Shaky commodity prices and the end of the boom have resulted in a bad year for job losses, and BHP and Rio have warned of more to follow.
Cutbacks have ranged from small belt-tightening measures, such as 36 job losses at Illawarra Coal, to the level of catastrophic collapse such as when mismanaged contractor Forge Group folded leaving 1300 out of work early this year.
Coal has been the worst hit in mining, with Vale announcing the closure of all operations in the Hunter Valley for care and maintenance, among a series of other cutbacks by BHP and Rio Tinto.
Queensland has also suffered, with Queensland Resources Council president Michael Roche saying that 10 per cent of mines in the state are now in a “very precarious position”.
Industry analysts have blamed oversupply on the global market for the plunge in the price of coal, with hard-coking coal having dropped to $US120 per tonne from $US330 in 2011.
Iron ore has also suffered price-wise, falling from $US135 per tonne down to $US110 in April, however the industry seems to have escaped any major job losses.
However last year’s optimism for iron ore jobs growth disappeared, with Rio Tinto and BHP predictions of demand for thousands of new workers failing to meet expectations.
Blue Ocean Equities director Rex Adams suggested at the Resources Round Up in Sydney earlier this month that the market is now seeing a situation of survival of the fittest, with companies that have grown used to boom-time prices forced to adapt or fail during the downturn of the cycle.
“Prices are pretty reasonable across the metals, they’re not boom-time prices but they’re not dire either, so most people should be able to make money out of the various metals,” he said.
Adams indicated that rapid industry expansion resulted in a swelling of the jobs market, which is now shrinking back to suit the current market.
“Coal prices have come back more savagely than some of the metal prices.
“Those companies are now down on their break even points, or even lower and losing cash, so they have to make some very tough decisions that other areas of industry don’t.
“They have to start cutting out their high-cost production, and that means job losses.
I think in the various metals, people are being careful and cutting back on high cost production, but theyre not in the same dire straights that the coal industry is in at the moment.
Adams said a market turnaround resulting in jobs recovery will take several years to effect.
“A couple of years out, probably, it takes that long for the adjustments to come through, for the industry to stabilise, maybe produce a bit less,” he said.
“It’s not just happening in this country, particularly in coal… it takes time for people to make the decisions to cut back on production, so you’d be looking a couple of years out for a turnaround, to the point where the job losses stop and people can think about increasing output.”
- Mining job losses in 2014