For those looking in from the outside it may have been a quiet few months for the Pilbara’s iron ore miners, but the spotlight is back on the sector after BHP Billiton’s move to axe around 170 workers from the Mt Whaleback mine in the Pilbara.
That news came just a week after the company cut around 100 people from its head office in Perth.
Those headline figures are worrying enough. More concerning however, is the fact that the public numbers are just the tip of the iceberg in terms of staff reductions, and there’s no doubt other miners are in the same position. Recent reports BHP is looking to cut almost 3000 workers have added further fuel to the speculation.
Outside some of the big cuts this year, even greater numbers have been axed quietly, particularly in iron ore. Workforce planning expert Shane Granger told MiningNews this trend wouldn't last if conditions got any worse.
“Initially companies will cut quietly so as to avoid media scrutiny, but if the iron ore futures remain subdued due to a $US90 per tonne price they will be forced into strategic reviews which will cause a slowing of production, thus impacting employment,” he said.
Along with job reductions, Granger said miners could be looking to reduce future costs by cutting wages and conditions.
But it was not just iron ore and the Pilbara that had escaped mainstream attention. Queensland’s industry had battled serious reductions over the past 12 months and Granger said smaller cutbacks were still progressing throughout the state.
“I’m still hearing about under the radar cuts in both coal seam gas and coal. The most recent was a QLD-based mine that just cut another 14 staff quietly.” he said.
“Given that a lot of big numbers have gone since September 2012, these types of cuts don’t get the media scrutiny but are part of a third wave of reductions. Over the next couple of months I’ll get some detail on this as I compare annual reports.”
Granger said there could be even more reductions in QLD moving forward, based on the number of marginal mines in play.
Taking wider stock of the industry, most sectors had seen declines over the past six months and the infrastructure and construction side of the business had also been quiet. Looking ahead Granger said there was a chance the downturn could bring even tougher conditions for construction firms.
“There’s a good chance that mining construction is not in for a soft landing. It could be hard and fast and take a lot of contractors with it over the short to medium term.
“We are seeing a rapid de-escalation of mining infrastructure and we have certainly hit the peak.”
Other threats to employment include the advancement of automation and remote control, which will cut numbers and reshape the structure of future workforces.
It’s not all bad news for resources though, particularly in the gas sector, which has added jobs on the eastern seaboard. Energy development is also building a solid foundation in the Northern Territory.
“On the positive side I’m very confident that the Northern Territory will steam ahead over the next couple of years and become the third mining state/territory," Granger said.
“Look for the NT to cement itself as a place to do business over the next 12-months. INPEX alone guarantees its position along with Queensland and WA.”
Recent industry surveys have also hinted at a small rebound in hiring intentions, with research from Manpower showing a majority of mining and construction firms tipping a positive outlook for the next three months.
That data shows mining and construction companies have staged a huge turnaround in sentiment, but whether this talk will flow through to solid job gains remains to be seen.
With this in mind, there’s no doubt there are still bright spots in the sector. But, at the same time most companies are driving productivity gains, and many more jobs face an uncertain future amid the weaker conditions.
