Why the boom is back on in hardrock underground mining

With the prices of a number of metals being at close to all-time highs, experienced miners are very thin on the ground and in short supply. The big mining companies and contractors are keeping up the BHP tradition, of pushing wages and benefits to all-time highs to get the workforce required to run their mines. These high prices have given the big players lots of cash to throw around when trying to attract and keep staff. To do this they will not only raise the hourly rates but also offer better conditions like shorter rosters. This means we can expect more sites go from the 2& 1 to 1&1 again.

The last time this happened was in the 2006 Nickel boom when the price went well over $40,000 a ton. The gold mines couldn’t compete with wages and bonuses, but found they could get people they needed with extra time off. By going to a 1&1 roster a number of owner operator mines were able to get the experience required to run their mines. This time its gold that’s riding the high prices over $1600oz in Australian dollars.

The current Gold industry boom is going under the radar of most, even though there are thousands of jobs on offer around country. One of the main reasons is because of the way the price is reported (in US dollars). Which is very deceptive when the mines here operate and sell their gold in Australian dollars. Currently the gold price has just dropped more than $60 on its US price from $1306oz to $1242oz. Some have seen this as a weakness in the industry with the price well off its all-time highs of US$1900oz.

Now look at the price in Australian dollars, our all-time high is $1824oz with a current price of $1670oz. If you have a look at the 10 year chart, you see that the price has been above $1600oz for more than 2 years. With the price being well over $1700oz for most of that time. That’s 2 years of being less than 10% off its all-time high, while in the US the price is 35% off its high.

With large surface and underground mines producing 10,000’s of ounces per month all around Australia, at costs between $600-$1000 to produce an ounce of gold. This is often referred to as the “landed price” and is calculated by dividing the total costs (head offices and everything) by the ounces produced. This means that a mine producing 10,000 ounces a month at a landed price of $650oz and selling it for the spot price they are making more than $1000 an ounce. Or a total monthly profit of $10,000,000, that’s $120million a year.

This means “New starters” will have to be taken on at most mines in WA, NSW & QLD while mines in SA, Vic and New Zealand can use their location (and small numbers) to attract experienced people home. Lots of New Zealanders have headed home from WA and QLD to work on one of the 5 underground gold mines being run in New Zealand. The same applies for people from SA and Victoria, it’s a great time to think about going home with mines in both locations having trouble filling spots.

So what can you do if you are new to the industry?

Learn the jobs required?

Simple as that.

If you know how the mine works, what the jobs are (nipper, truck, service crew) and can express this to the foreman, then you have something to offer the mining employers.

How can you do this?

Industry courses! Through our Do it Yourself and Workready packages

We use 4 industry online courses and a seminar about Australian mining to get people up to speed. If you learn all the information in the courses and understand it to the point you can talk about it with the Foreman in an interview. Then they hire, they would be mad not to. In the last couple of months, people having completed the training packages have been getting jobs in WA, QLD, NSW and SA.

Good luck to all those trying to get a job