Looming labour shortages to threaten supply – Rio Tinto

Australia is undergoing long-term economic transformation that will bring skills shortages and environmental issues to the fore, rather than a mining boom, Rio Tinto said yesterday.

Sam Walsh, chief of iron ore, said Rio would face “many” supply challenges in coming decades, with top-tier deposits declining and few new mines with compa-r-able quality ore being discovered.

Those new deposits that are found are often in “challenging geographies” in Africa and Asia, he added.

But he said labour shortages were looming in Australia, which represented 45 per cent of Rio’s gross global assets and is home to the majority of its top-exporting coal and iron ore resources.

Expanding the company’s Pilbara iron operations in Western Australia by 2015 alone will require another 6,000 workers, Mr Walsh said, with many needing specific skills.

“Often we will be competing for these skilled workers with direct competitors and also with other growth industries like oil and gas, particularly in Queensland and Western Australia,” Mr Walsh told an American-Australian business forum.

“My view is that what we are experiencing in Australia at present is not so much of a ‘boom’ as it is the start of a long-term structural shift in the Australian economy,” he added.

Walsh flagged “unprecedented” demand for commodities as China, India, Indonesia, Vietnam and parts of Africa and South America industrialise and urbanise, requiring everything from housing to mobile phones.

“Over the next 30 years it is projected that the world will consume as much iron ore as it has over the last 10,000 years,” Mr Walsh said. “And the question for everyone in the mining industry is: How are we going to meet that demand?” Rapacious demand for resources from Asia’s fast-industrialising economies helped Australia dodge recession during the global slump and rebound strongly, with booming commodities boosting terms of trade to their highest in 140 years. (AFP)