Over recent weeks, new projects have been announced, some reopened and others are hitting production. All of this brought with it the news that new jobs were up for the taking. 

The announcement of the reopening of the Woodie Woodie mine in Western Australia revealed that it alone would create more than 300 jobs.

Woodie Woodie was put on care and maintenance by its original owners Consolidated Minerals (ConsMin) Australia, which is now owned by the mine’s new owners Tianyuan Manganese Industry.

An initial 115 jobs have already been secured as part of the restart plan, with full-scale mining operations expected to be reached in October.

“We see this as a very important event for the WA mining industry,” ConsMin Chief Executive Officer Oleg Sheyko said.

“It was a very tough decision to close Woodie Woodie, but at the time it was simply unviable.

“We are now confident in the manganese market outlook and with an exploration investment we can see Woodie Woodie continuing into the future.”

Around the same time, major miners BHP and Rio Tinto both announced they would be increasing numbers in their next round of apprentice intakes.

BHP has said it would more than double its combined intake of apprenticeships and traineeships in Western Australian iron ore to 200 positions for 2018.

BHP WA Iron Ore Asset President Edgar Basto said the company hoped to “maintain or increase that intake in the years ahead”.

Could all of these events point towards the end of the downturn and the start of another upswing? National Mining Chronicle spoke with PricewaterhouseCoopers Australia Mining Leader Chris Dodd and discovered we could in fact be riding the wave back up again, and this time it could be more sustainable as miners learn from the last major bust.

“There are a lot more balanced decisions being made,” he said.

“It doesn’t feel like the crazy rush to build new things all of a sudden – I think the learnings from the bust are still close enough to us that people are making smart calls.”

Part of this learning involves choosing to reward stakeholders and shareholders while prices are up and the margins are better, enabling them to pay out greater dividends rather than investing the surplus in a project that has inflated costs due to rising prices.

“We’re actually reaping the reward for the past capital investment made,” Mr Dodd said.

“When the mining boom stopped, a lot of the building stopped but the capacity was increased.

“By increasing the capacity it had an immediate impact on supply and therefore price. We’re starting to see a level of price stabilisation.”

Mr Dodd said miners were being more disciplined about their capital, being sure to invest wisely.

He added that he believed we would soon start to see a lot of acquisitions as confidence in the market built up.

“Unfortunately, we see a lot of acquisitions at the top of the commodity prices because that’s the market signal that it’s a good time to buy, but then history says that’s the worst time to buy; you should have bought it five years ago when it was really cheap, but that was when no investor wanted to,” he said.

Once the boom from 2000 to 2008 went to bust, prices dropped, no new projects were approved and construction ceased.

As a result, miners were forced to become more efficient to make themselves profitable.

Production costs lowered while receiving higher prices.

In every cycle, this leads to an upward slope that sees higher profit margins and companies building new projects again.

Mr Dodd said the industry was currently in this growth stage.

“We are heading up – we have valuable investment that has been made and it’s being operated profitably and demand is rising at a time when supply is struggling to increase, other than incrementally,” he said. 

“All factors point towards positive news about where the sector is going.” 

However, recent research by SV Partners suggested the mining downturn was not yet over for the major players as five mining companies with turnovers of more than $100 million displayed a high risk of financial collapse. 

The SV Partners August 2017 Commercial Risk Outlook Report identified the sectors and geographical location of businesses most at risk of default during the next 12 months. 

SV Partners Managing Director Terry van der Velde said the change in outlook reflected an uncertain global climate. 

“With the predicted slowdown in China’s construction activity, we will likely see further declines in steel production, adding to existing pressure on Australia’s resource and energy sector,” he said. 

“If Chinese investment declines as nationally forecasted, our iron ore and coal mines will suffer. 

“As a result, Australia’s resources and energy export prices will drop.” 

The report revealed a total of 73 Australian mining business at high risk of financial failure in the next 12 months. 

Mr Dodd agreed there was currently a move away from investment in infrastructure metals and an increasing push towards lifestyle metals instead. 

While the first boom was about building, Mr Dodd said we needed to look at the components that went into cars, air-conditioners and mobile phones, as that would be the next boom industry. 

This means potential jobs may arise in zinc, copper and lithium mining. These jobs will be different from those during the former boom days as the industry sees an ever- increasing amount of automation. 

“Not all of the job increase is going to come from more humans,” Mr Dodd said. “What automation is doing is jeopardising any job that is repeatable and predictable.” 

However, not everything can be automated and Mr Dodd said we would still see highly manual jobs performed by people for the time being. 

In addition, new tech jobs will be created in areas such as program design and IT to maintain and develop the new machines. 

Picture: Chris Dodd. PwC

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