Skills Tasmania

West Coast Regional Profile

Part 2: Industry, Business and Training Profile


Table of Contents

Introduction

Mining and Support Trades

External Operating Environment

Consultation: Henty Gold

Consultation: Setori Engineering

Consultation: Alma Drilling

Regulatory Environment

Consultation: John Kirwan and Associates

Human Capital Management

Consultation: Henty Gold

Consultation: Copper Mines

Consultation: TAFE Tasmania

Wild Fisheries and Aquaculture

External Operating Environment

Regulatory Environment

Human Capital Management

Consultation: Australian Maritime College

Consultation: Seafood Training Tasmania

Consultation: John Kirwan and Associates

Synopsis

Tourism and Accommodation

External Operating Environment

West Coast Municipality Tourist Projects

Consultation: Federal Hotels and Resorts (Strahan)

Consultation: Anchordown

Consultation: Castaway Holiday Apartments

Regulatory Environment

Human Capital Management

Consultation: Tourism Council of Tasmania

Consultation: Federal Hotels and Resorts

Consultation: JobNet

Synopsis

Small Business Environment

Synopsis

The Impact of Economic ad Community Development on the West Coast

West Coast Infrastructure Projects

West Coast Community Capacity Building Projects

Tasmanian Community Fund

Community Support Levy

Sustainable Regions Program

Bell Bay Pulp Mill

Forestry Agreement

Synopsis

1

Page 1 of 65

Introduction

The analysis of census data identified the key industry and employment trends for the West Coast localities. These data suggested a continuum ofindustriesthatsustain the viability of West Coast localities. This continuum identifies resource based industries at one end and service industries related businesses at the other.

Percentage of people employed via broad industry groupings

Resource / Service
Mining / Mining Support
Trades / Government
Services / Retailing, Accommodation, Cafes, Restaurants / Tourism Experiences
Queenstown / 12.6 / 6.1 / 8.5
Rosebery / 18.6 / 2.8 / 4.7 / 4.0
Tullah / 13.7 / 8.7 / 6.0
Zeehan / 23.4 / 3.2 / 6.4
Strahan / 5.0 / 8.9 / 18.1
Mining / Commercial Fishing / Government
Services / Retailing, Accommodation, Cafes, Restaurants / Tourism Experiences
Resource / Service

The second part of this report examines the operating environment of both resource and service based businesses. Key business drivers that affect skill and training demand are identified. These drivers can be broadly classified as changes in the:

  1. Industry or business external operating environment;
  2. Regulatory environment; and,
  3. Internal business operatingmilieu.

The impact of change drivers on organisational human capital management and requirements are identified across the industry continuum. Examples of how individual businesses are responding to change drivers are highlighted in case study exhibits.

The report concludes by providing a high levelindustry perspective on how community factors such as infrastructure and demographic trends areimpacting on skill and training requirements.

Mining and Support Trades

Tasmania's mining and mineral industry employs over 3,500 Tasmanians directly and generates another 10,000 indirect jobs and pays more than $190 million a year in wages and salaries.

The industry generates over $710 million of export sales and accounts for over $1,365 million worth of sales shipped through Tasmanian Ports. Historically Tasmania has produced gold valued at around $1 billion in today's value.

A diverse range of commodities are exported, including ores and concentrates of iron, copper, lead, zinc, tin, gold, high grade silica and tungsten, as well as refined zinc and aluminium and ferro-alloys and cement.

Tasmania is the major supplier of ferro manganese to the Australian steel industry and produces more than 10 percent of Australian copper.

The in-ground value of discovered minerals is estimated to be over $31,000 million.

External Operating Environment

Changes in the external operating environment can create a need to train or retrain staff. Some examples of external operating changes are:

Political Changes:Government policies and priorities

Funding

Legislation or regulation

Economic Changes:Resource availability

Consumer demand

Competition

Demographic Changes:Availability of qualified labour

Labour costs/wages

Ageing Population

Technology Changes:Introduction of new technology

The Internet

The following section provides a snapshot of changes in the external operating environment at an industry level. How changes are effective businesses is illustrated through a series of case study exhibits.

