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EMERGING SKILLS SUMMIT 2020
AND BEYOND
A Critical National Challenge
“SUSTAINABILITY OF THE MINERALS
SECTOR IN AUSTRALIA, SKILLS NEEDS
IN A GLOBAL INDUSTRY”
Don Larkin, CEO, The AusIMM
Tuesday 22 November 2005, Sydney NSW
“DISCIPLINE AREAS OF NATIONAL
IMPORTANCE WILL BE PROTECTED WHERE
THEY ARE OF CONTINUING RELEVANCE”
Draft National Strategic Principles for Higher
Education – September 2006
Department of Education, Science and Training
TODAY’S PRESENTATION
• Profile of the Minerals Sector – National
Importance
• Human Capital Availability and
Changing Structure of Workforce
• The Minerals Sector and Human Capital
• Implications
• Suggestions to Address Skills
Shortages
PROFILE OF THE MINERALS SECTOR
• Global Industry – Global Options
• Cyclical Industry – Currently Buoyant
• Centralisation of Ownership with World Wide
Commodity Groups
• Emerging Sources of Supply – Increasing
Competition
• Increasing Demand from China, India, Asia
• Corporate and Social Responsibility – High on the
Agenda
PROFILE OF THE MINERALS SECTOR IN AUSTRALIA
•
2003-4 – 8% of GDP - $500 Billion directly to
Australia’s wealth over the past 20 years
•
Exports - $42 Billion ($67 Billion 2004/5) representing
35% (37% 2004/5) of (Australia’s total merchandise
exports and 28% of total exports of goods and
services
•
Exports of mining technology, equipment and
services of approx. $2 Billion (60% of the mining
software used in operations around the world)
•
24% of private new capital expenditure in Australia
•
Total government revenue payments of $4.6 billion
•
Significant infrastructure development – since 1967 –
built 26 towns, 17 ports, 26 airfields and over 2000
km of railway line.
Source: MCA Annual Report 2004
GLOBAL SIGNIFICANCE OF THE AUSTRALIAN
MINERALS SECTOR
•
Largest exporter of iron ore and black coal
•
Largest producer of bauxite, alumina, diamonds (by
volume), ilmenite, rutile and zircon
•
Fifth largest producer of aluminium and coal
•
Second largest exporter of uranium with the world’s
largest resources of low cost uranium
•
Second largest producer of zinc ore
•
Third largest producer of iron ore, nickel and gold.
Source: MCA Annual Report 2004
MORE PROFILE ON AUSTRALIAN
MINERALS SECTOR
• High Technology/Capital Costs – Low Labour
• Current Contribution to GDP per Employee is
$359,000 compared with average all Industries
approx. $70,000.
• Homogeneous Culture with Low Level of Diversity –
Causes Retention Problems
• Breakthroughs Imperative to find Next Generation’s
Resources, Increasing Value (Recovery) of Existing
Resources whilst ensuring Economic Efficiency,
Protection of Environment and Social Development.
• Where will the Investment Come From?
HUMAN CAPITAL AVAILABILITY
• Science and maths teaching in primary and
secondary is decreasing (geoscience) and quality of
teaching is declining.
• Students are attracted to “easier” options
• Attractiveness of career in remote or regional
Australia is low
• Greater awareness of impacts of cyclicity.
• “Demographic Destiny” – ageing population – sellers
market.
THE CHANGING STRUCTURE OF AGE
Implications of an Ageing Australia, Productivity Commission
April 2005
The Age Chasm – Drake White
Paper Volume 2, No. 5
Successfully Managing Age in your Organisation
As the population ages a fault line is emerging that separates
the past and future landscapes of the Australian workforce.
For the foreseeable future, growth in the supply of labour will
be firmly concentrated in the group aged 45 years and over.
For every new young person entering the labour market
today, there are seven people aged 45 years and over
available. By 2010 this will create permanent shortages in the
Australian Labour Market forcing organisations to
dramatically re-think their employment practices.
Expectation of Life from Birth (Years)
Expectation of Life from Birth 1920 to 2051
90
85
80
75
70
65
60
55
Years Years Years Years Years Years Years Years
1920- 1932- 1946- 1953- 1960- 1970- 1980- 199022
34
48
55
62
72
82
92
Year
1998
Years (Red are projections only)
ABS: Deaths - 3302.0 - 1920-98
Females
Males
Year
2005
Year
2041
Year
2051
Fertility Rates within Australia - 1921 to 2051
3.6
Fertility Rates
3.3
3
2.7
2.4
2.1
1.8
1.5
Years
192125
Years
193234
Years
194648
Years
195355
Years
196062
Years
197072
Years
198082
Years
199092
Years (Red are projections only)
ABS: Births - 3301.0 - 1998
Year
1998
Year
2005
Year
200651
New entrants to the labour market
Diminishing Access to Labour
1980’s & 1990’s
2020’s and beyond
Access Economics
Need to engage
more younger
workers.
Potential to maintain
engagement
of older workers
CURRENT
Source: ABS, 2001
PROJECTED
Key Risks (Drake)

Increased competition for labour
 Expansion of skills shortages
 Increased competition for younger people
 Increasing mismatch between the available labour pool and the
competencies and characteristics required
 Loss of operational knowledge, due to low retention rates and exit
to retirement
 Loss of executive knowledge, due to exit to retirement
 Impaired productivity consequences
 Falling or stagnating growth
 A shifting landscape of health and well being
 Limited capacity amongst the organisations managers and
leaders to assess and respond to the changed environment
FINALLY
From The AusIMM’s point of view
Seize the Opportunity in Tertiary
Education by Focusing on Discipline
Areas of National Importance as Outlined
in the National Strategic Principles for
Higher Education to Ensure the
Sustainability of the Minerals Sector in
Australia by Backing a Winner and this
does Require Some Interventions.
www.ausimm.com