Industry experts explore the cause and potential solutions for the mining and resources sector as it deals with the ongoing disruptions caused by the COVID-19 pandemic.
As the global COVID-19 pandemic continues to create mayhem across national economies all over the world, the Australian mining and resources industry has experienced a surge in activity.
According to Australian Bureau of Statistics data, employment in the resources sector grew by 8.5 per cent between February 2020 and November 2020.
However, that growth, along with the closure of international borders, is creating a new problem.
The lack of international skilled workers due to travel restrictions, along with an intermittent fly-in, fly-out (FIFO) workforce imposed by state lockdowns and interstate border closures, means companies are struggling to find solutions to labour shortages in the lucrative industry.
Australian Resources and Energy Group (AMMA) chief executive officer Steve Knott says Australia’s resources and energy industry has been firing on all cylinders throughout the pandemic.
“Hundreds of thousands of dedicated Australian employees have kept our industry among the most productive and prosperous in the world,” he says.
“However, prolonged closed borders to the small pool of international skilled migrants that supplement our domestic workforces has wreaked havoc on Australia’s resources industry, as it has most others.
“AMMA’s members have been reporting worsening skills shortages that have threatened to cripple our national recovery from the pandemic’s crushing economic impacts.”
According to findings from the World Economic Forum’s The Future of Jobs Report 2020, automation, in tandem with the COVID-19 recession, is creating a ‘double-disruption’ scenario for workers.
“In addition to the current disruption from the pandemic-induced lockdowns and economic contraction, technological adoption by companies will transform tasks, jobs and skills by 2025,” the report states.
“By 2025, the time spent on current tasks at work by humans and machines will be equal. A significant share of companies also expect to make changes to locations, their value chains, and the size of their workforce due to factors beyond technology in the next five years.”
Accenture head of resources David Burns says a more individualistic approach to the workforce post-COVID will be to look at every dimension of every worker – the personal and the professional – to support both the person and the collective business.
“Acknowledging and adapting to this reality can help mining companies operate with greater understanding and empathy, ultimately transforming their workplace – and the workforce – in the process,” Burns tells Australian Resources & Investment.
“This is increasingly important, as reflected in the World Economic Forum (WEF) 2020 jobs report, which showed that leadership and social influence are the top attributes that mining companies’ reskilling or upskilling programs are focused on.
“As managers move from managing manual workers to analysing data and managing remote teams, they will also require superior communication skills, and project and change management experience.”
Burns says COVID-19 is pushing companies to take digital transformation further by devising new ways to gain efficiencies at a time when fewer workers can be on site.
“The majority of on-site roles in the mining sector are typically mechanical in nature, relying on maintenance workers, machine operators and engineers handling heavy mining machinery and vehicles,” Burns says.
“The WEF 2020 jobs report found that 67 per cent of repetitive and manual tasks, such as information and data processing, and about 60 per cent of tasks involving physical labour will be automated.
“On the other hand, the report said that the top two emerging roles that will be critical for the future of the mining industry are artificial intelligence and machine learning (AI/ML) specialists and process-automation specialists.”
Burns acknowledges that prior to the COVID-19 pandemic, drones were already carrying out pit surveillance and autonomous trucks were hauling ore.
However, he says to advance the industry further, trucks that have full situational awareness and decision-making autonomy will be key to establishing fully autonomous and remote mine sites post-pandemic.
“Humans will still be needed to operate the trucks, but can do this from a control centre, rather than on site,” Burns explains.
“For this to happen, all fixed and mobile equipment will need to be connected and able to exchange signals and talk to each other.
“As always, the safety of all persons and equipment remains parallel. Once this can be met, the next challenge rests on the mining industry’s chief human resources officers (CHROs) and digital officers to reimagine their strategy for the post-pandemic era and explore new ways to re-organise and redesign their workforce, with new digital processes at the heart of that transformation.”
A report commissioned by the Chamber of Minerals and Energy Western Australia (CME) in June, undertaken by independent labour market specialists Pit Crew Consulting, looks at the sector’s workforce requirements in the near term and out to 2025.
Findings of the report show there is a significant shortage of workers in the Western Australian mining and resources industries now, with the potential for there to be a peak shortage of 33,000 workers.
CME chief executive officer Paul Everingham says the Western Australian mining and resources sector has traditionally been able to draw upon an international pool of skilled workers, particularly to address highly specialised positions/trades that might be subject to acute shortages.
“Being unable to access this pool in the next few years would mean potential peak shortages identified in the report would be more likely to become a reality,” Everingham says.
“The WA mining and resources sector currently has approximately $140 billion in its project pipeline.
“If the skills challenge is left unaddressed, there is a significant risk that not all opportunities will be able to be fully realised, in an environment where key commodity prices are forecast to remain strong into the immediate future.”
Burns says skilled labour in mining, in both traditional and emerging areas, has struggled to keep up with stimulus-accelerated demand for almost all commodities, amid COVID-related travel restrictions.
State and international border restrictions have made mining companies more dependent on a smaller pool of local workforces.
“Western Australia is feeling the impact of these developments, perhaps more than any other state. The WA Chamber of Minerals and Energy has warned of a looming shortage for key skills such as trades and technicians, flagging demand for an additional 8000 workers in 2021-22,” Burns says.
“Industry CHROs have confirmed these concerns, saying that metallurgists, mine geologists, engineers and surveyors are particularly difficult to hire and retain at the present time.
