Random Analytica

Charts, Infographics & Analysis without the spin

Tag: Mining

Random Analytics: Mining – A Dangerous Business (China to 24 July 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;
  • 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.

Here is an updated analysis of Chinese incidents resulting in significant casualties as reported by official Chinese media sources through to 24 July 2013.

Fatalities by Province

1 - ChinaMiningDeathsbyProvince_130725

To date there have been 40-major incidents which have been reported by Xinhua. This includes 411-deaths and 229-injuries. Due to a lack of follow-up reporting by Xinhua and the severity of Chinese mining accidents there are also 47-missing persons, many of whom should be considered as deceased.

The single largest incident was that of a landslide in Tibet which buried 83 from the Jiama Copper mine under 2-million cubic metres of mud and rock on the 29th March. This single incident also confirmed Tibet as the province with the most confirmed fatalities to date.

The South West province of Guizhou had the most reported incidents with seven separate incidents and a combined fatality count of 70. The most serious incident from Guizhou was a colliery gas blast at the Machang mine which left 25-dead and a further 20-injured.

Both North East and South West Regions have recorded 11-incidents each. The South West Region (which includes Tibet) had the worst data, so far recording 195-deaths. The North East had 114-deaths.

The most recent incident reported by Xinhua was the death of 10 sulphur miners in Chengcheng County, Shaanxi who were killed when a fire broke out on the 24th July 2013.

Note: The infographic was created using Tableau Public.

Fatalities by Resource

2 - ChinaMiningDeathsbyResource_130725

Coal continues to be the most dangerous resource to mine in China with 292-deaths or 71% of all reported fatalities. Additionally, with 33 out of the 40 incidents where the resource was known attributed to coal it has dominated the news representing 82.5% of all reported incidents.

Copper was the second most dangerous resource by numbers with 86-deaths (20.9%) but only two incidents (5%). Although we are just over half-way through the year I believe that percentile will come down further given that most of fatalities from copper mining came from a single incident (the Tibetan landslide) which even by Chinese standards was unprecedented.

Other commodities with reported deaths include gold (2.4%), sulphur (2.4%) and oil (0.5%). There have been two incidents and 11-deaths that had no details of the resource being extracted.

Fatalities by Month

3 - ChinaMiningDeathsbyMonth_130725

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 latest reporting. Often Chinese media do not follow-up on previous incidents.

To June the incident average is 5.7 per month and the fatality average was ranged between 62.5 to 69.2 (if you include the missing). With three incidents which claimed more than 25 lives each, including the Tibetan landslide which killed 83, March was the worst month on record for 2013.

Final Thoughts

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

A commonality of the 40 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 six incidents and 54-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.

 

—————————–

Update (8/07/2013)

  • Updated all infographics and some text with an additional six incidents between 6 June and 8 July 2013.

Update (25/07/2013)

  • Updated all infographics and some text with an additional three incidents between 9 – 24 July 2013.

Random Analytics: Mining Workforce Planning Scan (May 2013)

One Step Forward, Two Steps Back

There has been a marked decrease in mining industry Employment sentiment since the recent high experienced just three months ago in March, returning to levels I have not seen since the commodity crash of mid-2012. At the same time as Employment sentiment is hitting worrisome levels the discussion about skills shortages in the mining sector has been null and void for 2013, potentially reflecting an industry that is waning even faster than the pundits are suggesting by the reducing FDI (Foreign Direct Investment) figures.

To highlight this issue Coffey announced 54 projects that it had projected consulting on were either delayed or cancelled with a Q4 reduction in revenue of nearly $14-million (see Geosciences Contracted Projects Delayed or Cancelled and thanks to Andrew Duffy for tweeting this prior to his overseas trip). This loss of revenue may well result in the loss of around 150-jobs from the Australian Geosciences and Project Management business.

1 - Coffey-Projects-Cancelled

While some of the figures look grim, projects are still going ahead. During the month an iron ore junior, Sherwin Iron got the nod while discussions are progressing on all the mega-coal mines in Queensland are still progressing (although whether its momentum carrying it forward may be a question worth asking). Even while coal struggles, juniors, such as Taroborah Coal are still moving ahead on community consultations.

It really is a case of one step forward, two steps back.

Categories

Employment was the leading category with 24-stories (25.5%), the fourth month in a row. Of the past 12-months, Employment has been the leading category nine times centred around the commodity crash from mid-2012 and in the New Year as continued cost cutting has impacted on jobs.

Like April, WH&S (Work Health & Safety) was the second leading category with 23-stories (24.5%) and IR (Industrial Relations) was third with 11-stories (11.7%).

If you want to get a feel for where mining is going there have been no stories recorded for SkillsShort (Skills Shortages) in May and only one article in 2013. 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) and holding onto positions rather than risk a move.

2 - Mining_Categories_May2013

Positive/Negative Index

For the first time since October 2012, Employment has returned to being the most negative indicator. With five positive and 16-negative stories which resulted in a minus -11 reading for May. What is more concerning is that just two months ago this category had its highest reading in a year and looked to be on an improved trend-line.

For the third consecutive month and with three positive stories and nothing negative reported L&D/R&D (Learning & Development/Research & Development) finished as the most positive indicator. Given that it looks at mainly positive stories about mining L&D investment or education programs over the past 12-months this indicator has been the most positive on six occasions.

3 - Mining_PosNegIndex_May2013

Mining Employment Gains & Losses

May was the first month that saw 2013 numbers fewer than 1,000 (with no employment opportunities discussed in 2014). With just 1,190 jobs new positions reported over the next five years it was also the worst month in terms of employment projection on record for this year.

