A beautiful way to build a business

Entrepreneurs

Majority Indigenous-owned company SX5 is helping to heal the land damaged by some of Australia’s biggest mining companies.
Kenzie Smith (foreground) and Ralph Keller. | Image source: Stef King

The SX5 Group might be all about autonomous vehicles and value statements and other such modern concepts now, but the company’s name goes back to a time before fences, mines and safety boots.

Kenzie Smith’s father, Jack, used to ride out with a team of cousins and brothers into the back country of Western Australia’s Pilbara, the vacant Crown land, to muster brumbies and any unbranded cattle they could find.   

Unusually for an Indigenous man at the time, Jack was allocated his own brand – 6UB – in the 1940s, changing it to SX5 in the 1960s.

“My dad went out there,” recalls Smith, now an elder of the eastern Guruma people and co-owner of earth moving and civil engineering business SX5. “He was trapping them and selling them to stations. Anything that ran on vacant Crown land my dad took them. When we weren’t mustering, we were into contract fencing on different stations. You’ve got an original Indigenous enterprise right there.”  

Jack’s business grew out of Rocklea and Juna Downs Stations where Smith grew up. The new owner of both of those enormous old cattle stations – global mining giant Rio Tinto – reflects the new economic tide in the Pilbara.

“Rehabilitation is a beautiful place to be for traditional owners …They get to heal the land. Make it feel good.”

– Ralph Keller

Twenty-five years ago, when Smith was trying to get Rio to recognise his people’s traditional rights and to create Indigenous work opportunities, he and his mate Ralph Keller were talking about getting hold of a dozer and a grader and trying to get contracting work with Rio. They needed a company name and the old brand, SX5 seemed a logical choice. “It was something my dad created so I thought we’d carry it through, instead of me trying to come up with another name,” says Smith, managing director and 51% owner of the private company.

They launched the business in the days when you could still wear a singlet and shorts to work and have your dog in the ute. It was hard going, with plenty of pushback from competitors and clients. 

“We were trying to be a good contractor,” recalls Keller. “We were trying to meet their standards – difficult. We were Aboriginal which makes it hard. And people don’t like change. We just had to keep fighting forward until the times catch up and education comes into play and we get accepted. We’d just say to each other, ‘We’ve just got to be here for each other tomorrow’.

“Our other saying was, ‘Don’t come to a fist fight if you can’t take a broken nose’.”

Co-founders Ralph and Cherie Keller and Kenzie Smith. | Image source: Stef King

Keller has sympathy for the middle managers who had made life tough, recognising that their careers were being judged on production and profit, not community engagement. 

“The generals upstairs were committed, but unfortunately the mid-management are the ones who’ve undermined us. A manager changes and everything changes. They bring in new contractors and they bring in a different point of view. Every time a new supervisor comes in, he plays a different role.”

SX5 expanded rapidly with the China boom in the early 2000s, and the yard filled with equipment, but the bust that began in 2014 saw it struggle to pay wages. “Every month we’d sell a grader,” recalls Smith. “There’s $200,000. Get rid of it. We need the money.” The yard emptied, and the 40-odd staff agreed to a 10% pay cut. 

They simply could not fold. They had been held up as a long-standing Indigenous success story. What would failure say to the younger folk? When there was little left to sell, they borrowed $30,000 for wages. They’d talk about being there for each other tomorrow, and about fist fights and broken noses.

“We just had to let the dust settle and all the rabbits come in and go – and think that our turn would come again … and it has.”

Perversely, things started to change for SX5 after Rio Tinto made world headlines in May 2020, by destroying the 46,000-year-old Aboriginal rock shelters at Juukan Gorge to access more high-grade ore at its Brockman 4 mine.

Executive heads rolled, including those of then chairman Simon Thompson and chief executive Jean-Sebastien Jacques.

“(Rio) lost its values. (It) put money before commitment and engagement. After (Juukan) we were all back in business. We were getting the attention we needed, after three, four, five years of screaming out to them: ‘You’ve lost that value. You’ve lost that connection and you’re losing it big time.’ Since then, they’re standing to attention now.

“Rio are doing some fantastic things – they always have done – just that some people had put production and profit before values.”

Rio’s new chief executive for Australia, Kellie Parker, agreed with Keller’s assessment in a recent interview. The company had “started to focus internally on our business processes, our outcomes, our safety, production and cost,” she says. “There is no community in that. There was no external feedback.”

 With Rio’s added emphasis on rehabilitating old mine sites, SX5 has pivoted to that field – a business model more immune to global iron ore price fluctuations.

“Rehabilitation is a beautiful place to be for traditional owners,” says Keller. “They get to heal the land. Make it feel good. For us at our age, at the last stage of our contracting life, to find sustainability for the business and to find something that connects us back to our land, you cannot describe it. It’s a beautiful thing to do.”

They’d never taken handouts, but in order to get back in the swing of things, they got performance guarantees from Indigenous Business Australia, then learned of the government body’s leasing options. The yard has begun to fill again. “It’s a big industry. It requires big earth moving gear. Your typical dozer costs $2.5 million to $3 million.”

The work involves reshaping enormous hills of mining waste into more natural forms, then respreading the topsoil that was scraped and put aside – but still containing viable seed – before air-seeding it with appropriate local species. “Our message is that we’re more connected. It’s more spiritual to us. It means more to us.

“Our rehabilitation work has now put us at a $25 million-a-year turnover. We have approximately 30 people involved. The building side of the business is $15 million with 20 people involved. All up, we’ve got about 60 people. About 35% are Indigenous and our plan is to expand on that.”

In July, the company took delivery of a semi-autonomous dozer to do some of the dangerous work on the side of hills without risk to a driver.

“That’s our innovation and advancement,” says Smith, “to separate us from yesterday for tomorrow.”


Mining’s impact

• Globally, mining occupies about 57,000sq km. Less than the area of Tasmania
• It is estimated 40% of all mines will close within the next 25 years
• 45% of countries have strict financial controls over rehabilition.