Tasmanian Minerals Council (2005) has identified the following trends affecting the operating environment and skill requirements of mining enterprises:

Since 1999 there has been an increase in the profitability of mining enterprises. This trend is expected to continue for at least another 2-3 years.

The Tasmanian mining industry deals with 575 businesses. Because of the increasing demand for minerals in for example India and China, the mining supply chain is also likely experience a period of economic growth.

The employment structure of the Tasmanian mining industries is changing. A flexible firm business model that employs a core workforce and out sources work to contractors has been an emerging trend.

  • The number of employees in the mining industry decreased from 2646 in 1999/2000 to 2417 in 2004/2005. This represents a -9 percent loss of over a six year period.
  • The number of contract however has increased from 988 in 1999/2000 to 3598 in 2004/2005. This represents a 20 percent increase of over the past six year period.

In the West CoastMunicipalityfour mine sites are operational:

  1. Placer Dome Asia Pacific- Henty Gold
  2. Zinifex Rosebery Mine
  3. Intec Hellyer Metals Ltd - Hellyer Mine
  4. Copper Mines of TasmaniaMt Lyell Mine

Mine sites which have creased operations in the West CoastMunicipalityare:

  1. Renison Minewhich cased operations in June 2003; and,
  1. Savage River Mine which in ceased operations in 1996.

At a statewide level mining exploration projects which may impact on West Coast labour market include two local projects (Allegiance and Zinifex) and three intrastate projects:

  • Allegiance Mining has completeda feasibility study for the Avebury nickel project. A nickel mine and processing plant with a value of $94 million is to be built near Zeehan. Site work started in December 2005 and the first nickel is expected to be produced in the third quarter of 2007;
  • Major explorations in the Mount Read Volcanics being undertaken by Zinifex Limited, Newcrest Operations Limited, Bass Metals Limited, TasGold Limited and Saracen Metals Proprietary Limited;
  • Van Dieman Mines PLC is investigating the feasibility of commencing mining at two alluvial tin, gold and sapphire operations in the Pioneer-Gladstone area, northeast Tasmania;
  • Australian Tungsten Pty Ltd has commenced a full feasibility study into resuming scheelite production on King Island and has lodged a development application to commence a 600,000 tonne per year, ten-year mining operation in early 2007; and,
  • Tasmanian Titanium Proprietary Limited is scheduled to resume heavy mineral sand mining at Naracoopa on KingIsland.

Consultation: Henty Gold

The business operating environment of Henty Gold mine is summarised inFigure 1.

The Henty mine lease expires in 2008 and although exploration for new deposits continues in lower levels of the mine, the return on investment to date has been negligible.

With the impending lease expiring, Henty is hiring contract labour to replace employeeswho exit. International gold and silver have fluctuated and Henty’s current production targets are down when compared withthe 2003-2004 and 2004-2005 financial years.

Figure 1: The external operating environment for Henty Gold Mine

Consultation: Copper Mines

The external operating environment of Copper Mines is summarised inFigure 2.

Copper mines reported strong international demand for copper concentrate. Even though their production volume has not changed since the 2004-05 financial year, there has beena 37 percent increase in the market valueof copper concentrate.

Social trends such as the increasing preference for people to commute from the North West municipality and made the recruitment of qualified labour more difficult. Consequently more reliance has been placed on contract labour.

Figure 2: The external operating environment of Copper Mines

Consultation: Setori Engineering

Setori Engineering provides contract labour hire to mining businesses. They currently do not employ apprentices or trainees, however previously the business was a Registered Training Organisation.

Setori is competing with larger labour hire firms and perceived increasing competition associated with labour hire as having a negative business impact. Despite the negative impact of labour costs and availability, there is strong industr demand for contract engineering services.

