Layoffs looming in struggling mining sector – by Derek Sankey (Victoria Times Colonist – August 15, 2012)posted in Canada Mining, Canadian/International Media Resource Articles |
Boom-bust cycle cited as cause
Twenty per cent of mining companies in Canada have already begun laying off employees this summer in a sector that has taken a recent beating in the markets. The good news for existing workers is that employment appears to be getting more stable, with 76 per cent of the 140 mining executives surveyed not considering any further layoffs in 2012, according to a new report.
“What you’re seeing now in the market is [mining] companies are taking a wait-and-see approach,” said Andrew Pollard, president and chief executive of the Mining Recruitment Group in Vancouver.
Firms in the mining sector have been scaling back on their exploration and development plans (80 per cent) and reducing overhead costs (71 per cent), according to the survey by Pollard’s company.
“There are a lot of unknowns, [but] the fundamentals of the industry are quite sound over the long term,” said Pollard, noting 82 per cent of executives are bullish over a three year period, despite shortterm caution.“They’re riding out the markets hoping things will return sooner than later,” he added.
Sixty per cent of those surveyed do not expect to recruit in the next six months,. However, a generation skills gap exists for geologists with mid-level experience of 15 to 30 years under their belt.
Elmer Stewart, chief executive of Calgary-based metals company Copper Fox Metals, said there was a period when students avoided going into the sector, leaving a dearth of talent in a key demographic.
“You have a crop of younger graduates coming out with five to ten years experience, but you don’t have the people with 30-plus years experience,” Stewart said. “New grads coming out are starting at a relatively good salary, but they need the field experience.”
Junior exploration companies are suffering the most, said Pollard. They’re the ones relying almost exclusively on investment financing, which has dried up in recent months.
A report last month from the TSX showed financing dollars raised through venturecapital companies – a key source of financing for junior mining firms – was down 57 per cent, while all sources of financing combined were down 28 per cent.
Pollard’s survey showed about 60 per cent of mining companies have enough cash on the books to last more than nine months.
For the rest of this article, please go to the Victoria Times Colonist website: http://www.timescolonist.com/business/Layoffs+looming+struggling+mining+sector/7092764/story.html