[REPORT] Australian Mining Industry Could Lose 75,000 Jobs
The mining industry in Australia is in danger of losing thousands of resource-related jobs as the industry enters a new phase of mining.
According to a new report by the ANZ bank, Australia’s mining industry could shed up to 75,000 jobs over the next three years as the mining boom shifts gear.
The potential job losses will add to the country’s 5.8 percent unemployment rate and will require the creation of 150,000 new jobs a year to maintain this rate.
"Weaker than expected commodity prices would tilt the risks to more job losses as mining firms seek to cut costs," said Justin Fabo, senior economist for ANZ.
"So we think the unemployment rate will be in spitting distance of 6% over the next 12 months, and for improvement after that to be gradual."
The sector is seeing a switch in position as the job-intensive construction phase moves towards the job-light operation phase.
“Iron ore projects in Western Australia require, on average, one worker during the production phase for every two or three workers directly employed during the investment phase (but the ratio can vary markedly project to project),” Fabo said in his report.
The Australian Workforce and Productivity Agency said the total number of jobs in the industry has increased by 80 percent in the last five years to reach 263,000.
The ANZ expects iron ore exports – Australia’s biggest – to grow from $55 billion in 2012 to $75 billion by 2020. LNG exports should also increase, growing from $15 billion in 2013 to $67 billion by 2020.
The mining industry in Australia is expected to remain profitable as the volume of mineral exports surges.
“This phase of the mining boom, however, will not be as lucrative as Phase I,” ANZ said.
Lynas revenue jumps 21% as rare earth prices jump
Australian miner Lynas Rare Earths posted a 20.6% rise in revenue in the March quarter as selling prices for the key metals it mines hit record highs amid strong demand, particularly for neodymium and praseodymium (NdPr).
NdPr is used in magnets for electric vehicles and windfarms, in consumer goods like smartphones, and in military equipment such as jet engines and missile guidance systems.
The company said it plans to maintain production at 75% however, as it seeks to continue to meet covid-19 safety protocols and grapples with shipping difficulties. Shares in Lynas fell 6.1% after the results.
“They have faced a few logistics issues, and it would be good to know when they are going to start lifting their utilisation rates a bit,” said portfolio manager Andy Forster of Argo Investments in Sydney.
“Pricing has been pretty strong although it may have peeled back a bit recently. I still think the medium, long-term outlook is pretty good for their suite of products.”
Lynas post ed revenue of A$110mn ($85.37mn) for the three months to the end of March, up from A$91.2mn a year earlier as prices soared.
It said its full product range garnered average selling prices of A$35.5/kg during the March quarter, up from $23.7 in the first half of the financial year. “While the persistence of the covid crisis, especially in Europe, calls for careful forecasts for our business ahead, we see the rare earth market recovering very quickly,” said Lynas, the world’s largest rare earths producer outside China.
Freight demand has spiked during the pandemic, while the blockage of the Suez Canal in March delayed a shipment to April.
Lynas’ output of 4,463 tonnes of rare earth oxide (REO) during the quarter was marginally lower than 4,465 tonnes from a year earlier.