London, 28 June 2010

Global miner Rio Tinto says it faces a recruitment challenge and expects the problem to persist as the industry grapples with a shortage of skilled workers and demand for metals looks robust for the long term. Mining companies including Rio lack personnel at a time the sector's workforce is ageing and young people shun the industry.

Rio has major operations in Western Australia, where potential workers tend to shun its remote locations and take jobs in the high-paying off-shore oil and gas industry, said Narelle Crux, Rio's practice leader talent management. "It creates a very daunting picture, not only about securing people to run those operations but also major questions around infrastructure," Crux said.

"Housing is a major issue in Western Australia. We've encountered some of those challenges already." The shortage affects such areas as electrical trades and boiler-makers, Rio said.

"It's mainly skilled, technical or semi-skilled people in the trades, and in core mining professional disciplines like mining engineering and geologists," Crux said. "We're noticing it less immediately in our operating workforce."

Deja Vu

The situation is a nasty reminder of the skills shortage that hit the market prior to the economic downturn, when metals demand was booming.

This time, industrial metals prices are trending downwards as a seasonal lull in consumption compounds investors' concerns about a tentative Western demand recovery and steps by China, the biggest base metals consumer, to slow its red-hot growth.

But in the longer-term, Rio and other market players are optimistic and are starting to gear up for increasing demand. "The fundamentals still look very good. China continues to look very robust," Crux said. "India is very prospective as a market for us and for other mining companies," she added.

"It does indicate quite a significant increase in workforce demand in our industry and in our company, including in the next 10 to 15 years."

Rio is offsetting the skills shortage in some cases by using technology to manage operations remotely and in others by using "fly-in fly-out" projects, in which workers live in a major city such as Perth and stay at remote projects a few weeks at a time.

It is also looking to universities further afield to attract more young people. "While we already have relationships with many universities around the world, we need to strengthen these and extend partnerships into new regions," Crux said, adding that Rio is searching outside Australia for talent.

"You'll see our industry and us doing more internationally than we've ever had to do before," she said. "We definitely are looking further afield."

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