Rio Tinto: cut its full-year iron ore export estimate owing to “modest delays”

Permanent border restrictions imposed due to the current coronavirus outbreak in Western Australia, the world’s largest iron ore and lithium mining area, have limited the movement of fly-in, fly-out employees between states. A development boom on the east coast, fueled by the government, is forcing miners to compete harder for competent labor when they need them most.

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BHP, the world’s largest mining company, does not anticipate the challenges to be resolved this year, owing to sustained investment in resources and construction, as well as prolonged labor movement limitations.

Labor availability is becoming more constrained, and supply chain disruption occurs throughout Australian enterprises.  Rio Tinto, the country’s second-biggest miner, had to cut its full-year iron ore export objective.  Rio Tinto cited “moderate delays” in commissioning new greenfield mines and mine expansion projects as the reason for the reduction.

Shortages of rail employees in Western Australia reduced BHP’s third-quarter iron ore output by 5%, while Pilbara Minerals reported project delays due to labor shortages.  The Minerals Council of Australia says that closing the international border deprives miners of access to knowledge, hence exacerbating the skills deficit in numerous technical sectors.  Even though skilled migrants account for just 0.6 percent of the industry’s workforce,

Some professions, such as mining engineers, are experiencing a severe lack of workers.  It is encouraging to see that several engineering vocations have been included in Australia’s priority skilled migration program.  According to an analysis commissioned by the Chamber of Minerals and Energy WA, the mining and resources industry in Western Australia might need up to 40,000 more personnel by the middle of 2023.

The scarcity of skilled workers in Australia’s mining industry might jeopardize the capacity of the sector to meet the substantial future growth projected across the board as urbanisation and the clean-energy revolution generate massive demand for raw materials.  Car manufacturers worldwide are speeding up plans to create millions of electric cars in the following years, which would need the use of massive amounts of raw materials such as copper and lithium mined in Australia.  The need for steel, formed from iron ore, is expected to grow due to the expansion of green infrastructures, such as wind turbines.

Mining engineers, heavy-duty diesel fitters, electricians, geologists, electrical engineers, and metallurgists were the most in-demand occupations throughout the industry.  The commodities produced by the Australian mining industry are crucial for contemporary living, and the development of new technology, and the sector offers enormous long-term job prospects.  BHP said it will invest in a training school that will develop 2500 new job-ready apprentices and trainees over five years, mostly in rural areas.  For Australia to be in the greatest possible position to bounce back from COVID-19, both business and government must work together to make the country “stronger, more resilient, and ready to seize new possibilities.”

As the shattered labor market re-emerges from COVID-19 lockdowns, prominent business executives throughout the broader Australian economy have described workforce shortages as the single largest and most urgent source of concern.  An extensive new KPMG poll of more than 400 CEOs, executives, and directors reveals that over two-thirds of respondents believe that attracting and keeping talent will be their most pressing worry in the future through 2022 and that the problem will endure for another three to five years.

Closed borders have played a significant role in slowing the development of the COVID-19 epidemic in Australia over the last two years.  However, they have left companies “in desperate need of extra-human resources throughout the country.” Having enough trained personnel to satisfy consumer requirements is the most significant difficulty facing all firms as Australia begins to emerge from the lockdowns of the last two years. Ultimately, it is evident.

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