Australia’s mining jobs running dry as sector growth slow

Australia’s mining jobs running dry as sector growth slow

Australia’s mining industry hasn’t rest on its laurels; it has been harsh hit by slumping commodity prices, mainly coal.

Australia’s mining industry, once the country’s second-largest jobs generator, has become just one of many employers in the nation, data released Thursday shows.

According to the Bureau of Statistics, the sector added 4,200 jobs in the year to May, dramatically less than the 61,000 workers it hired in the same period ending in May 2012.

Having done their best to ride out a two-year slump in global coal prices, Aussies are shedding thousands of jobs as they shelve high-cost mines, sell non-core assets and drive efficiencies across their operations.

Only last week BHP Billiton (ASX:BHP) terminated a $338 million (A$360m) contract with contractor Downer EDI at its Goonyella Riverside mine one of Australia’s biggest coal mines. The decision will leave 427 workers out of jobs.

BHP, which through its partnership with Mitsubishi Corp. is the world’s largest coking-coal exporter, has also closed several mines recently, including its Norwich Park and Gregory operations in eastern Australia because of weak prices.

Vale (NYSE:VALE) and Glencore (LON:GLEN) are axing about 550 jobs each at mines in the Hunter Valley and Queensland — the two big coal producing regions, where about 50,000 people work in the industry.

In fact, 10% of Queensland-based operations are said to be in a “very precarious position”, particularly in lower-grade coking coal and thermal coal, Resources Council president Michael Roche told SMH last month.

The second largest mining company, Rio Tinto (LON:RIO) is also planning to cut cost for about $1 billion by the end of the year from its energy division.

Overall, Australia’s mining industry lost 6,600 workers in the three months to May. In contrast retail gained 16,600, tourism 26,100 and health and aged care 35,200, the Bureau of Statistics report shows.