As discussed in the introduction there were three articles where the number of infrastructure and operational jobs on offer exceeded 100. They were Sherwin Iron (600), Taborah Coal (330) and Northern Platinum (200 from 2015). On the negative side Coffey were looking to cut 150 followed by Transfield (113), BHP Iron (100) and Boggabri (106). Controversially, the job losses which hit Boggabri in NSW were featured on ABC 7.30 as local workers were cut over 457-visa employees.

4 - Mining_Employment_May2013

Here’s a look at the May data.

5 - Mining_Data_May2013

Story of the Month

My pick of the month is a story of three parts. It’s a story of a company trying to de-unionise its workforce by recruiting cleanskins. Based on the numbers it’s also a fantastic recruitment story for a 100% FIFO workforce. Again, based on the numbers it’s also a tale of how hard it must be to break into the mining industry without relevant experience.

After taking 14,000 applications for the 750 jobs on offer for Brisbane residents in its Bowen Basin mines, BMA closed off its Cairns recruitment campaign after receiving 8,000 applications for just 250-positions. This means that for Brisbane there were 18.7 applicants per position, while for North Queensland the ratio was 32 to one.

With this level of positive attraction in the recruitment campaign (and even with a potential 15-25% turnover for FIFO workers) it would now seem reasonable to suggest that the union campaign against BMA waged through to 2012 was misjudged to the detriment of local workers. Obviously the tier one miners will accept more expensive deployment models and malleable staff over instability.

It will be interesting to see how the IR story plays out in coming months if the mining sector continues to ease.

Final Thoughts

In my February Mining Workforce Planning Scan I stated that the mining sector had returned to Business As Usual, although cost cutting would be ongoing. Now that we are in the first week of June with End of Financial Year just around the corner you can just see the hint of troublesome currents.

Although a minus -11 Employment sentiment is awful, it’s not as bad as September 2012 when the commodity decline saw that number down as low as minus -20.

If we were to see a similar or worse number in June I would then be starting to get really concerned, especially if we started to see more than just cost-cutting numbers come through.

But then again, things could just return back to normal.

Note: My previous post on Mining Workforce Planning Scans can be found at Random Analytics: Mining Workforce Planning Scan (Apr 2013)

Random Analytics: Mining – A Dangerous Business (China to 14 May 2013)

On Saturday 11 May 2013 around 2pm in the afternoon more than 100 Chinese miners toiled in the depths of the Taozigao coal mine in Sichuan province unaware that within minutes they would be subject to a gas explosion brought on by a build-up of gasses from poor ventilation in an illegal operation. 28 would subsequently die and another 18 would be wounded, at least eight critically. Barely 24-hours prior to this incident another gas blast would kill 12 and injure two in the neighbouring province of Guizhou.

Dual incidents of this magnitude were enough to get global press including a mirrored story via Australian Mining which reported the initial incident.

A previous Xinhua story had some interesting (and sobering statistics). 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;
  • 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.

Now putting aside the fact that Xinhua is the official Chinese media outlet I thought I would do some digging into the safety record of Chinese mines and (time permitting) keep track over it over the course of 2013.

Here is my analysis.

1 - ChinaMiningDeathsbyProvince_130515

Map Details

Just looking at Xinhua data to 14 May there have been 28-major incidents which include 336-fatalities and 160-injuries. Due to a lack of follow-up reporting by Xinhua there are at least 42-people unconfirmed as either dead or rescued from various floods and collapses, although I hope to follow this up by interrogating provincial newspapers.

The single largest incident was that of a landslide in Tibet which buried 83-miners of the Jiama Copper mine under 2-million cubic metres of mud and rock on the 29th March. This single incident also confirmed Tibet as the province with the most confirmed fatalities to date.

The South West province of Guizhou had the most reported incidents with seven separate incidents and a combined fatality count of 70. The most serious incident from Guizhou was a colliery gas blast at the Machang mine which left 25-dead and a further 20-injured.

Both North East and South West Regions recorded 10-incidents each. The South West Region (which includes Tibet) had the worst data, recording 189-deaths against the North East which had 112-deaths.

The most recent incident reported via Xinhua was covering the gas blast at the illegal Taozigao coal mine on the 12th May 2013.

2 - ChinaMiningDeathsbyResource_130515

Fatalities by Resource

Coal continues to be the most dangerous resource to mine in China with 240-deaths, almost 3 out of every four reported fatalities occurring via that commodity. Additionally, with 25 out of 28 incidents attributed to coal it also made up 89.3% of all reported incidents to date.

Copper was the second most dangerous resource by numbers with 2 incidents (7.1%) and 86-deaths (25.6%). Although we are not yet half-way through the year I believe that percentile will come down over the course of 2013 given that 96.5% of that commodities fatalities came from a single incident, the Tibetan landslide, which even by Chinese standards was unprecedented.

With one carbon monoxide poisoning incident (3.6%) and 10-deaths (3%) gold was the only other commodity to have a significant reportable incident.

3 - ChinaMiningDeathsbyMonth_130515

Fatalities by Month

The final graph looks at reported mining deaths by month including provisional numbers for the current month.

Not including May the incident average for the first four months is 6.5 while the monthly average for deaths is at 74-deaths. Interestingly the incident variation is tight (between 5 and 8) while the fatality variation is more diverse (between 22 and 155).

Final Thoughts

Without discussing censorship, there is no doubt that the numbers I have discussed here only scratch the surface of Chinese mining fatalities.

A commonality of the 28 incidents reported by Xinhua was that they covered incidents with 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 go unreported by the national Chinese media.

