Bidding war begins in WA fuelled by a mining boom– really? Who believes this?
Summary: Here is an article saying that there is a mining boom once again in WA and that there is a search for workers. How many of you agree with this? Ray....
Last time the workers flew in from all over the country and abroad to earn the big money on Western Australia's iron ore mines. Companies were offering ridiculous wages and conditions.
But when the mining boom ended, the workers moved on.
Five years later and the iron ore game is again ramping up, but poaching the workers needed might not be as easy this time around.
"We're already seeing a bidding war in certain occupations and skill sets," BIS Oxford Economics senior economist Adrian Hart said.
"It's not being reflected across the broader construction price index which are still very weak, but we are seeing certain skill sets where we are seeing higher wages bid.
"The mistake NSW and Victoria have made is that they assumed Western Australia and Queensland would remain weak for many years, but we're starting to see recovery in WA and Queensland.
"That means it's going to be tougher all round for NSW, Victoria, Western Australia and Queensland to secure skills going forward."
Bidding war as projects ramp up
The rapid turnaround in fortunes in the jobs market shows just how much weight the iron ore heavies have when they pull the trigger on new construction.
BHP, Rio Tinto and Fortescue Metals Group are building new mines — all at the same time. This will require about 6,000 construction workers
Photo: Phil Thick describes lithium as a new frontier for WA. (ABC News: Hugh Sando)
While the level of investment does not match the height of the mining boom, everyone deciding to build at the same time is exactly what happened last time, and this tends to lead to a bidding war for workers.
"They're very large projects, they're all underway at the moment and that will really flow through over the next 18 months," Katana Asset Management's Romano Sala Tenna said.
"We're also starting to see some other projects coming through from lithium and new players, which is a new boost for this state."
WA is home to massive lithium deposits, now in huge demand for use in batteries for electric cars and home power storage devices.
Just two years ago it was considered a fringe commodity, but now it is a rapidly growing industry that is creating jobs in mining the metal, and processing is also taking place on home soil for the first time.
"This is a new frontier for WA," Tianqi Lithium Australia general manager Phil Thick said.
"This is a first in this industry and our plant has sort of set the scene for other companies to look at doing the same."
Mr Thick said the company tried to employ local people where possible, but there were challenges.
"It is an ageing workforce down here in Kwinana so we have to work with education, with the schools, with apprenticeships and keep that supply chain coming through for the right people with the right skills," he said.
Photo: Lithium is not just being mined in WA, but is being processed locally too. (ABC News: Hugh Sando)
Job ads reflect need for workers
Western Australia's latest skills shortage list reveals a growing need for automotive, construction and engineering trades workers.
The trend is also being reflected in job ads which are considered a key indicator of how the market is travelling.
Job advertisements on website SEEK, reveal the number of mining sector jobs on offer jumped 40 per cent between March to May this year compared to the same time in 2017.
In Western Australia alone, the number of job ads for mining engineers nearly doubled over the past year to April.
"I think the first area we'll see some shortages is certainly in mining construction jobs, they're quite a specific skills set so you need people who have got that level of expertise and certainly mining engineers as well," Mr Sala Tenna said.
Poaching staff from other states
Last mining boom, Western Australia poached workers from all over the country but most came from New South Wales, Queensland and South Australia.
Workers started migrating across ahead of the peak of the mining investment boom in 2006.
Migration numbers then ramped up considerably towards the peak of the construction cycle in 2011.
The end of the mining boom was clearly being felt in the five years to 2016, with migration numbers falling and people starting to leave the state.
So where will the workers come from? Experts agree it will be more challenging this time around. The east coast economies of Victoria, New South Wales and Queensland are now booming with their own rail and infrastructure projects, and England and Ireland's economies have also now recovered.
"The question is how much further does it go, and the challenge that we have is that New South Wales and Victoria aren't showing any signs of stopping just yet," Mr Hart said.
"They've got the next round of big infrastructure projects to deliver. We're talking many, many billion dollars worth of work in these two states", he said.
Downturn crushes prospective students' confidence
Adding to the problem is a dramatic fall in the number of students studying mining engineering.
During the mining investment boom, nearly 300 mining engineers graduated each year. It was the degree to study, as you were seemingly guaranteed to walk into a job offering a salary of at least $100,000.
But the downturn crushed the confidence of the next wave of students considering which university degree to pursue.
Based on data from eight Australian universities, the number of engineering students set to graduate will fall to 50 a year by 2022, according to the Minerals Council of Australia.
Photo: Romano Sala Tenna says the first worker shortages will be in the mining construction area. (ABC News: Kathryn Diss)
"We've seen over the last four or five years the number of students studying mining engineering is falling off a cliff, so the next couple of years there's going to be a real dearth of mining engineers," Mr Sala Tenna said.
Government figures paint a more positive jobs picture, with the number of people starting apprenticeships increasing by more than 7 per cent in the year to May 2018 — primarily due to increases in automotive, metals, manufacturing and electrical trades.
But Mr Hart agreed there were concerns, adding the country had plenty of unemployed workers who could be upskilled to do the work.
"At the moment we've got enough people to service the current level of work, but our outlook suggests WA is bumping along that bottom. We're going to see higher levels of demand coming through in the future in road, in rail, in mining and heavy industry where we will need to see some of those construction skills developed or return," he said.
"We will see shortages emerge unless a plan is put into place to attract skills and grow them.
"There needs to be a lot more discussion around training and development of skills within Western Australia itself. There is a large construction population which doesn't move, and making sure we've got the right mix of skills will be important in that training perspective."
Employers again look overseas
To get the workers back, companies will again have to offer high salaries or re-enter the controversial debate about overseas workers.
"I think through South-East Asia and the Middle East and India — that's going to be our new target market for mining engineers," Mr Sala Tenna said.
Mr Sala Tenna expected a push for competition in terms of what prices and packages were being offered.
"There's going to be some serious competition I think to be honest, though the most likely scenario there [is] we'll do what we did in the last boom, which is to fill some of those vacancies from offshore," he said.
Photo: Perth's expanded airport will make it easier to deal with an expected influx of workers. (ABC News: Rob Koenig-Luck)
While it's upbeat for the mining, professional services and healthcare sectors, retail and housing construction remains weak and could still be 18-24 months away from a recovery.
At least this time around, Perth has a new expanded airport and the housing needed to cope with an influx of workers.