Random Analytica

Charts, Infographics & Analysis without the spin

Tag: Mining

Random Analytics: Australian Mining Employment (Aug 2014)

Mining continues to play an important part in the overall economy of Australia. For all of the discussion about the sector many people don’t realise that mining only employs 264,400 (source: ABS). This is just a fraction of Australia’s total labour force and even that number is often conflated given that many who work in mining are employed on infrastructure or services activities rather than directly in operations.

Each month I spend some time collating stories from a wide range of industry and media sources to build some analytics around the current state of mining employment in Australia. The month of August 2014 was quieter than previous months when more than 3,000 jobs were lost in June and another 1,000+ in July yet at the end of August we still saw more jobs lost than gained.

Here are the charts for Australian Mining Employment through to the end of August 2014.

1 - MiningJobsByState_Infographic_Aug2014_140901

The opening infographic looks at total job gains and losses by State or Territory for the month of August. Where a job cannot be affixed to a certain site then the losses or gains are attributed to Australia (Non Specified).

Data-Points: Queensland was the only state to lose more jobs than it gained, while New South Wales and Western Australia picked up a small amount each. Two Australian companies, ResCo and Bluestone Global, cut 330 staff across the country.

2 - MiningGainsLosses_Chart_140901

The first employment chart looks at the previous 24-months from a total mining employment gain and loss perspective. The positive employment numbers are split into those that reflect infrastructure (tan) and operational (blue) gains. Job losses are then split into operational (red) and mining services (maroon). Mining services can include mining specific service centres, distribution, back-office functions and transport (thanks to learitee from the Australian Mining online community for the suggestion).

Data-Points: All of the 520 job gains in August were operational including the Baralaba North Coal expansion (QLD, Coal, 200); Maules Creek (NSW, Coal, 100) and I’ve included the 120 staffers at the recently opened QCLNG Gas Operations Hub. On the minus side Peabody Energy cut 350 staff from Burton Coal (QLD) including 100 contractors by text message and Glencore cut another 100 from its Newlands Coal (QLD) site.

3 - MiningResourceGainsLosses_Chart_140901

The next employment chart looks in more detail at the main resource types (Iron Ore, Coal, Gold/Copper, Zinc/Lead/Nickel, CSG/LNG and Uranium) by either a job gain or a loss.

Data-Points:

  • Although Coal gained 300-jobs it also lost 466 making this the 26th consecutive month of losses in that resource type;
  • Across the six resource types there was actually a gain of 6-jobs overall.

4 - MiningSectorSentiment_Chart_140901

The last chart tracks employment gains and losses sentiment and is now back dated to October 2011.

Data-Points: Sentiment took a slightly negative turn this month even with a lot of positive news including final approvals for Adani’s Carmichael Coal (QLD) and other smaller sites. With iron ore now touching on $80pmt during the month it has been hard to generate much good news in the West and Venture Minerals Riley Iron Ore (TAS) has deferred its project claiming approvals delays on top of poor pricing.

Another interesting point is that now I’ve pushed back the sentiment to Q4 2011 you can now see a lengthy period of good sentiment. That period of positive sentiment represented the sustained period of growth following the global recession stimulus package implemented by the Chinese several years before.

Juking the Stats (August 2014)

WorleyParsons again cut a significant amount of jobs across its global network. Recent news reports are stating they cut 1,700 jobs this year yet my research tells me the number is more likely to be 1,900. Furthermore this is the latest in a tranche of cuts and I believe they are close to cutting 4,800 since late 2012. WorleyParsons always discuss global job-cuts but given that most of their losses are currently occurring in Australia I suspect the bulk of recent layoffs would be amongst Australian employees. No journalist that I can see has put that question to them.

Summary

Not the best month but neither was it the worst. I continue to see trouble brewing if the iron ore price remains at $80pmt so I would be keeping a weather-eye on that over the next couple of months.

The Worsening Fatality Statistics in Australian Mining

For those that closely follow the Australian Mining Sector it will come as no surprise that 2014 is emerging as one of the worst in terms of safety that we have seen in a generation. According to SafeWork Australia in the first six months of this year there were 11 notifiable fatalities in the mining sector, which according to my calculations currently equates to a Worker Fatality Rate (WFR) of 28.8 fatalities per 100,000 workers. To give that some historical context the WFR for all Australian workers in 2013 was 1.64 fatalities per 100,000 workers.

2 - MiningFatalities_2003~2014

The first chart details the amount of work related fatalities by year since 2003. Figures exclude death by iatrogenic injuries, natural causes not related to work, disease, injuries sustained while overseas or suicide. The 2014 numbers are correct to 8 August with the 2013 and 2014 numbers reflecting the more comprehensive Industry of Workplace statistics (with thanks to the statistics team at SafeWork Australia for clarifying the differences).

Since the start of 2014 I have started to closely track employment, automation and fatalities as the three key indicators on the health of the mining sector. Within a few weeks I knew that mining safety would be a big story as a number of single fatalities occurred during January and February followed up by an underground collapse in April which killed two miners at the Austar Coal Mine .

Yet, a heightened fatality count in the mining industry isn’t the only story here.

Initially out of ignorance to how the industry and SafeWork Australia tracks its work related fatalities I started to build up a personal database of mining fatalities which also included those who have died of natural causes (on-site but not work related), from suicide, fatalities in overseas Australian miners and more recently those who could be considered Lifestyle Miners.

