The Chamber of Minerals and Energy has reported that Australia will be experiencing another mining boom as commodity prices of iron ore and coal have lifted. Following the 11% increase in exports of minerals, metals coal and petroleum totalling $220 billion within the year, mining companies have started working on new projects and have renewed their investment in existing projects. As a result, about 20,000 jobs have been made available in Western Australia (WA). This article is part 1 of our Mining Series that provides an overview about the current mining sector in Australia. In part 2 we will cover the ways to resolve skills shortage that may result from this mining boom.
What are the major projects in the pipeline?
Iron ore projects are WA’s largest resources sector and account for half of the industry’s 52,869 population. Three key iron ore projects that are currently underway in the Pilbara region in WA are led by global mining companies – Fortescue Metals Group (FMG), BHP and Rio Tinto as further detailed below:
- FMG is investing $1.7 billion on its new Eliwana mine and rail project – creating up to 1,900 construction jobs;
- BHP has commenced construction on its $3 billion South Flank projects after being granted government approval; and
- Rio Tinto is looking to launch its $2.2 billion Koodaideri development next year – creating approximately 1,600 construction jobs.
According to the Australian Bureau of Statistics, the mining industry accounts for 1.9% of the national workforce with close to 226,000 people employed in full time or part time positions. The new mines are expected to create an additional 6,000 construction jobs.
What happened to the industry following the mining downturn?
Mines across Australia are recovering fast since the mining downturn that made about 60,000 workers redundant between 2012 and 2016. Since then, the mining, resources and energy sector has experienced strong growth Australia-wide. Employment marketplace SEEK reported that the sector has shown a 32% increase in job advertisements and a 16% increase in advertised salaries since July 2017. However, the type of roles advertised have significantly changed with roles within maintenance and operations increasing from 63% to 78% whilst those within exploration and geoscience surveying decreasing from 17% to 6%.
Kaixin Owyong, Economist at the National Bank of Australia stated that there has been a shift from capital expenditure hiring to operational expenditure hiring over the years. Kaixin advised that “more recently, commodity prices have lifted and firms are spending again on maintenance roles, which are needed to keep the capital stock running”. WA’s most recent skills shortage list has further revealed a growing need for automotive, construction and engineering trade workers. Various jobs such as cooks, cleaners, engineers and diesel mechanics are also in demand as mining companies are setting up camps close to the three major mining sites.
How is the workforce responding to the increase in job opportunities?
The recovery in coal and iron ore prices and the surge in mining activity has led to an increase in job opportunities in Australia’s mining sector. Tom Reid, Head of Policy and Public Affairs at Australian Resources and Energy Group (AMMA) indicated that “the outlook is positive in terms of job prospects in the Australian mining industry. Year-on-year job vacancies are up more than 30% and this rise is showing no signs of subsiding. Queensland and Western Australia remain the hot spots for employment opportunities. In recent months, the biggest occupational growth has been in operational management, with the sub sectors of metal ore mining, and coal and mineral mining, showing large growth. We are also seeing great demand for labour in more regional areas, in particular skills shortages in the Kalgoorlie Goldfields in WA.”
Multiple sources have reported that the industry is struggling to fill available positions. In the previous booming stage of the mining cycle, WA sourced workers from interstate, namely Victoria, New South Wales (NSW) and Queensland. However, this time around – it has been more challenging to source workers from interstate as each state has its own major rail and infrastructure projects underway. Queensland alone is advertising 942 resources sector jobs that are paying an annual salary between $100,000 and $200,000 this month.
Is the Australian workforce holding back?
Despite a national average salary of $150,000 up to $200,000, Australians have expressed increased levels of caution and have been slower in applying for a job in the mines. According to industry expert Mining Technology, the lack of interest for mining jobs are due to a change in attitude towards the fly-in/fly-out (FIFO) roster which involves flying in workers to the remote work site for intensive shifts and flying them back to their usual place of residence on a rotational basis. This method is preferred by mining companies as it is cheaper than relocating employees and their families to the remote work site or finding residential accommodation for FIFO employees. Research has indicated that Australians are no longer finding the generous salary as attractive as they are aware of the impacts of social isolation, limited work life balance and possible workplace issues on one’s mental health. A study published by the Medical Journal of Australia, anonymously surveyed 1,100 FIFO workers at 10 remote mining and construction sites and identified that more than a quarter suffered from psychological distress.
What is being done to attract employees to go on a FIFO roster?
Mining Intelligence company, Infomine, conducted an interview with miners and feedback received was that the standard of accommodation, facilities and mental support have largely improved since the previous mining boom. Mining companies are considering the benefits of a work-life balanced lifestyle for its employees and started providing gym facilities onsite, healthy food and support personnel. Whether this will be sufficient for people to relocate to mining camps and work as FIFO employees is however, yet to be determined.
For further information
In the next few weeks, we will be posting part 2 of our Mining series which will cover other skills shortages in the mining industry and share the actions that the industry is looking to take to resolve this issue.
If you would like to be connected with our network of skilled candidates within the energy and resources sector, please contact us on +61 2 9285 1000 for a confidential discussion. If you are a candidate looking for your next career opportunity, please view our latest available jobs or contact us to find out more about what exciting opportunities there are in the market.
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