Skills shortage issue re-emerges

John Miller, Managing Editor

As the mining industry slowly recovers from the global financial crisis with new mining projects being initiated and existing projects expanded, the skills shortage issue is re-emerging.

The issue will bite particularly hard in resource-rich countries, like Australia and Canada, which are feeding burgeoning Asian economies.

During the pre-GFC boom, skills shortages hampered many new and existing mining projects.

Companies could have the right project and funding to get it off the ground, but a lack of competent workers often hindered progress.

Job losses caused by the GFC provided some relief as projects were put on hold or scaled-down but as the world recovers and new projects are announced, skills shortages are set to return to the forefront.

In Australia estimated growth in the resources sector over the next five years will create 136,000 new direct and indirect jobs, which is very impressive but an urgent issue that must be addressed now is finding where all of the skilled workers are going to come from.

It would be ideal if these jobs could be filled domestically but at this stage it seems highly unlikely and it is difficult to see them being filled by overseas workers with Australia facing significant competition from overseas projects.

In October 2009, the Australian Bureau of Agricultural and Resource Economics identified 74 advanced major resources projects in Australia with a value of Aus$112.5 billion and 267 less advanced projects with a value of $238.3 billion.

According to the Australian Bureau of Statistics, the resources industry directly employs 165,000 people, or just 1.5% of Australia's workforce, but with indirect employment included, the figure rises to around 530,000.

Clearly the mining sector is a catalyst for downstream job growth, particularly in the resource-rich states of Western Australia, Queensland, South Australia and New South Wales.

Of these, Western Australia presents the biggest challenges. It has just 10% of Australia's population but more than 80% of advanced resources projects. As well as the massive Gorgon liquefied natural gas project, which will require 10,000 jobs at its peak, there are also the Pluto, Wheatstone and North West Shelf LNG projects, Boddington gold mine, Sino Iron project, Brockman 4, Oakajee rail and port infrastructure, Worsley growth project, and BHP Billiton's iron ore expansion and Pyrenees oil project as the largest projects, each with a value of between $2 billion and $43 billion.

In a bid to address the skills shortage issue the Federal Government has established a National Resources Sector Taskforce, which is examining ways to encourage participation by local people as well as enticing skilled and unskilled people to move from other locations, including areas of high unemployment.

It is looking at fly-in, fly-out rosters, including training, retention, economic and social issues; examining bringing skilled people in from overseas; improving retention of existing employees; and targeting under-represented groups such as women and indigenous Australians.

It is a difficult dilemma but one that must be solved in order for Australia to benefit fully from its resources.

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