So you think the mining and resource industry is on a downward slide? Do you believe everything the media is telling you about the future of mining jobs in Australia?
Australia is witnessing a transition from the massive investment phase that spawned tens of thousands of mining jobs, to a productivity phase – so what’s next?
It doesn’t take a lot to realise the mining and resource industry can’t keep building and constructing new mines, rail networks, off-shore and onshore mega-structures forever. There has to come a time when there is a natural ‘tipping point’ for this type of activity to be reached. It seems we may have reached that point…
We’ve all heard of mining job reductions across the whole of Australia, fuelled by multiple factors such as the decline in the price for raw materials like iron ore and coal,† slow down in China’s economy and other mining countries accelerating their own mining projects to compete with Australia.
What we’re seeing right now in terms of growth in the mining industry in Australia is a swing to the production phase. Newly developed mining projects are starting to come on line, with some incredible increases in productivity. Heavy investment in new technology like automation and remote management processes have contributed to the efficiency of many of Australia’s top mining projects. All of this, and more,† has been detailed in a new report by the Bureau of Resources and Energy Economics (BREE), entitled Resources and Energy Major Projects”ĒOctober 2013.
huge investment activity in the resources and energy sector
Over the past 10 years, Australia has seen huge investment activity in the resources and energy sector. Major projects were given the green light by normally conservative mining companies like BHP, RIO TINTO and Fortescue Metals Group with higher global commodity prices making the projects viable from a profitability stance.
During the latter months of 2012, we saw a massive drop in commodity prices, making it more of a challenge for mining companies to remain competitive. The smell of burning cash was ever-present as high paid mining executives went on the rampage and slashed costs wherever they could to stem the financial drain on their own cash resources. Rising costs created a difficult and unique investment environment which contributed to a decline in the number of mining and resource projects going ahead.
$240 Billion Resource Sector Projects In The Pipeline
As of October 2013, there were 63 projects at the Committed Stage with a combined value of $240 billion compared with 73 projects with a combined value of $268 billion in the six months prior. The decline in project value is the result of mining projects advancing to the Completed Stage. This is particularly true of the “mega”Ě projects which were valued at over $5 billion.
The six months to October 2013 saw 18 resource sector projects completed accounting for a record $30 billion investment. Projects that have been completed over the past year have added immensely to Australia`s throughput capacity and look like supporting strong commodity export volumes well into the future.
Looking forward, it seems to be a common view that investment in the resources and energy sector in Australia is likely to slow over the medium term, although the opportunity still exists for mining companies to maintain higher levels of investment in the sector should projects currently at the early stage of development move through the cycle into the Completed stage.
Is there a future in mining in Australia? You had better believe it…
Are you looking for a job in the mines? Even if you have no experience, mining companies will still look at you if you have the right mix of training and attitude.
Download the new iMINCO e-book called “The Experts Guide To Entry Level Mining Jobs“.. it is packed full of information and will†give everyone who reads it a good understanding of what it takes to get a mining job.
Download your own copy of the†Bureau of Resources and Energy Economics (BREE), entitled Resources and Energy Major Projects report.