even as domestic spending slows.

Miners’ wages have risen 33 percent in the past five years in Australia, to A$2,113 ($2,222) a week, or more than double the national average, according to data released Aug. 18 by the Australian Bureau of Statistics. That’s almost twice as much as miners in the U.S., who are paid an average of $1,236 a week, according to figures from the Bureau of Labor Statistics.

The Reserve Bank of Australia said “the widespread increase in cost pressures” was a threat to inflation, in minutes of this month’s meeting released Aug. 16.

Pay Demands

“It’s not just a threat to inflation, it’s a threat to business,” said Nigel Stapledon, a lecturer at the University of New South Wales’s Australian School of Business in Sydney. “What happens in mining feeds through to costs in all sectors.”

A strengthening Australian dollar, which reached a post- float high of $1.1081 on July 27, has made it tougher for some manufacturers. BlueScope Steel Ltd., Australia’s largest steelmaker, today announced plans to stop exports, shut a mill and a furnace, and trim about 1,000 jobs.

Among miners, the difficulty in holding down a relationship is one of the factors driving demands for further pay rises, said Stephen Smyth, a Queensland-based president in the 120,000- member Construction, Forestry, Mining and Energy Union, which is organizing strikes this month at BHP Billiton Ltd. (BHP) mines.

Life Sacrifices

Tim Douglas, a mining engineer with Macmahon Holdings Ltd., said his job is incompatible with a long-term relationship. He works eight-day stints at Rio Tinto’s Argyle Diamond Mine in the East Kimberley region mine with six-day breaks in Perth, a 3 1/2-hour flight away.

“You’ve got to pretty much give up your life,” said Douglas, 24, who split up with his girlfriend in February. “A lot of my friends have been eyeing some quick cash in the mines, but it’s not all it’s cracked up to be.”

That’s making it harder for Roger Edwards, managing director of Kalgoorlie-based Acorn Recruitment, to fill vacancies. He has 120 roles open for electricians, welders, laborers and drillers paying as much as A$5,000 a week, and just 14 tradesmen in town qualified to do the work, he said. There may be a shortfall of 35,800 tradesmen by 2015 on resources projects, the National Resources Sector Employment Taskforce said in a 2010 report.

‘Go Crazy’

“The only thing that can keep us going is getting people from elsewhere,” said Edwards, who supplies workers for BHP and the nearby Super Pit, owned by Barrick Gold Corp. (ABX) and Newmont Mining Corp. (NEM) “But the fly-in, fly-out workers destroy the community. They’re the ones who go crazy. The number of breakups we see is unbelievable.”

Kelly Quirke, a BHP spokeswoman, said the company wouldn’t comment on what it’s doing to attract workers.

A mile from the Super Pit -- deep enough to swallow the Empire State Building -- miners’ fluorescent-orange safety shirts glow through the windows of bars along Burt Street, many served by barmaids dressed only in black-lace underwear.

Edwards isn’t the only one struggling to get workers. Two blocks away, at Langtrees brothel, the manageress who calls herself Dylan Delights is drafting in staff from as far as Ireland and New Zealand.

“Just come and have some fun and make as much money as you can,” she said on the phone to a woman in Tasmania. “What was your name, sweetheart? My name’s Dylan. I’m the madam.”

‘Love Hotspots’

Most clients are miners and many are married or in a relationship, said Dylan, sucking on a cigarette. An hour with a girl costs A$350 and a prostitute with as many as six customers a night can earn A$10,000 a week, said Dylan, 23. Prostitution is legal in Australia.

Some miners turn to the Internet to find a partner. Web matchmaker eHarmony.com Inc. has identified “Love Hotspots,” with mining towns such as Queensland’s Mount Isa atop the list. RSVP, Australia’s largest online dating service, said 14 percent more users signed up in the past 12 months, taking its clients to 1.8 million. In Kalgoorlie, the number jumped 76 percent.

Bernard Salt, a partner at KPMG in Melbourne, said the mining boom is exacerbating a history of gender isolation in Australia, where 22.7 million people populate an island almost as large as the U.S. The mining industry employed 214,000 workers as of May, government data show, 86 percent of them men.

“It’s a uniquely Australian issue,” said Salt, whose books include “Man Drought and Other Social Issues of the New Century.” Women, who a generation ago tended to stay in remoter towns and marry in their early-20s, are adding to the imbalance by moving to cities for work and education, he said.

Bachelor’s Guide

When they get there, they find a shortage of men.

“I’ve got a bunch of single girlfriends and we’re out there looking, but we’ve been scratching our heads wondering where all the decent men are,” said Lara Iacusso, a 41-year-old former Deloitte corporate-finance partner, who moved to Sydney from Perth more than three years ago. “It’s definitely tough.”

Brett Gilbert, a chef at Fortescue Metals Group Ltd. (FMG)’s Solomon iron-ore project, plans to publish a book this year, “The Fly-In Fly-Out Bachelor: A FIFO Bachelor’s Guide to Success With Women,” after overcoming his own depression.

“This whole industry is plagued with guys who probably want to be more successful with women,” said Gilbert. “When the guys are unsuccessful, they can go literally months, some years, without having an intimate relationship with a woman.”

In the most extreme cases, miners can become withdrawn, socially inept and introverted, he said.

At the Rock Inn Hotel, and without a girlfriend after two years in Kalgoorlie, Brown comforts himself with his pay packet.

“For a lot of us, it’s the money. If you want to work, there’s a job here for you.”

To contact the reporter on this story: Angus Whitley in Sydney at awhitley1@bloomberg.net

To contact the editors responsible for this story: Philip Lagerkranser at lagerkranser@bloomberg.net; Rebecca Keenan at Rkeenan5@bloomberg.net

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Photographer: Ron D'Raine/Bloomberg

Pedestrians wait to cross the road as traffic passes in front of the Exchange Hotel in Kalgoorlie, Australia.

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Photographer: Ron D'Raine/Bloomberg

Pedestrians wait to cross the road as traffic passes in front of the Exchange Hotel in Kalgoorlie, Australia. Close

Pedestrians wait to cross the road as traffic passes in front of the Exchange Hotel in Kalgoorlie, Australia.

Photographer: Carla Gottgens/Bloomberg

To persuade more workers to join the biggest commodities boom since the 1850s Gold Rush, companies must pay wages two-thirds higher than the national average and offer extras such as 7-hour, round-trip flights to cities every few weeks, driving up costs. Close

To persuade more workers to join the biggest commodities boom since the 1850s Gold Rush, companies must pay wages... Read More

Photographer: Ron D'Raine/Bloomberg

A Caterpillar 793 ore truck transports ore out of the Barrick Gold Corp. and Newmont Mining Corp.-owned Super Pit mine in Kalgoorlie, Australia. Close

A Caterpillar 793 ore truck transports ore out of the Barrick Gold Corp. and Newmont Mining Corp.-owned Super Pit... Read More

Photographer: Ron D'Raine/Bloomberg

Dylan Delights, manageress of Langtrees of Kalgoorlie, poses for a photograph in Kalgoorlie, Australia. Close

Dylan Delights, manageress of Langtrees of Kalgoorlie, poses for a photograph in Kalgoorlie, Australia.

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