QLD Mining & Energy Bulletin

QLD Mining and Energy Bulletin Summer 2011-12

QLD Mining and Energy Bulletin

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SOLUTIONS ON THE LOCAL FRONT S kills Australia is an independent statutory body, providing advice to the Minister for Tertiary Education, Skills, Jobs and Workplace Relations on Australia's current, emerging and future workforce skills needs and workforce development needs. The following article describes work that has been undertaken by Skills Australia, the National Resources Sector Employment Taskforce and the Australian Government. The aim is to better inform industry forward planning for future major resources projects, assist in better meeting industry skill needs, and to inform further policy responses to the emerging needs of the resources sector, which NRSET defined as including mining operations, major project construction and gas operations. The Skills Australia 2011 Interim Report on Resources Sector Skill Needs Following its consideration of the National Resources Sector Employment Taskforce (NRSET) report published in June 2010 (DEEWR, 2010) the Australian Government requested that Skills Australia prepare annual reports about the resources sector's likely demand for labour and the supply of skills available to meet the sector's skill needs. The 2011 Interim Report on Resources Sector Skill Needs, the first report prepared by Skills Australia, updates the work undertaken by NRSET. The report has been prepared in consultation with relevant Australian and state government agencies, and with the assistance of industry. The conclusions presented in the report were tested with industry stakeholders. Key findings The key findings of this report include: • The outlook is for even stronger growth in production and exports of resources 40 QLD Mining and Energy Bulletin Summer 2011/12 commodities in liquefied natural gas, uranium, thermal coal, copper and iron ore, than estimated by NRSET, accompanied by greater expansion of productive capacity in the resources sector than anticipated by NRSET. • Many major resource investment projects which were previously tentative have now been confirmed. Advanced major projects in April 2011 were valued at $173.5 billion, compared to $109.6 billion when NRSET reported in June 2010, representing an increase of $63.9 billion. Major projects in train include: • The Gladstone based British Gas Queensland Curtis Liquefied Natural Gas (LNG) Project and the Santos-led Gladstone LNG projects, which are expected to employ around 10,000 people at peak construction with 1,700 operational jobs when construction is completed in 2014-15; • AMCI Capital and Aquila Resources' $5.8 billion 30 million tonnes per annum West Pilbara Iron Ore Project, expected to commence exporting in February 2014; and, • Xstrata's $1.4 billion 8 million tonnes per annum thermal and soft-coking coal project at Ravensworth North, expected to create 250 construction and 550 operational jobs with first coal production expected in 2012. • In addition to these projects, there are a number of major developments underway or about to commence construction, including: Wheatstone (where a Fund Investment Decision has now been reached) and additional LNG trains at Pluto in the Pilbara; the Browse and Prelude Projects in the Kimberley; and the Ichthys Project based in Darwin. Together with the Gorgon project currently under construction, the workforce demands for LNG projects in west and northern Australia will exceed 20,000 jobs at peak construction. • The Australian Bureau of Statistics (ABS) anticipates mining capital expenditure will rise by 62.5 per cent to $83.3 billion in 2011-12 when mining investment is expected to rise to 59.7 per cent of total national capital investment. It therefore seems likely that there will be a more rapid and protracted build-up of construction labour demand than was the case when NRSET reported. • To date employers appear to be experiencing less difficulty recruiting skilled workers than they did immediately prior to the onset of the global recession and wage pressures are relatively contained in the resources sector. • However, based on the NRSET approach to modelling demand for skills in the resources sector, Skills Australia anticipates very strong growth in employment in the resources sector with a projected likely increase in employment in mining operations rising from 187,700 persons in November 2010 to 270,600 persons in 2016, a rise of 44 per cent. • Skills Australia now estimates the number of short term project construction jobs could range from around 154,500 (low scenario) to 287,000 (high scenario) compared to NRSET projections of 103,000 (low scenario) to around 255,000 (high scenario) short term construction jobs. • Potential employment in gas operations has been underpinned by Final Investment Decisions (FIDs) for major gas projects in Queensland. Santos has estimated that 1,500 new jobs will be created from its project by June 2011 and BG Group's project will employ more than 3,000 people during construction. • The supply of skills through training effort is increasing but the data highlight SOLVING THE SKILLS SHORTAGE

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