The Australian mining sector is sustaining its positive outlook with Newport Consulting's Mining Business Outlook Report revealing the dark days of the sector's downturn are well and truly over. However, the report shows mining leaders are now grappling with ongoing skills shortages and cost pressures.
|Image source: Newport Consulting|
According to the 2017-18 report, which features an exclusive interview with WA's Mines and Petroleum Minister, The Hon. Bill Johnston MLA, the sentiment among the mining industry is positive. The number of miners showing cautious optimism has jumped 55% since 2015, with almost three-quarters of leaders showing renewed confidence in the sector's growth.
With automation fast becoming a reality for mining operations, other key takeaways from the report include a push from mining leaders to embrace new technology. Automation and Big Data are top of the agenda for mining leaders, with 21% of respondents believing automated haulage vehicles will be the top technology influence to impact the marker over the coming year. Another key area of technology investment is drones, which are increasingly being used to map, survey and explore mines across the country.
Going forward, companies remain bullish on price forecasts, with more than half of mining leaders predicting an increase in pricing over the next 12 months. However, thermal coal remains the exception, with the commodity likely to face more headwinds than metallurgical coal.
Coinciding with a price growth is a noted rise in capital and investment spending. Following on from an uptick in spending in 2016, most miners will dig into deeper pockets, with 42% of leaders moderately increasing spending in 2017-2018, up 23% from 2016. Miners remain concerned about costs, particularly in energy and labour, with companies calling to Canberra to provide support in these areas.
With the Gig Economy set to redefine roles and disrupt job security for miners, Newport Consulting Managing Director, David Hand, says a spate of mining companies are concerned that Australia will face a growing skills gap, particularly in the areas of technology and automation.
"We spoke to many companies of all sizes that voiced concern over a widening skills gap, giving way to a pressing need to upskill and re-train the workforce. Miners must be able to meet the new digital demands of Australia's mining future," he said.
With a growing gap in the number of technical employees trained to manage future autonomous roles, Mr Hand said there were signs that the mining sector was getting on the front foot to ensure its workforce remains agile and flexible.
The report also showed that over one-third of leaders remain worried about the potentially adverse financial impacts of market consolidation and M&A activity, making some companies reluctant to form new partnerships.
However, as companies continue to look for high quality resource projects across the globe, and as market consolidation continues across geographical borders, Australian miners have been urged to embrace strategic partnerships to retain a competitive edge.