RESOURCE PEOPLE Issue 011 | Winter 2015 by AREEA

RESOURCE Getting back on track

Issue 011 Winter 2015

Workplace reform to unlock competitiveness

Social investment lifts the Congo Footy legend advances Aboriginal employment PLUS Nautilus Minerals edges closer to worldâ&#x20AC;&#x2122;s first seabed mining project

CONTENTS

EDITOR Tom Reid Tom.Reid@amma.org.au DEPUTY EDITOR Kylie Sully Kylie.Sully@amma.org.au AMMA CONTACTS 1800 627 771 membership@amma.org.au migration@amma.org.au policy@amma.org.au training@amma.org.au

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CONTENTS

REGULARS

04 05 54 56

From the Editor Chief Executive’s Message Events Calendar Business Partner Directory

COVER STORY

06 Getting back on track: Workplace reform to unlock competitiveness HUMAN RESOURCES

10 12 14 14 15

Top employers vie for young minds Wirra lays foundation for Aboriginal employment Operations and maintenance skills in demand Baby boomer exodus to shock 5 minutes with...

OHS & WELLBEING

16 17 18 19

FWC paves way for dual drug testing method Union organiser faces court App solution to mental health awareness BHP response to safety incident ‘diligent’: FWC

TRAINING

20 Scholarship winner follows engineering passion 21 Clough nurtures future leaders 22 Kids learn from resource experts MEMBER NEWS

24 In brief POLICY

28 Policy at a glance 29 FWC slams union for ‘cynical’ strike tactic 30 Intergenerational report drives reform urgency MIGRATION

32 Miners welcome ‘sound and considered’ 457 changes 33 New offshore migration arrangements 33 Migrants to boost GDP by $1.6 trillion LEADERSHIP

34 MMG social investment lifts the Congo 36 Svitzer executive in race of a lifetime 37 Transfield CEO named new AMMA President INNOVATION

38 41 41 42 43

Seabed mining uncovers potential of the deep Big data for greater efficiencies App puts exploration data at fingertips FIFO dad witnesses virtual birth People innovations to buck trend

DIVERSITY

44 46 47 48 49

‘Bravery, resilience’ builds outstanding career Aurizon champions to drive diversity Ana steps into CEO’s shoes Mentor revels in learning experience Golden opportunity for Indigenous students

ECONOMY & FINANCE

50 51 52 53 53

Iron ore: a trade in transition Energy demand to shift by 2035 Reports outline major project shortfall Australia less competitive than Russia, survey shows Tax credits to boost exploration

RESOURCEPEOPLE | WINTER 2015 | www.amma.org.au

REGULARS

Tom Reid EDITOR

From the Editor THE CYCLICAL NATURE of the resource industry is often seen in commodity prices and profit margins of large companies, but just as telling is the flow-on impact on niche service providers and the communities they seek to advance. This is a reality AFL legend David Wirrpanda knows all too well. The former West Coast Eagles star is building on his namesake foundation’s 10-year dedication to improving Indigenous opportunities with the launch of its Perth-based Vocational Training and Employment Centre (VTEC). While the slowdown in resources construction across Western Australia has impacted job opportunities for his VTEC participants, it is clear the fighting spirit Wirrpanda once displayed on the footy field has not waned as he works at strengthening relationships with industry and restructuring training programs to align with long-term job opportunities. This trend of setting businesses up to take advantage of the eventual upturn is reflected across the industry. In our Human Resources section we discover how the graduate programs of top-rated employers Glencore, Newmont, Shell and Santos are bolstering their stocks of up-and-coming talent to ensure when tough market conditions subside, their workplaces will prosper. While a ‘back to basics’ approach at present is proving popular

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and in most cases prudent, ground-breaking new practices and technologies are still ripe to be found. In Innovation, we catch up with Brisbane-based Nautilus Minerals as it progresses the world’s first seabed mining operation. The impressive technology developed to withstand the deepwater environment off the Papua New Guinea coast is just half the story. As Resource People discovers, Nautilus Minerals’s pioneering project is also delivering future-building employment, training and economic benefits to remote PNG communities. The positive contribution resource operations can make to developing countries is further explored in this edition’s Leadership section. We look at how minerals miner MMG is applying global best-practice standards to its Kinsevere copper operation in the Congo. Beyond the mine, social development activities are having wide-reaching impacts on everything from school participation rates, to healthcare and the local farming industry. These are just some of the compelling ‘people’ stories that are balanced with this edition’s in-depth Cover Feature exploring how AMMA’s work in promoting our sector’s workplace relations policy priorities could help to unlock greater competitiveness and assist our industry through shifting economic conditions. RP

Steve Knott

Chief Executive’s Message WHILE IN Resource People we prefer to focus on the innovations and successes across the ‘people’ areas of our national resource industry, in this edition we feel the time is right to lead with AMMA’s work influencing our nation’s policy makers. The Productivity Commission is undertaking a wide-ranging review of Australia’s workplace laws, and while there is some justifiable scepticism on the capacity for meaningful change in the current political environment, make no mistake this is a rare opportunity for Australia to get back into the business of fundamental workplace reform. Importantly, it comes as the Australian resource industry faces significant economic challenges that are not only impacting resource industry employers, but also employees, our economy and the wider community. In such a challenging environment, a workplace relations system that better supports a viable, growing, prosperous and globally competitive resource industry is in the interests of all Australians. AMMA’s recommendations to the Productivity Commission would deliver just that. Our cover story provides a snapshot of the overarching vision and major areas for reform AMMA has commended to the Productivity Commission. It also includes supporting analysis, findings and evidence from a comprehensive research study AMMA commissioned from KPMG, which delves into the competitive pressures on our industry and the potential benefits of AMMA’s proposed workplace changes. AMMA’s submission is only the beginning of the process, with interim reports, public hearings and political debate to ensue as the year progresses. As this plays out, our sector will have an integral role in advocating reforms that will support national productivity growth, new employment opportunities and increased living standards. I encourage you to visit AMMA’s campaign website: amma.org.au/backontrack to read both the AMMA submission and KPMG research, and to learn how you get involved and help shape a policy environment where our industry can grow, prosper and generate jobs, now and into the future. This Winter 2015 edition also hits your desks as the government puts the finishing touches on the 2015 Federal Budget. While debate will surely focus on who gets what, the more fundamental consideration should be the aggregate tax burden and its impact on doing business in this county. We should pursue a national taxation system that can effectively progress important social and economic policies, while balancing this with the need for competitive Australian businesses and an attractive foundation for investment. The resource industry is often referred to as ‘big business’, but in reality AMMA’s members come in all shapes and sizes. With no area of our membership immune to volatile market conditions, the cost, complexity and delays of operating in Australia needs to reduce for all employers if we are to remain globally competitive.

