Australia’s mining jobless rate surges

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By Leith van Onselen

The Australasian Institute of Mining and Metallurgy (AusIMM) has today released research showing that unemployment amongst professionals in the Australian minerals industry (including geoscientists and engineers) has increased from less than 2% to almost 11% in just 12 months.

The survey, which was conducted across the Institute’s 13 500 members, showed:

1) Unemployment among Australian minerals professionals increased from 1.7 per cent in July 2012 to 10.9 per cent in July 2013.

2) In July 2012, only 2.9 per cent of employed minerals professionals reported that they wanted to work more hours (the ‘under-employed’). By July 2013, many of those professionals found themselves unemployed. Among those still working, there was a threefold increase in reported under-employment, with a 9.1 per cent rate of under-employment.

3) Nearly 60 per cent of those surveyed believed that there will be fewer professional jobs available in a year’s time.

4) The survey shows some significant regional variations, with New Zealand professionals faring slightly better than their Australian counterparts, reporting an 8.7 per cent rate of unemployment in the New Zealand minerals industry (see next chart).

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5) After many years of focus on the need to increase the pool of skilled professionals in the Australian and New Zealand mining sectors, there are now many highly skilled professionals who are unemployed (or working fewer hours than they want to work).

AusIMM President Geoff Sharrock said The AusIMM’s research confirmed strong anecdotal evidence of considerable pain and disruption within the professional ranks of the minerals sector.

‘Traditionally, a downturn in mining industry investment and operations impacts first on exploration geologists and then other professionals, including mining and metallurgical engineers,’ Mr Sharrock said. This research shows that the impacts this time have been sudden and have bitten deeply into the professional employees who are central to finding, developing and running the mining operations that underpin our economy.’

AusIMM CEO Michael Catchpole said the increases in unemployment and under-employment are being felt right across the mining sector and are affecting people working for the major mining companies as well as those involved in exploration and consultancy work.

And to think the unwind in mining-related capital expenditure has barely begun:

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Comments

  1. I can’t say how I know, but the word on the ground makes this report sound optimistic.

    WorleyParsons, for one has cut its staff of geoscience engineers from 26 to 7. (I think those are the numbers). Many others have made similar cuts.

    The public service is a good place to be right now in WA.

    • Sadly geo’s are always hit hard in any downturn – usually before the downturn is even apparent.

      And most have too much ‘spirit’ to ever join the ps.

    • All your major EPCM and design companies have been shedding staff for almost a year, because the laundry list of pre-feasibilities and further expansion project prospects dried up effectively overnight. Billing rates are being slashed in a race to the bottom for even the smallest jobs (which 2 years ago would have been totally ignored). My company is still letting people go, and there’s very little real prospects in sight for the next six months at least. I expect the next phase of the downturn will hit your major construction contractors – John Holland, Leightons, Monadelphous, etc. as jobs pass peak-manhours and construction of current projects starts to unwind.

      Easy come, easy go. That should be the industry motto.

  2. If mining directly employs 10-12% of the population, would it be naive to assume that is around 1% of the Australian workforce?

    • Don’t be silly they will be shifted onto some program and out of the official employment data; therefore no increase in unemployment.

    • The 10% figure comes from the RBA and is for direct and indirect employment from mining. This report is much more narrow, and focusses on a smaller sample of professions, so it can’t be extrapolated like that.

    • I thought mining directly employed around 2% of the Australian workforce. Perhaps someone better informed could confirm?

    • The AusIMM is made up of professionals so is not a large percentage of the mining workforce and also not representative of their employment situation.

      • Sure, but the article says “AusIMM CEO Michael Catchpole said the increases in unemployment and under-employment are being felt right across the mining sector”.

        Do we have any reason to believe it isn’t widespread across all jobs in the sector?

      • Arrow, not at all, sorry I didn’t mean to imply it wasn’t indicative of widespread job losses, but they don’t survey outside their narrow membership subset of the mining industry so I wouldn’t try to quantify the degree to which others are impacted by extrapolating this survey, this is what I meant by representative.

  3. Phil the engineer

    It’s an employers market at the moment… Competition for work in non-mining sector engineering is fierce at the moment too as everyone is looking for other stuff to do. If you want some great value for money design work done just give us a call ;).

  4. “there was a threefold increase in reported under-employment, with a 9.1 per cent rate of under-employment” (from 2.9%)

    quite often on this site and others i see the word ‘fold’ used like it is a multiplier.

    i thought that 3 fold was like folding a piece of paper 3 times so instead of 3 fold = 3X, it should = X*(2^3)

    so a 3 fold increase from 2.9% would be 23.2%

    but i dont know, i might be wrong

  5. Everything hinges on unemployment. Once unemployment rises above a certain level, it initiates a powerful positive feedback loop with a lot of inertia behind it. This holds true for total unemployment as well as specific industries – e.g. I’d say retail and manufacturing have already well and truly passed their inflection points, and now it looks like mining’s tipped over as well.

  6. When Boart Longyear goes into administration that’s when we’ll know the mining industry is at a tipping point

  7. I’m hearing the same things about Electrical Engineering in Brisbane. A couple of friends were recently let go, and the company my wife works for hasn’t picked up any new contracts for nearly a year – she’s heard rumors they’re considering closing the Brisbane office.

  8. Yep, my mate at Newman in WA was let go last week after about 3 -4 months project along with all the others and no new job offers either.
    It took him 2 years applying before he got a start and he out class any 457 fitter/engineer any day….but he had to pass some silly tests probably designed by some American tosser before he could get the job….and even he said the pay and allowances are just so excessive that its pure stupidity but if this is the Australian mining way so be it.

    • he said the pay and allowances are just so excessive that its pure stupidity

      It’s not just in mining …