Skills Shortage? What Skills Shortage?

The mining industry is on the cusp of massive expansion in Australasia with skills and labour in huge demand.

Consider the statistics.

The value of commodities mined and quarried in NZ continues to increase. The value of coal, metals and industrial minerals production reached $1.347 billion an increase of 17.9% on 2004 values. 2005 was a record year for coal with national production reaching 5.276 million tonnes.

Indications are that this is going to continue to grow. Latest Crown Minerals statistics show that national prospecting and exploration expenditure rose to $38.5 million in the year ended March 31 2006 — an increase of 88% from the $20.4 million spent in the March 2005 year while the 2001 reporting totalled only $2.48 million.

Between 2004 and 2005 the mining sector had the second fastest FTE growth on the West Coast (55%) behind civil engineering (80%). Nationally mining experienced an 11% growth (equal second fastest growing industry).

In New Zealand there are major mining developments in both the North and South Island that will require a significant skill base.

The New Zealand industry faces huge competition for skills and labour with the rapidly growing Australian mining industry facing a requirement for 70,000 new workers by 2015. We have already seen Australian operations advertising for experienced staff in our local newspapers.

Over the past five years staff recruitment (skills and labour) has been a major issue for New Zealand. Over the next two years there will be a demand for at least 250 people. This is an increase of some 30% over the existing West Coast mining workforce.This situation will be compounded by current population trends. West Coast demographics show the population is declining and aging; there is continual movement off the coast particularly in the younger age group.

The number of young people leaving West Coast secondary schools is not going to change significantly apart from the blip around 2007-2009. 33% of this potential workforce coming out of schools will leave the region.

The region’s total population is predicted to decline by between 4 -20% by 2021. This represents the largest predicted population decline in the country and is in sharp contrast to our Canterbury and Nelson neighbours.

Unemployment in the region is low; we have a working age population that is currently fully utilised. There is no pool of available labour waiting to be offered work.

In summary, the West Coast will have an aging work force with a predicted smaller group of people coming through the system to replace them at the same time as an expanding local mining industry requires a larger skilled pool of staff.

Is this a cause for concern?
If so, how does our industry best meet these challenges?

Industry representatives met recently to discuss training and employment needs of the West Coast minerals industry at a Mining Industry Workshop organised by Minerals West Coast. The group asked four major questions: does industry agree we have a skills shortage in the West Coast minerals industry, and if so what is causing it? What are the current initiatives in place to address the situation? and what more can be done?

Some of the comments:

What is causing the skills shortage in West Coast Minerals Industry?

• School leavers and graduates prefer to choose careers perceived as clean/green, the skills needed in the modern mining industry are undersold.
• Many West Coast school children seem to have low career aspirations. They would like to be digger drivers, not mechanical engineers or geologists.
• There can be a negative perception of the mining industry in the community.
• The dismantling of the traditional apprenticeship schemes in the 1990s has markedly reduced the number of qualified tradespersons in New Zealand.
• An ageing workforce has resulted in fewer people looking for work in all sectors.
• Australia/Canada will almost always ‘outgun’ New Zealand in terms of remuneration.
  

What are current initiatives to counter this?

• Innovations in working conditions have added to competitiveness.
• Some firms have in house programmes to attract and retain staff, locally nationally and internationally eg informing, settling and assisting the partners and children of miners new to the region.
• BUT there is no collective or formalised effort of local or national agencies, councils or industry to address the issue strategically.
  

What else can be done?

• Investigate the concept of “FIFO” (Fly-In and Fly-Out) to access a more widely distributed potential workforce.
• Prepare and present an information package on what West Coast living is like for spouses/families of potential recruits to the West Coast.
• More effort on attracting local Coasters to the jobs we do have here.
• Provide more support for families when they get here - a Settlement Officer – making use of community networks.
• Retraining of workers in other industries to enter the mining industry. Investigate initiatives for encouraging people to find a change into mining, similar to recent campaigns for the dairy industry.
• Utilise the entire WINZ network through NZ to let people know of employment opportunities in Mining.
• West Coast Development Trust to assist with ways of promoting the West Cost region through publications and website.
• Promote mining industry careers in schools and through all the community to help change the prevailing attitudes about mining.
• We need to ‘market’ the industry.
  

At the end of the workshop the group had arrived at ten conclusions.

1. There is and will be a skills shortage in the industry for the foreseeable future.

2. The development of more introductory and specific training capability – especially Coast based – would be advantageous, but how this would be supported or structured was unclear.

3. The skills shortage is real; it varies from employer to employer and is to some degree dependant upon ‘workstyle’ and conditions.

4. This skills shortage will impact upon business operations, production and profitability.

5. Competition exists for staff, but is considered the norm and most operators accept this as status quo.

6. Competition was traditionally confined to within the Coast, has gone global with Coast operations now having to compete with other major mining areas such as Australia, Canada and Africa for skilled staff.

7. Each employer has individual ways of dealing with the issues; some have a number of in-house programmes in place to support recruitment.

8. As yet there is no clear urgency or will to act collectively as an industry and work with training providers to develop, or support the establishment of training capability or capacity on the Coast that will address either immediate or longer term strategic skills shortages.

9. Consideration should be given to there being more emphasis on the need to interact closely with learning organisations (including those outside of the West Coast), central and local government bodies, and agencies to disseminate information about the industry's employment needs.

10. Labour and skills shortages will affect all industries and competition between sectors for staff, and will inevitably be more pronounced in the future.

Participants will be asked to convene again in the New Year to progress a West Coast
industry position to address labour issues.

Keith Brodie Project Co-ordinator

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