1 - MiningRelatedFatalities_2014

The second chart looks at Mining and Mining Related deaths of Australians in 2014.The WFR is calculated only on the official SafeWork Australia figures (correct as at 8 Aug 2014).

The key data point in the chart is the inclusion of known suicides. In June The West Australian mining industry was left reeling when an onsite incident led to the death of one employee and the possible offsite death of another. This incident has been followed up by two more probable onsite suicides amongst Pilbara FIFO workers. The recent tragedies come about as the District Coroner for the Pilbara region referred a number of 2013 deaths by suicide amongst FIFO workers to the WA State Coroner for a possible inquest.

It’s not all bad news though and I was heartened by news that AngloGold Ashanti, who were at the centre of the recent multiple tragedy in the Pilbara have in the past week signed up to the FIFO Families Social Support and Education Program.

In summary, I believe the mining industry must face the issue of mental health and suicide head-on. As far as I am concerned, if a miner dies by his or her own hand onsite should be treated in exactly the same way as if it were a work related fatality including the provision of industry wide data and statistics on the subject, more education to employees and their families and if required, seeking help from appropriate resources and organisations.

 

If you or someone you know is thinking of suicide, phone Lifeline on 13 11 14. Help is also available via Rural Link (1800 552 002), the Suicide Call Back Line (1300 659 467) and online resources can be found at BeyondBlue.

This article was originally published on MiningIQ.
Read the original article.

Data Sources

[1] Australian Bureau of Statistics. 6291.0.55.003 – Labour Force, Australia, Detailed, Quarterly, May 2014. Accessed 11 Aug 2014.
[2] SafeWork Australia. Worker fatalities. Accessed 11 Aug 2014.
[3] SafeWork Australia. Work-related Traumatic Injury Fatalities, Australia 2013. SafeWork Australia. 2014. Pg: iii-vii.

Random Analytics: Australian Mining Employment (to July 2014)

Mining continues to play an important part in the overall economy of Australia. For all of the discussion about the sector many people don’t realise that mining only employs a fraction of Australia’s workforce (currently just 264,400 source: ABS) and that many in the industry work on the construction rather than the operational side.

Each month I spend some time collating stories from a wide range of industry and media sources to build some analytics around the current state of mining employment in Australia. Here are the charts for Australian Mining Employment through to the end of July 2014.

1 - MiningJobsByState_Infographic_Jun2014_140801

The opening infographic looks at job gains and losses by State or Territory for the month of July.

Data-points: After a horror month in June when 1,592 jobs were lost Western Australia has picked up some employment this month with announcements by Atlas Iron (+200) and Transalta (LNG +250). For the rest of the country the numbers were all in the negative, even in New South Wales which gained 450 (Whitehaven Coal) but lost 915 overall including big numbers in the Hunter Valley. Overall the nation gained 920 and lost 2,043 mining jobs.

2 - MiningGainsLosses_Chart_140801

The second employment charts looks at the previous 24-months from a total mining employment gain and loss perspective. The positive employment numbers are split into those that reflect infrastructure (tan) and operational (blue) gains. Job losses are represented in red.

The biggest data-point for July 2014 was that the big numbers seen last month reduced slightly as those some of those jobs finalised in July and that we are now in the third month of 1,000+ job losses and the second consecutive month of 2,000+ job losses. The last day of the month was especially bad with 400 Hastings Deering jobs going in Queensland and another 95 coal positions being axed by BHP in NSW.

It wasn’t all bad news as some large operational announcements, like the Whitehaven Coal announcement of 450 jobs at its Maules Creek mine offset some of the big losses being announced in the Hunter Valley.

3 - MiningResourceGainsLosses_Chart_140801

The next employment chart looks in more detail at the main resource types (Iron Ore, Coal, Gold/Copper, Zinc/Lead/Nickel, CSG/LNG and Uranium) by either a job gain or a job loss.

Two key data points:

  • Although there were some gains in both coal and iron ore they were much smaller than the operational jobs lost in both resource types;
  • Coal has lost operational jobs now for 18 consecutive months (the last recording of no job losses was in Jan 2013).

4 - MiningSectorSentiment_Chart_140801

The last chart tracks employment gains and losses sentiment and is now updated back to December 2011.

Although the employment news is quite bad the sentiment is actually positive. I’ve seen this occur before. If you look at the difference between Jul 2013 (-24) and August 2013 (+3) you see a big jump in sentiment. This occurred during last year’s commodity crash as government pushed through mining approvals (which is a positive indicator even though it might not include any immediate employment outcomes). So although there are continued job cut announcements they are being largely offset (in terms of sentiment) by positive future announcements, such as the Adani announcement for the build of Carmichael Coal in Queensland.

Juking the Stats (July 2014)

Silver Lake Resources is set to cut more jobs as the gold miner closes its Lakewood Mill but didn’t announce how many would go or when.

Summary

It’s been another bad month for mining employment which came as a surprise as often the first month in a Financial Year is a chance for companies and governments to highlight some good news or to make positive announcements. This is reflected in the data where job losses outweigh job gains but sentiment is improving.