AMMA CHIEF EXECUTIVE

As this plays out, our sector will have an integral role in advocating reforms that will support national productivity growth, new employment opportunities and increased living standards. As we focus on domestic policy and macroeconomics, it is well worth taking the time to reflect on the real difference our industry can make in creating opportunities and raising living standards for communities and individuals. Uplifting stories such as our Leadership feature on MMG’s Kinsevere Mine in the Democratic Republic of Congo can really help put our local challenges into perspective. Also in Leadership, you’ll note Transfield Services CEO Graeme Hunt has returned to the role of AMMA president. I wish to thank our former president Ian Smith for his many years of service to our association and to the resource industry more broadly. Ian is a passionate advocate for the benefits a strong resources sector delivers to the Australian community, and we wish him all the best in his future endeavours. Finally, we are now only a few months out from AMMA’s major national resource industry event, the 2015 AMMA Resource People National Conference. Held in Perth, from August 6-7, the AMMA team has put together a strong program of speakers who will explore both the challenges and opportunities the industry faces from a people and workforce perspective. In times such as these, engagement and collaboration with your industry peers is more valuable than ever. I look forward to seeing many of you there and engaging on our collective challenges and opportunities. RP

RESOURCEPEOPLE | WINTER 2015 | www.amma.org.au

COVER STORY

GETTING BACK ON TRACK WORKPLACE REFORM TO UNLOCK COMPETITIVENESS As the Productivity Commission reviews Australia’s workplace relations framework, national resource industry employer group AMMA is giving voice to the needs of employers in the mining, oil and gas, and related service sectors at a time when recapturing competitive advantage in global markets is critical for the nation’s future prosperity.

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COVER STORY

KPMG SAYS: AMMA’s recommended reforms support continued new project investment, improved operational performance and employment growth.

REFORM PRIORITIES FOR A BETTER WORKPLACE SYSTEM

• Balanced, sensible rules for strike action. • Accessible, reliable and competitive agreement options for new and existing projects. • Agreement content and protected strikes restricted to employment claims. • Balanced, sensible rules for unions entering workplaces. • Practical and useable options for individual flexibility. • Reduced risks and costs in defending adverse action and unfair dismissal claims. • Restructured employment institutions to focus on jobs, productivity and competitiveness.

GROUNDBREAKING KPMG RESEARCH into the true impacts of Australia’s workplace relations system on productivity and investment in the resource industry, has shown reforms to key ‘problem areas’ could add up to $30.9 billion to Australia’s GDP and create an additional 36,000 jobs. The KPMG report, Workplace Relations and the Competitiveness of the Australian Resources Sector, commissioned by AMMA, takes major priorities for workplace reform identified by resource employers, and uses CGE modelling to predict the potential economic and employment benefits. By fixing well-documented workplace issues that have contributed to delays and cost blow-outs on resource projects, KPMG estimates AMMA’s reforms could collectively support resource sector productivity growth of up to 5 per cent and investment of up to 8 per cent. This would grow national GDP by two per cent and employment by 0.3 per cent. “Consultation with resources sector businesses highlighted there are a number of challenges associated with the current workplace relations framework that have potential implications for the competitiveness of the sector,” KPMG says in its report. “Addressing these challenges has the potential to support favourable economic outcomes, including continued investment in resources projects, improved operational efficiencies and employment growth.” With the Productivity Commission (PC) undertaking a wide-ranging review of Australia’s workplace laws throughout the course of 2015, this research provides critical, independent economic evidence to strengthen the case for reform. AMMA’s comprehensive submission to the review, Getting Back on Track: Delivering the Workplace Relations Framework Australia Needs, provides more than 170 reform recommendations, to better support a prosperous and internationally competitive resource industry, which benefits all Australians. “This long overdue inquiry is an opportunity to get our workplace relations system back on track and deliver the

policies and framework Australia needs to secure future employment and growth,” AMMA chief executive Steve Knott says. “The Fair Work system is increasingly failing Australia. If we do not pursue reforms to better support productivity and competitiveness, our living standards will decline.” Incorporating six core reform priorities (see breakout box below left) identified by AMMA’s members in the past six years of research and engagement, AMMA’s submission and the KPMG report address four key areas for workplace relations reform: agreement making and bargaining; industrial action; union workplace entry; and employee protections. »

THE ECONOMIC CASE FOR REFORM

KPMG’s research report Workplace Relations and the Competitiveness of the Australian Resources Sector, found Australia is becoming a more costly and less competitive place to do business and ranks as one of the difficult places in the OECD to employ staff. The analysis found: • Mining productivity has fallen by over 45 per cent in the past decade. • Australia has gone from being highly competitive in coal production to being 66 per cent more expensive than the global average. • It is now 26-30 per cent more expensive to produce LNG in Australia than in Canada. • Wages in Australia’s iron ore industry are 21 per cent higher than the global average. • Resources construction wages have risen at 2.5 times the national average, twice as fast as Canada and three times as fast as the US. • It is nearly 150 per cent more expensive to staff an offshore resources vessel in Australia than a comparable European economy. • Australia has longer major project approval times than Canada, the UK and NZ.

RESOURCEPEOPLE | WINTER 2015 | www.amma.org.au

COVER STORY

» PRODUCTIVE AGREEMENT MAKING The agreement making and bargaining framework regulates how employers and employees, often with the involvement of trade unions, can move away from safety net-based employment to the regulation of work through a higher paying, registered agreement. “The current challenges for employers in the resources sector, associated with the agreement making and bargaining framework, relate to flexibility and choice of who employers can bargain with and how they approach and navigate this process,” KPMG explains. AMMA argues in its submission the Australian system has gone backwards in delivering actual enterprise bargaining and has become less relevant and accessible to a majority of enterprises, employers and employees.

DID YOU KNOW?: It can often take one to two years to negotiate a greenfields agreement that will only run for four years. It is also failing to ensure increased productivity, competitiveness and innovation driven by employers and employees in enterprises. AMMA’s recommendations would provide a range of bargaining options that would better equip businesses to be productive and competitive, reduce project delays, encourage further investment into the resource sector, and ensure future increases in wages and conditions are more sustainable and competitive. Another major area of contention for the industry has been the new project (greenfield) agreement making process under the Fair Work Act, which has contributed to project delays and excessive costs. AMMA advances a range of options to properly balance workplace relations regulation for new projects. BALANCED STRIKE LAWS

KPMG’s research shows the resource industry and the wider economy have much to gain from reforms that better balance rights for employees to take legally protected industrial action with appropriate safeguards and processes to protect employers, third parties and the broader community from premature and damaging strikes. Among many specific recommendations in this area, AMMA argues limiting the claims that can be subject to protected industrial action to those based on the employer-employee relationship; and implementing a new ‘public interest test’ for planned strikes would go a long way to genuinely balancing the system. “Threats of industrial action and the taking of industrial action dramatically change the bargaining dynamic into an unavoidable adversarial contest, and the system should minimise employees resorting to industrial action in prosecution of their claims,” AMMA says.

