THE surprisingly strong growth in big resource projects across Western Australia has left industry watchers increasingly worried about looming shortages of skilled labour.
Importing temporary skilled labour from overseas is one option that may have to be considered but this would be political dynamite and risk a major union backlash.
The crunch time will be the first half of 2005 when resource projects collectively worth more than $4 billion will be experiencing heavy labour demand.
“Developers are now starting to worry about the skill supply situation,” Chamber of Commerce and Industry divisional director commercial services Gary Collins said.
Industry Capability Network WA director David Kobelke, whose job is to try and maximise local content on big projects, is also worried.
Mr Kobelke said he had often heard alarmist talk of a skills shortage but this time he believed the problem would be real.
“There is a good chance they will all peak during the same six month period,” he said.
“They will all be seeking the same skilled labour and I think that will cause a problem.”
The current outlook brings back memories of the late 1990s, when BHP’s direct reduced iron project in Port Hedland coincided with a raft of other big labour-intensive projects, including Anaconda Nickel’s Murrin Murrin laterite nickel plant.
The big projects about to get underway are led by BHP Billiton’s $1.4 billion Ravensthorpe nickel project, which will employ 1,000 people at its peak. Alcoa’s $440 million upgrade of its Pinjarra alumina refinery will also have a peak workforce of about 1,000.
Other projects getting underway include Woodside’s $1.5 billion Enfield gas project, although most of the work will be done overseas, and the $225 million expansion of the Worsley alumina refinery, which is due to get final approval in the next month.
In addition, BHP Billiton and Rio Tinto are pouring hundreds of millions of dollars into the progressive expansion of their iron ore mining operations and several gold producers are investing in new production capacity.
In addition to these committed projects, Woodside is closely assessing its $1.6 billion Train 5 project, which would add enormously to the demand for skilled labour.
Given the tight labour supply, Woodside may consider it advantageous to proceed with Train 5 while contractors for the Train 4 project, which is approaching completion, are still at Dampier.
The big resource projects come at a time of buoyant engineering and construction activity right across Australia.
This is reflected in the fall in Australia’s unemployment rate to 5.6 per cent in March, its lowest level since 1989.
It is also reflected in skills shortages in the building industry.
“Skill shortages in the building and construction industry are prevalent in bricklaying, carpentry, plastering, cabinet making, tiling and plumbing,” said Master Builders Association of WA director Michael McLean.
Big infrastructure projects are adding to the strong labour demand.
Examples in WA include the 250-megawatt power station Transfield is building for Western Power and the $1.5 billion New MetroRail project.
The WA Government is tuned in to the risk of a skills shortage.
It has instituted a range of training and skill development initiatives to address areas of high skill demand in the infrastructure and resource development areas.
This includes fast track apprentice programs in metals and electrical trades and upskilling programs.
Ironically, the government has focused heavily on the oil and gas sector, including the half-dozen gas processing projects mooted for the Burrup Peninsula.
The Burrup has failed to live up to its early promise, with only one project proceeding. Nevertheless the training provided for that region is expected to be transferable to other sectors that are growing faster than expected.
Education and Training Minister Alan Carpenter emphasised that industry also had a role to play.
“It remains crucial for industry to maintain a commitment to training, particularly in the form of apprenticeships and traineeships, to ensure that an appropriately skilled workforce is available,” Mr Carpenter said.
Recent moves by the Federal Government indicate that the skills shortage is looming as a national issue.
Last week, Federal Education Minister Brendan Nelson launched a national skills shortages strategy.
The strategy includes measures to bring greater flexibility into trade training, such as shorter apprenticeships and specialised training to meet the needs of specific industries.
The Federal Government has also recently approved an increase in Australia’s skilled migration intake, specifically for people prepared to live in regional areas.
Mr Collins said he felt one critical element is missing from the debate.
“The key thing that is missing is a rational discussion about the importation of temporary skilled labour from somewhere else,” he said.
“There seems to be a reluctance to discuss this.”
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