New mines face labour crunch

One need look no further than the Internet recruitment pages of some of the bigger mines under development in North America to gauge the gravity of the labour shortage in the mining sector.

Although partners Sumitomo Metal Mining (STMNF-O) and Teck Cominco (TEK.SV.B-T, TCKBF-O) are expecting to pour the first gold from their Pogo mine in Alaska in March, they are still looking for underground miners, mill maintenance mechanics and gravity, flotation and dewatering operators. Only about half of the 50-odd underground mining jobs are filled.

“We expect to fill most of the positions,” says Michael Allan, vice-president of engineering for Teck Cominco. “But getting the underground miners is going to be a challenge.”

De Beers Canada‘s Snap Lake diamond mine in the Northwest Territories, which will draw 60% of the 500-strong workforce from local aboriginal communities when it enters production in 2007, is advertising for engineers and superintendents of all stripes — process, maintenance, plant, mining — as well as trainers and training co-ordinators.

The company’s Victor project in northern Ontario, which will follow Snap Lake into production, has openings for lab technicians, maintenance planners, engineers and superintendents amenable to working in the swampy environs of the James Bay Lowlands.

It’s a similar story at Inco‘s (N-T, N-N) Voisey’s Bay mine in Labrador, where managing director Phil du Toit identifies skills retention as one of the biggest challenges a mine situated in the cold and remote reaches of northern Labrador can face as it ramps up to full production in 2006.

There will be a big demand for skills and people in the mining industry over the next couple of years,” he says. “We are concerned that we might lose some of our key personnel.”

In fact, the industry will need up to 81,000 new people to meet its current and future needs, according to Prospecting the Future, a report on the state of human resources in the mining industry recently published by the Mining Industry Training and Adjustment Council (MITAC).

Because existing mines are already struggling with labour shortages, new mines coming on-stream — especially the more remote among them — need to be creative in order to attract people, says Chris Stafford, president of C.J. Stafford and Associates, a recruiting firm that specializes in the resources sector, predominantly mining.

“There is a shortage of labour and hundreds of opportunities,” Stafford says. “People who have a choice are not going to go to the Northwest Territories or Labrador; they’re going to work in more friendly environments, usually with salaries that are just as good.”

Stafford, who deals mostly with white-collar professionals, says the root of the labour crisis lies in the lethal combination of downsizing during the lean years, attrition through both retirement and people leaving the industry voluntarily, and declining enrolment in mining-related university and training programs.

“All of a sudden, we have a situation where there is such a huge shortage of talent that existing operations are having serious problems,” he says. “The people who have yet to be operators have no idea how drastic the shortage of skills and talent is.”

Exacerbating the problem in Canada is the loss of domestic talent to international projects in the 1990s, when there were few jobs at home. If those workers were reluctant to uproot at the time, they may be just as reluctant to leave behind an expatriate lifestyle that could include private schools, servants, a better tax regime and a generally higher standard of living.

“Many have realized that if they could get through a year without curling and ice fishing, then life wasn’t so bad after all,” Stafford says.

Operations such as Snap Lake and Voisey’s Bay are fortunate in some ways because they have been forced to consider human resource strategies and develop training programs well ahead of production while negotiating impact benefit agreements with local aboriginal groups. Voisey’s Bay, for instance, draws 80% of its workforce from Labrador. Most of the remaining staff consists of skilled personnel recruited in Newfoundland.

In Yellowknife, N.W.T., De Beers has helped build and expand the Kimberlite Career and Technical Centre and is supporting local high school students considering entry into the NWT Apprenticeship Program and other students leaving home to pursue education and trades training at institutions in Edmonton. The more money the diamond miner puts into training and literacy programs, the more likely De Beers is to build and retain its own highly specialized local diamond mining workforce.

Other potential solutions include recruiting recent immigrants, having a more prominent presence on university campuses and welcoming skilled personnel, especially engineers, from other professions. These are all initiatives the industry has failed to take so far, Stafford says.

Some of the smaller operators entering production in traditional mining camps such as Sudbury, Ont., and Timmins, Ont., have a competitive advantage over the bigger greenfield mines because they can tap into the established local mining pool and be more flexible about offering incentives like profit-sharing and stock options.

First Nickel (FNI-T, FNKLF-O), for instance, which just reopened the Lockerby mine in Sudbury, has had little trouble recruiting underground miners, though electricians and mobile equipment operators remain in short supply in the Sudbury camp. President and CEO Beth Kirkwood says First Nickel would like to “distinguish itself as an employer” by providing incentives to stay at Lockerby once the mine begins to generate cash flow.

Liberty Mines (LBE-V), which will have about 45 people working at its Redstone nickel mine in Timmins next year, has also been able to man its operation, says president and CEO Gary Nash. Liberty hired Dumas Contracting, a company with a long history in the region, to mine the deposit and Bob Bresee, former engineering superintendent at Falconbridge’s Montcalm nickel mine, to manage the mine.

But in order to staff a mine such as Pogo, Teck will need to continue its recruiting efforts throughout the United States, where miners tend to go where the best money is.

Pogo has a few carrots to offer. Under Alaskan law, employers must pay a premium for any work done over the standard eight hours per day, meaning miners on typical shifts can reap substantial overtime bonuses. Also, the project is only 85 miles from Fairbanks, so staff can easily drive home for long weekends on a 4-day-on, 3-day-off rotation.

— The author is a freelance writer specializing in mining issues, and principal of Toronto- based GeoPen Communications (www.geopen.com).