Immigration Minister Chris Bowen announced the landmark enterprise migration agreement, which is aimed at helping to reduce the critical skills shortage currently plaguing Australia's mining sector.

The agreement, which has been in the works for a couple of years, was proposed by a taskforce chaired by former parliamentary secretary for WA Gary Gray.

Speaking to journalists at a press conference today, Special Minister of State Gray said the immigration agreement with Roy Hill would ensure the project came on line on time without any delays.

"The idea of the enterprise migration agreement is to meet skills needs and the construction needs to get that mine built on time and on budget so that one billion tonnes of iron ore can be exported over the 20 year mine life," Gray said.

About 8000 workers are required for the project's three-year construction phase, with the EMA allowing for 1715 workers to fill the skilled requirements not currently available in Australia.

The workers will be eligible to come to Australia under the 457 visa program.

The EMA will cover key trades currently in demand, including electricians, mechanical fitters, scaffolders and boilermakers.

With more than $10 billion slated to be injected into the Roy Hill development, Gray said about 83% of that expenditure would be spent on local jobs and the local industry.

Gray said the EMA would allow Hancock Prospecting better management of its own workforce.

"What we are looking at here is jobs that are required during the construction phase and then not after that," he said.

"They are international, seasoned project construction workers."

The workers will have the opportunity to apply for Australian citizenship, with WA currently recruiting half of 457 visa holders as permanent residents.

Under the EMA, Roy Hill will also provide up to 2,000 training places for Australians, with more than 200 apprentices and traineeships being offered.

In addition, about 100 Indigenous Australians will be able to work in the construction.

Bowen said the agreement was vital to ensure WA kept up the demands of massive resource projects.

"The government's first priority is always ensuring jobs for Australian workers, but there is a need for temporary workers to help keep our economy strong," he said.

Projects eligible for the EMA need to have a capital expenditure in excess of $2 billion where a workforce is tipped to be more than 1500.

The agreement with Roy Hill is the first of its kind and could spur other major mining hubs like Queensland's Galilee Basin to follow suit.

The move comes at a time where mining companies are reeling from the critical skills shortage, with about 70,000 skilled workers tipped to be required for major resource projects over the next five years.

"We need enterprise migration agreements to cut red tape for very large resources projects such as Roy Hill which have a very strong demand for labour," Bowen said.

Gina Rinehart's Hancock Prospecting will hold a 70% stake in the Roy Hill project, while South Korea's Posco and Japan's Marubeni will have equal 12.5% interests and South Korea's STX the balance.

To date, more than $1 billion has already been spent on Roy Hill, which is targeting first production by 2014 before ramping up to full capacity of 55 million tonnes per annum of lump and fines the following year.

WA's Chamber of Minerals and Energy welcomed today's landmark agreement.

CME director Nicole Roocke said there was a high demand for skilled workers for upcoming resource projects.

"Industry's first preference will always be training and employing local people first however targeted skilled migration has an important part to play," Roocke said.

"For the resources sector to continue to lead the national economy and deliver benefits to the community, new projects have to get off the ground.

"Ensuring there is an adequate pool of skilled labour for these projects is therefore vital."

The Association of Mining & Exploration Companies also applauded the agreement, saying the EMA highlighted the extent of the growing skilled labour shortage in Australia.

"AMEC understands that prior to applying for an EMA, proponents of the Roy Hill project conducted extensive research through an independent labour market analyst firm into the skills required for the project and the availability of those skills in the Australian workforce," AMEC national policy manager Graham Short said.

"The report recognised there was a significant short fall."

However the agreement was not met with welcome arms by the Australian Manufacturing Workers Union, which described the move as unfortunate because it would set a low precedent for future development in WA.

"What is news to us, is that the Gillard government has allowed this project to go ahead with such a low bar that it won't even compel resources companies to properly test the labour market to source local labour before bringing in thousands of overseas workers," AMWU state secretary Steve McCartney said.

McCartney said the decision lacked common sense.

The announcement comes after federal Resources

Minister Martin Ferguson told the Australian Mines and Metals Association 2012 national conference that addressing the skills shortage and minimising regulatory red tape were crucial if Australia wanted to retain its competitiveness in the resource sector.