Big Salaries, Big Responsibilities

Western Australia

To anyone involved in Australia’s Mining Industry, it will likely come as no surprise that the sector leads the way in significant pay increases over other areas. Mineral-rich states such as Western Australia – which counts gold, iron ore, nickel, and alumina, along with crude oil and liquefied natural gas (LNG) among its key exports – saw a 1.5 per cent hourly pay increase earlier this year among WA workers, according to the Australian Bureau of Statistics data reveal. The only state to demonstrate a marked increase compared to last year’s statistics, WA revealed a significant increase compared to other states in the nation, which are demonstrating less significant figures.

With WA enjoying the biggest rise in the first quarter of the year, the state leads the way in mining and mining investment. The sheer number of mining projects currently underway – and the number which will start in the near future – demonstrate that Australia’s world-class mining industry will remain viable for many years to come.

Along with mining activity itself comes a host of related activities, from initial exploration all the way to mining feasibility studies, due diligence, capital appropriation, drafting, engineering, purchasing machinery, construction of buildings, and more. The need to hire the right people to fill these and countless other positions is vital for the success of any mining project in Australia, and this need is reflected today in salaries for mine workers.

Leading the way in pay increases, jobs in WA soared beyond the full-year increase earlier this year of 3.6 per cent to 4.5 per cent. Likewise, the jobless rate in WA is lower than in other states. The reason: the mining sector, responsible for more significant pay rate increases across all sectors. Like every economic scenario, the high rate of pay for mining employees has been beneficial for some, but has created what is referred to as a “two-speed economy.” Despite the mining sector surge, other industries including major airlines like Qantas are slashing staff, and many bricks-and-mortar retailers are suffering as shoppers turn in increasing numbers to online sales. Recent unemployment figures reveal considerably lower unemployment rates for WA: 3.5 per cent, compared to South Australia, Victoria, and New South Wales at 6.4 per cent, 5.5 per cent, and 5.1 per cent unemployment.

Despite dire predictions back in June made in the latest economic forecaster Deloitte Access Economics Business Outlook that Australia’s mining sector is about to peak, will slow within the next two years, and that there is an “increasing realisation that China is not a permanent gravy train,” there are a number of major mining projects currently underway. Led by major players like Xstrata, BHP Billiton, Fortescue, Newcrest and others, these are not modest jobs, but large-scale sites. Newcrest’s expansion of the Cadia East gold mine near Orange in NSW is budgeted at A$1.9 billion, while Xstrata’s Ulan Underground coal mine is pegged at A$1.1. Not to be outdone, BHP Billiton’s Queensland coal project, Caval Ridge, is in the billions of dollars, as is Fortescue’s WA-based Solomon iron ore project, at $4 billion.

As of 2011 in WA alone, there were in excess of $170 billion worth of projects under construction or awaiting confirmation; across all of Australia today, the amount is an estimated $260 billion for new resources projects and expansions. As a result, the need for mine site workers both skilled and unskilled is tremendous, and companies are willing to pay handsome salaries to attract the right people for the job.

Attracting almost exclusively young men in their late teens or early twenties to the work force, the demand for underground labour is so great that some who started young in the nation’s mines are now pulling in $200,000 a year. With salaries matching or exceeding those of some medical specialists, many young miners are spending their earnings on material goods, such as cars, motorcycles and property, creating a class of nouveau riche in mining states such as WA. These workers are filling a shortage of mine staff which, according to The Australian Mines and Metals Association, is expected to worsen. At present, it is estimated there are some 6,000 job vacancies in mining and oil and gas, which is forecast to increase to 40,000 vacancies as almost 100 projects are constructed or expanded.

The shortage – mainly of skilled workers such as civil engineers, project managers, surveyors, and machinery and plant operators – has left many frustrated. Some suggest increasing the number of foreign workers allowed into the country, while others welcome more fly-in fly-out (FIFO) staff and relocation assistance programs. Others, like The Minerals Council of Australia, say the nation’s universities are not turning out enough graduates to meet industry demand.

Although the lure of working on a mine site for substantial pay is tempting to young workers, not everyone is a fit for the job. Demand is great, yet the conditions are sometimes dangerous, and workdays are 12 hours long. Many miners live in small, remote locations, and maintaining relationships with family and friends back home is often difficult. Even long-distance satellite phone calls and emails are no substitution for face-to-face reunions. Some companies will provide flights back home every few weeks, or even fly families to visit workers over Christmas.

For many workers, mining can be a painfully lonely existence. In some areas, men outnumber local women 23 to one and, as in everyday life, the older one gets, the more difficult it can be to meet new people. Historically, many younger Australian women remained in smaller towns; today, they often leave for school or work opportunities in larger centres. For some people, the pay and perks cannot make up for time spent away from wives, partners, children and other family members, and the isolation and distance can put a significant strain on relationships.

A combination of a high-paying mining job, an isolated location, and lack of contact with loved ones often leads to abuse of drugs or alcohol. Small mining towns in WA and Queensland have been attracting more and more prostitutes, and with the oldest profession being largely legalised for the past two decades, there is no shortage of men with money and women who want to party with men who have money. Much like mine workers, a new breed of FIFO prostitute exists, despite recent efforts to ban FIFO sex workers from Queensland motels. Many are now coming not only from within Australia but from Asian countries, and quickly seek out mine workers at regional airports.

The concept of prostitutes following men is not new, and was an integral part of the California Gold Rush of the 1840s and 1850s. Lonely men worked the mines for money, and women soon showed up for the same reason: to earn a living. Today, however, there is the issue of legal versus illegal sex workers, leaving motel owners and government officials confused on how to handle FIFO sex workers.

With an estimated 184,000 men working Australia’s mines, and billions of dollars of new projects and expansions on the horizon, the need for both skilled and unskilled workers will continue, despite the occasional doom-and-gloom prophecy about the mining and oil and gas industries “peaking.” Wages amount to a considerable cost for mining companies, jumping 33 per cent just in the past five years in Australia, double the national average. The high rate of pay to miners is not unique to Australia, as wages are also rising in other prime mining locations, such as Africa and Chile.

As long as there is gold, copper, iron ore, and countless other minerals in the ground, the need for mine workers – and increasingly large pay cheques – will continue for years to come.

Strategic Resources

There are 17 classified rare earth elements, many of which have strategic purposes. Rare in name only, these elements are anything but scarce as they are found all over the world. The challenge rare earth elements pose is during extraction, as they exist in low concentrations and are difficult to separate from one another.

December 15, 2019, 2:53 PM AEDT

Markets

error : cannot receive stock quote information