Saying that governments don’t create jobs, businesses do and with so much infrastructure finalising and the narrative squarely fixed on productivity I’ll suggest that you will see more negative than positive news in coming months.

Random Analytics: Australian Mining Employment Update (to end June 2014)

Some years ago while working within the Workforce Planning fraternity I quickly understood that June was a tough month for employment, no matter what sector you either guided or worked in. It might have something to do with the seasons given that companies traditionally cut staff in the coldest months. Alternately it might be impacted on the business cycle. After more than a decade in Workforce Planning I’ve found that, whatever your view, business reflects more pragmatic ends.

Last month I suggested that June is often a horror month for mining employment.

My prediction was borne out (no matter the reason). What I didn’t guess was that the job gains versus the job losses would be the worst in more than two-years, potentially making June 2014 the worst month in mining employment since the commencement of the Global Recession (effectively Nov/Dec 2008).

Here are the charts for Australian Mining Employment through to the end of June 2014.

1 - MiningJobsByState_Infographic_Jun2014_140701

 

The opening infographic looks at job gains and losses by State or Territory for the month of June 2014.

Data-points: All key mining states (with the exception of the Northern Territory) have lost significant numbers of operational mining (human) capital. The only positive is that Tasmania picked up an additional 50-positions.

2 - MiningGainsLosses_Chart_140701

The first of my mining employment charts looks at the previous 24-months from a mining employment gain and loss perspective. The positive employment numbers are split into those that reflect infrastructure (tan) and operational (blue) gains. Job losses are represented in red.

The biggest data-point for June 2014 is that the losses in employment are the greatest in two-years, effectively making June 2014, officially, the worst month for two years but, in effect, the worst month for mining employment since the Global Recession which kicked off in Nov/Dec 2008.

3 - MiningSectorGainsLosses_Chart_140701

 

The next employment chart looks in more details at the main resource types (Iron Ore, Coal, Gold/Copper, Zinc/Lead/Nickel, CSG/LNG and Uranium) by either a job gain or a job loss.

Of the 3,939 job losses for the month of June the key points are:

  • 100% were operational job losses (effectively, zero in construction);
  • 79% were included in my tally of key resources;
  • 37.5% of the total operational losses in June were in the Coal sector, the 24th month of consecutive losses in that sector;
  • 0% of the losses were in mining construction.

It should also be noted that the figures above do not include projected job cuts from BHP Billiton who are currently reviewing their iron ore business in West Australia.

4 - MiningSectorSentiment_Chart_140701

The last chart tracks employment gains and losses sentiment.

Given that I haven’t commented on this chart for some time the key points are that August –November 2012 and Q4 FY 2012/2013 plus July 2013 were very negative times for mining employment (effectively corresponding with declining commodity prices). We are currently undergoing a similar period with soft mineral pricing from late 2013 through to even more depressed prices in the last six weeks of the financial year.

One last point on the uptick in June 2014. There were lots of positive announcements for mining in June from government (i.e. positive EIS announcements) but little in the way of immediate positive employment benefits.

Juking the Stats (June 2014)

Whitehaven Coal is cutting jobs at its coal handling and preparation plant at Gunnedah in response to “tough” coal market conditions. At the same time they are not releasing much in the way of details or numbers of the people they are putting out of work and potentially on the bench for an extended time. I look forward to a future update.

Even Money Prediction

After two years of consecutive coal mining employment losses due to depressed thermal and metallurgical coal prices the continued low iron ore pricing will see a similar (and consecutive) drip feed of employment decline in that resource group.

Random Analytics: Australian Mining Employment Update (May 2014)

For a number of professional and personal reasons I have not completed, nor updated my Mining Workforce Planning Scan since September 2013 (some ten months ago). As it happens an article by Australian Mining last week reminded me that it is something I should have a look at again, especially given the recent bad news in regard to mining employment. 2014: Mining jobs cut so far… Excerpt:

Shaky commodity prices and the end of the boom have resulted in a bad year for job losses, and BHP and Rio have warned of more to follow. Cutbacks have ranged from small belt-tightening measures, such as 36 job losses at Illawarra Coal, to the level of catastrophic collapse such as when mismanaged contractor Forge Group folded leaving 1300 out of work early this year.

Coal has been the worst hit in mining, with Vale announcing the closure of all operations in the Hunter Valley for care and maintenance, among a series of other cutbacks by BHP and Rio Tinto. Queensland has also suffered, with Queensland Resources Council president Michael Roche saying that 10 per cent of mines in the state are now in a “very precarious position”.

Industry analysts have blamed oversupply on the global market for the plunge in the price of coal, with hard-coking coal having dropped to $US120 per tonne from $US330 in 2011. Iron ore has also suffered price-wise, falling from $US135 per tonne down to $US110 in April; however the industry seems to have escaped any major job losses.

There is no doubt that after that article was written the news got worse with further cuts, especially in New South Wales coal mines. With iron ore falling another $15 to just above $95 at the end of May how long before we see another round of severe job cuts in the Pilbara similar to September 2012?

The Australian article then lists a large number of job losses in 2014. But what do these job losses look like compared to job gains across the last 12-months. Also given that Australia has become so currently reliant on mineral exports such as iron ore, coal and future reliant on growth in exports of LNG and Uranium how are job gains or losses looking for these resource types.

Re-commencing the first of a monthly series in Mining Employment updates here is a look at how that story from Australian Mining translates into two charts.

