Volume 1 — September 2019 · Australia’s mining industry has 57 new, expansion or restart projects either committed or considered likely to commence operating 2019 and 2024. These

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Volume 1 — September 2019

2 2019 AMMA MINING WORKFORCE MODELLING PROJECT 3

FOREWORD

METHODOLOGY2019–2024 Mining Workforce forecasts the estimated on-site labour demand for mining projects* listed by the Commonwealth Government’s Department of Industry as being in the either committed or likely to proceed phases.

This forecast is focused on the long-term operational phase of new and expansion projects, with total new workforce demand listed at start of each calendar year, based on all projects scheduled for completion in the year prior.

A variety of modelling techniques were applied to present as accurate a forecast as possible, including:

» Deriving average productivity ratios (commodity volume produced per employee) from official State Government production and reported employee figures, and applying these ratios to prospective new projects in the same commodity groups.

» Applying workforce planning formulas and occupation breakdown ratios provided to AMMA by several leading employers across all commodity types modelled.

» Cross referencing with workforce estimates and forecast project completion times in company issued in ASX statements, press releases, media comments or direct feedback from company representatives.

» Verification of AMMA’s forecasts by key industry participants in each commodity group.

Formulas have been applied consistently within each commodity group to factor in variances in mine design, quality of resource, terrain and locality, technology used and many more factors.

Importantly, across all modelling techniques AMMA has been very conservative. Among the reasons for this is the assumption that new mining projects will sit at the higher end of industry productivity levels; technology is seeing workforces be increasingly centralised in CBDs and remote operating centres; automation may reduce the ratio of on-site plant operators; and some of the new workforce demand will be filled by existing workforce capacity.

It is quite likely that some of the 57 projects modelled within this report will not proceed as planned. However Australia does have a further 153 projects in feasibility stage considered ‘possible’ to proceed, many of which are advanced in planning and awaiting final investment decision. These projects may be referenced in commentary, but are not included in new workforce demand forecasts.

AMMA thanks the various member representatives who assisted in this industry forecasting project.

*Construction phase workforces and hydrocarbons projects will be analysed in future reports.

Australia’s mining industry is facing new workforce demand at levels not seen since the previous investment and construction ‘boom’. Securing the pipeline of skills to support mining project growth is a significant challenge that must be met head-on, collaboratively, by industry and government.

Assisting all social partners to rise to this challenge, AMMA is pleased to present our 2019 –2024 Mining Workforce employment forecast initiative. Through this project AMMA seeks to:

Inform industry of expected growth in operational mining workforce demand to 2024, assisting employers with workforce planning strategies.

Inform government of expected growth in the national mining workforce, including specific occupations where shortages may emerge, to help direct VET reforms and other skilling initiatives.

Inform the nation broadly, including regional communities, job-seekers and school leavers, of sustainable career opportunities within the resources and energy industry.

There is no escaping that the mining industry, a significant driver of national wealth and prosperity, can be highly cyclical.

While the industry has always been a key pillar of the Australian economy, the period of 2005-2012 saw unprecedented levels of project and workforce growth. The number of direct employees in Australia’s mining industry jumped from 113,000 to 274,000 – a 162% increase in seven years. On average, the workforce demand grew by one-fifth every 12 months.

In 2019 Australia’s mining industry directly employs about 240,000 people and is again on the verge of a significant uplift. This report forecasts that 57 new or expansion developments, worth about $41 billion in value, will create an additional 20,767 on-site workforce demand by 2024.

Employers, peak industry bodies and state and federal governments are united in our desire to be well prepared for the workforce demands of this next phase of industry growth.

We must learn our lessons from the past and be better at industry workforce planning, nurturing the skills pipeline, facilitating inter-sector labour mobility, and avoiding projects cannibalising each other for critical trades and semi-skilled roles.

This employment forecast initiative will add immense value to these collective goals.

THE AMMA TEAM

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© AMMA 2019 | First published in 2019 by AMMA, Australian Mines and Metals Association ABN 32 004 078 237Lead analyst / author: Tom Reid, Head of Policy & Public Affairs | Email: [email protected] | Phone: (03) 9614 4777 | Website: www.amma.org.au

This publication is copyright. Apart from any use permitted under the Copyright Act 1968 (Cth), no part may be reproduced by any process, nor may any other exclusive right be exercised, without the permission of the Chief Executive, AMMA, GPO Box 2933, BRISBANE QLD 4000

ABOUT AMMA AMMA’s vision is to assist resources and energy employers in creating a brighter future for all Australians.