“In addition to the shortage of traditional skills, there is also an urgent need for ‘new skills’ in mining such as data science and programming, that needs to be addressed in order for the industry to propel forward.”
Burns says there is an opportunity to address these shortages by attracting a new wave of employees from adjacent industries who are used to working in an agile, fast-moving and tech-focused world. By doing so, the industry can advance the much-needed diversification of the workforce.
“Based on our research, industry CHROs also hope that flexible and remote work policies in mining will attract greater diversity including higher female participation, a group that has historically been underrepresented in the industry,” Burns says.
“People with families or other responsibilities, or health-related restrictions and disabilities, will also have a greater incentive to join the newly flexible and inclusive mining industry workforce.”
The WEF Jobs 2020 report states that the public sector needs to provide stronger support for reskilling and upskilling for at-risk or displaced workers.
It explains that the public sector will need to create incentives for investments in the markets and jobs of tomorrow; provide stronger safety nets for displaced workers amid job transitions; and to decisively tackle long-delayed improvements to education and training systems.
“Additionally, it will be important for governments to consider the longer-term labour market implications of maintaining, withdrawing or partly continuing the strong COVID-19 crisis support they are providing to support wages and maintain jobs in most advanced economies,” the report states.
In September 2020, the Australian Government introduced the Priority Migration Skilled Occupation List (PMSOL), which aims to ensure certain critical occupations are filled to support Australia’s COVID-19 recovery. In June, mining occupations were added to that list to address the skills shortage in the resources sector.
Federal Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs Alex Hawke says the Australian Government engaged with Australian employers, business leaders and industry bodies to determine the changes.
“Government has received valuable feedback from Australian business stakeholders on critical skill vacancies, which has been considered together with data from the National Skills Commission, in order to develop today’s update to the Priority Migration Skilled Migration List,” Hawke says.
“The Morrison Government will continue to support Australian businesses, including through skilled migration, as the engine room of our nation’s economy.”
Minerals Council of Australia (MCA) chief executive officer Tania Constable welcomes the mining occupations added to the PMSOL.
“MCA continues to see an effective, flexible and functional skilled migration framework as more important than ever, so that relevant skills are available for and applied to projects and opportunities across industry,” Constable says.
“As Australia adjusts to a post-COVID environment, the role of skilled migration in accessing specialist and technical skills for the mining industry will be crucial.”
The mining industry is also seeing increased competition from other sectors around Australia, a factor it didn’t contend with during the mining constriction boom of a decade ago.
Everingham says there is significant nationwide competition for skilled labour on the back of large-scale, government-backed infrastructure and construction projects being undertaken around Australia.
“While CME and its member companies understand the strong focus on community safety in relation to the COVID-19 pandemic, increased certainty and confidence around the status of state borders is one factor that could help encourage increased workforce mobility and interstate migration,” Everingham says.
“COVID-19 has certainly impacted the current skills situation, with international migration effectively stopping, interstate migration being limited and shutdown work being held over from 2020.
“But the scale of demand for ongoing operational and construction workforces is such that there would inevitably have been some element of tightening of the skilled worker pool over the next few years.”
Burns says technical talent with experience in high-capital industrial settings has always been highly valued in the industry and will continue to be.
Now, however, environmental, social and governance goals are reshaping the employee profile towards new types of talent, such as climate scientists, and talent that can help build strategies so that mining thrives in a world that is volatile, uncertain, complex and ambiguous.
“Mining companies should provide both reactive individual training and proactive large-scale training, to create as many productive upskilling opportunities as possible,” Burns says.
“This will facilitate the necessary diversification of modern mining roles. For example, a mechanic will need to work with AI/ML technology to predict machinery failure and perform preventative repairs; a mining vehicle operator will need to remotely oversee multiple pieces of autonomous machinery; and mining engineers will need to use technology to plan and design drill sites.
“At the same time, considerations for safeguarding employees’ mental health in what is a hugely challenging industry, in that respect, has never been more top of mind.
“Accordingly, it will be necessary for the modern mining professional to be emotionally intelligent, with the communications skills to safeguard remote working employees.”
The WEF Jobs 2020 report shows this to be the case, with key findings highlighting the window of opportunity to reskill and upskill workers has become shorter in the newly constrained labour market.
This applies to workers who are likely to stay in their roles, as well as those who risk losing their roles due to rising recession-related unemployment and can no longer expect to retrain at work.
However, the report also states that a significant number of business leaders understand that reskilling employees, particularly in industry coalitions and in public-private collaborations, is both cost-effective and has significant mid- to long-term dividends – not only for their enterprise but also for the benefit of society more broadly.
“Companies hope to internally redeploy nearly 50 per cent of workers displaced by technological automation and augmentation, as opposed to making wider use of layoffs and automation-based labour savings as a core workforce strategy,” the report states.
Burns says the challenge for industries is to reimagine their strategy for the post-pandemic era and explore new ways to re-organise and redesign their workforce, with employee experience and new digital tools playing a key role in that transformation.
“The good news is that mining CHROs have a head start – the pandemic only accelerated a change that was already occurring in mining – such as greater automation and critical evaluation of the skills required on site to encourage remote working,” he says.
“The recent WEF Future Jobs study found that around 95 per cent of surveyed mining companies are adopting strategies that create more remote working opportunities. There is also evidence that 85 per cent of mining workers are ready to embrace these changes to their environment.
“The companies that succeed will be those that make these changes quickly.”
This story also appears in the August issue of Australian Resources & Investment.