Another factor would be illegal mining. At least two incidents and 40-deaths that were recorded occurred in illegal mines, potentially unknown to Chinese officials until a major rescue effort was required.

That aside, everything that I discover about China is big.

Unfortunately that also includes fatality counts in its mining industry.

Updates (15/05/2013)

  • Added Fatalities by Month chart.

Random Analytics: Mining Workforce Planning Scan (Apr 2013)

Robotic Replacement expands in Australia

I spend a lot of time analysing either the stories with the most content or with the most positive or negative impact. Some categories don’t get the coverage in terms of either content or impact that they deserve.

Although it only had two stories for the month of April the indicator Augment(ation), which tracks all things to do with work augmentation, automation and robotic replacement was the category with the most impact.

The first story was the announcement that Hitachi will commence trailing automated trucks at the Meandu coal mine in the between the Sunshine Coast and Wide Bay Burnett regions of Queensland (just 2-hours north-west of Brisbane). The first three EH5000 AC trucks were expected to arrive by the end of April with Stanwell running trails over the next three-years. This is also the first real robotic replacement deployment in Queensland within range of the most extensive coal deposits in Australia (the Bowen and Galilee Basins) and is an ideal recce for Hitachi who has plans to develop more autonomous equipment to the surface mining industry by 2017 (as some of the larger projects in Queensland come on-line).

The second story was a robotics replacement milestone reached in Western Australia. Rio Tinto announced that its driverless trucks had now moved more than 100-million tonnes from its West Angelas, Yandicoogina, and more recently the Nammuldi operations. That’s almost double the amount Rio moved when it featured on the 7.30 Report (21 Feb 2012) stating it had moved 57-million tonnes.

All of this as BIS Shrapnel revised its engineering and construction numbers down from its 2012 report, stating that the nadir will commence from 2014 and not 2015. Mining doesn’t employee big numbers compared to other sectors when in its operations phase, it does however employee big exciting numbers during its infrastructure phase (which is currently still ongoing). Anecdotally, I had a conversation with a colleague who runs a Job Services Australia office who told me that the only ‘tradie’ (Australian slang for construction worker) he has seen since 2008 are those who have lost their license.

1 - Mining_AutomatedMiningTruckSites_Apr2013

Categories

For the third consecutive month Employment was the leading category with 27-stories (32.9%) more on job cutting than employment creation this month. WH&S (Work Health & Safety) followed with 22-stories (26.8%) while IR (Industrial Relations) finished third with 9-stories (11%) after a quiet March.

No stories were recorded for AOD/Crime (Alcohol & Other Drugs) or SkillsShort (Skills Shortages) in April.

2 - Mining_Categories_Apr2013

Positive/Negative Index

With one positive and seven negative stories WH&S, at minus 6 was the most negative indicator for April. The articles included at least four significant injuries and another site-death; this time of a contractor who collapsed at the Wesfarmers owned Curragh Coal Mine.

After six positive stories, L&D/R&D (Learning & Development/Research & Development) finished as the most positive with plus 6, the best monthly positive indicator for the first four months of 2013. The stories included the mining industry detailing its $1.15Bn (AUD) spend on training over the past two years, updates on two new mining training facilities and the donation by the New Gold Peak Mine of a $100,000 dollar underground loader to Western Dubbo TAFE.

On that story, I wonder if I’ll be recording a negative input next year as Western Dubbo TAFE realises no CAPEX spend but several thousand dollars in ongoing maintenance and WH&S implementation costs.

3 - Mining_PosNegIndex_Apr2013

Mining Employment Gains & Losses

Although April saw another good set of employment numbers discussed there was also a loss of both actual and prospective positions headlined by Arafura Resources which pulled out of its proposed Whyalla Rare Earths processing plant. This development may have delivered 1,000 jobs and $1-billion in economic development to the South Australian economy.

On the positive side Rio Tinto Alcan talked up the prospects of building its bauxite mine near Weipa later this year (950 construction workers during infrastructure phase, with 1,346 total employees including contractors forecast for operations) and Gindalbie opening its Karara iron ore project (500 operation jobs).

Technical note: I have updated the February employment numbers, shifting 400 from February to April as NRW Holdings announced the signing of works on the Nummuldi iron ore mine. Overall the project was forecast to employ 1,500 during the infrastructure phase.

4 - Mining_Employment_Apr2013

Here’s a look at the April data.

5 - Mining_Data_Apr2013

Story of the Month

Fortescue Metals Group (FMG) announced this month that it would be replacing its ‘spread-sheet’ system of rostering (and managing labour costs no doubt) with Microster with the implementation to be managed by ComOps.

FMG owes around $12.6-billion dollars (roughly 4.7% of Australia’s Total Commonwealth Government Securities on Issue) and employs more than 2000 employees and is managing its labour by the manual manipulation of ‘Busted Ass Spread Sheets’ (BASS).

Hard to believe, but true.

Final Thoughts

I choose the term ‘robotic replacement’ with the full knowledge that many are uncomfortable with the term. It should be noted that both stories mentioned in the introduction either emphasise safety or integration with employees while avoiding the subject of technological replacement of human workers or even peak mining employment.

It’s a common stratagem of lots of organisations when dealing with problematic issues.

Yet, we are beyond imaging what the mine of the future is as it is already here and being deployed more progressively as each year passes. Western Australian and Queensland deployments this year, no doubt New South Wales or the Northern Territory next.

Australians are just going to have to get used to the gradual transition to the mine of the future. That future is one which is largely operated by robotics and technology by a limited number of highly skilled personnel, potentially from any point on the globe.

