ADELAIDE-based Resources and Engineering Skills Alliance (RESA) has warned of continued productivity deterioration unless Australia’s mining industry lifts performance and skill levels.
A review of the mining labour productivity index has shown severe decline since its peak between 1995 and 2002, while other market sectors have continued to climb.
RESA chief executive Phil de Courcey said there had been little analysis of why the mining sector was behind in the productivity game compared to other industries, and that “more critical research into the underlying causes” was
Current skills in the sector, as well as those skills which were lacking or in short supply, remained the biggest impediment to lifting productivity, Mr de Courcey said.
“This lack of required skills is also driving the current cost blowouts on many of Australia’s major resource undertakings in both mining and energy,” he said.
“If we compare gross values per hour worked, mining productivity has collapsed from its euphoric highs of around 2001-2002 to now be below agriculture, forestry, fishing, manufacturing and an index measuring productivity in a basket of 12 selected industries.
“The role of inflated wages in lowering mining productivity also needs assessing.” Mr de Courcey said mining companies needed to focus on lifting productivity through a range of options including automation, diversity strategies, better career advisory services, workforce optimisation, improved project scheduling and simulation and demand-driven training.
According to a BIS Shrapnel report ‘Mining in Australia 2012 to 2027’ released in December last year, government support was needed to help address cost inflation in the sector.
New Anglo American chief executive Mark Cutifani said the mining sector was decades behind other parts of the economy on productivity and the industry, not the government, must raise its game.
“In the mining industry, we’re some 20 to 30 years behind other more progressive sectors in terms of productivity and business practices,” he said.
“We’ve got to go beyond [just having good mineral deposits] and make sure that we’re working our assets, the engine room, as hard as we can.”