“The deteriorating productivity of Australia’s mining industry will continue to worsen unless there is a concerted effort to lift both performance and the level of skills needed to protect and grow our position as the world’s third largest mining country in terms of minerals commodity wealth.” The blunt warning was issued by the Adelaide-based Resources and Engineering Skills Alliance (RESA) – one of the few bodies nationally tasked with bridging the skills, training and workforce gaps in Australia’s A$737 billion value resources sector. Speaking in Adelaide on the second day of the 2013 South Australian Resources and Infrastructure Conference, RESA Chief Executive, Phil de Courcey, said the sector’s productivity profile was at odds with its wider achievements compared to its global peers in generally capitalising on the mining and commodities boom post the GFC.
de Courcey said there had been little analysis of why the mining industry was perceived as being “well behind the productivity game” compared to other industry peer sectors “and more critical research into the underlying causes is required”.
He told delegates the current skills in the sector, as well as those skills which were lacking or in short supply, remained the biggest impediment to lifting productivity and with that a wider economic contribution to state and national economies from mining.
“This lack of required skills is also driving the current cost blowouts on many of Australia’s major resource undertakings in both mining and energy,” de Courcey said.
“No better proof of this is there than in a review of mining’s labour productivity index which peaked between 1995 and into 2002 but has been in severe decline ever since while the index covering other market sectors excluding mining, remains on the ascendancy.
“Worse, if we compared gross values added per hour worked, mining’s productivity has collapsed from its euphoric highs of around 2001-2002 to now be below agriculture, forestry, fishing, manufacturing and an index measuring productivity in a basket of 12 selected industries.
“The role of inflated wages in lowering mining productivity also needs assessing.”
de Courcey said Australia’s miners needed to ask themselves did they respect enough the potential to be the world’s number one mining country. If so, they needed to focus on lifting productivity through a range of options including automation, diversity strategies, better career advisory services, workforce optimisation, improved project scheduling and simulation and demand-driven training.
He said that while lifting miners’ productivity would be challenging, it should be seen as a vibrant opportunity. He pointed to South Australia particularly as one mining state with “‘amazing potential” and “still growing” – but there were serious skills gaps in the State in at least 16 resources specific professions and trades.
“Improving productivity delivers multiple benefits,” he said. “These include attracting increased investment, speeding up construction schedules, locking down secure employment and wages, creating an active environment for applying technology and innovation and ensuring Australia continues to optimize its share of commodity price cycles.”