Outback town that rivaled Manhattan’s prices now gathers dust

Port Hedland West Australia. Image: BHP

Of all the mining-town booms spawned by China’s insatiable appetite for minerals, few were as epic as that of Australia’s Port Hedland.

In one of the most remote corners of the Earth, its real estate was more expensive than in Manhattan, service workers earned bankers’ salaries, and its small airport began running direct flights to Bali, where miners bought beach houses to relax between stints in the red-stained Pilbara hills.

There were big plans, including a A$152 million ($106 million) yachting marina, and the town was expected to become the largest in northwest Australia, enriched by trains more than 2 kilometers long that brought powdered rock from the mines to be loaded onto an endless stream of ships bound for China.

Those plans haven’t materialized. Property prices have fallen about 70% from their peak, the marina was downsized and delayed, and Port Hedland’s resident population of about 15,000 people is some 6% smaller than in 2013.

For a decade, residents, mining companies and the state government have been tussling over the effect on people’s health of the dust generated by the transfer of the ore and what can be done to mitigate the pollution

The reason for the decline isn’t entirely clear. Many blame the five-year global slump in iron ore prices between 2010 and 2015 that hit property markets in many cities across Western Australia. But ore prices have picked up since then and exports continue to grow from Port Hedland, the chief hub for Australia’s A$64 billion in annual iron ore shipments.

For some residents, there’s another reason: dust.

“It’s not dust dust you get in the house, it’s iron ore dust,” says Jenny Higgins, 73. A thick layer of grime forms on her balcony table within a day of cleaning, and residents often suffer from dry cough and itchy eyes, she said. “It just coats everything.”

A two-day drive from the nearest big city, Perth, Port Hedland is the nexus of Australia’s iron-ore industry, the terminus of one of Australia’s longest private railways that hauls ore about 400 kilometers (250 miles) from the mines of BHP Group and Fortescue Metals Group Ltd. The line ran a record-breaking test train weighing almost 100,000 tons that was more than 7 kilometers long in 2001, and even normal trains haul up to 250 wagons of ore.

The rail cars dump their load in long piles of powdered red rock — more than half a billion tons a year — by the water in Port Hedland to await shipment from the world’s largest bulk terminal.

The scale of the operation can be seen from the air. On a flight into the airport, Port Hedland looks like a series of orange stains on spits of land around a hand-shaped inlet of water. The two parts of the town — Port Hedland and South Hedland — are divided by the water and long red piles of iron ore between rail tracks that are waiting to be loaded onto ships that dock along the edges of the inlet.For a decade, residents, mining companies and the state government have been tussling over the effect on people’s health of the dust generated by the transfer of the ore and what can be done to mitigate the pollution.

That debate gained momentum after a government taskforce said in a 2016 report that there is “sufficient evidence of potential impacts on human health.” The report prompted the state government to adopt land-use planning recommendations aimed at prohibiting sensitive land uses and restricting population growth in an area near the ore operation called the West End. The state’s planning commission is working on a draft improvement plan for the area.

“If there is a clear health risk, what does curbing the population do?” said Chris Green, director for policy and research at the Urban Development Institute of Australia in Perth. “We fear that this will set a precedent for whenever there’s land next to industry — that the industry wins.”

He said Port Hedland faces a downward spiral, where land loses value, reducing the town’s ability to generate revenue for environmental measures.

Property developer Alex Wightman said the dust makes even new buildings look shabby and reduces the value of real estate. He has spent a year in discussions with BHP about the dust and has also been in talks with 12 owners who together hold 41 local properties.

“BHP does many good things,” Wightman said. “But this is black and white. There’s pollution — dust in the air — and they should try to contain it, or compensate those affected by it.”

BHP said in a statement that it has a shared responsibility to control dust in Port Hedland and that all its Pilbara operations meet government standards. “We have invested many hundreds of millions of dollars in dust mitigation and we will continue to invest and work collaboratively with other operators in the area to manage air quality,” the company said.

Fortescue monitors dust creation closely and uses control measures such as washing stations and sprays for ore conveyor belts, Chief Executive Officer Elizabeth Gaines said in an emailed response to questions. She said the company works with the government and local communities “to ensure our dust management strategies are industry best practice.”

Kirsty Danby, CEO of Port Hedland Industries Council, which represents major users of the port including BHP and Fortescue, said part of the problem was that the town developed before the introduction of modern planning principles. She said the new plan being developed by the state would “provide greater separation between industry, port and residential areas.”Port Hedland was founded in the 19th century and grew up supporting the mining of gold and then iron ore in the interior, with many of the town’s inhabitants over the past century braving the heat and dust in the hope of prospering from the booms. Temperatures in March reached 47 degrees Celsius (117 Fahrenheit).

“It’s a mining town, what do you expect?” said Shabaz Mohammad, a taxi driver who has lived in the town for five years. “Either you deal with it, or you can leave.”

Those involved in the iron ore operation point out they’re not the only ones creating dust.

“If you didn’t do any mining, you did nothing else, it’s the dustiest place in Australia naturally,” said Roger Johnston, CEO of the Pilbara Ports Authority, the managing body of the shipping port. He said pollution levels have dropped due to mitigation efforts relative to the significant rise in shipment volumes.

But for residents like Higgins and her family, who bet their future on the town, it’s not so easy to leave. The retired school principal moved to Port Hedland seven years ago during the boom years when her husband came to set up a dental practice. Now, he runs two practices in the town and her children and grandchildren live locally.

“We’ve invested heavily here, so we’re committed here,” she said. “Buy us out, and then we’ll go.”

(By Krystal Chia)

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