Mining industry faces labour crunch, volatility, high costs: Deloitte – by Lauren Krugel (Canadian Business Magazine – November 27, 2011)

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The Canadian Press – The global mining industry is facing a severe labour squeeze, which means companies must be creative in finding enough talent to run their operations, says a report released Sunday by a major professional services firm.

Deloitte Touche Tohmatsu Ltd. said there simply are not enough workers to power the huge growth expected in the mining sector — capital expenditures this year are estimated to be US$113 billion, 50 per cent higher than 2010 — and firms must look at unconventional ways to fill the gap, like doing more work remotely.

“Given the acute shortage of key talent, delivering on all these projects may be near impossible,” said the report, called Tracking the Trends 2012. Glenn Ives, Deloitte Canada’s Americas mining leader, said demographics are at the heart of the problem.

“There is a 20-year gap in the mining industry. If you think about it, mining was not that great an industry to join in the 80s and the 90s, and so there weren’t a lot of new graduates joining the mining industry in that time frame,” he said in an interview.

The baby boomers who would have joined that industry before that period are nearing retirement, and there aren’t enough younger workers aged 30 to 50 to take their place.

“Those are the people that have the experience and the enthusiasm. Those are peak productive years, and with that gap it does make building mines tougher. It does make operating mines tougher,” said Ives.

These days, fewer people are willing to work in isolated locations and live far away from their families for an extended period of time. To get around this problem, some companies have been automating their processes, or running their mines from operating centres thousands of kilometres away.

“You don’t have to send a truck driver to the actual mine. They can do the work from essentially an office with a joystick,” said Ives, citing global giants like Rio Tinto and Vale as examples of companies embracing this approach.

But the report says technology alone won’t solve the problem. Companies need to stringently plan their workforce needs and scoop up workers from industries that have shed jobs, like manufacturing and automotive, and train them to work in mining. Ives said teaming up with local colleges and universities to cultivate talent is a good idea, too.

Aside from the labour crunch, Deloitte points to a number of other challenges the mining industry faces, including political uncertainty, price volatility and high costs.

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