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Aussie Miners Dig Deep for Talent

Mining is one of the most important industries in Australia, but worker shortages abound. Companies hope training programs will help address the problem.

November 21, 2008
Related Topics: Career Development, Basic Skills Training, Candidate Sourcing, Employee Career Development
Australia’s mining sector is on the cusp of an unprecedented boom. Its abundant mineral resources have fueled massive industrialization along the Pacific Rim, but especially in China and India. Mineral exports are surging, with no apparent end in sight. Revenue from the resources industry this year is likely to top that of 2007, which according to the Australian Trade Commission approached nearly $110 billion, including $52 billion in the country’s gross domestic product.

Yet unless companies are able to dig up skilled workers in equally abundant supply, observers fear the boom will swiftly become a bust. There are signs that a skills shortage already is hurting companies’ capacity for growth.

Even as demand accelerated in recent years, some mine owners shelved new excavation and postponed expansion of existing sites, mostly due to lack of engineers and mine operators, says Jenny Neumann of the Mining Skills Industry Centre, a government-industry partnership in Brisbane.

A 2005 report by the Australian government predicted that as many as 35,000 new people would be required to help mine companies keep pace, but that estimate may be out of date already. Since the report was released, Australia’s mining workforce has swelled from 100,000 to about 140,000, not counting workers in support industries such as transportation, construction, infrastructure and logistics, Neumann says.

Australian mining companies face a triple threat. Historically low unemployment and an aging workforce are exacerbated by voracious foreign appetite for the country’s raw materials, which include aluminum, bauxite, coal, copper, diamonds, gold, silver, lead, nickel, iron ore, tungsten, uranium and zinc.

Neumann says the pressure forces mining companies to show renewed interest in employee learning.

"The percentage of people entering the mining industry without mining experience is getting higher and higher. It places an incredible training burden on mining companies that they haven’t had to shoulder before," says Neumann, whose organization provides advice and other services to the mining industry.

Downer EDI Mining in South Brisbane, part of Sydney-based Downer EDI Limited, is seeing shortages across the board, particularly for highly skilled positions such as surveyors, chief electricians, engineers and plant operators, says Lee Byron, its employment development manager.

Those critical gaps are common throughout Australia. While mine owners and operators have the luxury of hiring unskilled people and training them as they go, that usually isn’t practical for contracting firms that run on tighter margins, Byron says.

Downer EDI, which is involved in about 30 mining operations throughout Australia, continues to offer monetary rewards to employees to encourage them to refer candidates to the company. Downer EDI also is shifting more job ads online, hoping the Web will be better able to reach mine workers, who tend to be nomadic.

More significant is Downer EDI’s new Masters in Action Learning curriculum, an 18-month program that teaches people the art of problem-solving and project management. Byron says nine of Downer EDI’s employees in Australia are pursuing the course, which is offered at a number of universities, including some in the U.S.

The program requires people to identify specific business problems and research solutions, and put in place a plan of action. Once implemented, the plan has to demonstrate results—whether the results are positive or negative doesn’t matter. What’s important, Byron says, is that employees learn to think critically.

"It’s like a Six Sigma approach [for process improvements], but in a bigger way," he says.

Learning for a fly-in, fly-out workforce
The action-learning approach illustrates Downer EDI’s evolving attitude toward employee learning. Byron says the 22,000-employee company wants to decrease its reliance on classroom instruction in favor of blended learning techniques.

Mentoring, informal one-on-one coaching and shorter, interactive sessions with facilitators should provide more targeted training to a highly mobile workforce, Byron says.

"The instructor-led classroom approach is not for our business. We’re miners working in remote areas, with people flying in and flying out," making it impractical to rely heavily on classroom learning, Byron says.

Mining companies across Australia are partnering with the Skills Centre and similar skills-development mining organizations to persuade universities to offer more programs online. Neumann, Byron and others say it is an approach whose time has come for the highly fragmented and skills-deficient mining sector.

People are needed across the mining sector to fill critical roles such as boilermakers, electricians, fitters, mechanics and truck drivers, experts say.

