As Australia’s miners announce a deluge of plans for new underground mines or underground mine extensions, the industry is already at bursting point and likely to suffer a severe skills shortage in coming years.
That’s the view of Bill Beament, the former mining labourer and engineer who built Northern Star Resources into a $10 billion gold company. He says nearly all the skills investment has been in open pit mines for more than a decade, and more miners are about to start heading underground.
“If you go back in history, the last big company that managed to train up underground personnel was Western Mining Corp, which was taken out by BHP [in 2005],” he says.
“WMC created the underground playbook we all use now: the pay manual, the contract structure, how we actually develop underground mines, it all comes out of Western Mining.
“All the underground managers out of WMC’s mines at Kambalda and elsewhere, went on to create the contracting game.”
So mining has split. The big miners – BHP, Rio Tinto, Fortescue Metals Group – have the big, tier one, long-life projects that are mostly open pit, and they have the balance sheet to train up the next generation of open pit operators, maintenance workers, technical people and the like.
A big part of the underground work, which mostly lies outside the majors, has gone to the contractors.
The big two contractors are Barminco, founded by WMC mining engineer Peter Bartlett and now owned by ASX-listed Perenti, and privately owned Byrnecut, set up by another WMC graduate Steve Coughlan. Both are industry legends and their businesses are now global.
However, the contractors have been squeezed, while the industry legends are selling up or getting towards retirement stage. Others to go include Ross Graham and Michael Foulds’ GBF Group, now owned by Macmahon.
“I built my career working for those sorts of individuals,” Beament says.
“And I worry that Australia’s underground industry is at a crossroads. If we don’t keep that productivity, keep that innovation and that advancement of being the world’s best, most productive miners, then we’re going to suffer domestically and abroad.”
Beament does have a barrow to push; he’s behind a reasonably new underground mining contractor called Develop Global, has nearly $50 million of his own money invested in it, and he’s obviously motivated to talk up its prospects. He reckons he’s been offered contracts without tender, which is unheard of, and shows the skills shortage already draining the industry. He is trying to bring new tradespeople and other workers into mining.
But Beament is also the sort of miner who has his eyes up and is keen to make sure there is enough work for everyone. He’s proud to be an underground miner, and a digger and dealer.
His comments come amid a stack of underground mines in the pipeline, including what will be the two biggest underground mines in Western Australia: Liontown’s Kathleen Valley, a hard rock lithium mine; and Northern Star’s mill expansion at Kalgoorlie, which could help mine another 4 million to 8 million tonnes a year.
“The amount of work and effort and people in those projects, and that’s just two jobs,” he says.
Other companies with plans to go underground or considering it include Allkem’s Mt Cattlin, Delta Lithium, Mineral Resources’ Mt Marion, and Core Lithium in the Northern Territory. There are also gold mines expanding, and base metal mines, while Aussie miners will be called up to develop the next generation of underground mines globally.
While some of the expansion will happen, and other parts will prove too costly and get delayed, Beament’s warning is worth listening to. Because if there is one thing needed to transition the energy sector, it is more resources – copper, lithium, nickel, cobalt, rare earths and the like. And they’re all laying underground and will increasingly be accessed via underground mines.
