Next Generation Mining Latin America Summit 2011: Lack of skilled labour increases costs to mining industry

When it comes to economic recovery, the mining industry completely tears up the rulebook.

While other sectors continue to be ravaged by recession, the mining sector is currently experiencing improved market conditions, global demand for commodities and a subsequent boom in prices.

Which, of course, has resulted in more mines operating and a greater demand for skilled professionals and technicians.

Sounds like a win-win situation. And it would be, were it not for a lack of staff and a subsequent increase in mining companies’ labour costs.

According to Alvaro Merino, Director of the Department of Studies at Private Miners Association Sonami, the situation is particularly pronounced in the Chilean mining sector.

“From an economic point of view, when a resource is scarce, costs go up immediately so mining companies are forced to improve offers to attract and retain workers,” Merino was reported as saying.

Figures show that the booming mining sector was responsible for the highest increase in wages and labor costs in November last year.

Says Merino: “While the average monthly wage in Chile is 466,000 pesos (around US$950), the average wage in the mining sector is 1.04 million pesos.”

Some mining companies say the shortage of skilled workers has forced them into exploring increased automation in mines and, at times, to slow expansion. Such was the case for the Nittetsu Mining Company of Japan which reportedly put the brakes on a plan to develop the Sol Naciente copper mine in Chile.

Other mining companies say the industry is facing increased competition for skilled workers from the oil and natural gas industry, which is also ramping up spending on exploration and development.

Analysts predict Chile will see investments worth US$50 billion in the mining industry over the next five years. The projects to be developed are expected to require around 70,000 workers per year until 2014.

Sonami’s president Alberto Salas says that kind of demand represents a good opportunity for the education and training of workers within the sector that needs to be developed urgently in order to meet future needs.

“Companies, universities and the government will need to make a joint effort to address this problem if they are to be successful,” says Salas.

The lack of skilled mining professionals is likely to be one of key issues at the Next Generation Mining Latin America Summit 2011, which takes place from 10-12 May in Santiago, Chile. This closed-door summit, hosted by GDS International, features some of the leading voices of the mining sector, including Marco Orellana, CIO of Codelco; Yvan Garcia, CIO of Chinalco; Rob Moore, VO Operations of Excellon Resources Inc; Paul Farrow, VP Safety & Health of Goldcorp and Renaud Adams, VP Operations, Americas of IAMGOLD Corporation.

Along with information security, other key topics for discussion include process optimization, lowering risks and costs through strategic logistics and HSE standards and regulations.

Next Generation Mining Latin America Summit 2011 is an exclusive C-level event reserved for 100 participants that includes expert workshops, facilitated roundtables, peer-to-peer networks and co-ordinated meetings.

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