 

Note: My previous post on Mining Workforce Planning Scans can be found at Random Analytics: Mining Workforce Planning
Scan (Mar 2013)

Random Analytics: Mining Workforce Planning Scan (Mar 2013)

A Return to Growth

It has become apparent after 15-months of analysis and reporting that each month of mining workforce planning data has a theme. This month the theme is ‘A Return to Growth’ as the sector returned to pre-commodity bust norms in relation to employment. Like the most recent ABS data which showed an increase in Australian employment by 71,400 (the largest increase since July 2000) the Mining Workforce Planning Scan for March received its first positive reading after nine consecutive months in neutral or negative territory.

All of this comes at a time when most of the big-ticket minerals return to sustainable levels of pricing. Noting that the high-commodity price  period ended in late May 2012, iron ore has since returned to sustainable levels (>$110 per metric tonne) from October of last year while thermal coal has nudged past the $100 average in the past month. Less bullish is bullion as it continues its malaise with gold and silver trending down after highs experienced six-months ago.

To emphasise the return to growth the first graph is a positive/negative index looking only at the Employment data. I’ve included a three-point polynomial trend-line which tracks the high price commodity period (pre June 2012), commodity crash period (May 2012 – Feb 2013) and eventual return to growth this month.

6 - Mining_PosNegIndex_Jan2012~Mar2013_EmployOnly

More good news than bad from Employment gave it the highest content count for the second consecutive month while at least three Australian mining work-related deaths put Work Health and Safety (25%) a close second. In another positive sign for mining employment Diversity (9.7%) had several good stories this month which propelled it to third place. Generally, softer workforce planning indicators strengthen as the employment situation improves.

1 - Mining_WFPScan_Mar2013

At +5, Learning & Development was the most positive indicator for March with all five stories this month reflecting Australian research and being of a positive nature. Both Diversity and Employment closely followed with +4.

Reporting of ten Australian significant safety incidents, which included three fatalities and three major injuries against only one positive story propelled Work, Health & Safety to a -9 rating for March. Interestingly Alcohol & Other Drugs/Crime, at -4 was the second most negative indicator as miners featured in four stories including housing explosives at home, increasing use of drugs during downtime and a NSW miner who murdered his girlfriend.

2 - Mining_PosNegIndex_Mar2013

Here is a look at the indicator data for March. Probably worth noting that the Workforce Planning content has increased percentile wise month-on-month since January (25.1%, 34.4% and now 38.5%) but still remains on the low side compared to 2012 (averaging 44.8%).

Additionally any thought that the FIFO enquiry findings which saw the FIFO/DIDO indicator crash to a record -4 negative sentiment last month continuing into March were dashed as the topic was hardly raised during the month.

Goes to show you how much notice everyone (outside of Canberra) takes of Senate and Standing Committee reports.

3 - Mining_Data_Mar2013

March saw another set of good employment numbers reported with 2044-jobs added this year and the Shenhua Watermark Coal Project looking likely to construct another Western NSW mine in 2014. There is still cost cutting going on especially as coal continues to trim fat, reflected by the -317 jobs reported lost in March.

Notably Xstrata announced the closure of its Brisbane coal office (although the location is still visible on its web-site as at 29 March). This has to be seen as both a display of its lack of long-term confidence in its coal assets and potentially the pro-mining Queensland government which has been struggling with higher than average unemployment levels since it came to office in March 2012.

4 - Mining_Employment_Mar2013

The mining centric states of Queensland and Western Australia again dominated with 16-stories (22.2%) each. New South Wales had 10-stories (13.9%), then the Northern Territory and South Australia had one apiece 1.4%. On a national level there were 21 Australian stories (29.2%), two for China (coal-disasters), and one each for Indonesia, Namibia and New Zealand.

5 - Mining_WFPStoriesByState_Mar2013

On a humorous note the story of the month was a Recruit/Retain tale from Indonesia when coal miner Pt. Karya Bumi Baratama advertised for a receptionist asking specifically for “good looking” single females under 25 to apply. Having married into an family with an Indonesia background I have some empathy and can envisage the writing style in Indonesia. If we are honest with ourselves I can’t see much difference when companies request ‘well-presented’. Lucu banyaklah (Very funny indeed)!

To sum up, all the indicators now show that the mining sector has returned to its pre-June 2012 growth phase. Employment numbers look good this year and outside of a disaster in China or a collapsed US economy I can only surmise that these numbers will remain static for the rest of the year.

On that, it would be worthwhile keeping an eye on indicators like Industrial Relations, Migrate/Visa and Remuneration in coming months. A pick up in content and how it plays in terms of positive or negative sentiment will potentially highlight another sector increased wages demand cycle, a situation that the industry is continuing to downplay, even as some commodities return to reasonable margins.

Random Analytics: Mining Workforce Planning Scan (Feb 2013)

In January I raised the prospect that mining had returned to Business-As-Usual (BAU), although its return heralded a much more ‘leaner and meaner’ approach. With the second month of data for 2013 completed, the trend around employment which commenced in November has continued, confirming that we had commenced a new normal. What is more interesting is that current producers are emphasising cost cutting, while future projects or producers are trying to complete works as fast as possible. Thus the slight negativity we are seeing in employment sentiment is not reflected in the employment gains, even when like this month the employment losses recorded neared 2000.

An obvious example of this was the Rio announcement of the $3.1-billion dollar Pilbara expansion program that will employ 1,500 this year in the infrastructure phase and another 700 ongoing positions when it moves into its operations phase. 2,200 new positions sounded great but it’s a shadow of its 2012 program which had started to recruit for 6,000 expected roles but was quietly axed without explanation. In the same month Rio announced 350 positions would be going at the Argyle diamond mine, mainly from its contracting staff. There are no mixed messages here, Rio is repositioning out of Africa expanding only where it can be assured of good margins, while any of its assets that are marginal (I’ve been aware of Argyle being marginal for about a decade) are being cut or cutback.

