Labour shortage hurting Australian miners

CANBERRA: Shortages of labour and higher construction costs are hindering Australian mining expansion as producers try to capitalise on record prices for copper, zinc and gold, industry leaders said yesterday.

"We've got severe shortages of skilled labour, which is resulting in spiralling labour costs, we also have the impact of spiralling oil costs and there has been a blowout in construction costs," Peter Coates, chief executive officer of Xstrata's coal division, said on the sidelines of the Minerals Council Minerals Week 2006 conference in Canberra.

"We've also got real constraints in infrastructure capacity and it's all hurting."

Gold, zinc and copper all reached records this month amid surging metals demand from China.

Australia's merchandise exports to China soared 42 per cent in the 10 months to April 30 from a year earlier, the Australian Bureau of Statistics said in a report released yesterday.

Charles Lenegan, managing director of the Australian unit of Rio Tinto Group, said labour shortages in the industry were "critical".

"We have a lot of trouble attracting, developing and training skilled employees," Lenegan told the conference. "It's a problem for production."

Australian miners spend A$1700 ($2018) per head on training, compared with a national average of A$600, according to Mitchell Hooke, chief executive officer of the Canberra-based Minerals Council of Australia.

In a recent client note, stockbroker Teather & Greenwood said the shortage underlined its view that mines were working flat out with no real prospect of any substantial growth over the next two to three years.

A joint study by the Minerals Council and the Chamber of Minerals and Energy of Western Australia said the minerals industry used the least number of skilled migrants nationally, despite a severe shortage of workers.

"Only 19 per cent of the minerals industry workforce was born overseas compared with 25 per cent of all workers in Australia," it said.

Australia's employment dropped 3200 in April, increasing the unemployment rate to 5.1 per cent from a 29-year low of 5 per cent.

Special regional visas allowing foreign workers to enter temporarily would help ease staff shortages at projects under development, the study concluded.

- BLOOMBERG, REUTERS