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Australia's Recovering Mining Industry Struggles to Fill Jobs |
| by Cynthia Koons |
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September 22, 2009
Many Australian companies are facing a problem that firms in most other advanced economies emerging from the downturn might envy -- a lack of workers for all the jobs being created.
A rebound in the mining and energy sectors thanks to a quicker-than-expected recovery in demand from China and elsewhere for Australia's commodity exports means that recruiting a work force, rather than finding work, is the overarching problem for companies in these sectors.
Adding to the skilled-worker shortage are Australian federal government promises to spend 84 billion Australian dollars (US$73 billion) on infrastructure ranging from new school halls to city transport links and a new broadband network.
Australia's resurgent resources boom requires a plethora of skilled workers from engineers to welders, riggers and drillers. The country has only a fraction of the people needed, forcing employers to recruit around the world. Even amid the downturn, demand for workers has remained strong, particularly in remote areas where the shortage is acute, boosting pressure on wages. Workers in the mining industry earn, on average, more than those in any other industry in Australia, including health care and financial services.
The problem has attracted less attention over the past year as the financial crisis initially slowed development of infrastructure and new mines, but latest data indicate the problem is returning. A government measure of skilled-job vacancies rose 1% in August from July, the first monthly rise since November 2007.
"One of the real challenges in Australia is continuing to get a really high-quality, high-skilled labor force," Santos Ltd. CEO David Knox said. Santos will soon make a decision on one major liquefied-natural-gas project and is planning at least two more at a time when energy giants Chevron Corp., Exxon Mobil Corp. and Royal Dutch Shell PLC this month agreed to undertake the A$43 billion Gorgon natural-gas project in Western Australia.
While Australia's labor force has weakened a little because of the global downturn, the jobless rate remains low compared with many other countries. Australia's economy had the fastest pace of growth among the world's advanced economies in the second quarter, expanding by 0.6% from the previous quarter.
Leighton Holdings Ltd. CEO Wal King said his construction company's order book is approaching a record A$40 billion, up from A$37 billion at the end of June. "I think everyone's probably surprised at how quickly things are appearing to spring back," he said.
Australia has a history of labor shortages. In 2005, the government planned fairs in London, Berlin, Amsterdam and Chennai, India, to attract skilled workers and tradespeople in what was considered its biggest recruitment drive since the 1960s.
As recently as April 2008, when the Australian Petroleum Production and Exploration Association, an oil-and-gas lobby group, set a target to triple the country's LNG output by 2017, Woodside Petroleum Ltd. CEO Don Voelte said the target "is not an aspiration, it is not even a dream, it is impossible." He was referring specifically to labor and equipment shortages.
The government this month set up a task force to explore strategies to help secure as many as 70,000 skilled workers needed for major resource-sector projects over the next decade. Peter Goode, CEO of Transfield Services, a global maintenance company, said government programs help but don't address his company's need for experienced workers. In the past, the government has looked to its immigration policies to address the issue.
Cost estimates for a clutch of the biggest LNG projects, including Gorgon, the nearby Pluto and Australia Pacific LNG in north-eastern Australia already total more than A$100 billion, an amount that is set to rise sharply as companies finalize plans for additional LNG plants or sign off on expansions of existing facilities.
Mr. Goode said as many as 100,000 additional workers may be needed. "I think there's going to be an acute labor shortage, and those operators who start to do their projects first will ... get the labor," he said. "I think those that delay are going to struggle."
-Rachel Pannett and Veronica Dagher contributed to this article.
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