West Australian mining skills shortage to peak in 2023 amid ongoing tightness

A skills shortage in the world's biggest iron ore and lithium producing jurisdiction, Western Australia, is forecast to peak in 2023 and remain high beyond 2025, according to a local labor market analyst.

"We're in a tight labor market which is set to further tighten," Pit Crew Management Consulting Services Pty Ltd. Managing Director and founder Peter Dyball told the Mineral Sands Conference in Perth, Australia, on Nov. 17.

Total labor demand in the state's resources and energy sector stood at 140,000 workers in construction, mining and shutdown roles in mid-2021. That figure is set to peak at about 166,000 mid-2023, with a total shortage of about 31,000 workers by the third quarter of 2023, according to Pit Crew.

With the state's unemployment rate at 4.1% in September, "just about everyone who is qualified and experienced can be considered to be employed either in the resources sector or in the broader economy," said Dyball, whose firm analyzes over 70 occupations in the resources sector.

Though the pandemic-induced lockdowns and border closures have exacerbated the skills shortage, these did not cause the shortage, Dyball said. The industry could have done something about the labor shortage over two years ago but many ignored warnings as things seemed fine, the founder said.

"The project market is already starting to self-constrain. Project schedules and budgets are blowing out, final investment decisions are being delayed or not being made, and skills dilution in the workforce [is occurring]."

Dyball used the skills shortage in the state's mineral sands sector to illustrate how devastating the consequences can be: "On the construction of a standard mineral sands project, a 10% drop in workforce productivity is worth at least A$15 million to A$20 million in capital cost."

"The availability of out-of-state resources is seriously compromised" due to competition from projects in Australia's eastern states, including New South Wales and Victoria, which are currently driving the national labor market.

People are also reluctant to move between states amid uncertainties over outbreak-related snap lockdowns and border closures, which can impact industry given that the interstate fly-in, fly-out workforce represents about 40% to 50% of Western Australia's mining sector workforce on a construction project, he said.

Mitigation strategies

A key mitigation strategy would be to focus on attracting workers and their families to relocate to Western Australia for operations jobs on a permanent or long-term basis. Similarly, attracting workers to temporarily relocate and establish long-distance FIFO paths into the state could help fill up construction and shutdown roles, which are usually transient and mobile nature.

There are time constraints on training, Dyball said, so training for semiskilled jobs like rigging, scaffolding, rigging and crane operating — which lend themselves to short-term training programs — could start during construction, while upskilling for more technical roles can be timed during the operations phase.

However, Dyball believes training managers and supervisors is critical in maintaining the "whole-of-workforce productivity."

"Increased workforce numbers also precipitate a requirement for more supervisors and managers. During 2010 to 2013, the issue of inexperienced supervision, engineering and management [workers] had a huge impact on overall project performance," Dyball said.

"A policy could be developed and implemented where supervisor and manager training is mandatory, or at least highly recommended, [for] all workers in those roles."