Last week, global mining giant Rio Tinto announced the development of a new $3.5 billion, 43 million tonnes per annum Koodaideri iron ore mine in the Pilbara – to replace production from depleting mines nearby and position the company for further growth. But the company’s job forecasts for the new mine show it will deliver far fewer jobs than current operations.
Last week, global mining giant Rio Tinto announced the development of a new $3.5 billion, 43 million tonnes per annum Koodaideri iron ore mine in the Pilbara – to replace production from depleting mines nearby and position the company for further growth.
But the company’s job forecasts for the new mine show it will deliver far fewer jobs than current operations.
Rio Tinto is already the largest iron ore company in Australia, and the Pilbara region already dominates wold iron ore trade. The new mine will showcase Rio Tinto’s increasing efforts around automation.
The company announced that there would be 2,000 jobs in construction and 600 when operating. That means the company is investing almost $6 million per ongoing job created. That continues and accelerates the trend of increasing capital intensity and declining jobs per dollar invested.
The annual production per job is also staggering – around 72,000 tonnes per person. This compares to somewhere between 19,000 and 25,000 tonnes per person per year across Rio Tinto’s existing mines, depending on how the jobs are counted. If the new mine replicated the productivity of current mines, it would create 1,700 to 2,200 ongoing jobs.
Rio Tinto doesn’t say that all the 600 jobs are on-site, so perhaps the company is counting the remote operations staff in those numbers too. And it is likely that many of the workers will be transferred from jobs that are disappearing from other Rio Tinto mines as resources deplete or automation is implemented.
The make-up of the workforce is bound to be quite different – there will be few truck drivers and more technology people.
Even when looking at Rio Tinto’s existing iron ore mines, the job numbers over the last four years – as obtained from the Western Australia Department of Mines, Industry Regulation and Safety – show steady decline. Tom Price has fallen from 1,831 to 1,406, Paraburdoo from 1,551 to 1,212 and Nammuldi from 2,358 to 1,712.
Those reductions are in the order of 25-30% over four years. The company says that this rate of decline enables it to rely on natural attrition and to redeploy workers without requiring forced redundancies. In that context the new mine provides opportunities to redeploy some workers from other mines.
But these numbers show that, despite the significant recovery from the bust that followed the resources boom, the trend of mining investments producing fewer jobs is continuing. There will be no jobs bonanza in the Pilbara.
However, in the remaining jobs, workers will have higher bargaining power if they are organised.
And with less money flowing to communities through worker pay packers, mining companies will be under pressure to demonstrate that they are delivering benefits to the regions they operate in.
Rio Tinto is engaging globally with unions about the impacts of automation and remote operations on its workforce, with unions aiming to maximise retraining and redeployment opportunities for existing employees and minimise job losses.