1 - MiningGainsLosses_Chart_140601

The first chart looks at the previous 12-months from a mining employment gain and loss perspective. The positive employment numbers are split into those that reflect infrastructure (tan) and operational (blue) gains. Job losses are represented in red.

The obvious take away from this chart is that outside of August and September 2013 the losses have far outweighed the gains, with job cuts underrepresented to some extent as some companies chose to supress actual details. The data for May includes:

  • 392 operational jobs added;
  • 1,000 infrastructure jobs added;
  • 1,944 jobs lost.

2 - MiningSectorGainsLosses_Chart_140601

The second chart attempts to breakdown the job gains and losses by key resource types (Iron ore, Coal, Gold, Copper/Zinc, CSG/LNG & Uranium). Similar to the previous chart the only period of overall job growth occurred in these resource types happened between July and September 2013. The May details were:

  • Iron Ore: 120 lost;
  • Coal: 350 added and 828 lost;
  • Gold: Newcrest opened the Cadia East Gold Mine (see Juking the Stats) and 94 lost.

Juking the Stats (May 2014)

The most notable manipulator of employment information in May was Newcrest which opened its Cadia East Gold Mine with the assistance of NSW Premier Mike Baird. The mine is expected to support 1,900 direct and indirect jobs (source: MineWeb). No doubt it has created some employment but given that Newcrest NEVER shares it job loss data (Telfer July 2013 and November 2013 most recently) and its financials have been less than satisfactory I felt that conflating direct and indirect employment might be a way to also conflate its entire Cadia Valley Operations footprint). I have requested further details directly from Newcrest and am awaiting a reply before including Gold employment numbers for May.

Other Jukers include:

  • Perilya who ended their MacMahon contract which will result in job losses but no specifics were provided;
  • BHP Billiton has confirmed that there will be job losses (a source suggests in the hundreds) at Worsley Alumina but have not confirmed details.

Final Observation(s)

May/June tend to be months where companies clean house, especially around employment so June may prove to be another awful month for further job cut announcements. On that note, I will return next month with updated employment charts and a revised employment sentiment chart which will hopefully add another dataset for your consideration.

Random Analytics: Mining Workforce Planning Scan (Sep 2013)

The Mining Workforce Planning Scan is a mixed quantitative/qualitative report card built from relevant online industry magazines and media sources. Utilising 14 data items (expressed as categories) the scan collates relevant stories over a period of time (in this case a calendar month) to give a picture of how Australian MINING is positioned from a workforce planning perspective.

Two Solid Months

With the Australian election now over there has been a return to confidence in the mining sector not seen since June 2012 when more than eight months of positive, or at least neutral employment sentiment were recorded (my analysis currently only goes back to November 2011). In terms of the mining workforce planning scan the trend is confirmed when the employment sentiment is consistently zero or above (see Chart 2) AND the employment category number is below Work Health & Safety (WH&S) or as the market tightens Industrial Relations (IR) (see Chart 1). We are not quite there as there is still some delayed cost cutting going on along with new ventures being announced.

Learning & Development & Research & Development (L&D/R&D) recently spiked during the August month on the back of a lot of election chatter around mining skills as an answer to other slowing sectors (see Chart 1 & 2). This has returned to a more normalised value during September but was an interesting outcome from the 7 September Commonwealth election.

Employment numbers were strong but it should be noted that many of the announcements made were actually on the infrastructure side making up 6,270 (or 87%) of the total monthly employee gains reported and most of those were actually detailing the tier 1 or tier 2 arrangements for iron projects in Western Australia or LNG projects in the Surat Basin, Queensland (see Chart 3).

Chart 1: Workforce Planning Categories

 2 - Mining_Categories_Sep2013_131014                      

The following chart is an 18-month look at 14 mining related workforce planning data items (expressed as categories) and the frequency of stories.

Chart 2: Positive/Negative Index

3 - Mining_PosNegIndex_Sep2013_131014

The next chart is an 18-month look at 14 mining related workforce planning data items (expressed as categories) and their positive or negative weighting.

Chart 3: Mining Employment Gains & Losses

4 - Mining_Employment_Sep2013_131014

The following table looks at the reported employment gains and losses. Job losses are actuals as reported by mining industry sources but often do not reflect the total loss of employment as some companies chose to limit information relating to redundancies. Employment gains are forecast and include infrastructure phases. Often employment gains are overstated as they link to public relations exercises.

Final Thought or Prediction

I see another month of transition data coming in as some companies continue to tidy up their less difficult workforce development areas (contractors, costs and corporate), some companies move beyond the low hanging fruit to address more difficult components of their strategic workforce planning and a number of companies launch greenfields proposals.

Interestingly, I also see the commencement of a new phase of Industrial Relations activity as commodity prices solidify and productivity ramps up.

Note: My previous Mining Workforce Planning Scan can be found at Random Analytics: Mining Workforce Planning Scan (August 2013). If you are interested in “How does the global economy work in a world of reducing ‘work’” then please check out my other blog PeakJobs.