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KPMG forecasts this would see more agreements reached without strike threats and provide greater investor certainty around project costs and timelines. UNION SITE ENTRY ‘NOT A RIGHT’

Under the Fair Work Act 2009, longstanding rules governing how, when and for what purpose union officials could access Australian worksites were significantly relaxed, opening the floodgates for union entry and associated disruption. AMMA’s submission to the PC Review, identifies a range of proposed reforms that would restore balance, sensibility and order to union ‘right of entry’ laws. AMMA’s straightforward list of reforms seek to restore the pre-Fair Work rules that were well understood and widely respected. The practical benefits of these reforms, according to KPMG, would be greatly reduced administrative costs and greater productivity through less lost-time across a wide range of resource sector workplaces. KPMG similarly found the increased union access to Australian worksites has particularly impacted on the resource and related industries. Among several examples, KPMG draws on the extreme number of entry requests to BHP Billiton’s Worsley Alumina Plant, where site entry requests jumped from 82 in 2007-2008, to more than 1500 in 2010-11 (see graph on page 9). PROTECTING EMPLOYEES WHILE MINIMISING COSTS AND LITIGATION

While acknowledging employee protections are an important part of the employment safety net, resource employers have long argued such measures, which include unfair dismissal

CASE STUDY: Strike action threatened by just 50-60 tug boat employees during the Teekay Shipping dispute of 2014 would have cost our iron ore industry $100m per day and the WA state government $7m per day in lost royalties.

COVER STORY

and ‘adverse action’ protections, must be balanced, proportionate, transparent, practical and navigable. AMMA argues the Fair Work Act’s unfair dismissal rules in particular have had the effect of encouraging speculative claims and have in many instances seen the FWC encroach on key commercial, strategic and compliance matters that should be left to management. KPMG’s research shows unfair dismissal claims have recently skyrocketed and the ‘speculative nature’ of proceedings is increasingly pervasive. Even more controversial than current unfair dismissal laws are the adverse action provisions, which were a new addition to Australia’s workplace system in 2009 and pose a serious and escalating challenge to resource industry employers. AMMA’s recommendations address

CASE STUDY: Number of union visits to BHP Worsley Alumina Plant 900

792

800 Visits per annum (no)

KPMG SAYS: reforming current union site entry rules would reduce administrative and compliance costs including productive time lost during union visits.

726

700 600 500

378

400 300 82

200 0

0 2007

2008

2009

2010

2011

Operations Construction The cost of these frequent union ‘right of entry’ visits was estimated to be about $1,145 per visit. SOURCE: Extract from the AMMA-commissioned KPMG report, page 85

a range of challenges for the system of employee protections under current legislation, which KPMG believes would reduce business costs by adding clarity and balance to the system, by discouraging unfounded claims, and by increasing capacity for managerial decision making in critical areas.

TAKING ACTION ON WORKPLACE REFORM

AMMA’s representations, backed by comprehensive KPMG research, attempt to help the Productivity Commission truly appreciate the scale of the workplace problems that must be confronted to continue the resource industry’s ongoing success and further grow the living standards and economic wellbeing of the broader community. “The resources sector is a major contributor to the Australian economy. It supports income for Australians and makes direct investments into capital cities and regions as part of its operations, across a range of industries,” KPMG says. “It is important for the resources sector to remain competitive so it can continue to contribute to the Australian economy. To ensure this contribution is sustained, the resources sector must be able to compete in the global market for commodities and for investment capital.” This Resource People article provides a snapshot of AMMA’s workplace relations submission to the Productivity Commission, and the findings of the supporting KPMG research report. To dig beyond the surface of this work and learn how your organisation can get involved, visit amma.org.au/backontrack. RP

RESOURCEPEOPLE | WINTER 2015 | www.amma.org.au

HUMAN RESOURCES

Newmont vacation students

TOP EMPLOYERS VIE

for young minds

Irrespective of the cyclical nature of the resource industry, competing for the top new graduates remains serious business for employers aiming to secure their talent pipelines with the brightest young minds.

AT THE BEGINNING of each year it is not unusual to see up to 50 eager graduates file onto Glencore Mount Isa Mines’ bustling copper and zinc operations. While their crisp and clean high-vis uniforms are yet to show any signs of the work that awaits them, to Glencore these young minds are just as prized as the minerals they uncover. “There will always be roles for high calibre graduates regardless of whether the market is in an upturn or downturn because the key disciplines that we recruit for are very scarce in the Australian resources market,” says Jodie Hope, Glencore’s human resources lead in Australia. Glencore’s approach to graduate employment recently saw it voted one of the top mining sector employers in the Australian Association of Graduate Employers’ (AAGE) 2015 national survey

of graduates. “We build relationships with students when they first start university because we want to attract the best talent studying a core resource sector engineering discipline,” Hope says. “We provide a number of scholarships as well as opportunities for vacation work to undergraduates. Our graduate recruitment practices ensure these scholarship recipients are a core element of our selection process when it’s time for them to graduate.” Also topping AAGE’s list of mining employers is gold producer Newmont. Group executive of human resources, Michael Bisset, says the recognition not only reinforces the company’s graduate employee value proposition, but helps build the industry’s broader skills base. “Newmont constantly seeks to benchmark our key people activities

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to ensure they are fit for purpose and we have a very clear employee engagement model that is designed to increase the individual’s belonging to the organisation,” Bisset says. “By recruiting and developing high quality graduates we not only ensure a strong ‘supply’ for the future needs of the mining sector, but we also promote the long term viability of the sector by ensuring the future leaders have the capability to work at the appropriate complexity of sustainable industry practices.” Both employers’ programs involve a two-year rotation with opportunities for graduates to get a taste for different areas of the business. “Graduates can move across Glencore’s businesses, but we don’t mandate it,” explains Hope. “Their career development is very much their own responsibility as much as

HUMAN RESOURCES

the company’s, and is very much based on discussions with their immediate managers and mentors. “Because of the diversification of the company there are opportunities to be community-based as a graduate or live in the city and work FIFO.” Newmont works closely with its graduates to ensure its Emerging Talent Program is beneficial and enjoyable. “Throughout the program graduates are expected to master a set of competencies within their profession, and are provided with multiple programs to enhance their capability,” Bisset says. “Their views are canvassed throughout the program and each year we consult directly with them on any improvements.” Working in the Newmont Boddington Gold processing maintenance engineering team, Casey Dawson was given many opportunities to excel as a graduate employee. “We were encouraged to learn about all aspects of the site and business, training was readily available and our team was really supportive,” Dawson says. “I was given responsibility early on in a few areas, which allowed me to make decisions and affect outcomes. This has really set me up for a successful career and I believe my contributions to Newmont are now paying back the investment in me.”