While the producers continue to increase production while driving down costs, those that are not producing or have assets that are not in play are looking to get them completed ASAP. In this case though, it’s the lack of stories that I find interesting.

So, in terms of employment I’ll be interested in following updates (or lack thereof) from small to medium operators who are not producing at the moment, anything in Queensland that is not producing and as an aside, the highly leveraged FMG assets which are still in an expansion phase. Given all the cuts to mining staff across Australia I will also be following stories about mining contractors, given the amount of movement in the market currently. Contractors squeezed profits due to a retraction from these services has me guessing that we might see some go to the wall over the next quarter or two. Like a game of musical chairs, those who don’t have a chair when the music stops will be out of business permanently!

The last item of note for February was the publishing of the FIFO ‘Cancer of the bush or salvation for our cities’ Report by the Standing Committee on Regional Australia, chaired by the Independent Member for New England, Tony Windsor. As the name suggests, the Committee were not big fans, making 21 recommendations to government and 14 to industry to improve the practice. Although I cannot say that this report is as even handed as it should have been (there are both issues and opportunities presented by FIFO/DIDO practice) it does reflect some negativity in the reporting that I’ve been able to capture over the past 14-months of data (see Figure 3).

Now, let’s look at the data. The three dominant mining Workforce Planning stories for January were Employment (22.9%) closely followed by WH&S (19.3%) and IR (14.5%).

1 - Mining_WFPScan_Feb2013

Figure 1: Australian Mining Workforce Planning Scan (Jan – Feb 2013). Source: Australian Mining. Some stories have been verified against primary resources.

Diversity and Engagement both received a (+2) positive reading while IR received a (-6), WH&S (-5) followed by Employment and FIFO/DIDO both received a (-4) negative sentiment.

2 - Mining_PosNegIndex_Feb2013

Figure 2: Australian Mining Workforce Planning Positive/Negative Index (Jan – Feb 2013). Source: Australia Mining.

The Employ category which tracks employment gains, losses and general sentiment was the leading Workforce Planning indicator for February but only just at 19-stories (22.9% +1.6%mom/+4.5%yoy). There was a 4210-jobs gain but a spike in jobs lost which sat at 1,994 which goes some way to explain a slightly higher negative sentiment (-4 or -1mom). As previously mentioned, Rio’s revised announcement of 2,200 new positions was the best employment gain for the month but a newly approved Venture Minerals proposal in an opened Tarkine could provide up to 1,000 positions in the depressed Tasmanian economy. UGL announced 1,000 positions will go globally with 700 to be cut from its Australian operations alone, while Bradken, a mining and rail manufacturer posted a $46.7-million half-yearly profit (up from $43-million the previous year) after cutting its staff by 500.

WH&S which tracks Work, Health and Safety incidents and initiatives came in as the second leading indicator for February with 16-stories (19.3%, -19%mom/-8.3%yoy). Only one Australian was reported injured when after a Mount Isa underground incident required an aero evacuation. Near misses and complaints of conditions ensured WH&S finished the month with a (-5) negative sentiment. One story that is worth reading and highlights the dangers of the sector is of the 4th mining related death in just a fortnight in West Virginia. (For the record, injuries or deaths that occur outside of Australia do not count toward the positive/negative index).

IR or Industrial Relations was the third leading indicator for February at 12-stories (14.5%, +8.1%mom/steady from 2012). Ongoing industrial disputes with Pacific National Coal, lockouts at BHP and a walkout at Hanson Quarry gave IR a (-6), the most negative index reading for February.

Diversity which looks at female, indigenous and disabled participation (although other subject groups would not be ruled out) finished the month with 2-stories (2.4%, -1.9%mom/+0.2%yoy). Both stories looked at the sectors female participation this month. The need for mining to increase its female participation from the current 15% to the 25% by 2020 is my pick for the month.

FIFO/DIDO (or Fly-In Fly-Out/Drive-In Drive-Out) is a mining specific engagement indicator. As previously mentioned FIFO/DIDO with just five stories for February had a negative reading of (-4). Looking at 14-months of data, this negative sentiment has only been reached once before, in June 2012 when the sector was still (for all intents and purposes) booming and the FIFO enquiry was in full swing. Generally the indicator has been negative, averaging 1.5 over the past 14-months although the stories softened from September through to November, which corresponds to last year’s commodity crisis.

5 - Mining_PosNegIndex_FIFO_Jan2012toFeb2013

Figure 3: Australian Mining Workforce Planning FIFO/DIDO Positive/Negative Index (Jan 2012 – Feb 2013). Source: Australia Mining.

Here is a closer look at the February data.

3 - Mining_Data_Feb2013

Table 1: Data for Australian Mining Workforce Planning Scan (Feb 2013). Source: Australian Mining.

Finally, here is a look at the Mining Employment Gains/Losses tracker for 2013.

4 - Mining_Employment_Feb2013

Table 2: Mining employment gains and losses for 2013. Source: Australian Mining.

Update 1 (5/03/2013): The Commonwealth Bank released an economics update on the 25th February which I only had a chance to read today (many thanks to Andrew Duffy (@ajduffs) for passing it on). Its findings, especially in relation to cancelled projects for 2012 and CAPEX decisions for 2013 are most interesting.

Update 2 (6/03/2013): New infographic. Rather than more information via a table or a graph I thought I might show the breakdown of Australian stories via a map of Australia. I’ll include this as a standard graph from March onwards.