A proud member-based organisation, AMMA’s work in policy and advocacy drives positive outcomes for members and the broader industry.

For more than a century, AMMA has delivered representation and support services to Australia’s resources and energy industry.

AMMA provides expertise, influence, leadership and support in key workforce areas including workplace relations, human resources, diversity, training, government relations and public affairs.

Historic ForecastAustralian direct mining workforce: 2006-2024

300

250

200

150

100

50

02006 2009 2012 2015 2018 2021 2024

57Projects

$41 bn value

20,767 Additional workforce demand


NATIONAL SUMMARY

57Projects

$41bnValue

6

6

3

30

12

$6.8bn

$3.8bn

$1.4bn

$19.2bn

$9.9bn

2402

1553

419

10,679

5714

20,767 Additional workforce demand

5$1.4bn

850

COMMENTARYAs of May 2019 the Australian mining industry directly employed 240,000 people.

There were 57 new, expansion or restart projects either ‘committed’ or considered ‘likely’ by the Australian Government to be completed between 2019-2024. Should all proceed, the on-site operational demand would lift the national mining workforce by an estimated 20,767 (or 8.6%) to 260,767.

This would be the highest point of direct mining industry employment in Australia since 2012 when the historic investment and construction boom was at its peak (274,000 employees). Notably, whilst 2004-2012 saw 14% annual average employment growth, modelling to 2024 estimates a far steadier average annual rate of 1.7%.

The first growth phase will come from new projects completed in 2019, demanding 4185 new operational roles by 2020, or 1.8% growth of the current workforce. Notable projects include Carrapateena (copper), Byerwen (coal), Amrun (bauxite), Gruyere (gold) and Cataby Mineral Sands.

Projects then scheduled for completion in 2020 will demand an additional 6357 operational workers by 2021, lifting the overall direct mining workforce by 2.6% over 2020 levels. Projects include Olive Downs (coal), Eliwana (iron ore), Bylong (coal), Cadia expansion (gold) and Kemerton Lithium Plant.

By 2022, operational workforce demand would have grown by another 7665 employees or 3.1%, following a number of large projects set for completion in 2021 including South Flank, West Angelas, Robe Valley and Koodaideri (all iron ore); Carmichael and Mount Owen expansion (both coal).

Finally, projects scheduled for completion in 2022/23 (including Iron Bridge and Mount Holland Lithium) are forecast to create demand for 2560 additional on-site employees across 2023/24, or a further 1%. Should any of the 153 projects rated ‘possible’ come online, workforce demand could exceed this forecast considerably.

Overall, 2019-2024 modelling shows iron ore projects will account for 29% of new operational workforce demand, coal 24%, gold and copper 17%, and lithium 9.7% (see pages 14-15 for further breakdown).

The total new operating workforce required by these projects is an estimated 20,767. Broken down into classifications, demand will include:

Australia’s mining industry has 57 new, expansion or restart projects either committed or considered likely to commence operating 2019 and 2024. These projects have a combined estimated value of $41bn and comprise the following commodities:

gold

lithium

copper

coal

iron ore

graphite

Mineral sands, rare earths, other materials

phosphate 1 bauxite,1 nickel

6 38

8 2

10 99

*Further data breakdown and list of projects modelled on pages 14-15

projects committed or publicly announced

estimated value

operational workforce

4$500m

200possible projects only—not included in forecast totals

8660 mining plant operators

2847

970

4110

4180

heavy diesel fitters

other trades (electrical, mechanical, maintenance)

supervisor, management, administration

mine engineering, technical, geology.

Total Workforce

HD Fitters

Engineers, Technicians, Geologists

Plant Operators

Trades, other

Supervisors, Management, Admin

New mining workforce demand 2020-2024: Australia

2020 2021 2022 2023 2024

25,000

20,000

15,000

10,000

5000

0

57 mining projects 20,767 employees

AGGREGATE FIGURES


COMMENTARYWestern Australia’s mining industry directly employed 105,300 people at May 2019, or 48.8% of the national mining workforce. 30 projects scheduled for completion by 2024 are forecast to drive average annual workforce growth of 2%, or 10% in total, bringing the overall direct mining workforce to about 116,000.

