Comparative analysis of the work of two mining companies with host communities

RUNNING HEAD: COMPARITIVE ANALYSIS OF THE WORK OF TWO
MINING COMPANIES WITH HOST COMMUNITIES
Comparative analysis of the work of two mining companies with host communities
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COMPARIVE ANALYSIS OF THE WORK OF TWO MINING COMPANIES WITH
HOST COMMUNITIES1
Community relation activities of two mining companies which are Fortescue Metals
Group and Rio Tinto this paper will be compared in this paper. The community relation
approach of Solomon Hub mining project of the Fortescue Metal Group and mining projects
of Rio Tinto will be compared to identify the internal management structure of these two
companies regarding community relation approach.
Overview of mining projects:
Fortescue Metals Group, an Australian company, established in 2003. This company
produces iron ore. More than 87000 square area under this company in the Pilbara region of
Western Australia. Products of this mining company are iron ore, lithium, copper, steel, and
gold (Fmgl.com.au., 2019). In the Pilbara region of the western part of Australia, Solomon
hub is controlled by this group. The location of Solomon hub is situated in the middle of
Fortescue’ Pilbara area. One of the major mining projects of Fortescue Metal Group is
Solomon hub. The first production from this hub was achieved in December 2013 by this
group (Fmgl.com.au., 2019). In 2012, 129 km Solomon railway was developed by this
mining company to connect with the mainline of Fortescue to the company’ port operations
(Fmgl.com.au., 2019). Fortescue mining group has a target, which is achieving more than 5
billion tons of iron ore from Solomon hub. The market capitalisation of this company is 27.54
billion dollars (Fmgl.com.au., 2019).
In 1873, an Anglo Australian international mining company, named Rio Tinto, was
established (Riotinto.com., 2019). Iron ore, aluminium, gold, diamonds, uranium, bauxite,
alumina, coal, copper, titanium dioxide, and borates are produced by Rio Tinto Company.
(Riotinto.com., 2019). Sixteen iron ore mine projects and 1700 km rail networks are
controlled by the Rio Tinto Company in Pilbara region. With the support of proper

COMPARIVE ANALYSIS OF THE WORK OF TWO MINING COMPANIES WITH
HOST COMMUNITIES2
infrastructure, this company is interested in ensuring employee safety, improving public
health and the environment (Lee, 2017).
Discussion about the host communities:
The Solomon Hub is an iron ore mine, which is located near about 60 km north of
Tom Price in the western part of Australia. The workers of Solomon Hub are accommodated
at a village where more than 1500 workers live with their families (Fmgl.com.au., 2019).
Fortescue mining group bought several houses for the employees of Solomon Hub in Tom
Price.
The nearest population centre of the mining project is Tom Price town in Pilbara,
which is operated by the Rio Tinto Mining authority. Most of the people from this area work
for Rio Tinto organisation. In this community, near about 3005 people live (Riotinto.com.,
2019). The community of this area is the young family cantered community. This town is
mainly iron ore mining town (Ellem, 2015).
Nature of the relationship between the host communities and the company:
Fortescue Metals Group work together with all stakeholders, including people from
the host community, to achieve the common goal and promote sustainable development.
There was a legal conflict between Fortescue Metals Group and the East Guruma people
(Wells, 2013). The people from East Guruma tried appealing to the Indigenous protection
committee of the state, and even in Supreme Court to protect the Spear hill in the Pilbara
area, which is located near Karijini National Park. This hill is the issue of Dreamtime creation
story about the significance of people gathering and sharing resources (Young, 2019).
However, Fortescue Metal Group has to re-route the train network. The people from East
Guruma were not against the Fortescue group or their project. These people were interested

COMPARIVE ANALYSIS OF THE WORK OF TWO MINING COMPANIES WITH
HOST COMMUNITIES3
in protecting their sacred site. After this incident, this group is interested in promoting
sustainable development in the host community area.
Improving the lifestyle of the people from the host community is the principal goal of
Rio Tinto. However, this mining company faced a legal problem. There is a complaint
against this company which states that this company is responsible for a leak of nineteen
thousand gallons of oil into the ground. The Department of Resources complained to the
Northern Territory (Riotinto.com., 2019). The main issue of the complaint was that this
company did not conduct a proper investigation and interested to close the issue. This types
of activity are developing a negative impact on the company. Company reputation is essential
for every company. Rio Tinto is interested in maintaining its impressive reputation by helping
the host community to improve their lifestyle.
Implemented community project:
Economic opportunities are provided to the locals by making them a part of the
Fortescue Metal Group and also by using that are available locally. The organisation tends
to create an energetic and ever-growing community, which will be attracted to grow for the
organisation as well as provide future workers. For Port Hedland and Karratha, almost 500
employees are working for Fortescue, who is based in Pilbara Efforts are also taken by the
company to combat any problem faced by the communities (Fmgl.com.au., 2019). In order to
ensure the same, regular feedbacks are gathered from their residential workers as well as
from the local government of the region. As a part of their local procurement venture, the
organisation willingly takes up the local content, which they can gather from a particular area
(Cleary, 2014). Again, the local businesses are supported by the organisation so that they can
build a relationship that will benefit both the parties and at the same time bring in economic
growth. The procurement level of this organisation is maintained because of their attitude