Random Analytics: China Mining Fatalities (August 2013)

Xinhua had some interesting (and sobering statistics) on mining casualties. They include:

  • Mine accidents killed 37 workers for every 100-million metric tonnes of coal produced in 2012, down from 56.4 for 2011 but well above the US which reported 1.9 in that same year;
  • 1,384 fatalities occurred in Chinese coal mines in 2012, down from 1,973 in 2011 and 2,433 in 2010;
  • 93% of coal gas blasts were caused by poor ventilation.

China is acknowledged by many to be the most dangerous place on Earth to work in mining, especially when it comes to coal mining.

Currently updated to the end of the first week in September here is a look at the major incidents in the mining sector in China as reported by Xinhua and other media outlets.

Infographic

  1 - ChinaMiningDeathsInfographic_130909                     

There have been 46-major incidents which have been reported by Xinhua. These incidents have recorded 446 confirmed fatalities and 236 injuries. 54-persons were reported as missing without confirmation of their subsequent rescue so the fatality count could be as high as 500.

As shown above Coal is the most dangerous resource to mine in China with 38-incidents (83%) and 320-deaths (72%). Copper was the second most dangerous resource by numbers with just two-incidents (4%) but 86-deaths (19%). Incidents in gold, sulphur and oil extraction accounted for the rest of the balance.

When it comes to the cause of major incidents which result in fatalities gas blasts make up slightly more than half of the current total with 18-incidents (39%) and 225-deaths (51%). Landslides were the second leading cause with 4-incidents (9%) and 103-deaths (23%) while poison gas also had 4-incidents (9%) but just 41-deaths (9%).

Other causes include flood (7-incidents, 20-deaths), mine collapse (4-incidents, 18-deaths), accidental explosive discharges (3-incidents, 17-deaths), fire (2-incidents, 15-deaths), electrocution (1-incident, 5-deaths), oil explosion (1-incident, 2-deaths). Two incidents (4-deaths) have an unknown cause.

There has been a lot of winter rain in China which has caused severe flooding in some parts of the country and increased the risk profile of landslides and flooding.

Another interesting data point is that at least seven incidents and 60-deaths can be confirmed in illegal mining operations.

Fatalities by Province

2 - ChinaMiningDeathsbyProvince_130909

The above infographic is the breakdown of incidents and fatalities by Province.

Fatalities by Month

3 - ChinaMiningDeathsbyMonth_130909

The final graph looks at reported mining deaths by month including provisional numbers for the current month. I have split the graph to show confirmed fatalities and those still missing at the time of the most recent incident reporting. It should be noted that often Chinese media will report a major incident but do not do follow-up updates.

To August the major incident average is 5.5 per month and the fatality average ranged from 54 to 60.75 (if you include those reported as missing).

To date the three most significant mining disasters of 2013 include:

  1. Jiama Copper Gold Polymetallic Landslide (29 March 2013): On a Friday morning a three kilometre landslide with more than 2-million cubic metres of rock and debris buried the Jiama Copper Gold Polymetallic company facility located within the Tibet Autonomous Zone and 83-workers who were onsite at the time. More than 1,000 first responders attended the scene along with 129 pieces of plant but unfortunately there were no survivors.
  2. Babao Coal Mine Gas Blasts (29 March & 1 April 2013): On the same day as the Jiama incident in Tibet a gas blast ripped through the Babao Coal Mine in Jilin Province killing 36 and wounding 12. At the time the company underreported the incident. The provincial government put an immediate halt on production for safety inspections but the mine management disregarded the order and sent further work crews into the shaft. A subsequent explosion occurred 3-days later killing a further 17 and wounding eight bringing the combined disaster total to 53-dead and 19 wounded. The Supreme People’s Procuratorate (SPP) conducted investigations of the mine and found that coal had self- ignited and there were a lack of fire-preventing measures in place all caused by poor management practices. Senior managers have since been prosecuted, as have officials including the local mayor and members of the Work Safety Bureau.
  3. Taozigao Coal Mine Gas Blast (11 May 2013): As 108 unauthorised workers toiled in the Taozigao Coal Mine in Sichuan Province a gas blast erupted killing 28 and wounding 18. This incident is the largest known illegal mining disaster of 2013.

The most recent incident was at the Yangliutan Coal Mine in Guizhou Province, South West China when five workers were killed by electrocution and another three were hospitalised.

Final Thoughts

This analysis can only scratch the surface of what is going on in the Chinese mining industry.

A commonality of the 46 incidents reported by Xinhua was that they covered accidents which involved three or more persons. Thus, a huge amount of individual deaths and injuries that can happen on any mine in any part of the world including Australia must surely go unreported. There is also no way to validate this data against a Chinese regulator. In all fairness to the Chinese it is also difficult to get immediate injury and fatality data from Australian mining regulators and Work Cover entities.

Another factor here is illegal mining. To date at least seven incidents and 60-deaths occurred in illegal mines which have subsequently required a major rescue effort. How many unknown accidents and tragedies have gone unreported?

While China remains the most power hungry nation on the planet one unfortunate (yet certain) point can be taken from this analysis.

There will be more tragedies.

 

Note: I also complete a monthly Australian Mining Workforce Planning Scan. If you are interested you can find it here: Random Analytics: Mining Workforce Planning Scan (August 2013).

Random Analytics: Mining Workforce Planning Scan (Aug 2013)

The Mining Workforce Planning Scan is a mixed quantitative/qualitative report card built from relevant online industry magazines and media sources. Utilising 14 data items (expressed as categories) the scan collates relevant stories over a period of time (in this case a calendar month) to give a picture of how Australian MINING is positioned from a workforce planning perspective.

