2022-2027 Workforce Forecast

RESOURCES AND ENERGY

WORKFORCE FORECAST

2022– 2027

ABOUT AREEA

AREEA is the Australian Resources and Energy Employer Association – the national association for resources, energy industry and supply chain employers.

Since 1918, AREEA has worked to ensure Australia’s resources and energy industry is an attractive place to invest, employ and contribute to the nation’s economic prosperity. In doing so, AREEA helps the industry to create a brighter future for all Australians.

AREEA provides particular expertise, influence,

leadership and support in key workforce areas including people management, training and upskilling, talent attraction and retention, diversity and inclusion, mental health and wellbeing, and workplace relations.

Through its support on employment, skills and other people matters, AREEA is a source of considerable assistance for Australia’s resources and energy employers to meet their commercial objectives, overcome operating challenges, and run productive, competitive and socially responsible businesses.

METHODOLOGY

Resources and Energy Workforce Forecast (20222027) estimates the workforce and skills demands of prospective mining and oil and gas projects in Australia’s development pipeline.

Only projects that have been committed by the proponents / investors or have been assessed by AREEA’s analysts as advanced and ‘likely to proceed’, are included in this forecast series.

Further, this forecast is for the long-term operational phase of these projects, with workforce demand listed in the year they are scheduled to enter full production. It does not include the short-term construction workforces involved in building the projects in the years prior.

A variety of modelling techniques is applied to present as accurate a forecast as possible, including:

•Applying average productivity ratios (commodity volume produced per employee) from official State Government production and reported employee figures.

• Applying workforce planning formulas and occupation breakdown ratios provided to AREEA by leading employers in each commodity group.

•Cross-referencing workforce estimates in company issued ASX statements, press releases, media comments, project documents or via direct feedback from company representatives.

• Verification of forecasts by key industry participants in each commodity

Formulas have been applied consistently within each commodity group to average out variances in project design, quality of resource, terrain and locality, technology and the other myriad factors which can impact total workforce numbers.

Across all modelling AREEA has been very conservative. It is assumed new resources and energy projects will sit at the higher end of current industry productivity levels and improving technology may reduce the ratio of onsite operators to centralised white collar roles.

For expansion projects, only the actual increase on current workforce numbers is included in the forecasts. Therefore, expansions designed to maintain current production and workforce numbers have new workforce demand listed as nil.

AREEA thanks the various member representatives who assisted in this industry forecasting project.

FOREWORD

Australia’s resources and energy industry is a global powerhouse with seemingly limitless project and workforce potential. Despite all the disruptions arising from the pandemic, geopolitical and international trade issues, direct employment in the sector is at record levels and only set to rise.

This AREEA forecasting report shows there are 107 major resources and energy projects advanced in Australia’s investment pipeline, either already committed or considered ‘likely’ by AREEA's analysts to enter production between the second half of 2022 and end of 2027.

These projects are worth roughly $130 billion in capital value and would create demand for an additional 24,000 production-based roles within this five-year period.

While industry growth should always be celebrated, there is no doubt many resources and energy sector CEOs would look at such data with some trepidation.

Shortages in skilled labour are overwhelmingly the biggest issue facing employers in the industry. This is not only threatening the continuity of operations but driving other issues including historic levels of staff turnover and spiralling sign-on and retention bonuses.

This of course is not an issue confined to the resources industry – almost every sector of the Australian economy is feeling the pinch of a national labour market with a near-50-year low in unemployment.

But what sets the resources industry aside is the extraordinary level of workforce growth it has experienced over the past two years. According to the ABS, the May Quarter of 2022 sees the industry

directly employ 295,200 people – it’s highest ever recorded level.

Nationally, the industry has grown by nearly 20,000 workers in the past quarter alone. Over two years (May 2020 – May 2022), the industry has grown by 66,000 workers or by nearly 30%.

Should all the projects listed in this report come to fruition, as expected, the industry’s workforce would surpass the never-before-seen 300,000 mark sometime in 2023 and grow by another 8% over the next five years.

On current trend, this may very well prove to be highly conservative.

AREEA proudly presents the third edition of this Workforce Forecast series. This is just one tool designed to assist employers through present and future skills challenges, by adding to the information at hand to analyse and understand labour market trends.

At a time when Australia faces significant economic and fiscal challenges including national debt nearing one trillion dollars, this report further reinforces the enormous role continued resources and energy project investment will play in maintaining our country’s world-leading living standards and ongoing prosperity.

THE AREEA TEAM

Resources and energy direct workforce (2017-2027): National

© AREEA 2022

First published in 2022 by Australian Resources and Energy Employer Association ABN 32 004 078 237

Lead analyst / author: Tom Reid, Head of Policy & Public Affairs

Email: policy@areea.com.au | Phone: 1800 627 771 | Website: www.areea.com.au

This publication is copyright. Apart from any use permitted under the Copyright Act 1968 (Cth), no part may be reproduced by any process, nor may any other exclusive right be exercised, without the permission of the Chief Executive, AREEA, PO Box 3033, West End, QLD 4000. Cover image: Courtesy and copyright of Fortescue Metals Group Ltd.

