Digging Deep

Australia's Mining Sector Will Need to Solve a Talent Crunch to Hit Its Targets

 
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PHOTOS COURTESY OF RIO TINTO

Rio Tinto's Silvergrass iron ore mine in Western Australia. At right, an iron ore mine in Pilbara, Australia

Iron ore mining projects are on the rise again in Australia. After prices plummeted in 2015, the sector is expected to see an increase in export volumes of iron ore from 847 million metric tons in fiscal 2019 to 874 million in fiscal 2021.

Most of the country's major mining companies have announced massive new initiatives. BHP is building a US$2.9 billion iron ore mine, while Rio Tinto started construction on an AU$3.5 billion project. Fortescue, meanwhile, has two projects in the works: an AU$3.6 billion mine planned for a 2022 completion and an AU$1.7 billion mine that will open at the end of next year.

In all, the next few years will bring an estimated 15 new iron ore mining projects to Western Australia—and a huge influx in construction jobs. BHP's project will create about 2,500 construction jobs; Rio Tinto's initiative, over 2,000; and 3,000 will be created with Fortescue's largest project.

Yet the strong demand for resources is hitting a sector already plagued by talent shortages, which could hamper project schedules and budgets. Mining companies will have to find and train people skilled in construction, engineering and—as the industry becomes more automated—IT. “We are seeing increased demand for some skill types, and we are seeing more competition for jobs,” Chris Salisbury, Rio Tinto iron ore chief executive, told the Australian Broadcasting Corp.

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—Chris Salisbury, Rio Tinto, to the Australian Broadcasting Corp.

To meet that challenge, the industry will have to leverage lessons learned from the 2004-2012 boom in mining construction projects. At its peak in 2012, Western Australia had AU$287 billion in mining projects that were in construction or under consideration, compared with AU$108 billion in 2018, according to the Australian Department of Mines and Petroleum. To secure the talent it needed at the time, Western Australia flew in tens of thousands of workers from other Australian states and from overseas.

Mining companies will likely continue to hire skilled workers from outside Australia—and have to navigate those team dynamics. Experts also say that project leaders and the government will need to train and retrain locals to undertake the mining construction work.

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One way that Rio Tinto could stay ahead of the skills shortage is through automation. Rio Tinto is one of the first companies to adopt autonomous trucks, drills and trains in order to drive down costs, and its new mine will be its most technologically and digitally advanced project to date. While the company has not said if automation will result in fewer jobs, it has noted that the project will create more highly skilled positions.

As automation gains a foothold in mining, the industry will need more people with IT expertise. “It is not only skilled tradespeople, engineers and geologists the industry needs,” Tom Reid, head of policy and public affairs, Australian Resources and Energy Group, told Mine Magazine. “It also requires qualified data scientists and programming experts with more high-tech qualifications.”—Novid Parsi

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