Glencore engages with students early

OIL AND GAS MAJORS POPULAR

With Australia’s oil and gas sector set to dominate the global market, employers are wasting no time attracting talented graduates with exciting opportunities to kick-start their career. In her third year as a graduate development geoscientist within Shell Australia’s Technical Development team, Perth-based Jacqui Walsh says after a daunting selection and recruitment process, the professional development opportunities came thick and fast. “Already, in my first two years on the program, I have been an integral part of two subsurface projects, exposed to international training and gained offshore rig experience,” Walsh says. “The next phase of my career as a technical graduate is the Shell Advanced Technical Program, which facilitates further technical development and growth, and aims to fast track my early career as a geoscientist.” As well as being voted a top oil and gas employer in AAGE’s 2015 survey, Shell also made GradAustralia’s top 100 employers list along with companies including Chevron, Santos, Exxonmobil and Woodside. Shell Australia country human resources manager Helen Reid says it is important to gain recognition within a competitive marketplace and believes demonstrating an ongoing commitment to developing people is key. “A career with Shell offers students the chance to work at the very forefront of our industry, delivering meaningful innovation that has a significant impact on real world challenges,” she says. “Every step of the way, we support our graduates through a combination of structured training, informal learning, on-the-job training, regular check-ins and inspiring mentors.” Santos human resources co-ordinator Amanda Mudge agrees the market for engineering and geoscience graduates is competitive and nothing less than a wellstructured and interesting experience will attract the top talent. New graduate employees attend ‘Santos School’, which introduces them to the industry and company value chain before more technical training.

Shell graduate employee Jacqui Walsh

Our graduate recruitment practices ensure these scholarship recipients are a core element of our selection process when it’s time for them to graduate.

“Our goal is to provide graduates with a sound platform for a fulfilling and interesting career with us,” Mudge says. “Graduates are allocated a buddy and mentor to assist them on their journey and our graduate ambassador committee facilitates opportunities to network with each other as another form of support.” Santos’s graduate program also encourages participants to step outside of their workplace. “Graduates are allowed to get involved with our community events and projects, which is an element of the program that receives lots of positive feedback,” Mudge says. “We feel offering such a diverse range of experiences helps the graduates build important skills they not only bring back to their roles, but also to their personal lives as well.” RP

RESOURCEPEOPLE | WINTER 2015 | www.amma.org.au

HUMAN RESOURCES

WIRRA LAYS FOUNDATION FOR

Aboriginal employment

Celebrating 10 years of enhancing the lives of Aboriginal and Torres Strait Islander people, the Wirrpanda Foundation is ramping up its resource industry relationships as its VTEC program seeks sustainable employment for more than 200 Indigenous jobseekers.

WEST COAST EAGLES club legend David Wirrpanda is today as much a household name for his tireless work in Indigenous health, education and employment as he is for his AFL footballing heroics. While his eponymous organisation has been highly regarded for a decade, July 2014 marked a new era for the Wirrpanda Foundation with the launch of its Vocational Training and Employment Centre (VTEC) program. It’s one of just three Perth metro-based VTEC providers and the only one specialising in the construction, mining and oil and gas sectors. With 710 Aboriginal people in his database and a federal government commitment to place 235 by the end of 2015, it’s a responsibility Wirrpanda doesn’t take lightly. However, the former star defender draws inspiration from mentor Andrew Forrest, Fortescue Metals Group chairman and founder of the VTEC concept, to take his foundation to the next level. “My personal relationship with Andrew Forrest and his model of training professional (Aboriginal) people internally within his company was something that really struck a chord with me,” Wirrpanda says. “(Foundation CEO) Lisa Cunningham and I agreed we really needed to look at expanding our foundation in a different way. Five years ago we probably didn’t have the capacity to take on the VTEC, but now we are well in that space with the right people and structures.” Increased engagement with Perth’s business leaders is benefitting the foundation as Wirrpanda seeks strong corporate relationships, top shelf governance at board level and decreased reliance on government funding to deliver his suite of Indigenous employment programs. While the internal objectives are important, the ultimate focus and KPI

remains on the impact the foundation makes on Indigenous peoples’ lives. The foundation has previously had a training partnership with TAFE and achieved promising results with its Indigenous Employment Program (IEP), but the attraction of the VTEC concept is in its focus on real employment outcomes. “One of the big things we discovered with a lot of the existing training programs is we were seeing a lot of Aboriginal people coming through who were then trained up well in a lot of different areas, but there wasn’t any job commitment at the end of that road,” Wirrpanda explains. “That’s the big difference with having the VTEC now. By going to companies and building strong corporate relationships, we are delivering better pathways to real employment and that’s an important part of our expansion and improving the work we do.” WORK READINESS IN FOCUS

Wirrpanda speaks highly of his VTEC manager, David Hynes, a former

David Wirrpanda (left) is known for his work in Indigenous health, education and employment

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professional footballer who then worked for the West Coast Eagles in skills and community development. Hynes has managed the foundation’s employment programs since 2011 and is excited by its evolution into a VTEC provider. “VTEC is a lot about getting away from ‘training for training’s sake’, and getting into guaranteed jobs by identifying gaps and delivering industry-specific training,” Hynes explains. “The model is right in that sense. You want your training to be aligned to practical employment opportunities and those skill sets to be congruent to the training. In the past that hasn’t necessarily been the case.” VTEC operates on a five stages model: community engagement; work readiness; vocational training; guaranteed jobs; and post placement support. While the Wirrpanda Foundation is working with different demographics of jobseeker, including unskilled, semi-skilled and skilled people, Hynes says it is the work readiness stage that presents the greatest value to the majority of entry-

HUMAN RESOURCES

level Indigenous trainees. Most of the foundation’s employment placements in the resource sector are through Perth-based FIFO work. “All our participants have an initial assessment and individual plan, and we work more in employability skills and doing a lot of behavioural assessments that we know employers are looking for. We see it as a real point of difference in the way we do things,” Hynes says. “We’re trying to always identify and highlight those behavioural competencies that may be derived from non-industry experience but translate into the competencies they are looking for in those roles.” BUILDING THE NUMBERS IN A TOUGH MARKET

With a strong brand in the Aboriginal and broader communities built from a decade of solid results, by far the main challenge for the Wirrpanda Foundation’s VTEC program is in its timing. The recent slow-down in major project construction in Western Australia means Wirrpanda and Hynes are working with a large database of Aboriginal jobseekers within a saturated recruitment market. “At the moment there are a lot of experienced people looking for mining and construction roles so employers have an opportunity to employ pretty experienced people,” Hynes says. “The challenge with the VTEC model is trying to forecast those long-term jobs so you get the training right. Even

