SECTOR: MINERAL EXPLORATION

... of concern is the myth that somehow what is happening in the mining and exploration industry is related to an 'old economy' ...nothing could be further from the truth...

SkilledGeoscience talks with the president of the Australian Institute of Geoscientists, Andrew Waltho.

The real cost of declining mineral exploration - an interview with the President of the Australian Institute of Geoscientists.

Australia is one of the world's main mining and exploration nations, a barometer for the industry world wide. Last September figures on the AIG website show that unemployment of geoscience professionals is still rising and has reached nearly 14%, close to twice the national professional unemployment figures.

The trend is particularly worrying because since 1996 there has been 50% decline in employed professional geoscientists (from 8000 to only 3500 ). These figures are alarming. When half the country's exploration geologists are unemployed, the message is simple: if you don't look in new areas there will be no new mines found. You don't need to be a Rhodes scholar to see this is not good for a country that gets nearly half its earning from resource exports (and worse for some states like Western Australia where mine exports are 70% of all exports).

The situation is compounded for graduates. Many companies no longer have graduate training because the work is being outsourced to contractors. SkilledGeoscience asked Andrew Waltho, President of the Australian Institute of Geoscientists, to comment on the implications.

SG. Outsourcing in manufacturing has contributed to a decline in traditional apprenticeships. Are we seeing an analogy here in the profession?
AW. What has been lost to a large extent is the mentoring aspect of employment that was so important as a means of transferring skills from experienced practitioners to graduates. Many of the larger companies used to have excellent graduate development programs of which mentoring was an essential component. This is a change of which AIG is very conscious, and something the volunteers who devote time as AIG Council and Branch committee members are working hard to address. The change also hasn't gone unnoticed by universities and a number of very positive initiatives are emerging aided by the Minerals Council program.

SG. Universities will not be able to replace on the job mentoring?
AW. Companies are relying more on contract rather than staff employment - there can be no doubt of that. That doesn't mean though that geoscientists are being employed in lesser roles or under poorer conditions. In many cases, contractors work alongside staff with little differences as to how they are treated or regarded by employers. Where employed as contractors in the simplest sense, geoscientists require extra skills to ensure they manage their work in a businesslike manner and use the opportunities available to them. The onus for continued development of skills always rests with the individual and there are a number of ways in which this can be achieved.

SG. What are the reasons for the dramatic decline in employment?
AW. The decline in the number of geoscientists in Australia in recent years appears to coincide with decreased mineral exploration across Australia and throughout the world. This decline has been linked to land access issues in Australia but it is as much a product of falling commodity prices as anything else, with a similar slump in activity experienced throughout the world. We have also seen a major shift in focus amongst major mining houses internationally from growth by exploration to growth by acquisition, with boards seeking to reduce risk and maximise returns to shareholders.

There can't be any sense of blame attached to this as they are only doing what corporate statutes require them to do in most countries. There are no tangible incentives for investment in exploration, to acknowledge the level of risk associated with this form of investment.

Mineral, coal and petroleum exploration combined provide career opportunities for about 60% of geoscientists in Australia. Any decline in exploration activity consequently has a major impact on geoscientist employment. Mine geology accounts for a further 18 percent of employment opportunities. Failure to replace depleted resources with new discoveries through exploration has a delayed impact on these as well. Education and R&D account for a further 10 percent of employment opportunities. Exploration is a specialised field of expertise, dependent on continuously improved techniques and new technology. Again, decreased levels of exploration reduce demand for skills in this sector.

SG. What are the real community and economic cost of this decline?
AW. The decline in geoscience employment happens before employment multiplier effects have their impact on the economy as a whole, with each exploration position supporting another four jobs in the wider economy, many of which are in rural and regional areas of Australia. There are number of quite serious, longer term flow-on effects: geoscientists forced to seek alternate employment, especially those with families, won't return to an insecure future after leaving the industry. Their skills and experience are effectively lost, at considerable cost to the community in both real and opportunity terms.

For instance, geoscientists specialising in fields such as engineering geology, hydrogeology and environmental geology frequently start as graduates in exploration or mining and then enter other fields through postgraduate experience and study. This will result in a loss of expertise affecting a wide range of industries from mining to other land based resources and a sustainable environment, to major infrastructure or engineering projects completely unrelated to mining.

Geoscientists are trained to understand systems and processes that shape our planet, not just to find minerals, skills with important applications outside mining. Unless we can continue to attract high quality students to geoscience careers these skills will not be available when they are needed in the future.

This Interview was with Andrew Waltho was first published in the SkilledGeoscience Newsletter in May 2001