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Economic role easing anti-mining views jeopardizing Australian skills pipeline

SNL Image
Pilbara Minerals Ltd.'s Pilgangoora lithium-tantalum project in Western Australia is part of an increasing number of projects in the region focused on minerals for electric vehicles.
Source: Pilbara Minerals

Western Australia's plethora of minerals amenable to electric vehicle production, and the role of the mining industry in "keeping the nation afloat" through COVID-19, will protect the sector from negative sentiment that has been jeopardizing its skills pipeline, according to Northern Star Resources Ltd. Executive Chair Bill Beament.

The mining industry has been "losing the public relations battle" and it is presenting challenges for the recruitment of mining engineers, South32 Ltd. COO Jason Economidis said Jan. 20 at the company's Cannington silver-lead-zinc mine in Queensland.

Australia's Association of Mining and Exploration Companies also recently warned that the flood of negative sentiment stemming from the fallout of Rio Tinto blasting a 46,000-year-old Aboriginal site in 2020 may cloud discussions regarding what the industry considers serious flaws in Western Australian heritage reforms due in 2021.

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Economidis recently told The Australian that South32's graduates have said they were "heckled" at university because they were studying mining and that the industry would struggle in the next five years as "we just aren't generating enough" graduates.

Such heckling is more likely on Australia's east coast, where a small percentage of university students study mining-related subjects, Beament said during a Jan. 21 call covering Northern Star's results for the December 2020 quarter. Australia's east coast economies are less understanding of the resources sector "keeping the nation afloat" during COVID-19, he said.

Beament "can't see heckling within Western Australia" given the proliferation of lithium and other battery metals projects contributing to green technologies like EVs, asking, "How can anyone heckle on the EV revolution?"

It is evident that Western Australia's public "understands the importance and the [economy's] great connection to the resource industry," considering up to 75% of Australia's resources sector is based in the state, Beament said.

Australian Treasury data revealed in mid-December 2020 that increased iron ore prices have led to company tax receipts being A$3.4 billion higher in fiscal 2021 than forecast in October, the Minerals Council of Australia said in a news release.

The tax increase contributed to an estimated A$15.9 billion improvement in Australia's underlying cash deficit for fiscal 2021, and the Treasury expects mining exports to grow by 5% in fiscal 2022, further contributing to the country's economic recovery from COVID-19.

Mining skills needed

Aside from the economic benefits, "I don't know what [anti-mining young adults would] live in or what they'd drive around if they didn't have the resources that come out of states like Western Australia and elements of Queensland and New South Wales," Beament told investors and analysts on the call.

Skills will be needed across the mining sector to develop the resources to create such products, and the Australian government on Jan. 20 announced a reform trial project to expedite access to qualifications for industry jobs.

Raleigh Finlayson, managing director of Northern Star's merger partner Saracen Mineral Holdings Ltd., said Jan. 21 that it was "good to see the [mining] majors come to the party" to talk about key recruitment issues when asked about it during his own company's call covering quarterly results.

The "biggest issue" when considering graduates is for industry to work together to "make sure we're getting a good pipeline coming through and not getting crazy on wages" whenever "green shoots" start appearing across various commodities, Finlayson said.

Investing in trades and graduates to ensure the future workforce pipeline through the "boom-bust cycle" is critical, as enrollments in mining-related university courses are similarly cyclical, Finlayson said.

Economidis told The Australian that the lack of new interest in the industry is a generational issue. He said young adults opposed to mining are part of a "complete divorcing of practicality and what they think they are passionate about."

Australian Prime Minister Scott Morrison said it is time to "get over the stereotypes that are thrown about and the misinformation" about the mining industry, "and be very honest with our young people," during the Jan. 20 press conference at the Cannington mine with Economidis.

"This is a great industry that makes a huge contribution to Australia ... and will continue," Morrison said. "So I'm very grateful for it [and] frankly, I think most Australians are," he said.