The Chamber of Mines and Energy for Western Australia (CME) was founded in 1901 and its members account for 95% of the mineral production in the state. What is your current mandate?

In recent years the industry has refocused on its core objectives, and at the Chamber, our three key areas of focus are competitiveness, capability and contribution.

When it comes to competitiveness, we are working to make sure that Western Australia (WA) and Australia are competitive mining and energy jurisdictions. We realize that we are competing with other countries when it comes to the mining and oil and gas sectors, and to succeed we need to be at the cutting edge of competitiveness. We are a team of approximately 25 people in the organization, and a third of us are consistently working on ways to improve WA’s competitiveness as a jurisdiction.

Capability is another of our priorities. A skills shortage has become quite a significant issue, both in WA and across Australia, and the industry is struggling to obtain the skilled workers that it needs. In Perth, between 110,000 and 140,000 people are employed directly by the mining and oil and gas sectors each year, and approximately 1 million are indirectly engaged or employed in WA. Over the next six months, an additional 15,000 specific skilled roles will need to be filled, but the talent to fill these roles is simply not available.

During the last mining construction surge that WA experienced between 2007 and 2012, we could draw on skilled workers from across Australia. Unfortunately for WA and fortunately for these regions, they have also seen significant growth, and they’re now using their own skilled workforce. We believe that we won’t be able to train the 15,000 people that industry needs in one year, and we will need to rely quite heavily on international migration. This is not ideal because we would prefer to have a locally-trained, skilled workforce to call on. However, because of the situation we are in, addressing the talent shortage has become a focus area for us.

The final focus is on contribution, both societal and economic. The mining and gas and oil sectors have a value proposition that is not necessarily well understood beyond creating jobs and paying taxes. While they are important, the sectors invest heavily in the communities where they operate so that they are good places to live and work.

With the upturn in full flow, how are the Chamber and the state aiming to address the talent shortage issue?

In the short term, talent is being sourced from other industries and internationally. Each individual company must manage this, but we believe that Q4 2019 will bring signs of manageable wage inflation across the mining and oil and gas sectors in WA.

What is surprising is that WA has the second-best mining school in the world in Kalgoorlie, but it is a challenge to attract students. The Chamber is investigating a number of initiatives to attract students into mining, beginning in primary school. We are working on introducing programs into schools to inform students about the range of opportunities and careers that exist in the mining and oil and gas sectors. We also have a secondary project that aims to educate parents about the benefits of their children working in the mining industry. We want to convince both students and their parents that joining the industry will lead to a fulfilling and successful career.

In 2018, there was AU$18 billion worth of mining investment into WA. Has this investment come through CAPEX or OPEX projects?

Activity has largely been a mix of operational projects, maintenance projects and some capital renewal projects. In terms of capital spent, the surge between 2005 and 2015, led largely by the urbanization of rural China, saw a capital spend of approximately AU$350 billion, or approximately AU$35 billion per annum for 10 years. Although AU$18 billion is a very large figure, it is significantly smaller than was spent per year during 2005 to 2015.

Following the construction phase, WA is now in an operational phase and producing higher volumes than ever before, and Australia’s balance of trade is at record highs.  Significant revenue is being produced, but these projects require less workers compared to the construction phase. We expect that over the coming five years, we will see a significant amount of capital investment because we are waiting on some big decisions about multi-billion-dollar projects from a number of major players in the industry.

How is the Chamber attracting foreign companies and investors into the state?   

Australia and WA are very welcoming of foreign investment, and the mining industry has been a historic long-term partner of foreign investors. We have a strong history of investment partnerships with the United States, Japan, Korea, China, Europe, the United Kingdom, Africa and Asia. In terms of Chinese investment into the country, the government has made it clear that a foreign partner is unwanted in the case of some infrastructure projects, but the mining industry remains a strong supporter of foreign investment, including Chinese investment.

What is your outlook for Australia’s mining industry?  

Australia, as an investment destination, is very stable and has a history of reliable government. The country offers a fantastic quality of living at very affordable prices. It is now a very exciting time to be in the mining industry, and we believe that WA will be the epicenter of this excitement in Australia. We are optimistic, but we’re not taking anything for granted, and will be working hard to attract investment dollars.