Kalgoorlie-Boulder's Mayor has warned the local economy could miss out on "millions of dollars", if a 1,000-bed workers' camp proposed by mining giant BHP is built outside the historic city in Western Australia's Goldfields.   

As an ongoing accommodation crisis drives up rental prices in Kalgoorlie-Boulder, with houses being advertised for up to $1,500 a week, BHP has proposed building a "temporary" camp on council-owned land in Somerville. 

It would accommodate workers for a planned furnace rebuild at BHP's Kalgoorlie Nickel Smelter during the 2025-26 financial year.

Up to 2,000 workers are expected on site during peak construction periods, which is nearly six times the smelter's residential workforce of 350.

BHP's Kalgoorlie general manager Jacinta Parsons said the camp would minimise the impact on "stressed" accommodation providers. 

"This workforce accommodation is temporary, and our intention is to demobilise that 1,000-bed village following the completion of the major project within three years," she said.

BHP's Nickel West division supplies the metal to major electric vehicle manufacturers, including Elon Musk's Tesla, the Ford Motor Company and Toyota.

Ms Parsons said the furnace rebuild would ensure the smelter remains a key part of the supply chain for at least the next 20 years.

"This is our preferred option with the advantages for the local economy as the village is close to the main street, shops, and restaurants," she said. 

"We believe we can contribute positively to the economy through this project."

Mayor supports camp

As part of the development, BHP wants to lease 1 Trasimeno Way in Somerville and a 107,611 square metre portion of Lot 9000 Bates Drive.

The council will advertise for public submissions in coming days, before councillors vote on whether to lease the land to BHP for three years, with the option for three one-year extensions. 

Kalgoorlie-Boulder Mayor John Bowler said the proposed location makes sense.

"They could build a camp either on site, or in Kambalda with the Shire of Coolgardie," he said.

Mr Bowler said the council has clear policies that promote residential living over FIFO accommodation, and he is adamant the camp will be temporary.

Accommodation crisis to worsen

The city's accommodation crisis became apparent for BHP during a month-long shutdown at the smelter last October when it struggled to find 650 short-stay accommodation rooms for contractors.

Demand for workers accommodation is only expected to grow with a $1.5 billion, three-year expansion of the Fimiston Mill at the Super Pit gold mine. 

Gold miner Evolution Mining has also committed to a $250 million, two-and-a-half-year expansion of its Mungari mill. 

This week, accommodation shortages led to the property developer behind a new 122-room resort at the Kalgoorlie Golf Course being granted permission by the council to park up to 40 caravans on site for 18 months. 

Kalgoorlie-Boulder's median weekly rental price has risen 14.6 per cent to $550 a week in the past 12 months, according to the Real Estate Institute of WA, which today advertised four-bedroom houses at up to $1,500 a week.  

Record FIFO numbers

The massive influx of fly-in, fly-out workers to the city also has Kalgoorlie-Boulder Airport on track for its busiest year on record.

In the first nine months of this financial year, there were 277,841 passenger movements through the council-owned airport for a $9.7 million profit. 

The current record of 305,102 passenger movements was set in the 2018-19 financial year.

But after the airport's busiest March ever, with 36,399 passengers during the month, that record looks set to be easily eclipsed when the June quarter data is released later this year.