This would be the state’s largest number of direct mining employees since mid-2012 (119,800). With AMMA members already experiencing skills shortages, the forecast 10,677 required new workforce will cause some concern.

Five projects are scheduled for completion in 2019, creating new workforce demand of 1,338 or a 1.3% increase by 2020. Key projects include Cataby Mineral Sands, Gruyere (gold) and Koolan Island (iron ore).

A significant number of new projects (12) scheduled for completion in 2020 will create workforce demand of 2.7% or 2,847 employees by 2021. Gold and lithium are strongly represented at three projects each, with Eliwana being the only new iron ore project forecast for this period.

Additional workforce demand at the start of 2022 will be driven by four large iron ore projects (South Flank, Koodaideri, West Angelas and Robe Valley expansions) all set for completion during the 12 months prior. Six projects in total will create 4,265 new operational positions, or 4.3% annual growth.

Strong growth will continue throughout 2023 and 2024 (a combined 2,228 employees or 2.2%) driven by four new lithium developments and Fortescue’s Iron Bridge project.

Overall, iron ore accounts for just seven of the 30 projects ‘committed’ or ‘likely’ by 2024, however given their significant size, this will account for more than half (5,575) of total new workforce demand. Should all 7 projects proceed, they would boost the state’s already world-leading iron ore production by 27% or 217mtpa.

Western Australia has a further 49 ‘possible’ projects in feasibility stage that have not been forecasted here.

WESTERN AUSTRALIA

Total new operating workforce estimate to 2024 is 10,679 employees. Breakdown of forecast demand:

Western Australia has 30 mining projects either ‘committed’ or ‘likely’ to proceed. Of these 20 are new projects, 8 are expansions and 2 are restarts. Commodity breakdown follows:


1486

461

2130

2138





IRON BRIDGE (Fortescue)

20mtpa iron ore 900 2022

ELIWANA (Fortescue)

30mtpa iron ore (new) 500 2020

WODGINA LITHIUM (Mineral Resources)

833ktpa lithium project 500 2022


SOUTH FLANK (BHP)

80mtpa Iron ore 2000 2021

GRUYERE (Gold Road / Gold Fields)

270,000oz gold mine 300 2019

CATABY MINERAL SANDS (Iluka Resources)

Ilmenite, zircon, rutile 600 2019

KEMERTON LITHIUM PLANT (Albemarle)

100ktpa lithium hydroxide 500 2020

KOODAIDERI (Rio Tinto)

28mtpa iron ore (new) 700 2021

ROBE VALLEY (Mesa B,C,H - Rio Tinto)

25mtpa iron ore (expansion) 625 2021

WEST ANGELAS C&D (Rio Tinto)

30mtpa iron ore (expansion) 750 2021

Estimated workforce Estimated start date

871

8 51

lithium

iron ore (6 hematite, 1 magnetite)

nickel

other minerals’ (rare earths, graphite, titanium oxides)

gold

copper

Total Workforce

HD Fitters


Plant Operators

Trades, other


New mining workforce demand 2020-2024: Western Australia

2020 2021 2022 2023 2024

12,000

10,000

8000

6000

4000

2000

0

AGGREGATE FIGURES


COMMENTARYQueensland’s mining industry directly employed 71,000 people at May 2019, or 29.6% of the national workforce. This has greatly fluctuated in recent years due to commodity prices, operational requirements, ageing assets, new projects and other factors.

In 2015-16, the state’s mining workforce declined by more than one-third (36.2%). However strong recovery has since followed with 2017-2019 averaging 12% year-on-year growth.

The 12 projects ‘committed’ or ‘likely’ to enter production in 2019-2023 would continue this upward trend at a steadier 1.6% annual average. Should all projects proceed, Queensland’s direct mining workforce is predicted to grow by 8.5% in total over this period.

The first phase of new workforce demand will come from three projects due for completion in 2019 (Amrun, Byerwen Coal and Charters Towers), producing 3.1% growth and new workforce demand of 2,227 by 2020.2.