5 - Mining_WFPStoriesByState_Feb2013                      

Figure 4: Australian Mining Workforce Planning Australian stories by State (Feb 2013). National stories represented by the AUS figure. Source: Australia Mining and ABS. Software utilised: Stat Planet (non-commercial).

Random Analytics: UPDATED Mining Workforce Planning Scan (Jan 2013)

On the 1st of February I released the first of this year’s Mining Workforce Planning Scans. Since that release I have come across two additional pieces of intelligence which have altered my viewpoint of where mining is currently. First let me detail the additional data.

The first is a mea culpa. At the time of release I was capturing data via a daily email update from Australian Mining which I believed contained all the daily stories. This turned out to be an assumption (of the make an ass out of me, not you kind). In fact by correcting my methodology (using the News archive facility) I was able to add 9-stories, or 4.8% more data to the January statistics.

The second and more interesting piece of intelligence was that over the weekend I was able to complete a data validation of the 2012 Australian Mining data (all 1963 stories) and then converted that to the new format to allow for additional analysis. More on that after a look at the updated January data.

Here is the updated January Workforce Planning Scan with a slightly reduced WH&S count (no additional stories) and a slightly higher Employment count (one addition). Augment and Diversity also increased slightly with an additional story each.

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Figure 1: Australian Mining Workforce Planning Scan (Jan 2013). Data sourced from Australian Mining & News Archive. Some stories have been verified against primary resources.

The updated January Positive/Negative Index has only two changes. Augment and Diversity both increase by +1 to the value of 1 with a positive story each.

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Figure 2: Australian Mining Workforce Planning Positive/Negative Index (Jan 2013). Data sourced from Australian Mining & News Archive.

Updated January data with an additional nine stories as previously mentioned.

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Table 1: Data for Australian Mining Workforce Planning Scan (Jan 2013). Data sourced from Australian Mining & News Archive.

When I initially looked at the finalised January data I came to the following conclusion:

To wrap up, I feel there is uncertainty in the story thus far. First of all, I am not sure at this stage we have enough data to state whether or not mining is starting to normalise or if the sector is still in its ‘wait and see’ mode. I suspect that it’s still in a ‘wait and see’ phase, especially with a federal election called for the 14th September 2013. Secondly, I know that the mining industry is no fan of the current Labor government and would be hoping for a conservative win but not sure how that will impact on the workforce planning issues and the data.

I guess we will all have to all ‘wait and see’…

Based on the additional nine stories I wouldn’t have changed my view. However, after completing the 2012 analysis in more detail I have now found a compelling trend commencing in September which shows that the mining industry has returned to a business as usual range and has been in that mode from approximately November.

First of all, let’s look at the incidence of stories since Jan 2012.

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Figure 3: Australian Mining Workforce Planning Scan (Jan 2012 – Jan 2013). Data sourced from Australian Mining & News Archive. Some stories have been verified against primary resources.

Then a look at the Positive/Negative Index during the same period.

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Figure 4: Australian Mining Workforce Planning Positive/Negative Index (Jan 2012 – Jan 2013). Data sourced from Australian Mining & News Archive.

A lot has been made of the commodity crash that occurred in mid-2012 and its impacts on the mining sector (with my view remaining the same, in that most commodities remain overpriced and that oversupply will be the medium to longer term issue). Looking at the graphs over a 13-month period you can easily see that prior to the commodity crash Employment averaged a steady 14.7% and a very healthy 3.8 on the positive side. When commodity prices crashed from June/July the mining sector reacted in two ways. Some operators panicked, reacting by cutting costs and staff quickly, a fact highlighted by the negative 20 number for Employment in September. Other organisations have used the crisis over the past seven months to ‘clean house’, fixing up issues with both their book and labour. This is reflected in the Employment numbers continuing on a slightly negative trend, averaging minus 2.67 over the last three months from lows in September and October while the actual employment losses are still relatively minor (see the Employment Tracker in the previous January release).

I’ll no doubt have more to say about this in the February release as more data comes in but I can say with some confidence that the leaner (and meaner) mining industry has returned to business as usual and the ‘wait and see’ is on hold.

Random Analytics: Mining Workforce Planning Scan (Jan 2013)

The commencement of this year’s analysis of mining workforce planning brings forward two very distinct but different themes. With only 1 out of every 4 stories covered for the month related to workforce planning my initial thoughts were that the story is a continuation of the Q4 story, which was of an industry that had made the necessary cutbacks both in terms of costs and suppressing IR dissent but wasn’t quite sure where to go from here. The volatility of commodity prices, especially those of iron and thermal coal add weight to this direction, given that business will always take stability in prices over price instability (even when pricing is lower).

That’s one take on the first month of data. For the last five months of 2012 the mining coverage was dominated by employment contraction reports but prior to that it was Work Health and Safety (WH&S) which had the most reporting for six out of seven months as IR peaked at 24.4% in May on the back of the BMA dispute which even led the company to declare a force majeure. So, the question has to be asked, are we seeing a return to more normalised conditions?

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Figure 1: Australian Mining Workforce Planning Scan 2012 (Jan 2013). Data sourced from Australian Mining & News Archive. Some stories have been verified against primary resources.

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Figure 2: Australian Mining Workforce Planning Positive/Negative Index 2012 (Jan 2013). Data sourced from Australian Mining & News Archive.

The three dominant mining Workforce Planning stories for January were WH&S (38.6%), Employ (20.5%) and FIFO/DIDO (at just 9.1%). The only category to record a positive reading was Recruit/Retain (+2), while WH&S (-6) was in the negative followed by Employ (-3) and IR (-3).

