20,000 More Mining Jobs to Go as Construction Winds Back 1

Tuesday, December 1st, 2015
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Around 20,000 more jobs are set to go as investment in resource related construction activity in Australia falls by almost 60 percent over the next three years, the latest report suggests.

In its latest report, industry research outfit BIS Shrapnel says it expects the dollar value of fixed capital investment in mining to fall by 58 percent over the next three years from $80.3 billion in 2014/15 to $33.9 billion in 2017/18 as major LNG projects draw toward completion and a combination of weaker commodity prices and the relatively high cost of development in Australia see producers pull back on investment in areas such as coal, iron ore and gold.

Adrian Hart, Senior Manager of the Infrastructure and Mining Unit at BIS Shrapnel, said this would see around 20,000 more positions eliminated in addition to the 40,000 jobs which have already been lost.

Hart said whilst contractors would benefit from opportunities for maintenance work on mines already built, these would generate fewer opportunities for employment compared with the construction phase of the boom.

“We haven’t hit bottom yet on commodity prices or investment, which will continue to be a key drag on Australian economic growth from here,” Hart said. “While mining production will continue to rise strongly, led by new LNG exports, the facts are that this growth will be far less employment intensive than the investment phase, albeit offering contractor opportunities for maintenance and facilities management.”

Around Australia, activity is winding back on the construction of major resource developments as a number of LNG related projects draw toward completion.

Last week, for example, UK contractor Bechtel handed over the keys after final completion f its $11.5 billion Queensland Curtis LNG project on Curtis Island near Gladstone.

Work on Santos’ nearby $18.5 billion GLNG project, meanwhile, is expected to wind up early next year once the second train of production comes online.

At the same time, there appears to be little coming through in terms of new projects as miners are deterred by a slowdown in China and growing competition from lower cost countries and some commodities, such as coal, face long term risks over the direction of policies relating to climate change.

Outside of new construction, BIS says opportunities associated with the maintenance of existing mines will increase as expenditure on mine maintenance rises from $7.2 billion to $9.9 billion over the five years to 2019/20.

Even in this sector, however, the nature of opportunities are changing as some producers are bringing non-essential maintenance in-house to save on costs whilst others are reducing the frequency of maintenance activities and moving their total operations to care and maintenance.

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  1. Muzz

    I'll take this article with a grain of salt. The author fails to get the basic facts right about a companies base. You may want to google Bechtel.