Election Bounce

If there was one key theme of the August it was that sentiment shifted from extremely negative to very positive. In fact, the sentiment reading of +14 was the highest I’ve recorded in 22-months of confirmed data.

With most commodity prices stabilised or increasing, the Australian dollar reducing into a more competitive range and miners now fully focussed on increasing productivity have we reached the point where the sector is on the rebound?

At this stage I’m going to say, maybe.

The mining industry has made no secret of its distrust and dislike of the current Labor government (no matter who leads it) and its desire to see a new Coalition team in place. No matter whom leads the next government the following is still true:

  • Commodity prices will still be dictated by China for the foreseeable future;
  • The Australian dollar will continue to rise or fall on the whim of US Federal Reserve decisions;
  • Mining took its eye of the productivity ball during the boom. Future productivity gains will come from the sectors ability to contain its structural costs by not re-inflating all of its input costs (again).

The data does look good for August. It’s certainly the best that I’ve seen in a long time.

It could just all be election bounce though.

Workforce Planning Categories

  2 - Mining_Categories_Aug2013_130902                     

The following chart is an 18-month look at 14 mining related workforce planning data items (expressed as categories) and the frequency of stories.

WH&S (Work Health & Safety) was the leading category with 20-stories (24.7%). Generally WH&S is one of the leading categories when mining is tracking well or during BAU (Business-As-Usual) as safety programs and incidents reporting is reasonably consistent (averaging 18.25-stories per month in 2013).

Employment was the second leading category with 19-stories (23.5%) as the mining sector paused its cost cutting activities after the election was called and recommenced discussing future prospects. L&D/R&D (Learning & Development/Research & Development) was the third category with 11-stories (13.6%) without any election related announcements.

Subjects that were not discussed in August were SkillsShort (Skills Shortages) and Work/Life (Working Life Fit often referred to as Work Life Balance). The last Skills Shortage story was in March, the only one of the year (or just 0.0006% of all stories). That’s not to say there are no operationally critical, critical or hard-to-fill roles in mining, just the sector has gone through two heavy phases of cost cutting and job shedding thus few employees are moving and turnover rates would be low.

Positive/Negative Index

3 - Mining_PosNegIndex_Aug2013_130902

The next chart is an 18-month look at 14 mining related workforce planning data items (expressed as categories) and their positive or negative weighting.

The most negative indicator for the month was IR (Industrial Relations) with a -4 sentiment. As the only negative reading greater than -1 and the most positive month in 22-months of data I wouldn’t read too much into this, especially during an election month. That said, with the Coalition almost certainly forming government next week IR could become a more interesting space.

L&D/R&D was the leading positive category with a +7 for August, the highest positive monthly indicator for 2013. There were a lot of announcements, like the Tasmanian University Research Lab co-funded with Newcrest or the University of Wollongong’s opening of the Joy Global Remote Access Facility as examples.

Given the recent $5.77-billion dollar write-off and job slashing I wonder where Newcrest found $2.5-million to open anything non-core business? Very curious.

Mining Employment Gains & Losses

4 - Mining_Employment_Aug2013_130902

The following table looks at the reported employment gains and losses. Job losses are actuals as reported by mining industry sources but often do not reflect the total loss of employment as some companies chose to limit information relating to redundancies. Employment gains are forecast and include infrastructure phases. Often employment gains are overstated as they link to public relations exercises.

With just 22-jobs confirmed lost and 6,885 jobs projected the employment numbers in August were very impressive.

Although it still has to complete the Commonwealth Department of Sustainability, Environment, Water, Population and Communities EIS the Waratah Coal project received Queensland State approval. Officially this project will generate 3,500 infrastructure jobs from 2014 and 2,300 operational jobs from 2016 onwards. As a rule of thumb I think of the coal industry as turning every four infrastructure jobs into one FTE when they commence operations. So 2,300 in 2016 is probably closer to around 900 operational roles.

The Shell Prelude floating LNG were a little more honest when they forecast their job numbers suggesting that 1,000 jobs would be created by 2017 including 350 on the platform and 650-indirectly. LNG is a worse converter of infrastructure to operations phase employment and this is a project where most of the construction is modulised offshore then shipped in. I’ll be following this one closely just to reset my modelling.

Internationally, job shedding is ongoing with 1,700 cut from Oyu Tolgoi (Mongolia) and 920 gone from Tampakan (Philippines).

Here’s a look at the Aug data.

5 - Mining_Data_Aug2013_130902

Story of the Month

The story of the month is the Workplace battle which looms over Collinsville and the increasing use of transit workforces as industrial relations instrument rather than a response to skills shortages or for economic considerations.

Final Thought or Prediction

With the two party preferred split currently sitting at 54-46 (2/09) in the Coalition’s favour it is highly probably there will be a change of government on Sunday.

I’ll enjoy reading this blog in three years but my prediction will be that a Coalition government will not necessarily mean a radical overhaul of Industrial Relations during their first term, even  with a strong push from the business community (*unless there is a massive downturn which impacts Australia).

Happy Election and don’t forget to vote.