The Wirrpanda Foundation’s VTEC program specialises in resource industry training

Wirrpanda Foundation VTEC participants

within a healthy job market, you need a little window of opportunity and to understand the timing to secure big clusters of the right kind of jobs.” While the foundation is currently finding ‘small clusters of jobs here and there’ in the tightened resource recruitment market, Hynes says the VTEC is nonetheless tracking well to achieve upwards of 70 per cent of its designated target. Reaching the full 235 jobs mark may require a bit of luck, but the foundation is rolling with the market and focusing its attention on factors within its control. To this end, Hynes is setting the Wirrpanda VTEC up to work as a virtual extension of

companies’ own HR function. “We’re a very fluid model and can shape ourselves to really assist organisations. We just need to continue our dialogue, find partners with a likeminded approach and work towards exactly what the industry and individual organisations are after,” Hynes says. Wirrpanda admits reaching the contracted placement numbers is ‘tough at the moment’, but is upbeat about the development of the foundation that bears his famous name and its strong position for when investment and construction activity again picks up. “We went out to many large companies a year ago and since then the market has changed. We have to embrace that challenge and be a little patient. In the end it’s good for us to have that flexibility,” he says. “Having relationships directly in the industry goes a long way. A lot of people don’t get the opportunity to present to the board or the people upstairs and that’s where you really have to pitch it. “It’s all about educating both jobseekers and employers, and creating that relationship and trust. It’s not always easy to place an Aboriginal person who is not over-qualified for a particular role, but we are in the position where we’ve got people ready to go and can put the right people in the right jobs. “That’s always been the big game.” RP

RESOURCEPEOPLE | WINTER 2015 | www.amma.org.au

HUMAN RESOURCES

OPERATIONS AND MAINTENANCE

skills in demand OPERATIONS AND MAINTENANCE staff will be in most demand throughout 2015, however, Australia is at risk of losing key skills to overseas projects, according to recruitment firm Hays. Director of Hays Oil & Gas Paula Kirwan says with 60 million tonnes per annum of additional LNG capacity coming online, Australia is poised to become the world’s largest LNG producing nation, but questions the underlying economics of the projects given cost overruns and delays. “This has delayed some investments, put a lid on new LNG projects and shifted attention to improving the economics and efficiency of existing operations,” Kirwan says. “In contrast, the coal seam gas

extraction industry is growing thanks in no small part to export capabilities. Natural gas is also expected to see some good performance in the year ahead. “In terms of staffing demand in Australia, operations and maintenance staff will continue to be the key area of demand in 2015 in both terminals and construction work. “Specialist engineering skills are always in demand and with the shift in market conditions, relocation FIFO and DIDO will remain common to the industry. “Gas production will continue to increase in Australia in the coming years, but the industry will have to battle with potential overseas opportunities for the LNG skilled workforce. “As North American/Canadian

projects come online, Australians will be more and more in demand and, if working visas are made available, Australia may see up to 10 per cent of our LNG workforce moving overseas.” A Hays survey conducted in late 2014 before the oil price started to fall found the average salary of Australians among the 45,000 surveyed oil and gas professionals was about $160,000. This is higher than the most recent Australian Bureau of Statistics average weekly earnings data for November 2014, which revealed resource industry employees are on average the highest earners in the country, taking home $2494.50 per week before overtime and bonuses, equating to almost $130,000 per year. RP

BABY BOOMER exodus to shock AUSTRALIA’S HUMAN RESOURCES professionals may not be adequately prepared for the loss of knowledge that could occur as baby boomers retire. According to the Australian Human Resources Institute’s latest HR Pulse Survey, less than a quarter of the 1,931 respondents say their organisation takes routine steps to capture the knowledge of workers as they transition out of the workforce. As Australia faces the reality of an increasing retirement age, recruiting and retaining older employees also looks challenging. The survey found HR professionals identified the clear benefits of recruiting older workers for their experience, knowledge, reliability and commitment.

However, while 53 per cent say agerelated bias seldom or never occurs in the workplace, clear perceptions about younger workers having more energy, career ambition, technology skills, creativity, and being more physically capable than older workers were revealed. “It is encouraging to see only a small proportion (12 per cent) of respondents believe that age-related bias is common in their workplace,” AHRI chairman Peter Wilson AM says. “However, with around a third (35 per cent) of respondents acknowledging bias sometimes occurs, it appears to be an issue that requires a degree of attention.” Around three-quarters (77 per cent) of respondents say line managers in their workplace are offered no training in

www.amma.org.au | WINTER 2015 | RESOURCEPEOPLE

ways to manage different generations. Age Discrimination Commissioner Susan Ryan believes overcoming such barriers requires fundamental workplace changes, especially if the pension age rises to 70 by 2035. “Employers need to factor in reassessments of their mature workers. Some older workers may require flexibility in the number of hours or days worked,” Commissioner Ryan recently told the AHRI. “Employers should look at how they can incorporate this flexibility in a way that is good for business. Many employers have quite successful flexible employment for women returning to work from maternity leave, and a lot of the lessons here can be transferred to older workers as well.” RP

HUMAN RESOURCES

5 minutes with...

Sumant Narula, Chief Financial Officer and Company Secretary, Cape Flattery Silica Mines Pty Ltd (CFSM)

A typical day’s work for me involves: Being on my computer playing with numbers, as I am an accountant by trade. Also, as part of the CFSM executive management team, some of my time is spent in meetings with the CEO and GM as well as stakeholders, discussing financial, operational, planning, funding and capital issues.

Western Australia before transferring to a resort in tropical Cairns, Queensland. I left hospitality for mining and have been with CFSM for more than 15 years.

I think one of the resource industry’s greatest challenges is: The impact the international economy has on the Australian resource industry and its ability to adapt quickly.

The greatest challenge of my role is: Juggling priorities and being able to quickly and appropriately respond to queries.

If I could give my younger self one piece of career advice it would be: Trust your I think one of the resource industry’s ability, you are not as stupid as you look! greatest opportunities is: Our Indigenous workforce. At CFSM we are Something you may not know about trying to harness this with more than 30 CFSM: It is the biggest silica sand mine in per cent of our workforce from the nearby the world. community of Hope Vale.

My career path has taken me: From one side of the country to the other. Originally from Perth, I worked as a chartered accountant then moved to the hospitality industry where I worked throughout

What I love about working in the Australian resource industry is: The people I work with and meet, as well as the never-ending new and interesting challenges of the industry.

