Mining Industry Survey Offers Solutions

Thunder Bay, ON -- The Mining Act in Ontario is continuing its slow steady legislative process. The update to the legislation is now headed to the consultation phase as it heads to committee.In an international report released by Canada's Bedford Consulting Group - one of the leading executive search and recruitment firms for the mining industry - 130 mining executives from around the world reveal for the first time their economic priorities as they look toward stimulating recovery in the next two years. Although the mining sector has seen a recent subsidence in prices, a surprising 47 per cent of respondents are either optimistic or moderately optimistic about 2009. While this group expects to see improvements by the latter half of the year, 45 per cent are expecting improvements no sooner than fourth quarter 2010.Not surprisingly, 84 per cent of those surveyed indicate that industry improvements are most likely to come from the gold sector. Gold is often considered a stable alternative currency and a safe haven, especially during times of economic uncertainty, says Russ Buckland, Managing Partner of the Bedford Group. The rise of gold leads to increased production and stimulates employment growth in the mining industry, and other sectors affected, including retail. The Mining Survey also indicated four factors holding back the recovery of the industry: lack of available credit (84%); declining markets for metals (83%); volatility of commodities (81%) and finding new sources of investment financing (72%). When asked to identify what is needed to stimulate recovery, credit flow was the top ranked priority (89%), followed by the start of new infrastructure projects (54%).As the mining sector adjusts to new economic realities, a full 92% anticipate capital project delays and 72% indicate that more shutdown of operations are to be expected. Further consolidation among sector juniors are presumed by 59% of respondents and 43% see a major selling of assets. A strong focus on employee retainment (25%), leadership development and skills training (54%), and building relationships with schools and universities (64%) were also identified as recovery tactics in the report. It's crucial for organizations in the industry to retain top talent, especially in mining where talent across all levels is expected to decline in the next five years, says Buckland. When the industry emerges out of this turbulent economy, organizations armed with the best management and workers will prosper. A bright spot for aspiring minors, a resurgence of jobs is predicted to emerge with industry recovery, survey respondents project a strong need for Mining Engineers (66%) and Project Managers (62%). There will be a need for mining skills (40%), general management (38%), geologists (37%), and trade skills (35%) following recovery.Key Report Findings: While the majority of respondents are optimistic about the year ahead for the mining industry, 9% see the industry in a deep recession, likely to last well beyond 2010. Highlighting key factors that are currently limiting the mining industry's growth, 83% of respondents cited the declining market for metals, while 81% attribute the volatility of commodity prices for the slow recovery. Other limiting factors, unrelated to the current economy, include: operating costs (37%), socio-political risks (37%), lack of good projects (23%), government red tape (21%), and shortage of skills (20%). Realistic of the limitations caused by the economic downturn, a full 92% expect further delays in capital projects and 72% expect continued slowdowns of operations to be announced. A short supply of mining disciplines including: mining engineers (68%), followed by mining and trades (46%), technical specialists (46%), senior executives (45%), and geologists (40%) is expected over the next five years during industry recovery. Survey results suggest that the significant shortage of Mining Engineers and Project Managers will lead to upward wage pressures for these positions. To combat the shortage of skills and talent, respondents suggest improving the industry's recruitment brand (69%) and to recruit for key leadership roles during the down cycle (71%). Also recommended is development of leadership training programs for current talent (65%), acquiring better talent for key roles (54%), and to utilize innovations in recruiting from non-traditional talent pools (46%). While gold emerges as the only bright spot in terms of improvement in 2009, there is also expectation of improvement in some base metals (38%), uranium (34%), potash (20%), and iron ore (17%). Government's lack of execution of stimulus packages was seen as moderately holding back a recovery with 16% reporting this as a factor.