350,000 300,000 250,000 200,000 150,000 100,000 50,000 0

As of May 2022 the Australian resources industry and energy industry directly employed 295,200 peoplethe highest level of employment ever recorded by the industry.

Looking forward, the 107 mining, oil and gas projects either committed or considered likely to proceed by 2027 would demand approx 24,000 new production roles and grow the workforce by an estimated further 8%.

Demand from the 89 mining projects modelled (see ‘mining occupations’ left) will be 20,365 workers. This is significantly frontloaded in the forecast timeline with 69 projects requiring 15,000 workers by the end of 2024.

Gold contains 21 projects requiring 3580 workers, more than half of which (11 projects, 2000 employees) are expected to come online in the second half of 2022 alone. Coal has 21 projects requiring nearly 7200 workers, spread more evenly over the five-year forecast timeline.

With a number of large new projects entering production over the past two years, iron ore will play a more modest role in new project growth over the next five-year period, with seven projects requiring some 1800 new workers.

The most notable area of emerging opportunity for Australia is in critical minerals, with a mixture of lithium, graphite, manganese, zircon, vanadium and other rare earths, seeing 19 projects in the category projected to require over 2500 new workers by 2025.

Further, there is a healthy supply of new and expansion projects across copper, nickel / cobalt and ‘other commodities’ (e.g. phosphate and sulphate), requiring just under 4000 new workers by 2025.

The oil and gas industry contains 18 projects, 10 new and 8 expansions, forecast to require 3635 new workers by the end of 2027. This demand will come much later in the timeline with the most significant new projects predicated to be completed in 2025-2027, requiring 3200 new workers in those two years alone.

As of May 2022 Western Australia’s resources and energy industry directly employed 150,700 people.

accounts for 51% of the sector’s national workforce and is a historic high figure – 34,000 more people than May 2021 and roughly 30,000 more than the peak of the previous ‘mining boom’ in 2012.

Looking forward there are 57 projects in WA’s investment pipeline will create demand for approx. 11,250 new workers by 2027, growing the state’s resources workforce by another 7.5%.

The mining sector is overwhelmingly the strongest contributor of growth in the first phase, from 20222025. This includes 14 gold projects totalling 2370 workers, with 9 entering production in the second half of 2022 and requiring more than 1650 new workers by the end of this year.

15 ‘critical minerals’ projects – including lithium, graphite, rare earths and vanadium – will create demand for over 2100 new workers over the three year period of 2023-2025.

Six iron ore projects – five of them new – will require a forecast 2140 new workers by the end of 2024. This comes off the back of multiple large-scale projects (Eliwana, South Flank, West Angelas) being recently completed and not included here.

Three nickel / cobalt projects will require nearly 700 new workers by 2025, whilst lead / silver, uranium and sulphate projects will demand around 1150 workers within the same timeframe.

WA’s oil and gas workforce demand is much more back-ended within this modelling period. The largest (and most speculative) project modelled here is Browse LNG, however Scarborough, Pluto expansion and Crux LNG are all forecast to commence production in late 2026 and 2027.

There are eight LNG projects set to enter production earlier in the modelling timeline (2022-2025) however most are expansions requiring minimal new operational personnel (or in the case of three, none).

AGGREGATE FIGURES

As of May 2022 Queensland’s resources and energy industry directly employed 84,600 people, or roughly 29% of the national workforce.

Like WA, this is the highest level of direct employment ever recorded by Queensland’s resources industry, and only the second time in history the sector has employed over 80,000 people – the last being November 2013 at 80,600.

While the state’s resources workforce has grown by more than 28% over the past two years alone, growth from 2022-2027 is forecast to be far more modest at 5560 people or 6.5%.

Of the 16 ‘committed’ or ‘likely’ projects in its five-year pipeline, coal is by far the star of the show. The sector has ten projects – nine of which are new – forecast to demand 4524 new workers by 2027, with most of that demand being before 2025.

This is forecast to raise the number of people directly employed in Queensland’s coal industry from the present 28,600 to around 33,000, or 15% growth.

In other commodities, two gold projects are expected to create demand for over 350 new workers by 2023. The Eva Copper Project is estimated to be complete in 2023 requiring 280 personnel, and the Sconi nickel / copper mine forecast to require 300 workers also in 2023.

The Mount Carbine tungsten project expansion rounds out the ‘likely’ projects with 100 employees expected in 2023.

Queensland’s oil and gas industry is comparatively scant with new or expansion projects. Phases 2-5 of Arrow Energy’s Surat Gas Project is the only development listed as committed or ‘likely’, requiring 200 additional operating personnel in 2026.

Looking at the wider project pipeline, Queensland has 61 projects worth potentially 18,000 new production phase jobs, in early stages of feasibility. This highlights the enormous opportunities for the state should it see more projects become committed.

AGGREGATE

As of May 2022, the New South Wales resources and energy industry directly employed 33,900 people.

This is just 11.5% of the industry’s national workforce. Further, bucking the national trend, this is 3500 people, or 9.4%, less than two years ago.

