Yes, they will be out of a job in some cases if they insist on living local.
http://www.gladstoneobserver.com.au/news/mining-operations-excluding-local-jobseekers/2195492/
I'm reading this to mean that they're recruiting locally in very limited numbers, not that they're sacking existing employees who want to live locally. This isn't illegal and perhaps their stats indicate that there's a clear commercial benefit to recruiting elsewhere.
My own business stats indicate that when hiring admin staff, middle aged women with school aged children are a good match to my needs. Nothing stopping me from hiring that person over the young single next door neighbor who's just as qualified on paper, but in my opinion won't fit the company culture as well.