Figure 3: The external operating environment of Setori Engineering

Consultation: Alma Drilling

Almac Drilling is a small business and has flexibility to respond to changes in market direction. Whilst most of Almac’s work is within the West CoastMunicipality, the business also has interstate contracts (Figure 4).

Almac Drilling has also successfully procured government contracts. Furthermore the demand for resources in China and India has had a positive impact on business revenue and the demand for drilling services is strong.

Almac currently has no apprentices or trainees.

Figure 4: The external operating environment of Almac Drilling

Synopsis

The external operating environment for resource based businesses varied according to the products being mined. The demand for mining copper and zinc on the West Coast, for example, is being driven by global demand. Gold and silver prices on the other had have fluctuated and Henty Mine operations are in a ‘declining’ business phase.

Skill and labour shortages were reported by most mining and contract businesses as having a negative impact on operations. Increasingly workers in the mining industry have opted for contract employment arrangements. However, none of the businesses surveyed reported a reason for the aforementioned trend.

Contributing to the labour and skill shortage issues were social and demographic factors. For example;

  • Poor quality housing stock and rental accommodation has resulted in mine workers living outside the West CoastMunicipality and commute to work.
  • A lack of education beyond Year 10 and a preference not to board children has resulted in people choosing to reside outside the West CoastMunicipality and commute to work.
  • The partners of professional people working in mining (such as environmental scientists, geologists and engineers) have trouble finding suitable work in the area. Thus professional people are choosing to commute to the West Coast and reside in localities such as Penguin.
  • A lack of social and other infrastructure results in a high turnover of professional and vocational employees. A lack of childcare and public transport for example is a barrier for the partners of mining finding suitable employment.

One business however, Alma Drilling, reported no labour attraction or retention problems. This small business has a stable labour force and the average tenure was seven years.

Regulatory Environment

Licensing and regulatory controls can apply to the range of work environment layers in the mining industry (Figure 5):

Figure 5: Scope of licensing and regulatory control

For vocationally trained miners (e.g. open cut, underground and processing) there are no occupational licensing requirements.

Work equipment however may require a certificate of competency under the Workplace Health and Safety Regulations 1998(S.R. 1998, No. 152) SCHEDULE 5 - Specified tasks requiring a certificate of competency. Competency certificates are required for:

(a)scaffolding, dogging and rigging, including–

(b)crane and hoist operation,

(c)pressure equipment operation

(d)fork-lift truck operation, excluding pedestrian walk behind or pallet trucks;

(e)order-picking fork-lift truck operation

(f)Mine winder operation.

Consultations with Workplace Standards Tasmania, revealed that there no impending changes to schedule 5 of the Workplace Health and Safety Regulations 1988 that would impact on the mining industry.

In terms of the workplace, employers have a duty of care around occupational health and safety andconsequently to provide training in first aid, confined spaces and risk management competencies.

The Tasmanian mine industry typically contract Tracmin (a Registered Training Organisation in Western Australia) to conduct mine safety training. The safety training program is known as MATCSTA[1] (Mining And Resource Contractors Safety Training Association- which is a not for profit peak body) and is a ‘ticket’ that is recognised across 85 percent of Australian Mines as a minimum job entry requirement. Like a first aid certificate MATCSTA certificates are valid for two years and require renewal.

A consultation with Tracmin revealed that there are no anticipated changes to the MATCSTA course as the result of legislative or regulatory requirements.

Accredited vocational training is the preferred method for which mines ensure work practices meet occupational health and safety requirements. This training is discretionary, however employers encourage workers to undertake accredited vocational training for performance and risk management reasons.

Consultation: John Kirwan and Associates

Kirwan and Associates specialize in safety related training for industry sectors such as mining, aquaculture, forestry and food processing. Table 1provides a summary of Kirwan and Associates registration scope of registration and the units of competency for which occupational health and safety related training is delivered in the West CoastMunicipality. Kirwan and Associates reported that most of their training demand is based on composites of skill sets rather than qualifications.

