Executive summary

This study analyses the primary bottlenecks and opportunities for development in the region of the Pilbara, Western Australia, within the context of its high specialisation in mining activities. It provides recommendations to attain a more inclusive and sustainable development model that supports economic diversification and improves the living conditions of its communities, with a particular focus on First Nations.

Assessment

The Pilbara is one of nine regions located in the state of Western Australia. It is known for its thriving mining and resource extraction industries. The region is large and has a low population density. Its geographical size is equivalent to Spain but 780 times less populated, which places it among the 5% least densely-populated regions in the OECD. While the Pilbara’s industrialisation is relatively recent, dating back to the 1960s when towns were established to accommodate the mining workforce, First Nations peoples (Indigenous or Aboriginal) have inhabited the region for approximately 50 000 years. For many, the Pilbara is a difficult place to live, given its harsh climate and distance to major cities but, for First Nations peoples, it is the place where its ancestral, kinship, community, cultural and spiritual ties remain.

The Pilbara’s mining sector is a top supplier of iron ore in the world, particularly to the Asian market, and has fuelled the economic growth of the state and country. The mining sector contributes to the bulk of the Pilbara’s regional output (86.9%) and has also supported community and exported-oriented infrastructure (e.g. Australia’s largest port by tonnage). The Pilbara accounts for 19.2% of Western Australia’s gross domestic product (GDP) and 3.4% of Australia’s GDP, ranking the region 5^th in terms of GDP per capita, with the 7^th lowest unemployment rate among 50 OECD mining regions (see the next chapter for an explanation of this benchmark). Beyond mining, the region benefits from a strategic geographic location to Asian markets, a rich cultural heritage, home to 30 First Nations, renewable energy potential and the presence of a unique landscape and natural amenities.

Despite these assets and wealth, the Pilbara faces important challenges to improve its attractiveness and well-being standards, especially for First Nations and non-mining workers. Harsh climate, remoteness from metropolitan areas and low population density act as disincentives for more diversified businesses and workers and their families to establish or remain in the region. Furthermore, the high dependence on extractive activities, particularly on iron ore, increases its vulnerability to economic volatility and makes it reliant on fly-in fly-out (FIFO) workers. Combined with an uncertain long-term vision of the mining legacy in the region, these factors have fuelled a number of well-being challenges, including the highest cost of living in the state, acute socio-economic disparities with First Nations populations and shortage of affordable housing, which compound already difficult circumstances in recruiting workers for service provision such as childcare. Furthermore, greenhouse gas emissions of the region are twice as high as the average of 50 OECD mining regions.

These challenges also stifle current and future growth opportunities in the Pilbara and can impede the region from becoming a global leader in the green energy transition. Well-being challenges, especially in First Nations communities, can impact investment attractiveness, including through social licence for future projects in energy and mining, as social movements and international investment strategies increasingly focus on the impact of mining on the environment and people.

Against this backdrop, the green transition presents the Pilbara with an opportunity to diversify its economy and improve the well-being conditions of its communities, particularly for First Nations, while becoming a strategic player in the global shift towards more sustainable mining. To achieve this, the region needs to adopt an inclusive and long-term development strategy that ensures the participation of First Nations and local governments in regional policy making, with better co-ordination amongst different levels of government, local initiatives and private companies’ social and environmental programmes to address the main priorities of its communities and First Nations.

To support the region in attaining a more inclusive and sustainable development model, this study identifies 16 recommendations across 4 pillars: i) enhancing the development opportunities of First Nations, through First Nations co-designed reforms ; ii) improving access and provision of housing and services; iii) diversifying the economy inside and outside the mining sector with a focus on green activities; and iv) establishing a coherent place-based strategy with a long-term vision for development.

Key recommendations

	Recommendations
I.	Enhancing the development opportunities of First Nations, through First Nations co-designed reforms
1.	Organise a Pilbara First Nations Self-determination Summit to unite the region’s First Nations, local governments, industry and the broader community to address truth telling, First Nations’ greater involvement in regional policy and to examine the alternative deployment of trust funds
2.	Tailor education services to First Nations’ needs and establish a Pilbara First Nations Capacity Building Program by tailoring curricula and attracting organisations focused on First Nations education and capacity-building programmes
3	Standardise First Nations procurement across industries and government by clarifying industry’s First Nations procurement criteria, processes and procedures
4.	Establish a Pilbara First Nations Chamber of Commerce to promote First Nations’ business initiatives and access to capital
II.	Improving access and provision of housing and services in the Pilbara
5	Attract and retain professionals to improve local service provision by evaluating the implementation of a living cost incentive and by increasing the use of institutional mechanisms to attract and integrate migrant workers
6	Improve the housing market by creating a dedicated space to reach common solutions among various stakeholders and setting a formal state strategy to promote collaboration among levels of government and mining companies to improve the housing market
7	Establish a task force to strengthen access to quality education and training in the region that carries out a future skill mapping for mining and for potential new industries in the region and links training programmes of mining companies to government programmes
8	Better integrate fly-in fly-out (FIFO) workers to increase social cohesion and strengthen local communities by improving co-ordination of industry needs for FIFO camps with governments’ plans and by incentivising FIFO participation in the local economy
III.	Diversifying the economy inside and outside the mining sector with a greater focus on green-related activities
9	Facilitate projects on critical minerals co-developed with industry, various levels of government and First Nations by promoting value-added initiatives and greater local linkages with improved information on government support for downstream projects
10	Promote renewable energy projects with the participation of First Nations communities and local businesses by monitoring emissions reduction of mining companies, identifying schemes that allow co-ownership and promoting infrastructure for common use
11	Accelerate circular economy practices around and in the mining value chain by establishing a multi-stakeholder platform to explore opportunities around circularity and developing regulations and public-private agreements to incentivise circular practices
12	Promote more sustainable mining with greater transparency on environmental impacts by supporting environmental monitoring led by First Nations and universities and improving accessibility to public information reported by companies
13	Increase the support to local entrepreneurs, small -and medium-sized enterprises and social enterprises by establishing a formal mechanism to connect them with government programmes and mining and financing companies, co-adapting existing entrepreneurship programmes with First Nations, promoting entrepreneurship across mining workers and easing not-for-profit organisations’ access to long-term funding
IV.	Establishing a coherent place-based strategy with a long-term vision for development
14	Create a coherent long-term vision for the Pilbara’s development, with a communication plan to clarify the priorities for development
15.	Adopt a long-term place-based development strategy for the Pilbara with a proactive approach to prioritise policy actions based on the participation of local governments and First Nations in policy making and greater use of foresight analysis
16	Establish a formal co-ordination mechanism to implement and monitor the Pilbara’s development policies by involving state departments and regional stakeholders and improving local government areas’ capacity and better linking government plans with corporate social responsibility strategies