MRG President Andrew Pollard in The Calgary Herald: Layoffs Loom in Mining Industry
Boom-bust cycle cited as cause
Derek Sankey, For The Calgary Herald
Published: Saturday, August 04, 2012
Twenty per cent of mining companies in Canada have already begun laying off employees this summer in a sector that has taken a recent beating in the markets.
The good news for existing workers is that employment appears to be getting more stable, with 76 per cent of the 140 mining executives surveyed not considering any further layoffs in 2012, according to a new report.
“What you’re seeing now in the market is (mining) companies are taking a wait-and-see approach,” says Andrew Pollard, president and chief executive of the Mining Recruitment Group in Vancouver.
While the industry is bracing itself for a round of job losses, mining companies say the future of the sector is bright.
Firms in the mining sector have been scaling back on their exploration and development plans (80 per cent) and reducing overhead costs (71 per cent), according to the survey Pollard’s company released recently.
“There are a lot of unknowns, (but) the fundamentals of the industry are quite sound over the long term,” says Pollard, noting 82 per cent of executives are bullish over a three-year period, despite short-term caution.
“They’re riding out the markets hoping things will return sooner than later,” he adds.
Sixty per cent of those surveyed do not expect to recruit in the next six months, however a generation skills gap exists for geologists with mid-level experience of 15 to 30 years under their belt.
Elmer Stewart, president and chief executive of Calgary-based metals company Copper Fox Metals, says there was a period when students avoided going into the sector, leaving a dearth of talent in a key demographic.
“You have a crop of younger graduates coming out with five to ten years’ experience, but you don’t have the people with 30-plus years experience,” Stewart says. “New grads coming out are starting at a relatively good salary, but they need the field experience.”
Junior exploration companies are suffering the most, says Pollard. They’re the ones relying almost exclusively on investment financing, which has dried up in recent months.
A report last month from the TSX showed financing dollars raised through venturecapital companies – a key source of financing for junior mining firms – was down 57 per cent, while all sources of financing combined were down 28 per cent.
Pollard’s survey showed about 60 per cent of mining companies have enough cash on the books to last more than nine months.
Despite the cautious tone of the sector, key workers that can fill that mid-level range will continue to be in demand.
During the 1980s and 1990s, many workers decided to go into oilsands mining for the oil-and-gas industry instead of the targeting the traditional metals and minerals mining sector.
Pollard isn’t yet seeing that trend materialize again under current market conditions. Most skilled professionals are focusing their careers on specific commodities, such as diamond exploration, uranium or precious metals. Others target geographic locations.
Mentoring will play a key role in successful mining companies’ future strategies, as part of a bigger focus on overall succession planning. Pollard advises workers in the sector to broaden their skill sets as much as possible, rounding out their experience and keeping up to date with professional training.
The situation in the Canadian mining sector hasn’t gotten too dire. Pollard says he’s not seeing any significant mine closures.
“This time around, what I’m noticing is a much more passive approach,” says Pollard. “They might not be planning on recruiting as much but, at the same time, they’re not making the same deep cuts they were making three or four years ago.”
Stewart’s company, Copper Fox, has only two fulltime employees. It relies almost solely on contractors, including the executive team and workers out in the field.
The $480-million company (measured by market capitalization) prefers to offer its workers the flexibility of working on a contract basis at projects like its Shaft Creek location.
He says the industry has been on a constant rollercoaster ride over the last 30 years.
“From 1997 to about 2004, you couldn’t find a job in this business if you tried,” says Stewart.Then as markets boomed prior to the recession, labour supply dried up.”For the last few years in this business, it’s been very difficult to get your hands on good people,” he says.
Today, professionals who have jobs in this sector are busy during the peak summer work season. Stewart is in the middle of it now.”We have no time off in the summer,” he says “It never stops.”