By Samantha James
A report by leading independent economic forecaster and industry analyst BIS Shrapnel predicts further mining job losses until 2018 led by the coal, iron ore and gold industries.
The Mining in Australia 2015 to 2030 report stated that investment would fall a further 58 per cent despite an expected 6 per cent annual rise in mining production.
This would drive a corresponding increase in mining operations activities and export volumes but would not be enough to support job growth.
“We haven’t hit bottom yet on commodity prices or investment, which will continue to be a key drag on Australian economic growth from here,” BIS infrastructure and mining unit senior manager Adrian Hart said.
“While mining production will continue to rise strongly, the facts are that this growth will be far less employment intensive than the investment phase, albeit offering contractor opportunities for maintenance and facilities management.
“We are forecasting a further 20,000 job losses in the mining industry over the next three years, on top of the 40,000 direct job losses since the investment peak.”
Excluding oil and gas, mining investment was expected to fall a further 40 per cent to 2017 – a 70 per cent decline overall, led by coal, iron ore and gold woes.
“The persistent drag from falling mining investment has important ramifications for the economy,” Mr Hart said.
“Quite simply, Australia badly needs new investment drivers beyond mining to provide sustainable growth in jobs and incomes.
“While other tradable sectors of the economy, such as tourism, are benefitting from the lower Australian dollar and starting to invest, the onus is also on governments to stand up and get back on the job of investing in productive public infrastructure.”
However, an increase in mining production, operations and maintenance would assist the Australian economy across the next five years.
BIS estimated mining production to represent 20 per cent of the national economy, given strong growth in production and related services combined with a (falling) level of investment.
BIS economist and report author, Rubhen Jeya, said a significant volume of capital injected into the mining industry had yet to translate into production.
“The value of mining production has grown at an annual average rate of 7.1 per cent over the past five years – and there is more growth to come,” he said.
“Mining production is forecast to expand by over one third again over the next five years – around double the pace of the national economy – taking the value of industry output to $186 billion in gross value added terms (GVA) by 2019-2020.”