Table 1: Regulatory training delivered to mining support occupations

Industry / Job Roles / No. Businesses / No. Individuals
Mining / Electricians
Plumbers
Refrigeration and Air-conditioning Mechanic Administration Assistants / 3 / 20

The skill sets for which training has been delivered to mining industry is presented in Table 2.

Table 2: Competency skill sets related to workplace regulatory requirements

TDMMR1901A Safely handle and stow explosive and flammable materials
TDTD197B Shift materials safely using manual handling methods
TDTF197B Follow OHS procedures
TDTF397B Implement and monitor OHS procedures
MTMMP4 Follow safe work policies and procedures
MTMMP70B Participate in OH&S risk control process

Human Capital Management

There are a variety of approaches for human capital or workforce development (Figure 6). This section explores those strategies used by mining enterprises to retain, develop and manage their human resource functions. The following section focuses on three key human resource (HR) functions:

  1. Workforce Planning
  2. Selection and Recruitment
  3. Human Resource Development (namely, training and career development)

Figure 6: Facets of human capital management

Consultation: Henty Gold

Human ResourcePlanning

Henty Gold Mine does not undertake formal workforce planning. The business does not have a Human Resource Information System and is unable to track key employee characteristics such as age, qualifications and tenure. The business does however have an electronic payroll system and tracks costs and full-time equivalent establishments (FTEs).

Currently there are 107 FTEs, as well as 60 contractors hired from Setori Engineering. The business has 7 female FTEs and the remaining employees are all male. The average age and tenure of employees is estimated at 45 years and 5 years respectively. Because approximately 50 percent of the employees are replaced every 5 years, there is no apparent evidence of an ageing workforce. Furthermore it was reported that because the work is physically demanding it is common for people not to work beyond 54 years of age.

Selection and Recruitment

The business recruited approximately 5 people in 2005-06 financial year. Staff turnover rate was 11.5 percent and 22 people exited the business during the 2005-6 financial year. Recruitment methods include contract labour firms, newspaper advertising and word-of-mouth.

Employee attraction strategies focus on promoting the nature features of the West Coast as a lifestyle choice. For example, Henty mine tries to attract professional and vocationally trained workers who are interested in bushwalking and other outdoor recreational activities.

Human Resource Development Programs

Training is delivered mostly on the job where possible. Exceptions are courses such as First Aid which are classroom based. Training needs are aligned to business regulatory requirements and workplace standards.

A loss control (safety) management training and development continuous improvement system was launched in the 2004/2005 financial year. The training and development system was based on Placer Dome Corporate standards. The program included implementing risk management systems and training, developing safety conscious leadership, and identified safety champions. The outcomes of this training are being evaluated on a continuous basis against key performance indicators such as accident and injury rates.

Henty does not undertake succession planning, career development or similar human resource development programs. However it is embarking on leadership training. Twelve people have been identified to undertake a Certificate IV in Frontline Management. This will be delivered in house by a Registered Training Organisation via workshops and assessed through workplace assignments. Recognition of current competency may be offered to other employees who can gather evidence through a portfolio approach.

Whilst some apprentices and trainees are employed, Henty prefers to source skilled contract labour. This is because the current mining lease expires in 2008.

In terms of vocationally based training, Henty Gold cannot provide an exact head count, but estimates that 20 of the 107 employees have completed an accredited qualification.

Henty Gold currently employs a second year Electrical apprentice and a third year Mechanical apprentice. In terms of traineeships, however, Henty has negotiated for Business and Employment to deliver a Certificate III in Metalliferous Mining to 56 eligible employees. A part of this negotiation, Business and Employment will provide a training coordinator onsite on a full-time basis.

Henty Gold mine does not track training costs or have an allocated training budget. Rather training for legislative or regulatory requirements is an accepted as an operational cost. Henty Gold also delivers training to contract labour to meet regulatory compliance requirements. Internal records are maintained regarding the training delivered, as a risk management strategy.

Consultation: Copper Mines