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In 10 years’ time, I hope the Cape Flattery Silica Mines will: Continue to be the leader in supplying high-quality silica sand to our customers. RP

RESOURCEPEOPLE | WINTER 2015 | www.amma.org.au

OHS & WELLBEING

FWC PAVES WAY FOR

dual drug testing method The Fair Work Commission has paved the way for employers to include both urine and saliva testing in their drug and alcohol management regimes after ruling in favour of ‘saving lives’ at a coal terminal in New South Wales.

THE IMPORTANT RULING followed a dispute between the Construction, Forestry, Mining and Energy Union (CFMEU) and the BHP Billiton-managed Port Kembla Coal Terminal, over a proposed drug and alcohol screening policy that would see employees at the Wollongong site subject to both urine and saliva testing at random. The employer’s planned policy of combining urine and saliva-based drug testing methods instigated the dispute, with the CFMEU seeking remedy through the FWC, arguing that urine testing constituted an ‘illegitimate interference with the privacy of an employee’. The union’s argument continued its consistent view that urine testing risked revealing insight into private drug use that ‘may bear no relevance to their capacity to safely perform at work’. As well as citing the common use of urine testing on other coal export terminals in Australia, Port Kembla said the use of both urine and saliva sampling would ‘overcome the limitations of either method if used in isolation’. Further, the employer argued the dual testing method would act as a persuasive deterrent as employees would be unable to avoid positive test results if unaware of

which method would be utilised that day. Commissioner Cambridge rejected the CFMEU’s argument that urine testing revealed information about employee private lives even where such drug use potentially had little impact on their capacity to work. “The detection of a drug at or above the levels set by the relevant Australian Standard must represent a measure that can be logically inferred to have some impact on capacity to perform work related functions, irrespective of the time period that may have elapsed since the drug was taken,” Commissioner Cambridge said. Importantly, Commissioner Cambridge also said the focus on privacy rights made the matter a contest ‘between private lives or saving lives’. “Any discomfort or embarrassment about providing a urine sample would be of negligible consequence if such discomfort or embarrassment avoided death or debilitating injury suffered at work,” Commissioner Cambridge said. “The balance, in my view, would overwhelmingly favour the benefits of adoption of a superior drug detection and deterrent mechanism for the cost of the discomfort, inconvenience or

www.amma.org.au | WINTER 2015 | RESOURCEPEOPLE

embarrassment of having to provide a urine specimen.” Commissioner Cambridge’s decision to back Port Kembla’s new drug and alcohol management policy came shortly after a separate FWC decision also found impairment from drug use was of little relevance where a presence was detected. In that drug management case, an unfair dismissal claim was pursued by a former BCS Infrastructure employee who was sacked after the airport services firm detected eight times the permitted limit of cannabis in his bloodstream during a routine drug and alcohol test. The employee, who serviced baggage carousels at a Sydney airport, argued his dismissal was unfair on grounds that he was not a regular consumer of illicit substances and had never failed a drug test previously. Further, he argued the ‘zero tolerance’ approach of BCS Infrastructure was particularly harsh in his circumstance because in his view he was ‘not impaired’ while on the job. In rejecting the former employee’s application, a Full Bench of the FWC firmly refuted the common argument that impairment must influence disciplinary outcomes resulting from failed drug and alcohol tests in the workplace. RP

OHS & WELLBEING

UNION ORGANISER

faces court THE CFMEU AND one of its organisers is facing Federal Circuit Court action after construction workers were allegedly told to stop a concrete pour or they were ‘all going to die’, despite a WorkCover investigation finding there was no safety risk at the site. Luke Collier allegedly failed to comply with a request by the manager of the $45 million Redfern residential project to produce his site entry permit, before forcing his way onto the site and ordering employees to stop work due to safety concerns. Collier allegedly obstructed work and refused to speak to site management about his apparent safety concerns. A report by a WorkCover representative later determined the site manager ‘had implemented

adequate systems that had demonstrated compliance with safety legislation’. The incident drew the attention of industry inspectorate Fair Work Building Construction (FWBC), which is pursuing the matter in the Federal Circuit Court. FWBC is alleging Collier, the CFMEU and CFMEU NSW each broke the law 13 times, with the court’s maximum penalties per breach being $10,200 for an individual, and $51,000 for a union. The FWBC has recently stepped up its campaign against union officials using non-existent safety issues to circumvent workplace site entry laws. FWBC director Nigel Hadgkiss notes reports of individuals using ‘questionable safety concerns’ to get onsite are becoming alarmingly frequent.

It is alleged Collier flashed what he implied was a WHS Right of Entry permit at the project manager for two seconds, from a two metre distance. When asked again, Collier allegedly refused to co-operate. On another occasion, Collier allegedly said ‘I don’t need permits, I can do what I want’. “It is now up to the Court to determine this matter,” Hadgkiss says. RP

Collier allegedly obstructed work and refused to speak to site management about his apparent safety concerns

RESOURCEPEOPLE | WINTER 2015 | www.amma.org.au

OHS & WELLBEING

APP SOLUTION TO MENTAL

health awareness

Drawing on years of research at a well-known West Australian university, academic and entrepreneur Dr Susanne Bahn is taking mental wellbeing intervention to the next level with the launch of a new interactive app.

IMAGINE THE BENEFITS of being able to track the mental wellbeing of your workforce, assess the effectiveness of employee assistance programs and intervene early when someone needs help. A new wellbeing and assessment app from Perth developer Tap into Safety may allow just that. Chief executive officer, Dr Susanne Bahn says the latest innovation in the company’s suite of safety training and assessment products introduces a ‘new paradigm’ in employee education and mental health monitoring. “We know that 47 per cent of people are going to have a mental health issue in their lifetime. But the reality is that businesses don’t really know how their people are tracking in terms of mental health,” Dr Bahn says. “It’s very hard to get people to stand up and say they have a problem until they have a really big problem. “Our wellness app is one way employers can track how their workforce is going in a positive way. It’s about being proactive rather than reactive.” Dr Bahn is recognisable to many WA resource employers from her six years as an Edith Cowan University researcher. Delving into safety and wellbeing issues across the sector, her experience has led to the new app offering an important dual capability – creating cultural awareness and collecting statistical data on workforce mental health. Teaming up with psychologists at Mine Pyschs to develop the app, Tap into Safety requires respondents to deal with interactive scenarios and recommend strategies to overcome them. Users can either be anonymous or identifiable as they answer questions relating to specific work environments,

