ABC goes to work for mining capital

By Leith van Onselen

Apparently, Western Australia is facing another mining boom and a chronic shortage of workers. From The ABC [my emphasis]:

Last time the workers flew in from all over the country and abroad to earn the big money on Western Australia’s iron ore mines. Companies were offering ridiculous wages and conditions.

But when the mining boom ended, the workers moved on.

Five years later and the iron ore game is again ramping up, but poaching the workers needed might not be as easy this time around.

“We’re already seeing a bidding war in certain occupations and skill sets,” BIS Oxford Economics senior economist Adrian Hart said…

The rapid turnaround in fortunes in the jobs market shows just how much weight the iron ore heavies have when they pull the trigger on new construction.

BHP, Rio Tinto and Fortescue Metals Group are building new mines — all at the same time. This will require about 6,000 construction workers…

Adding to the problem is a dramatic fall in the number of students studying mining engineering…

Based on data from eight Australian universities, the number of engineering students set to graduate will fall to 50 a year by 2022, according to the Minerals Council of Australia…

“I think through South-East Asia and the Middle East and India — that’s going to be our new target market for mining engineers,” Mr Sala Tenna said.

Clearly this is a ruse to open the immigration floodgates and employ cheap foreign labour. Because any objective analysis of the data would see that capital expenditure in Western Australia has collapsed:

Dwelling construction has collapsed:

Labour underutilisation (i.e. both unemployment and underemployment) has skyrocketed:

And there is a massive oversupply of engineers (including mining engineers), according to the Department of Employment’s latest skills shortages report:

Labour market conditions for engineering professionals remain soft, particularly when compared with those prior to the Global Financial Crisis. None of the occupations assessed in 2017 were found to be in shortage…

Shortages have not been apparent for any of the assessed engineering professionals since 2013…

In 2017, employers attracted large numbers of applicants (on average, 39.9 per vacancy of whom 28.3 were qualified).

Although the average number of suitable applicants per vacancy has fallen from 3.6 in 2014 to 2.5 in 2017, there are considerably larger numbers than there were prior to 2013…

There is no evidence of shortages of mining engineers, with all advertised vacancies filled. Demand is currently subdued in line with reduced mining investment and is evidenced by the substantially low numbers of internet vacancies. Supply to the occupation is strong, with employers attracting large numbers of qualified applicants…

On average, employers attracted 28.3 qualified applicants per vacancy, almost nine in ten of whom were considered by employers to be unsuitable. The main reasons for unsuitability were lack of sufficient experience in the profession (for example, recent graduates) or lack of experience in a particular specialisation or industry sector…

Moreover, with giant LNG projects like Gorgon, Wheatstone and Ichthys all winding down, there is no reason to believe that mining construction will ramp-up any time soon.

[email protected]

Comments

  1. reusachtigeMEMBER

    Well it’s true, we are entering our next boom which will no doubt be the biggest yet.

    • deustchedropper1

      Lol, you’re worse than a cheap whore……’Its the biggest I’ve ever seen”

  2. You are correct this is a ruse to open the floodgates to cheap imported workers. Frustrating as all hell.

  3. Good analysis. From an employers point of view, there is a huge shortage of engineers – cheap engineers. Just like there is a shortage of 25c hamburgers, 5c cigars and $100 cars.

    Expect to see increased business lobbying for visas which let businesses pay foreigners half of what locals earn. Two weeks ago Gerry Harvey and Scott Farquar (from Atlassian) were talking about this. See http://www.news.com.au/finance/billionaire-plea-for-cheap-labour/news-story/21bb2c176d529532929714bbfdd10ef6

    Just as business needs tax cuts to compete with foreign companies, they need wage cuts, too.

  4. The miners are adopting more and more high-tech and automation. The thing that is holding back more adoption (particularly with autonomous trains) is the unions.

    This may actually be a play for mining companies to flood the country with immigrants to weaken the power of the unions, while at the same time driving down wages. Sound familiar?

