Industry evolves to meet mining's changing demands

The resources boom which is said to be cleaving Australia's economy in two is proving to be a boon for those industries servicing Queensland and West Australia's mining contingent.

The economic conditions that Australia's dramatic financial analysts are referring to here are unsurpassed abundance in Australia's resource-rich regions and economic stagnation in the country's traditional industrial capitals of Sydney and Melbourne.

It's not a new story - the boom has been going for quite a while now - but what is of interest is that experts aren't predicting it to slow down anytime soon. And because of this continued growth, some companies are changing the way their businesses are structured to meet the increased regional demand.

The resources and mining industry is a major customer base for Gates Australia. Sales and marketing manager, Rob Taranto told ProcessOnline that the boom has had a significant impact on not only its business, but the product lines being used and the overall supply chain.

"The boom has focused the mining/resources sector into ensuring as much up time in production as possible," he says.

This drive for maximum production with as little down time as possible has actually seen a change in the product lines being used. The industry is investing in technology to safeguard against the costs that arise from delays in production.

"The purchasing of products has shifted to higher quality products that can improve production and reduce maintenance," Taranto says.

New technology for harsh conditions

Sales and operations director at the Sykes Group, Jeff Butler says Sykes has also experienced changes in product demand as a result of changing practices in mine operations as the resources boom continues.

He says that as mine sites go deeper, greater capacity pumps have been necessary for mine dewatering applications; for example, pumps with flow rates of up to 150 litres per second running at diesel engine speeds and discharge heads of up to 245 m.

"The number of complete stainless steel pump sales has also increased, due to the harsh water conditions on a number of these sites," he says.

Another company that has experienced growth due to increased activity in the mining/resources sector is Champion Compressors. Communications manager, Paul Issai says that interest in the company's products and after-sales service has currently hit an all-time high.

Skilled workers in short supply?

Interestingly, while there has been much publicity of late about a major shortage of skilled workers to service the booming resources sector, Issai says that Champion has so far had no issues with adequately staffing its operations.

"Some people would argue that the resources boom has led to a significant shortage of skilled labour, with many tradespeople migrating to Western Australia and Queensland.

"Champion has always been active in the mining/resources industry, but the recent boom has certainly contributed to the appointment of several new employees nationwide," he says.

This is certainly not the case across the sector as a whole. There are many businesses that are experiencing a very real skills shortage and are finding it challenging to recruit suitable staff.

The industry has been attempting to combat the shortage by encouraging more students to look to the resources sector as a lucrative career option, poaching skilled labour from other states or, as a last resort, recruiting overseas workers.

In fact, the Queensland government made headlines last year with its unsubtle campaign to attract workers from New South Wales and Victoria to fill vacancies.

The northern state has also been very active in its drive to encourage high-school students into the resources sector. In September 2006, the Queensland Resources Council (QRC) launched an advertising blitz to address skills shortages in the minerals and energy sectors.

QRC statistics place Queensland as the largest exporter of seaborne coal worldwide. In 2004-05, the state exported a new record of 145.5 million tonnes of coal, which was an increase of 10.4 million tonnes over the previous 12-month period.

And this figure is being touted to reach as much as 210 million tonnes by 2010.

Planning for the future

The QRC is laying a foundation now to ensure no skills shortage in the future. Part of its recent campaign has seen more than 300 resource sector scholarships offered to school leavers who pursue science or engineering at a university level.

Swagelok Eastern Australia has four offices in Australia, one of which is in Queensland. The past couple of years have seen significant structural changes in response to overall company growth.

"We have relocated to larger premises in our Melbourne head office and have employed new account managers for our Queensland branch," CEO, David Dickey told ProcessOnline.

He says that one of the company's growth strategies will focus on Queensland's mining industry, as while all areas are currently experiencing growth, Queensland has been the most significant.

"The Queensland branch will be moving to larger premises in the future. Our future growth is in the complete supply chain from product to assembly to testing. This growth has taken place in all our offices."

When asked if the resources boom was happening at the expense of other industries, Gates' Taranto said it is, in fact, making up for markets that are currently not as profitable as they have been in the past.

"With the drought heavily impacting on the agricultural market, it is offsetting declines within that market." He also indicated that the increased demand for workers was seeing the resources sector poach employees from other industries.

If the labour shortage is the only fly in the ointment for Australia's suppliers, the good news is that the Queensland government's strategy seems to be working. In that state alone, last year saw a 20% increase in students enrolling in university engineering courses.

The QNC also said that it expects to see more positive results from the recruiting strategies it currently has in place within the next two to three years.