Notwithstanding this decline, NSW has a healthy number of new and expansion projects in its investment pipeline, set to add approx. 4635 production-oriented workers to its workforce by the end of 2027. This would represent 13.7% growth on today’s employment levels.

Like Queensland, the strong majority of this demand will come from the coal sector. Eleven coal project expansions will add another 53.3mtpa onto NSW’s annual coal production and require an estimated 2865 new workers by 2026. Another lone new coal project (Wallarah 2) is scheduled for completion in 2027, requiring 290 workers.

Should this to come fruition it would lift NSW’s coal workforce, which has been in fairly strong decline in recent years, by nearly 20%.

Gold is the second most represented commodity, with three expansions and one new project (McPhillamys) set to come online by 2026 and require about 670 new workers.

Rounding out mining, the Broken Hill Cobalt Project is expected to require 400 employees in 2024 and Hawsons iron ore will require 500 workers in 2026.

Finally, NSW has one gas project advanced in feasibility, being Narrabri. Should the project proceed, it would be operational in or around 2025 and require 200 production-based workers.

This would be a 12.5% uptick on the state’s present existing oil and gas extraction workforce being 1650 people.

Looking to projects earlier in feasibility, NSW has an additional 28 projects which could double the forecast workforce demand to 9000, if those projects were to hypothetically all proceed.

VICTORIA

AGGREGATE FIGURES

As of May 2022, Victoria’s resources and energy industry had 8500 directly employed resources and energy workers and Tasmania 2900. This represents just 2.9% and 1% of the national workforce, respectively.

Both are now at similar levels to 2020, despite seeing a temporary increase in workforce numbers throughout 2021. Tasmania, coming off a smaller base, has seen fluctuations of up to 1000 people on a quarterly basis during the pandemic years.

Looking forward, Victoria has 11 projects in its development pipeline that could potentially create over 1000 new jobs in the state. However, only four of these are either committed or considered likely to proceed at this stage, requiring 525 workers.

MINING OCCUPATIONS ENERGY OCCUPATIONS

Those four projects include two new gas developments and one expansion, expected to create demand for 275 new workers. Note, the Golden Beach Gas Project (comprising unmanned offshore infrastructure and a pipeline) is listed as only requiring five operating employees. Should the project also include a proposed onshore gas plant, this number would lift considerably.

Victoria’s sole mining project is the proposed new Stockman Copper Project, which could create demand for 250 new workers by end of 2023.

Tasmania’s only ‘committed’ project is an expansion of the Renison tin mine, which will mainly be for employment continuity. Reactivation of the Dolphin Project on King Island is considered ‘likely’ and would require 65 workers.

Looking at more speculative projects in Tasmania does not offer much more in future employment. Four other proposed mining projects are too early (or unlikely) in development to warrant an employment forecast and Woodside’s proposed Bell Bay Hydrogen Hub is the sole prospective energy development.

NORTHERN

& SOUTH AUSTRALIA AGGREGATE FIGURES

As of May 2022, the South Australian resources and energy industry directly employed 12,200 people, representing 4.1% of the national workforce.

While workforce levels have fluctuated during the past 2-3 years, hitting a record peak of 17,600 people in February 2021, the state is overall sitting at a similar level of direct resources employment as it did during the previous investment ‘boom’ ending in 2012.

Four ‘committed’ or ‘likely’ major projects currently reside in SA’s investment pipeline. Three of these are in copper and are expected to demand 690 new workers in 2023 and 2024. One graphite project (Siviour) is forecast to require 100 new workers in 2024.

This demand should see SA’s mining workforce increase by 5.5% over the next three years.

Looking at more speculative projects, another 11 possible developments sit in the state’s major project pipeline which could demand over 1000 additional jobs combined.

The Northern Territory’s resources and energy industry directly employed 2000 people in May 2022. This is just 0.7% of the industry’s national workforce and comes after the Territory has experienced continued decline in direct resources employment, down from its historic peak of 7500 in February 2017.

There is real potential for this decline to be turned around in the next five years. The Barossa backfill gas project is expected to require 350 production personnel during or before 2025.

There are also four mining projects, albeit modest in size, expected to be completed by the end of 2025 requiring around 820 new workers.

While these projects alone could lift the NT’s direct resources workforce by nearly 60%, there are also an additional 13 mining and 2 gas projects earlier in feasibility that, if all come to fruition, offer an additional 1850 jobs on top of those modelled in this report.

PROJECTS

350

King of the Hills Gold 2022 300

Kwinana Lithium Plant (Covalent Lithium) Lithium hydroxide 2024 150

Kwinana Lithium Plant (Stage 2) Lithium 2025 50

Lake Giles iron ore project (Moonshine and Ularring) Magnetite/ hematite (iron ore) 2024 258

Lake Wells Sulphate of potash 2023 200

Mardie Salt & Potash Project Sulphate of potash, salt 2025 220

Marillana and Opthalima Hematite (iron ore) 2024 625

Mount Holland Lithium Mine Spodumene (lithium)

Mulga Rock

Norseman

Odysseus

Parker

Pilgangoora

Queens

Scarborough

Sorby Hills

Spartan Development

Telfer

Thunderbird (Dampier)

Thunderbox

Tropicana