  5. YEars ago, when blu ray came out, i saw copies of all the documentation and procedures necessary to construct and operate an IO mine placed on that disc
    as far as i know copies of that disc went as far as russia, mongolia, for the development of mines there.
    What was still missing was the field personnel to manage and operate those mines, and you can tell from the issues gina had in getting her mines going even local talent wasnt good enough.
    But is we bring in people from overseas and train them into how to operate an mine, we are really shooting ourselves in the foot.
    this free trade agreements is rubbish, sooner or later we need to put straya first, cos coming second globally where we have the option to be global leaders is very foolish.
    Boom engineering has time n Kwinana, maybe that could poach him back

    • ‘Gold rush’:Like most everyone else here, Pando was lured to the sand mines by the prospect of big pay. Even unskilled newbies can pull down $US19 an hour, almost triple the state’s $US7.25-per-hour minimum wage.
      A student at Texas Tech University, Pando took off the spring semester to start working at Black Mountain. Six months into the job, he’s making $US28 an hour.

  6. Lets face it. These people are attempting to destroy Australian society. I read with interest on weekend changes to the Pharmacy industry afoot. Seems there is talk of online purchase and postal delivery of drugs. That would would be the nail in the coffin for the Aussie Battler. The country would be awash with prescription drugs and we will have our own opiod epidemic.
    Clearly that is the plan. Low Wage Jobs, Casual/Part Time jobs.. expensive housing poker machines and sex trafficked girls in massage parlors in every suburb then to kill of the battler totally a prescription drug epidemic.

    When it really turns to shit they will start some needles war and send the lower classes off to die in some god forsaken place.

  7. I couldn’t believe that article either. Thought I was reading an AFR junket piece for a minute rather than quality journalism from our public broadcaster.

    • I agree with all that, and don’t think that there is a skill shortage, nor should we be boosting WA’s population.

      However, I have heard from the shop-floor level and I can tell you that some of the engineering services companies are gearing up. I don’t think the people I talk to are making this up. I am hearing that there is a burst of hiring now, irrespective of LvO’s historical graphs. Companies may not need the boots on the ground today, but they know they will need them soon.

      The big projects on Barrow, Wheatstone etc are all long gone and so are many of the jobs. They are not winding down, they have wound down.

      Now we have several Li mines and processing plants, with +400 jobs at Greenbushes alone and more to come as the downstream processing ramps up into 2019 at Kemerton, Kwinana and possibly Kalgoorlie. 2-3 new iron ore projects (RIO, BHP & FMG) will ramp up through 2019 as well as a couple of new gold projects in construction (GOR) and in planning (CMM).

      Perth Basin gas field development is planned for 2020 and beyond. The Savannah nickel-copper mine (PAN) is reopening and Mincor is mining gold ahead of possibly reopening its nickel mines as well.

      New infrastructure projects are also in play with the rail link running multi-year, while the dog box construction continues apace and the number of cranes on the horizon does not appear to be falling.

      These Macrobiz charts a fantastic, but they are historical.

      Recent data is showing rising rental pricing in the Pilbara.

  8. I know most people don’t give a toss about the ICT industry, but ICT is the canary in the coal mine – this is exactly what happened during the early 00’s after the IT bust of 2000.

    During the IT bubble ridiculous salaries were offered: $100k-$130k, it took fifteen years for salaries to even get close to returning. Salaries clawed back quickly during the IT bust, people took a $30k decrease in pay.

    To survive the IT bust the IT recruitment industry kept bangin’ on about skills shortages way after news about layoffs had subsided, the skills shortage stayed forever whilst the IT boom went home and the government bought it.

    Then the multi-national outsourcing companies came in and cleaned up as the pathway to cheap visa workers had been made, and then the IT recruiters were the next to go.

    Noone cared because IT people were earning too much.

    History repeats.

    • IT now pays $2000/month. If a $100k salary was ridiculous, they could have hired smart young Aussies/Kiwis do it for $30k/year. In 2004, Aussies smarter than me were working in rubbish jobs for $16/hour.

  9. Lmmao…. I remember almost 20 years ago when CAD monkeys and engineers were put on farms in say the Bahamas, but yet mobs like Bechtel were still charging 100+hr. I was up to Rev. 22 on a job about then, hows that for a billable. Oh and this was right around the time stuff started getting manufactured in say India [sub standard] and shipped over here for QC and rework. Still heaps cheaper for the Q balance sheet in the short term but long term maintenance due to poor quality materials and ho hum QC is another story.

    On the bright side profit was taken in the here and now… for some…

  10. Uranium GeoMEMBER

    There is certainly an uptick in mineral exploration activity with most of my work being Cu-Au and some Li. At this stage I only consult/contract however companies try to wave the carrot of a full-time job (no such thing in my game) in return for relocation as a residential worker. There are still a lot of people on the sidelines who are once bitten and twice shy living on the east coast and will not relocate so the WA operators are having a hard time getting them to move back.