Random Analytics: Mining Workforce Planning Scan (Jul 2013)

The Mining Workforce Planning Scan is a mixed quantitative/qualitative report card built from relevant online industry magazines and media sources. Utilising 14 category metrics the scan collates relevant stories over a period of time (in this case a calendar month) to give a picture of how the industry is positioned from a workforce planning perspective.

Discussing Automation (again)

Although Augmentation/Automation only had four stories for the month of July (representing 3.9% of total inputs), the subsequent robust discussion on several forums captured the attention on many industry commentators. University of Queensland’s Centre for Social Responsibility in Mining (CSRM) set off the debate when it released its Exploring the social dimensions of autonomous and remote operation mining: Applying Social License in Design report.

I discussed the subject on LinkedIn via the MiningIQ forum. It’s a lengthy discussion but my comments in relation to employment, posted 24 July 2013 included:

As welcome as this report is, I actually believe the authors are not fully recognising the full downside risks of a fully automated mining environment. Mining currently only employs around 264,000 persons (via Skills Info and correct as at Feb 2013). A cut of 50% in an open pit environment would not necessarily be picked up on the automation side, nor through large scale production increases thus you could start forecasting a peak jobs horizon for mining employment numbers in Australia in the short to medium term.

I also believe that the 50% number of open pit reductions is probably conservative. Just thinking about an Operator Hauler FIFO 14/7 shift with 3 groups in my mind’s eye I can immediately conceive of an 80% reduction as a baseline once an automated system was implemented!

I also commented on the safety issue 27 July 2013:

Within a decade I see a case where it will start to become MORE (not less) expensive, at least from an insurance perspective, to choose to operate heavy machinery with only human inputs. Let me be very clear here. As data mining becomes more commercially aware (intrusive) insurance companies will eventually overcharge or refuse to insure those industries which fail to incorporate strict augmentation and robotic controls on industries that utilise heavy equipment including miners.

Many people see automation as an all or nothing argument. That is its robotics and automated systems over all human inputs. This is not the case. My final comments on the forum, added 31 July 2013 covered that as well:

At no time has anyone on this forum discussion or myself stated that there will be no employment in mining. There will always be a requirement for onsite operational and maintenance employee’s, just the numbers will be much lower and the KSAOC’s will need to be much higher. (FYI: Knowledge, Skills, Attributes & Other Capabilities).

Megan Edwards (Editor and Director of MiningIQ) did a good write up of the main points, including some of my comments via Cost Reduction, Automation and Change Management – a Natural Trifecta? (Note: You will need a sign-on to access the story).

Here are the analytics and analysis from July.

Workforce Planning Categories

2 - Mining_Categories_Jul2013

The following chart is an 18-month look at 14 mining related workforce planning categories and the amount of times it features as a story.

Employment was the leading category with 42-stories (41.2%), the sixth consecutive month as lead category and almost unchanged in terms of weighting from the June with 38-stories (41.3%).

For the sixth month WH&S (Work Health & Safety) was the second leading category with 14-stories (13.7%). AOD/Crime was third with eight stories (7.8%).

This is the first time AOD/Crime has finished in the top 3 as a category with data going back to January 2012. Its elevation is due to a noticeable rise in incidents plus an increased willingness for mining companies to report, whereas in the past they may have not discussed these matters publically. An example of a recent incident is an act of sabotage which occurred on a Bechtel worksite on Curtis Island, Queensland. It should also be noted that the ICAC Commission did not feature in my AOD/Crime data as it never impacted on workforce planning or employment.

I’ve also included some key time periods which underline the 18-month story. July 2012 was the commencement of the commodity crash and the first phase of job and cost cutting which saw a spike in Employment related stories (mainly negative). By December 2012 the commodity prices had stabilised somewhat but off peak pricing. At the time I thought that the mining sector had returned to Business-As-Usual (BAU) but from mid-February I’ve picked up another round of job and cost cutting impacting on Employment. This second phase is currently still ongoing and deeper in terms of time period, negative sentiment and employment impact than the first round (Jul-Oct 2012).

Positive/Negative Index

3 - Mining_PosNegIndex_Jul2013

The next chart is an 18-month look at 14 mining related workforce planning categories and their positive or negative weighting.

Employment continues its highly negative trend with a further dip in July. At -18 it’s not at its worst level on record which was -20 in September 2012 but it is close enough to warrant further investigation.

At the other end of the scale Engagement recorded a +4, the tenth time in 18-months that it has been the most positive indicator.

Mining Employment Gains & Losses

4 - Mining_Employment_Jul2013

The following table looks at the employment current reported gains and losses. Reported job losses are actuals as reported by mining industry sources but often do not reflect the total loss of employment as some companies chose to limit the amount of information in relation to redundancies. Employment gains are forecast and include infrastructure phases of employment. Often employment gains are overstated as they link to public relations exercises.

July is the fourth month this year where reported employment losses were greater than 1,500. With the Queensland Resources Council stating that more than 7,000 mining jobs were lost in Queensland alone the question that I’ll be looking at later this month in a separate article will be “has mining reached its peak jobs number”.

Here’s a look at the July data.

5 - Mining_Data_Jul2013

Story of the Month

Did you know that helium is used in the production of semi-conductors and utilised for Magnetic Resonance Imaging (MRI) devices? I was not aware that the United States had a Federal Helium Reserve and that rationing of the gas has already happening. Nothing to do with workforce planning but a great article by Brent McInnes and the pick of my mining reads for July.