WH&S which focuses on everything safety, both good and bad is often the leading workforce planning category because mining is a hot, dirty and dangerous business. January did not commence on a good note given there were a number of serious incidents including the first reported fatality of 2013 when a Santos sub-contractor died of possible heat-stroke outside of Roma. Several other fatalities were noted in China and Indonesia and these increased the overall WH&S tally but did not add to the Pos/Neg Index as international coverage is recorded as a neutral indicator.

The Employ category which tracks employment gains, losses and general sentiment which dominated the coverage between August and December of 2012 was reduced to 20.5%. With a further 164 jobs lost in the sector and 6210 gained in 2013. You would imagine that the first indications are positive, however the $1.8Bn AUD McMahon contract win to run the Fortescue Metals Group (FMG) Christmas Creek expansion included 6000 hires. As was shown last year, when the iron ore prices tumbled mid-year FMG came under intense financial and speculative pressure. With the potential for the $AUD to rise this year and FMG’s inability to dig up its product for less than approximately $110pmt I would be concerned that, if we see further volatility in the steel index then, the employment gains might not be curtailed by global economic conditions. Overall employment sentiment was slightly negative (-3) but this was more about some ongoing cost cutting and job shedding (just 164 jobs lost) without any large pickup in new hires (210 if you exclude the McMahon contract).

FIFO/DIDO (or Fly-In Fly-Out/Drive-In Drive-Out) is a workforce planning subject unique to only a few industries and has become the dominant method of bringing in large construction and mining workforces into Australia’s remote regional areas, especially over the last decade. In many respects when I look at the FIFO/DIDO figures I also double-check against Work/Life which covers all aspects of Work Life Balance and Work Life Fit issues. At just four stories (one negative, one positive and two neutral) it wasn’t dominate but it is still on the radar for 2013. Of note was a story from my home state of Queensland which discussed tougher guidelines for FIFO with the intent of increasing development of regional areas, thus probably opening a discussion and less emphasis on pure FIFO operations over regional improvements.

Recruit/Retain which follows all aspects of recruitment and retention was the only category to record a positive number for January. As recruitment agencies put out their expected mining employment/skills wish-lists for 2013, the Mining Oil & Gas Jobs infographic (which was a little basic to be honest) generated a very large discussion (for further info see the Mining Oil & Gas Jobs website. I would also suggest that mining recruitment agencies, especially the small ones might come under some pressure this year as the sector insourced its recruitment during the latter part of 2012 as a continual cost cutting exercise while at the same time Foreign Direct Investment (FDI) comes off the boil.

Lastly, IR had just three stories, all of which were separate New Year industrial actions thus it equalled employment with a negative 3. This included a story at the Hay Point Terminal where 300 construction workers employed by McConnell Dowell and GEOSEA, have been waiting for up to four weeks to be paid! Fair enough too.

Here is a closer look at the January data.

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Table 1: Data for Australian Mining Workforce Planning Scan 2012 (Jan 2013). Data sourced from Australian Mining & News Archive.

Finally, here is a look at the Mining Employment Gains/Losses tracker for 2013.

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Table 2: Mining employment losses and gains 2013. Data sourced from Manufacturing Monthly Newsletter & News Archive.

To wrap up, I feel there is uncertainty in the story thus far. First of all, I am not sure at this stage we have enough data to state whether or not mining is starting to normalise or if the sector is still in its ‘wait and see’ mode. I suspect that it’s still in a ‘wait and see’ phase, especially with a federal election called for the 14th September 2013. Secondly, I know that the mining industry is no fan of the current Labor government and would be hoping for a conservative win but not sure how that will impact on the workforce planning issues and the data.

I guess we will all have to all ‘wait and see’…

Update 1 (1/02/2013): Magda Knight (Enhance Media SEO) requested an inclusion of a link to the Mining Oil and Gas Jobs site via email. Given that I had made especial mention of their January infographic (and it’s a most reasonable request) I’ve included that link above and in a previous paragraph.

Random Analytics: Wide Bay Burnett Regional Research

I’m very excited to announce two research studies for which I completed the analytics between June and December of last year on behalf of Regional Development Australia Wide Bay Burnett (RDA WBB) in my role as chair of the Workforce Planning Sub-Committee which provides supplementary advice, training, support and assistance in the areas of Workforce Planning, Workforce Development and Workforce Analytics.

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The Workforce Development Jobs and Skills Matching Study 2013 was developed after nearly 1000 registered job seekers were surveyed in partnership with Wide Bay Burnett Job Services Australia (providers). The study utilised the data to identify key barriers and opportunities for the Region’s unemployed labour force.

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The Resource Sector Workforce Mobility Study 2013 is a look at the first 700 Resource Sector workers who undertook the IM4FIFO survey between August and December 2012. The study utilised the data to identify the key barriers and opportunities for the regions mobile workforce. Furthermore this research will establish effective long-term solutions for the Wide Bay Burnett’s existing workforce providing them with better work/life balance solutions while still addressing key industry issues of safety, fatigue management and staff turnover.

Analytics are only a small component of these projects and I have benefited from having worked very closely with two very outstanding individuals.

Grant Maclean, the RDA WBB Chairman has always had a vision for creating a step change for the Wide Bay Burnett region. His guidance and strategic vision has, in my view, made our region standout in terms of focussed outcomes. He has also been a fantastic guide as I had to carefully balance both operational and Board responsibilities for the latter half of 2012.