The wellbeing app provides feedback on mental health

be quite confronting, so we have set up the app so that it won’t store or divulge answers. It will just provide a rating of how they are going in terms of stress, anxiety and depression,” she says. “That rating should only go to somebody in the organisation with psychological qualifications such as a chief medical officer. “Within the app, employees can also optin for somebody to be immediately notified if their rating reaches an ‘at-risk’ level.” Dr Susanne Bahn Dr Bahn says employers can get the most value by asking employees such as fly-in, fly-out arrangements. to compete its five-minute modules “The scenario-based questions give an every quarter and measure workforce insight into how employees would address wellbeing levels over time. a situation as if they were having the “Businesses are able to assess how problem themselves,” Dr Bahn explains. workforce wellbeing is tracking on a regular “It is a way to get the whole workforce basis and build this into their safety culture doing interactive training and selfand wellbeing programs,” she says. assessment in a palatable way, because With the need for greater statistical people aren’t going to talk about their information on mental health being one mental health unless they are really issue identified by the WA Government’s ongoing Inquiry into mental health seeking help.” aspects of FIFO work arrangements, Tap The app also includes the DASSinto Safety expects its wellbeing app to 21, a widely-used questionnaire that be met by strong demand from resource measures symptoms related to stress, anxiety and depression. employers focused on promoting mentally healthy workplaces. RP “Some of the DASS-21 questions can

www.amma.org.au | WINTER 2015 | RESOURCEPEOPLE

OHS & WELLBEING

BHP RESPONSE TO SAFETY

incident ‘diligent’: FWC BHP BILLITON’S DISCIPLINARY response to a ‘potentially fatal’ safety incident at its BMA Peak Downs coal project in Queensland has been commended as ‘well trained and diligent’ by Fair Work Commissioner John Lewin. The commissioner’s comments came during an application to deal with a dispute brought on by the employee at the centre of the safety incident and represented by the CFMEU. The employee, an operator of a water tanker used in road dust control, argued disciplinary action taken against him was unfair after he was found to have used excessive water on the roads, causing the $1.2 million vehicle to topple onto its side, injuring the driver and severely

damaging the truck. Following its investigation of the incident, BHP determined disciplinary action was necessary and verbal counselling, known as a ‘Step 1’ action under its policies, was sufficient and should be delivered by the driver’s supervisor. In assessing whether the employer’s actions were excessive, Commissioner Lewin noted more serious disciplinary actions had been considered by the employer and decided against. “[The employer] judged any greater action would be excessive to the facts and its effects on Mr Reyes. Rightly so in my view. I judge [the employer] was required to make an important and finely balanced decision in onerous circumstances. The accident

could have been fatal. The damage was very significant,” Commissioner Lewin ruled. Given the seriousness of the safety incident, Commissioner Lewin found it would have been inappropriate for the company to take no disciplinary action. He dismissed the employee’s application and commended the employer’s response to the incident. RP

RESOURCEPEOPLE | WINTER 2015 | www.amma.org.au

TRAINING

SCHOLARSHIP WINNER

follows engineering passion New South Wales high school graduate Renee Hirst has received a helping hand to pursue her dream career thanks to the Bengalla coal mine project.

THE FORMER ST JOSEPH’S Aberdeen High School student is putting a four-year, $34,000 engineering scholarship to good use as she embarks on studies at the University of Newcastle. It is the ninth consecutive year the Bengalla mine, located 4km south-west of Muswellbrook in the Hunter Valley, has offered the scholarship to a local student who wants to become an engineer. “It was both overwhelming and very exciting to hear I won the Bengalla Engineering Scholarship this year,” Hirst says. “I’m grateful this scholarship will reduce financial pressures so I can focus on my studies. “I am most looking forward to completing vacation work at Bengalla where I can get a real feel for what chemical engineering is like, gain valuable insights from experienced professionals and have first-hand experience in my field. “I’ve always been passionate about science and engineering, as a child who always asked ‘why?’, so I think my studies will certainly satisfy my interests and I can’t wait to start.” Bengalla general manager operations Jo-Anne Scarini says the engineering scholarship is one way the mine, which is managed by Rio Tinto Group company Coal & Allied, is supporting and encouraging young people to pursue a career in engineering. “We want local students to achieve their study and career goals and build capacity to sustain our local communities, which is why we are pleased to provide this scholarship to a local student like Renee each year,” Scarini says. “The scholarship provides valuable industry experience through 10 weeks of paid vacation work at Bengalla in addition to the financial support to study

engineering at university. “I look forward to welcoming Renee to site to develop skills and gain real-life engineering experience on a mine site.” BENGALLA MINE TO EXPAND

The future of the Bengalla mine and its 400 employees has been assured following the New South Wales Government’s approval to extend the open cut mine’s life until 2038. The new Development Consent allows for production to expand to a maximum 15 million tonnes per year with the potential to increase employment. “This approval secures a long term future for our mine, which provides work for 400 employees and flow-on jobs in the surrounding region,” Scarini says.

“This approval comes with comprehensive conditions determined by the Department of Planning and Environment and the Planning Assessment Commission through a rigorous assessment process.” Bengalla is currently completing a ramp up to an annual production rate of 10.7 million tonnes, the limit of its previous Development Consent. “After expansions to our coal handling and preparation plant over a number of years, we are bringing on extra heavy equipment,” Scarini says. “This is creating work for around 40 more people to operate and maintain the new fleet. We are focused on providing opportunities for local people and increasing the proportion of women in the operation.” RP

We want local students to achieve their study and career goals and build capacity to sustain our local communities...

www.amma.org.au | WINTER 2015 | RESOURCEPEOPLE

Renee Hirst and Jo-Anne Scarini

TRAINING

CLOUGH NURTURES future leaders IT IS NOT always easy to source project managers with the right mix of technical and leadership skills to meet unique business objectives. Taking matters into its own hands, engineering and project services company Clough has launched a new program to develop critical project management skills within its existing workforce. A group of Clough practitioners identified as future project leaders have commenced an intensive project management development program at the Clough Project Management Academy. The development consists of e-learning, a ‘360-degree feedback tool’, workshops and specific on-the-job experiences and will culminate with a residential program at Stanford University in the US. “The Australian resources sector has witnessed cost and schedule overruns

on the majority of projects executed in recent years,” Clough CEO and managing director Kevin Gallagher says. “Lack of project management expertise has been cited as one of the root causes of this industry issue. “Clough will develop the leadership, management, technical and communication skills that will see Clough certified project managers recognised as the best in the industry.“ Participants will progress from a

Clough certified project practitioner, to project manager to the ultimate Clough certification of project master. Successful students will also receive the globally recognised Project Management Body of Knowledge (PMBOK) accreditation. In addition to the Clough Project Management Academy investment, Clough is continuing to support its 47-yearold Scholars program, which awards scholarships to the brightest engineering students in Western Australia. RP

Clough is investing in the development of its project practitioners

RESOURCEPEOPLE | WINTER 2015 | www.amma.org.au

TRAINING

KIDS LEARN FROM

resource experts MORE THAN 300 high school students across Queensland are gaining insight into what it’s really like to work as a resource industry tradesperson or operator. The Queensland Minerals and Energy Academy (QMEA) is rolling out a series of workshops for school children across more than eight regional centres to build awareness of the many roles available in the resource industry, such as boilermakers, diesel fitters and electricians. Already high schools in Mackay, Emerald, Moranbah, Blackwater, Clermont and Dysart have benefited from the program. All children work with trainers to complete hands-on activities to build

practical skills, followed by a networking session with real trade trainers from BMA and Glencore, designed to develop mentor relationships. “Programs such as these are essential to ensuring students make informed career decisions, while also encouraging young people to consider the range of career opportunities available in the resources sector, for both career professionals and skilled tradespeople,” QMEA director Katrina-Lee Jones says. High achieving students who have demonstrated an interest in professional science or engineering careers are also invited to attend a special STEM 4 workshop.