Further 2.3% growth, or an additional 1,676 employees, is forecast by 2021 due to three new coal projects set for completion in 2020 – Olive Downs, Taroborah and Ironbark No.1.

The third growth period will be driven by five projects set for completion during 2021, including Carmichael Coal, Baralaba South (coal) and Cloncurry Copper. By 2022, these projects will demand a further 1,600 employees or workforce growth of 2.1%.

At this point (start of 2022), Queensland’s direct mining workforce is forecast to reach 76,500 – surpassing the previous high of 75,600 in 2014.

Only one ‘likely’ project is listed for 2023 (Dysart East), however Queensland does have a very significant 56 projects rated as ‘possible’ in its development pipeline to 2026.

Three of these projects – Alpha Coal, China First and Kevin’s Corner – could be amongst the largest coal mines in the world. If any or all of these feasible projects were to proceed, Queensland’s forecast demand would rise significantly and could easily see the state’s direct mining workforce exceed 80,000 for the first time.

AGGREGATE FIGURES


Queensland has 12 mining projects either ‘committed’ or ‘likely’ to proceed. Of these 8 are new projects and 4 are expansions. Commodity breakdown follows:

3 thermal coal 2 coking coal, 2 mixed coal

2 gold 1 copper

1 phosphate 1 bauxite

CLONCURRY COPPER (Altona Mining)

39kt, 200oz copper/gold mine 243 2021

CARMICHAEL COAL (Adani)

10mtpa thermal coal 800* 2021

IRONBARK NO.1 (Fitzroy)

2.6mtpa thermal coal 289 2020

BYERWEN COAL (QCoal Group)

10mtpa thermal coal 677 2019/20

AMRUN (South of Embley – Rio Tinto)

22.8mtpa bauxite project 1400 2019

OLIVE DOWNS (Pembroke Resources)

15mtpa coking coal 1000 2020

BARALABA (Baralaba Coal)

5mtpa thermal coal 333 2021

TAROBORAH (Shenhuo Group)


Total Workforce

HD Fitters


Plant Operators

Trades, other


New mining workforce demand 2020-2024: Queensland

Estimated workforce Estimated start date *Very conservative estimate

QUEENSLAND

2020 2021 2022 2023 2024


767

291

1120

1157





6000

5000

4000

3000

2000

1000

0



COMMENTARYHistorically, periods of new mining project growth in South Australia and the Northern Territory have potentially exacerbated skills and labour mobility challenges for employers in Western Australia and Queensland. Based on projects presently ‘committed’ and ‘likely’, the risk of this scenario developing in 2020-2024 is fairly moderate.

South Australia’s mining sector presently employs around 7,800 people (at May 2019), less than half of its 2014 peak of 16,160. The six projects scheduled for completion by 2024 would see a forecast 20% growth to 9,353 employees. This figure could rise even more dramatically if BHP proceeds with a major expansion of its Olympic Dam copper production that could create up to 600 new operating roles (AMMA has assumed the lowest case scenario here).

A significant proportion of this growth will come off the back of two large new copper-gold projects, Carrapateena in 2020 and Hillside in 2021, each forecast to create 500 new operational roles.

Beyond the projects forecasted here, there are an additional six projects in feasibility phase that could boost South Australia’s workforce growth prospects further if they were to proceed. While mostly small copper, gold and other minerals mines, the 24mtpa Central Eyre iron ore project would require around 600 employees and could be a factor in labour sourcing for Western Australian operators.

The Northern Territory has three ‘likely’ projects in its development pipeline, all set for completion in 2020 and forecast to require 419 new operational employees. This would lift its current mining sector direct workforce from 1,700 to 2,119, or 24% growth.

The Territory’s mining sector growth prospects appear to hinge on converting the nine projects listed as ‘possible’ for development by 2024 to ‘committed’. These projects are mostly small to medium sized gold, copper, rare earths and other minerals mines, but collectively could double the Territory’s mining workforce if they all were to proceed.