Final Thoughts

Last month I stated that if we had another bad set of Employment numbers in July we would be in a period similar to the commodities crash of July to October 2012.

Upon reflection I’d say that we have now exceeded the commodities crash in terms of employment friction.

Production numbers are certainly up. With more supply capacity coming on-line in coming years and some companies still locked into forward contracts (which means they are shipping commodities, namely coal at less than the total price of production) you won’t see an immediate rebound in pricing.

The risks, especially for employment are on the down side.

This is going to mean further job shedding as companies continue to tighten fiscal belts and this second phase of cost cutting looks to be ongoing, at least in the short term.

Thus more friction and workforce planning pain for both employers and employees.

Note: My previous Mining Workforce Planning Scan can be found at Random Analytics: Mining Workforce Planning Scan (June 2013).

Random Analytics: Mining Workforce Planning Scan (Jun 2013)

The Mining Workforce Planning Scan is a quasi-quantitative report card built from relevant online industry magazines and media sources. Utilising 14 category metrics the scan collates relevant stories over a calendar month period to give a picture of how the industry is positioned from a workforce planning perspective.

Body Count

After last month’s poor Employment numbers which dipped below -10 negative sentiment for the first time since the commodities crash of August through to October last year I stated that if this route were to continue then I would be very concerned, especially if the numbers being cut were more than just peripheral cost cutting.

The numbers were bad all month but the last week of Financial Year 2012/2013 was especially brutal for coal which reported a loss of more than 1000-jobs in a single week. Gold was also very negative with more jobs and reviews being shed globally.

I’m also not convinced about the big operational employment numbers forecast to come out of future mega-mines such as Kevin’s Corner (QLD) or refining capacity like the Curtis Island facility.

Looking at a recent example of refining from Portugal José Manuel Fernandes stated:

Last April, GALP [a Portuguese energy conglomerate] inaugurated a renovated refinery in Sines. At €1.4bn, it is the biggest industrial investment in the history of Portugal. It will have a huge impact on our balance of payments, because we will export diesel fuel. All of this is excellent, except when it comes to the impact in terms of jobs. Only a hundred people will benefit. That is next to nothing, and it is an example reveals the dilemma of modern economies. Huge investments, including investments in heavy industry, are capable of having a significant impact on competitivity and on the trade balance, but they create very few jobs. Sometimes they even reduce the number of employees. What is true of GALP is also true for most of the industrial sectors in Portugal, as well as for the rest of Europe.

It’s been a tough month for mining and I’m not convinced we have seen an end to the bad news.

Categories

Employment was the leading category with 38-stories (41.3%), the fifth month in a row and a record high over 18-months of data analysis. The next highest Employment tally was September 2012 with 36-stories (39.6%).

Like April, WH&S (Work Health & Safety) was the second leading category with 14-stories (15.2%) and IR (Industrial Relations) and FIFO/DIDO were equal third with 9-stories (9.8%).

If you want to get a feel for where mining is going there have been no stories recorded for SkillsShort (Skills Shortages) in June and only one article, thus far, in 2013. For context during the period Jan-Jun 2012 there were six SkillsShort stories.

What this is telling me is that mining is cutting employee’s quickly enough that new ventures have enough candidates to fill most of their hard-to-fill and critical roles and the operational critical roles (generally only around 5% of a workforce) are holding onto positions rather than risk a move.

2 - Mining_Categories_Jun2013

Positive/Negative Index

From a +4 in March Employment has been on a steady reversal in terms of sentiment. Returning a -4 in April (-8 points) it has continued its rapid decline with -11 recorded in May (-7 points) and most recently a -16 (-5 points). Only September 2012 was more negative when a -20 was recorded.

On the positive side both Engagement & FIFO/DIDO recorded the monthly high of +3. Engagement usually tracks pretty well but FIFO/DIDO as the best indicator for the month comes as a surprise. Looking at the detail there was only one negative story which looked at FIFO mental health and four positives. Two of the positives looked at changing the FIFO/DIDO workforce to better suit local conditions, one was a response to the negative press FIFO has received and another was a FIFO support consultancy which is owned and operated by a miner’s spouse.

3 - Mining_PosNegIndex_Jun2013

Mining Employment Gains & Losses

May was the second month that saw 2013 new employment numbers fewer than 1,000, although there were some employment projections as far out as 2020.

4 - Mining_Employment_Jun2013

Here’s a look at the June data.

5 - Mining_Data_Jun2013

Story of the Month

FIFO is a tough business, especially for families so it was nice to see the story on Anna Rushton (I’ve linked the original story via The West Australian) who has started her own little consultancy FIFO Success. As a mum and wife to a FIFO miner she obviously could see a business opportunity!

Final Thoughts

If we have another set of -10 or worse numbers for Employment sentiment in July we are then in a period similar to the commodities crash from August last year.

Given that production numbers are starting to ramp up (especially as coal and iron ore capacity comes on line), there is softening demand (especially from China) and declining commodity prices I wouldn’t be surprised if we continue to see more bad news for mining and miners.

 

Note: My previous Mining Workforce Planning Scan can be found at Random Analytics: Mining Workforce Planning Scan (May 2013).

Updates (10/07/2013)