But no professionals are more highly sought than mining engineers. The Minerals Tertiary Education Council, part of the Minerals Council of Australia, has estimated that as many as 9,000 new mining engineers will be needed by 2020.

Some Australian educational institutions are trying to fill the void. The University of Queensland, Curtin University of Technology and the University of New South Wales in 2006 launched a joint venture known as Mining Education Australia. The University of Adelaide joined in June, extending the program across four states in Australia.

The goal is to churn out hundreds more new mining engineers each year to support exploration, extraction and production efforts. But even the consortium’s best efforts probably will fall far short.

Mehmet Kizil, a professor who heads the mining program at the University of Queensland, estimates that companies easily could employ at least 400 new engineers a year.

The problem is, "we can only graduate about 150 engineers next year—maybe 200," Kizil says.

In an ironic twist, past efforts at career advancement may have backfired. Neumann and Kizil both say many companies have scrapped internal "graduate programs" in which new engineers rotate to different mines. Usually extending for at least two years, the programs are aimed at giving the engineers exposure to various aspects of mining, including operations and blasting.

But companies are gradually dropping the programs, rushing people instead into production as soon as possible.

"They’re so desperate for people to work the mine that [companies] can’t afford to put a mentor on a new graduate student to help them develop," Kizil says, adding that this leads to people getting promoted before they acquire the necessary skills and knowledge.

The fast-track career path is having a dramatic impact on wages.

"My graduates will get paid [immediately] more than I do after teaching for 20 years. They start at pay packages of about AUS$100,000 ($61,000). At age 21, that’s a pretty good start to a career," Kizil says.

True enough, but the broader mining industry faces a crisis that increased pay alone may not solve. A comprehensive report last year by Neumann’s organization, the Mining Industry Skills Centre, discovered that escalating salaries are having little effect on retention of skilled workers. In fact, attrition rates are going through the roof.

Neumann says the means many mining organizations face the prospect of training a significant portion of their workforces every two years.

"That’s why we’re encouraging the industry not to throw money at the problem, because if market conditions were to change, those higher salaries aren’t likely to be sustainable," Neumann says.

Companies continue to fill jobs by luring expatriates to Australia from other mining-dependent nations. Neumann says South Africa and South America are the most common recruiting grounds, with some mine workers also originating in the U.S. and Canada. Asia accounts for a growing portion of specialized trades in Australia.

Expatriates don’t seem to be plugging the gap, however. Although the country’s immigration service took steps that make it easier for foreigners to obtain work visas, acute skills shortages in mining, construction and other sectors persist, The Australian newspaper reports. Rather, its October 16 report notes that many skilled migrant workers are opting for careers as hairdressers, cooks and other less-critical professions.

The retirement factor
Although once a secondary concern, leadership training and succession planning now are hot topics. That’s because roughly 20 percent of Australian mining employees could retire at any time, thus creating a serious vacuum in knowledge and practical experience.

Downer EDI has cut back on frontline management training in which people pursue their MBAs.

"We weren’t getting any results out of it," Byron says.

The company replaced the training with targeted group exercises of no more than 10 people. Those involved forgo textbooks and desks for "a few chairs and a helluva lot of activities," designed to teach them how to put leadership concepts into practice, he says.

Once they finish, participants complete a self-assessment and also have to complete specific projects on the job to demonstrate applied knowledge, Byron says.

It may be cold comfort, but Australia is in the same fix as other mining-dependent nations.

For example, the Namibia Chamber of Mines says the number of qualified mining professionals is nearly 40 percent below projected need. It also found that the number of skilled tradespersons falls 15 percent below projections. Demand is expected to outstrip the talent supply in Namibia during the next three to six years, necessitating a higher rate of investment in training by both the government and private sector.

Similarly, Canada’s mining companies need about 70,000 new employees during the next decade, according to an October report by consulting firm Ernst & Young.

The situation is different in the U.S. mining industry, which employs nearly 620,000 people. But U.S. mining employment is expected to decline nearly 2 percent through 2016, according to the federal Bureau of Labor Statistics. Other than required safety and compliance training, the agency notes that mining firms in the U.S. have not made career advancement a priority.

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