SOUTH AUSTRALIA & NORTHERN TERRITORY

AGGREGATE FIGURES


South Australia (6) and the Northern Territory (3) have a combined 9 mining projects ‘committed’ or ‘likely’ to proceed.Commodity breakdown follows:


OLYMPIC DAM (BHP)

100kt copper expansion

120 (up to 600) 2021

FINNISS LITHIUM PROJECT (Core Exploration)

180ktpa spodumene 80 2020

MOUNT PEAKE (TNG Ltd)

Vanadium, titanium, iron 175 2020

AMMAROO (Verdant Minerals)

2mtpa phosphate 164 2020

CARRAPATEENA (Oz Minerals)

4.25mtpa copper / gold 500 2019

HILLSIDE (Rex Minerals)

110kt copper/gold 500 2021

KALAROO (Havilah Resources)

80kt copper, 220oz gold 260 2020

311

211

copper-gold

copper

phosphate

graphite

lithium

vanadium, titanium, iron


261

113

381

403





Total Workforce

HD Fitters


Plant Operators

Trades, other


Mining workforce demand 2020-2024: South Australia & Northern Territory

2020 2021 2022 2023 2024

2500

2000

1500

1000

500

0

ULEY (Quantum Graphite)

50kt expansion graphite 50 2020

SIVIOUR (Renascor Resources)

123kt graphite 123 2022



COMMENTARYSix new and expansion mining projects in New South Wales are forecast to create 2,402 new operating roles in 2019-2024, the most significant being Glencore’s Mount Owen expansion (coal), Bylong (coal), Cadia expansion (gold) and Hawsons (iron ore).

This would increase New South Wales’ direct mining workforce by 6.8% to around 37,900 – its highest point since 2017 where the workforce reached 41,000 before three years of consecutive 14% declines.

All six projects are scheduled for completion in 2020-2021, seeing peak new workforce demand by start of 2022.

The wildcards for New South Wales are the 24 projects listed as ‘possible’ to proceed over the next five years which have the potential to create more than 4,000 additional operating roles not forecasted here.

10 of these projects are in the thermal coal sector, which could see NSW coal operators potentially compete with Queensland for future operational labour should these feasibility-stage projects proceed.

The outlook for Victoria and Tasmania is far more subdued, with no projects committed or considered likely to proceed by 2024.

Victoria has five mining projects considered ‘possible’ (magnesium, copper, mineral sands), which could demand more than 800 jobs if they reach final investment decision. The state direct mining workforce has nonetheless recovered strongly since a one-third fall in 2015, today employing about 16,300 people or a similar level to 2014.

Tasmania has four prospective mining projects considered ‘possible’ by the Department of Industry, all in tin, copper and tungsten, and worth about $130 million in capital expenditure. The state’s direct mining workforce is 2,400.

NEW SOUTH WALES, VICTORIA, TASMANIA

AGGREGATE FIGURES

Total new operating workforce estimate (2020-2024) is 2,402 employees. Breakdown of forecast demand:

New South Wales has 6 mining projects either ‘committed’ or likely to proceed. All are scheduled for 2020-21 completion.Commodity breakdown follows:

DARGUES CREEK (Diversified Minerals)

50,000oz per annum gold 70 2020

CADIA (Newcrest)

650,000oz gold expansion 400 2020

BYLONG (Korean Electric Power Corp.)


MOUNT OWEN (Glencore)

12mtpa thermal coal expansion 800 2021

HAWSONS (Carpentaria Exploration)

10mtpa iron ore 500 2021


3 gold 2 coal 1 iron ore (magnetite)


333

105

479

482





Total Workforce

HD Fitters


Plant Operators

Trades, other


New mining workforce demand 2020-2024: New South Wales

2020 2021 2022 2023 2024

3000

2500

2000

1500

1000

500

0

5$1.4bn

850

4$500m

200

Estimated valuePossible projects only—not included in forecast totals



All projects modelled (‘committed’ and ‘publicly announced’ only)Further Data Breakdown

PROJECT STATE COMMODITY YEAR EST. WORKFORCE

Amrun (South of Embley Project) QLD Bauxite 2019 1400Ardmore QLD Phosphate 2021 87Baralaba South QLD Coal 2021 333Byerwen Coal Project QLD Coal 2019 667Carmichael Coal QLD Coal 2021 800Charters Towers QLD Gold 2019 161Cloncurry Copper Project (Little Eva - Roseby) QLD Copper 2021 243Dysart East QLD Coal 2023 211Ironbark No.1 (Formerly Ellensfield Coal Project) QLD Coal 2020 289Mt Carlton QLD Gold 2021 137Olive Downs QLD Coal 2020 1000Taroborah QLD Coal 2020 387