Although you won’t see his name on the reports, Paul Massingham, the Executive Officer of the RDA WBB has done an amazing job in the creation of these two documents and for my thinking deserves the bulk of the credit for these fantastic publications. In just six months, while managing a small but very capable team he was able to access an enormous amount of data, brief key stakeholders and build strong relationships with three levels of government, the community and industry. It was certainly a bonus for our recently appointed FIFO coordinator, Danielle Andreuzzi to have the data immediately available for the write up of the Resource Sector Workforce Mobility Study. Having worked on analytics (in one form or the other) for over a decade I must say my six months collaborating with Paul in an operational capacity were not only the most productive (I was able to produce more than 80 baseline info-graphics from which our staff can now build and scale) but one of the most enjoyable. Paul’s professionalism, subject matter knowledge, drive and pure energy allowed for quick turnarounds on my input with minimum repeats.

As stated above I think both these studies are fine pieces of Regional Workforce Planning research and if I would commend them to you.

 

 

If you need more information about either of these studies or about the IM4FIFO campaign then please contact Paul Massingham at:

Regional Development Australia Wide Bay Burnett

PO Box 1045, Hervey Bay, QLD, 4655 – Phone: 07 4125 9272 – Email: info@rdawidebayburnett.org.au – www.rdawidebayburnett.org.au

As an aside you can also view the IM4FIFO advertising campaign which was broadcast across the Wide Bay Burnett region after the Queensland Minister for Education, Training and Employment, the Hon. Mr John-Paul Langbroek launched the project officially on the 14th August 2012.

Random Analytics: Mining Workforce Planning Scan (Dec 2012)

Here is the last Australian Mining Workforce Planning Scan updated to the 14th December which is the finalisation of Australian Mining until early 2013.

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Figure 1: Australian Mining Workforce Planning Environmental Scan 2012 (Jan-Dec). Data sourced from Australian Mining Newsletter & News Archive. Some stories have been verified against primary resources (i.e. ASX, commercial websites and other news agencies).

With only 10-days of data available (the minimum to calculate a decent trend) Employment and Workplace Health & Safety (WH&S) continued to be the dominant stories in December.

This is the sixth straight month where employment stories have been the leading workforce planning issue but there was an improvement in the percentile of positive stories even though the negative trend continued. In the month of November there were 9 unique employment stories, 5 being negative (297 jobs lost) and 3-positive stories (30 jobs gained).

The further breakdown of Employment stories for July through to December (as per the yellow data line):

  • July: 25.9% (61.9% negative, 38.1% positive);
  • Aug: 35.4% (71.4% negative, 28.6% positive);
  • Sep: 44.8% (76.9% negative, 17.9% positive and 5.2% neutral);
  • Oct: 35.8% (83.3% negative, 16.7% positive);
  • Nov: 32.9% (72% negative, 28 % positive);
  • Dec: 31% (55.6% negative, 33.3% positive and 11.1% neutral).

Here is a closer look at the monthly data breakdowns.

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Table 1: Data for Australian Mining Workforce Planning Environmental Scan Dec 2012. Data sourced from Australian Mining Newsletter & News Archive. Some stories have been verified against primary resources (i.e. ASX, commercial websites and other news agencies).

Of note were a slight increase in stories relating to Diversity since November after Professor Marcia Langton raised the issue of an Aboriginal Australia middle class. Diversity stories which averaged just 2.1% over the year rock-bottomed between June and September as commodity prices crashed and mining companies looked for savings across their P&L.

A couple more graphs to close out the year. First of all is a look at the data breakdowns for 2012.

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Table 2: Data for Australian Mining Workforce Planning Environmental Scan Jan – Dec 2012. Data sourced from Australian Mining Newsletter & News Archive. Some stories have been verified against primary resources (i.e. ASX, commercial websites and other news agencies).

The year of 2012 was really a story of two halves. Before July it was an industry still with great CAPEX projections, continued FDI growth through to 2014/2015, industrial action, skills shortages and wage pressures. From July the mining sector was dominated by collapsing terms of trade, the high Australian dollar, cost savings and redundancies.

To highlight the transition I’ve added a look at the data in two halves. For me the data for Employment and Recruit/Retain (Recruitment and Retention) sums it up. In the first half of the year the annual Employment stories were at just 29.8% while Recruit/Retain was at 70% of their yearly total. During the last half of the year as unemployment stories surged and recruitment/retention stories declined the figures had reversed reflecting the difficult conditions for mining over the past six months.

Out of interest, here is some baseline data I did for the first Quarter of 2009 (Jan – Mar only). As you can see, although the mining industry collapsed in Oct – Nov 2008 you can already see the largely negative employment stories declining (as stimulus packages were deployed across Australia and China) and by March the WH&S stories returning to longer term normalised levels. Although it would have been interesting to baseline for 2008 and 2009 I just didn’t have the time.

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Figure 2: Australian Mining Workforce Planning Environmental Scan 2009 (Jan-Mar). Data sourced from Australian Mining Newsletter & News Archive. Some stories have been verified against primary resources (i.e. ASX, commercial websites and other news agencies).

My last pick of the month for December goes to the Australian Mining story wishing everyone a Merry X-Mas and a Happy New Year. Not only do I wish to share that sentiment with all of you but I received an unsolicited special mention in dispatches for my input to the online magazine during 2012. I very much appreciated the thought. In return I’d like to specifically thank two Australian Mining staff for their support in building this Mining Workforce Planning Scan and Db. They are Andrew Duffy who was a great help on industry specific questions as I had a lot to learn about the industry over the past year and Sharon Amos who greatly assisted me mid-year when my email address was dropped unannounced.

Merry X-Mas to all of you working in or around the mining industry and a Happy New Year.