Andrew Forrest’s Fortescue Metals Group has claimed a major milestone in its efforts to spark indigenous development, announcing a series of new contracts that double its deals with Aboriginal business to $1 billion.
Six five-year contracts worth a total of $500 million were awarded to several Aboriginal joint ventures, each of which included Brisbane-based mining services group Morris Corporation as a partner.
The contracts are for a wide range of services, from catering and cleaning to camp administration.
Leighton Contractors is also involved in using indigenous sub-contractors as a major mining contractor to FMG.
FMG chief executive Nev Power said the $1 billion mark had been a stretch target chosen in late 2011, and the miner was buoyed by the fact that the iron ore group had achieved the goal six months earlier than its original two-year deadline.
“This is not about preference or handouts or welfare in any form,” Mr Power said.
“We worked with each of these owner groups to make sure they had the capability.”
FMG has nearly 1,000 Aboriginal people working for it, more than half through contracting organisations. It identifies an Aboriginal business as one with at least 25 per cent indigenous ownership, but Mr Power said most of the joint vent ventures FMG dealt with were at least half owned by indigenous people.
In line with Mr Forrest’s nationwide indigenous employment covenant target of 60,000 jobs, FMG has quickly caught up with the bigger players in the Pilbara.
Rio Tinto CEO Sam Walsh regularly highlighted his firm’s record when he ran the iron operations. Rio claims nearly $2 billion in contracts to indigenous business, or almost 14 per cent of total Pilbara-based expenditure.
However the big numbers mask the challenge for indigenous business development – the slowdown in mining and the gradual end of the construction phase in the Pilbara, which will require new skills as mining services firms chase smaller, longer-term contracts.
Aboriginal leader Noel Pearson was on hand at FMG’s event today to congratulate the company and highlight how the Pilbara was leading the way in providing a sustainable economic development for indigenous people in Australia.
