- By Region
After five years in the mining industry, Will Dunford has worked in Fort Knox, Alaska, planned mines in remote regions of Russia and has returned to the benign surroundings of the corporate development department at Canada’s Kinross.
For a graduate in mining engineering and economics, attracted to the industry by the promise of international experience, Kinross’s Generation Gold programme, which since 2006 has rotated graduates through different roles, seemed ideal.
“Some programmes focused on developing engineering talents; others focused on management skills,” says Mr Dunford, recalling on-campus recruiting. “Kinross’s programme seemed unique in the amount of exposure and the variety of exposure I could get in a very short time.”
The gold miner is among the companies that has got it right, says Professor Laeeque Daneshmend of Queen’s University in Ontario. “They set priorities, designed a programme for developing and mentoring new blood and, even more importantly, stuck to those plans even when sky was falling in on the industry.”
As the mining sector reports earnings battered by falling commodities prices and rising costs, chief executives repeatedly bemoan a skills shortage which runs from engineers and geologists to rock face operators.
Few mining companies can boast a clean sheet when it comes to cost overruns or delays to development projects, with Barrick Gold and Anglo American among the latest high-profile casualties. Kinross too has struggled with its Tasiast mine in Mauritania.
But as commodity prices head south and investors focus on ever-tighter cost control, some fear that mining companies will again cut staff and suffer the consequences.
“The origins of this crisis go back to the huge decline in minerals prices in 1990s when cost cutting was the order of the day,” says Tony Hodge, president of the International Council on Mining and Metals. “We need to start stretching our minds to think longer-term and that includes a more stable, greater commitment to people.”
“The industry has been poor in terms of how it treats people when downturns come,” says Mr Daneshmend. “In the panic of the global financial crisis, companies reneged on job offers only to try to reinstate them a few months later.”
Industry experts debate the impact of the 1990s downturn on today’s industry, some pointing to a “hollowing out” of technical capacity in the sector. They also disagree on whether internal teams or external consultants have borne the brunt of it.
But others have a different explanation for project-related woes – that the easy mines have already been built so projects like Barrick’s Pascua Lama, which straddles the border of Chile and Argentina at an altitude of more than 4,500m and is surrounded by glaciers, present new challenges.
“Genuinely, development is getting harder,” says Rachael Bartels, managing director of Accenture’s mining group. “Companies are developing in more complicated geological conditions, more challenging locations and managing increased expectations from governments. Developing a mining community, with skill sets from scratch, is a huge undertaking.”
The industry’s extraordinary growth – as well as greater determination by governments to share in the spoils of their country’s natural resources – has also added sociological requirements to engineering and operational jobs.
“There is no doubt that has changed,” says Peter Freyberg, chief executive of Xstrata Coal. “Our operations leaders deal every day with their communities. There is a heightened awareness of our industry and we are under more scrutiny than we were 20 or 30 years ago.”
Xstrata – where a devolved structure puts the onus for such issues on each business unit – now includes modules on communication and business ethics in its leadership training. The company, which primarily relies on in-house expertise, has also focused on distilling the lessons of 20-plus past projects into tools to save managers repeatedly battling the same issues and has just converted an Australian mine slated for closure into a training facility.
“Irrespective of whether there are potential skills shortages, we have well-developed project management systems that guide managers through how they should approach building a mine and what to do,” Mr Freyberg says, pointing to the Mangoola coal project in Australia where 60 per cent of employees had not worked in the industry before.
Attracting new people to the sector is another challenge. “The mining companies should set a precedent,” said one European mining academic, calling for more scholarships or bursary programmes. “It’s a no brainer. I’m waiting for them to bang on my door.”
Even Codelco, the state-owned Chilean mining company, is looking far afield, recently launching a grant programme to attract non-Chilean engineers to the country to train and work.
Mr Dunford returns to his alma mater to spread the word: “Given how crucial this industry is to Canada, it is amazing to me how little I knew about it as a teenager.”