Beyondie WA Sulfate of potash 2020 45Calingiri WA Copper 2023 220Cataby Mineral Sands WA Ilmenite, zircon, rutile 2019 600Eliwana (Western Hub) WA Iron Ore 2020 500Gabanintha Project WA Vanadium 2020 200Glenburgh WA Gold 2021 70Greenbushes Expansion beyond 1.34Mtpa WA Spodumene (Lithium) 2022 125Greenbushes Expansion CGP2 WA Spodumene (Lithium) 2020 60Gruyere Project WA Gold 2019 300Gwalia Extension WA Gold 2020 193Iron Bridge WA Iron Ore 2022 900Kalgoorlie Lithium Hydroxide Plant WA Lithium hydroxide 2022 100Karlawinda WA Gold 2020 90Kemerton lithium plant WA Lithium hydroxide, sodium sulphate 2020 500Koodaideri WA Iron Ore 2021 700Koolan Island WA Iron Ore 2019 100Kwinana Lithium Plant WA Lithium 2019 200Lake Disappointment WA Sulfate of potash 2021 120McIntosh WA Graphite 2023 83Mount Holland Lithium mine WA Spodumene (Lithium) 2022 300North Perth Basin Project (Boonanaring, Atlas) WA Ilmenite, zircon, rutile, leucoxene 2019 138Pilgangoora (Stage 2) WA Spodumene (Lithium) 2020 150Ravensthorpe WA Nickel 2020 350Robe Valley (Mesa B,C,H deposits) WA Iron Ore 2021 625South Flank (Yandi, mining area C) WA Iron Ore 2021 2000Thunderbird WA Zircon, ilmenite, leucoxene 2020 280West Angelas (Deposits C&D) WA Iron Ore 2021 750Wiluna/Matilda WA Gold 2020 100Wodgina Lithium Project WA Spodumene (Lithium) 2022 500Yangibana WA Rare earths 2020 380

Bylong NSW Coal 2020 432Cadia NSW Gold 2020 400Dargues Reef (Majors Creek) NSW Gold 2020 70Hawsons NSW Iron Ore 2021 500McPhillamys NSW Gold 2020 200Mount Owen Continued Operations Project (Modification 2)

NSW Coal 2021 800

Ammaroo (Stage 1 and 2) NT Phosphate 2020 164Finniss Lithium project NT Spodumene (Lithium) 2020 80Mount Peake NT Vanadium, titanium, iron 2020 175

Carrapateena SA Copper, Gold 2019 500Hillside SA Copper, Gold 2021 500Kalkaroo SA Copper, Gold 2020 260Olympic Dam Expansion SA Copper 2021 120Siviour SA Graphite 2022 123Uley (Phase 2 and 3) SA Graphite 2020 50

New mining workforce demand 2020-2024: By state

QLD

WA

NT

SA

NSW

12000

10000

8000

6000

4000

2000

0

New mining workforce demand 2020-2024: By commodity7000

6000

5000

4000

3000

2000

1000

0

New mining workforce demand 2020-2024: Blue collar East/West

5000

4000

3000

2000

1000

0

New mining workforce demand 2020-2024: White collar East/West

2500

2000

1500

1000

500

0

Iron Ore

Coal

Gold & Copper

Lithium

Other

Plant Operators (WA)

Plant Operators (QLD, NSW)

All Trades (WA)

All Trades (QLD, NSW)

Total Blue Collar (SA, NT)

Engineers, Technicians, Geologists (WA)

Engineers, Technicians, Geologists (QLD, NSW)

Supervisors, Management, Admin (WA)

Supervisors, Management, Admin (QLD, NSW)

Total White Collar (SA, NT)

2020 2021 2022 2023 2024 2025 2026

2020 2021 2022 2023 2024

2020 2021 2022 2023 2024

2020 2021 2022 2023 2024

Volume 1 — September 2019 · Australia’s mining industry has 57 new, expansion or restart projects either committed or considered likely to commence operating 2019 and 2024. These

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