As a general rule, the most successful man in life is the man who has the best information. A combination of mass retirements and increasing natural resource demand from emerging economies has created a crisis in the resource extraction sector - one which is definitely not on investor’s radar screens. Currently there is a “massive talent gap” that is going to get worse because the global mining industry is experiencing the biggest wave of workforce retirements in 70 years - the oldest baby boomers turned 65 years old in 2011.
The Mining Industry Human Resources Council (MIHRC) has recently said that about 40% of the resource extraction industry’s workforce is at least 50 years old and one third of them are expected to retire by 2022. The organization also forecasts that the Canadian mining industry will face a shortage of 140,000 workers by 2021 – this number of workers being needed just to maintain current levels of production. The Petroleum Human Resources Council of Canada warned a severe oil patch labor shortage is looming and that the “patch” will need to hire 24,000 new employees by 2014.
Increased resource demand is driving demand for skilled workers. A shortage of skilled workers was the second biggest business risk for mining in 2011 (as it was in 2010) and is forecast to be the number two risk (resource nationalism/country risk is the number one risk) for miners again in 2012. In the coming years a lack of skilled workers is going to be the major cause for concern in the resource extraction industry.
A lot of people ask me what is my biggest concern. What keeps me awake? Having skilled people available to do the job… That is one of the biggest challenges. We are looking to build a whole lot of mines in the future. And getting the right skills to build those mines is a challenge, not only for us, but for the various engineering companies… The baby boomers are starting to get to retirement age. And there is a whole lot of them that are going to disappear very quickly… If you look at the youngsters coming through, they are looking at other industries.vibrating screen:http://www.crusher-machine.com/8.html
The skills shortages are global, shortages are happening in South Africa, Australia, Canada and South America. Costs are increasing; projects are being deferred or perhaps even cancelled outright due to the inability to staff operations - tighter labor markets also provide unions with greater bargaining powers when dealing with companies over wage settlements and other disputes.
Increasingly we will see falling average grades being mined, mines becoming deeper, more remote and come with increased political and nationalization risk. Extraction of metals from the mined ore will become increasingly more complex and expensive, even more so when one considers the effects of Peak Oil – the cost of technology innovation to power mining in the production of Raymond mill will be very high.
Just when we need it the most the mining industry in which dryer machine takes up a large proportion is starting to suffer a massive loss of accumulated wisdom, knowledge and field experience. This loss of experience, when combined with labor shortages, means future mineral output will be constrained and that has bullish implications for prices.
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