Education has a role in improving perceptions of careers in mining and oil and gas.
DISCOVERING and developing an orebody has traditionally been the biggest challenge for the mining industry, until now. Finding and training workers is fast becoming a bigger test, with a report from the world’s top management consultancy, McKinsey & Company, exposing a deep-seated problem that could derail energy transition.
In its simplest terms, the McKinsey report into the shortage of mine workers and technical staff shows that young people would prefer to work anywhere else than the mining or oil and gas sectors. The report should have mining companies and governments scrambling to find a solution, or risk losing industries that fund much of the economy.
Only 11 per cent of respondents aged between 15 and 30 would ‘definitely’ or ‘probably’ work in mining.
Less certain were the 19 per cent who ‘might consider’ a mining career.
The vast majority – 70 per cent – would prefer to not work in mining with 42 per cent saying ‘definitely not’ and 28 per cent saying ‘probably not’.
Oil and gas scored a similarly high level of rejection. This perception of mining as a bad career choice is said by McKinsey to be the result of three industry trends: the nature of the work is evolving with a far greater science-based requirement; worker preferences are changing, with a greater focus on lifestyle; and the way of working is also changing, with organisations adopting remote working models.
All of those points are valid.
However, the missing ingredient in the McKinsey report is that children are taught from an early age that mining is bad because it involves disturbing the environment.
The problem with that view, which is at the core of objections to mining by the environmental movement, is that without mining there can’t be transition from fossil fuels to renewables.
The metal-heavy demands of batteries, wind turbines and solar panels means there needs to be a dramatic increase in the mining of copper, nickel, lithium, rare earths and other minerals; but without investment in new mines and the recruitment of more workers, the raw material for energy transition will not be available.
What material will be available will increasingly come from countries with poor environmental protection laws and a disregard for human rights.
Forcing mining to migrate to countries with governments that turn a blind eye to abuses is not in anyone’s interest, though that’s what will happen if first-world countries such as Australia, Canada and the US cannot make mining a career for young people to follow.
McKinsey’s report, titled ‘Has mining lost its lustre? Why talent is moving elsewhere and how to bring them back’, said that the conventional way value was derived from mining had been in terms of commodity prices, ore quality, location, reliability of equipment and physical assets such as processing plants.
“However, talent is increasingly being elevated from a simple enabler to a true value driver,” McKinsey said in the report, which is a collaborative analysis by Australian and Canadian staff of the global consultancy.
“Importantly for miners, they can enhance performance through comparatively low investment in talent and within shorter timeframes than can be achieved by seeking to alter physical attributes of an asset,” it continued.
Examples cited for improved mining company performance include the employment of a gifted metallurgist who could improve metal recovery from ore, an effective mine planner who could lift productivity, or the recruitment of a talented financial markets manager to boost the value of material being sold.
“That said, mining companies are experiencing a talent squeeze, with 71 per cent of mining leaders finding that the shortage is holding them back from delivering on production targets and strategic objectives,” McKinsey said.
“Indeed, 86 per cent of mining executives tell us it is harder to recruit and retain the talent they need than two years ago.
“Mining is not currently an aspirational industry for young technical talent to join.”
McKinsey’s suggested solution involves a four-stage approach.
• Treat talent as a strategic pillar alongside safety, production and costs rather than the human resources problem, which has been the usual way of dealing with a skills shortage.
• Focus on what matters to employees rather than what managers think the workers want. Pay is important, but a survey of workers also revealed a need for workplace flexibility, meaningful work, career development and inspiring leadership.
• A deeper understanding of workforce capability to include leadership skills, business awareness and digital “savviness”.
• Take bold steps on the social agenda by investing in the long-term sustainability of communities and the taking of a public leadership role to drive a consistent approach on societal topics such as natural resource governance, charitable work and education equity.
McKinsey comes close to identifying the image problem damaging the reputation of mining and preventing most young people from seeing it as a career option, but where it falls short is in addressing the bias of the Australian education system towards an industry that generates the lion’s share of Australia’s wealth.
Canada calling
ANOTHER challenge for Australia mining companies is competition from other countries, with no better example today than the lure of Canada for lithium explorers.
What started as a trickle of talent making the trek to the frozen north has become a flood, thanks to two factors.
Firstly, there has been a series of fabulous lithium discoveries in Canada, which could form the basis of an industry to rival (and perhaps overtake that evolving in WA), Secondly, there are the financial incentives being offered to North America mining through the Inflation Reduction Act of the US, which is encouraging car makers in particular to source their raw material requirements locally.
Best known of the Australian lithium stars migrating to Canada is Ken Brinsden, who built Pilbara Minerals from the status of penny dreadful to a business valued today on the stock market at $13 billion. Following in Mr Brinsden’s footsteps are: David Southam, a former chief executive of Kambalda nickel miner Mincor Resources and now managing director of Cygnus Metals, which has made a significant lithium discovery in Quebec; and Chris Evans, formerly of WA lithium miner Altura Mining and now managing director of Winsome Resources, which has also made a big lithium discovery in Quebec.
Canada’s lithium industry is in its infancy today but if assay results and photographic evidence of massive, surface-outcropping lithium orebodies is a guide, it could quickly morph into a boom (directly across the border from US car capital Detroit, which is rapidly shifting to the production of battery powered electric vehicles.
