Miner vs. machine: Pitfalls of a labour shortage

The mining industry image of a dusty underground miner with a hardhat and headlamp is fading as more companies consider replacing workers with machines to address a growing global labour shortage.

A recent report from international consultancy BDO says 50 per cent of mining company executives from around the world believe that,“substituting technology for labour” will have a positive impact on their business in 2013.

“We are in the midst of a transition in the mining industry from a blue collar to a white collar workforce,” says Charles Dewhurst, global national resources leader, Natural Resources industry group at BDO.

“With advancements in technology – from new software that makes prospecting easier, to advancements in mineral transportation – the industry is at a critical juncture.”

Of the mining executives surveyed in the BDO report, 79 per cent felt the lack of a skilled workforce would have a negative impact on their business this year.

“International mining executives are bracing for the negative impact the lack of a skilled workforce will have on their organizations,” the report says.

A shortage of skilled workers at mines around the world has driven up labour costs as companies pay huge dollars to attract and keep workers. The problem is particularly acute in places like Western Australia, as was documented in an eye-opening Wall Street Journal article about the $200,000-a-year mine worker.

Companies are already investing millions in technology to support operation of their mine sites, which could someday create a fully automated operation.

Anglo-Australian miner Rio Tinto PLC is considered a leader in automated mine technology with its “Mine of the Future” program. Rio says the program is designed to create new technologies for mines that will increase efficiency, lower costs and improve safety.

The BDO report says 30 per cent of mining executives see new technology as helping to improving profitability in 2013.

“Many are reinvesting their profits into technology that will improve and sustain their business in the future,” the report says.