QMEA STEM outreach officer Daniel Rea says these workshops expose students to more challenging practical exercises. “During the one-day workshop, students complete three practical activities that focus on a number of areas of science, engineering and maths, and are based on real-world activities conducted by minerals and energy professionals,” Rea says. “The students then have the opportunity to network with industry professionals who work on minerals and energy worksites, such as geologists, chemical engineers and environmental scientists. “They are able to gain an understanding of their roles and career paths.” RP

Students hear about resource careers

Students take part in industry-related activities

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www.amma.org.au | WINTER 2015 | RESOURCEPEOPLE

CAL EMAILL OR FOR YONOW LO UR DISTRICAL BUTOR

MEMBER NEWS

IN BRIEF A snapshot of recent news and milestones across the Australian mining, oil and gas sectors.

ABBOT POINT DEAL IN A MAJOR step towards the development of coal mining operations in the Galilee Basin, the Queensland Government has reached an agreement with GVK Hancock and Adani to continue with plans to expand the Abbot Point Coal Terminal. Central to the agreement, dredged spoil will be disposed of onsite, rather than at sea – an issue that has been the target of campaigns by environmental groups. “I welcome today’s announcement because it demonstrates the priority the government has placed from the outset on ensuring economic development proceeds in Queensland subject to robust environmental standards,” says Adani CEO and country head Jeyakumar Janakarij. Combined, Adani and GVK Hancock’s coal mines and associated rail and port infrastructure are expected to create upwards of 20,000 jobs during construction and operation, and contribute more than $60 billion in taxes and royalties. RP

...the Queensland Government has reached an agreement with GVK Hancock and Adani to continue with plans to expand the Abbot Point Coal Terminal.

Santos GLNG pipeline technician Daniel Daly

GLNG FIRST GAS COMPLETES TRIO SANTOS GLNG HAS introduced natural gas to its LNG plant on Queensland’s Curtis Island, marking the third and final project on the island to reach the milestone. The gas brought into the two-train facility has fired the first gas turbine generator to be used for high-voltage power generation at the site; a critical step toward production of LNG. Santos vice president downstream GLNG, Rod Duke says all construction required for initial production is almost complete. “Santos GLNG is over 90 per cent complete and on track for first LNG in the second half of 2015,” he says. BG Group’s QCLNG project exported its first LNG shipment in January, while Origin and ConocoPhillips’ Aus-Pacific LNG project reached first gas in February.

www.amma.org.au | WINTER 2015 | RESOURCEPEOPLE

Engineering, construction and project management company Bechtel is responsible for building all three projects. Global LNG general manager Alasdair Cathcart says 2015 has so far been a year of milestones on Curtis Island. “Our recent milestones (with the GLNG project) – bringing gas onto site, lighting the flare and firing the first gas turbine generator – are key steps to the successful start of LNG projection on the project,” Cathcart says. “This remarkable progress is the result of hard work from our team and a great level of coordination with our customer, Santos GLNG. “2015 has been a critical year for our Curtis Island construction teams implementing an unprecedented program that will have all three plants producing LNG, including the second train on Queensland Curtis LNG.” RP

MEMBER NEWS

AGC INDUSTRIES LANDS CHEVRON BROWNFIELD CONTRACT IN PREPARATION FOR transitioning its mega LNG projects to production, Chevron Australia recently awarded a five-year brownfield maintenance and support services contract to AusGroup subsidiary AGC Industries. The five-year contract is for the operational phase of Chevron’s West Australian assets and is a significant win for the company, which has actively focused on transitioning the business in preparation for a market shift from construction to production. “It’s the award of projects such as the Chevron maintenance contract that validate the strategy we committed to in terms of expanding the AusGroup business with the future in mind,” CEO and managing director Stuart Kenny says. AGC is a Singapore-listed company that recently acquired Ezion Offshore Logistics Hub and Teras Australia in a bid to offer offshore and onshore marine services. RP

Downer Mining staff at Christmas Creek

DOWNER STARTS CHRISTMAS CREEK CONTRACT DOWNER EDI HAS commenced an expanded contract to perform mining services at Fortescue’s Christmas Creek open cut iron ore mine in the Pilbara. Fortescue consolidated two service contracts at the site, including one previously held by Macmahon Holdings, and awarded all drill and blast, and load and haul works to Downer. “This expanded contract highlights the strength of our relationship with

Fortescue and the quality of our service,” Downer chief executive officer Grant Fenn says. The new $720 million contract runs until the end of September 2016 with the option to extend for a further year. Downer originally had around 600 workers based at Christmas Creek and planned to initially take on up to 400 Macmahon employees already familiar with the site. RP

DECMIL AWARDED $37.5M ROY HILL CONTRACT

Construction takes place at Roy Hill

DECMIL AUSTRALIA HAS begun work on a new $37.5 million contract for the Roy Hill iron ore project. The contract is for the design and construction of diesel fuel infrastructure, which it expects to complete by March 2015. “Market conditions within the mining, and oil and gas sectors remain challenging so we are thrilled to be involved in this project,” Decmil Australia CEO Scott Criddle says. “The award of this contract strengthens our position and further demonstrates our expertise within the iron ore sector.” In April 2013 the company was awarded two contracts, totalling more than $71 million, to design and construct rail and port facilities at Roy Hill. RP

RESOURCEPEOPLE | WINTER 2015 | www.amma.org.au

MEMBER NEWS

INPEX CELEBRATES 7,500 TONNE MILESTONE THE ARRIVAL OF six large prefabricated modules weighing about 7,500 tonnes combined has marked a major construction milestone for the INPEXoperated Ichthys LNG Project in the Northern Territory. The two shipments from STP&I and AG&P rounded out first deliveries from all four of the yards that are fabricating equipment for the project’s onshore liquefaction plant. Ichthys LNG Project managing director Louis Bon says the onshore LNG facilities under construction at Bladin Point near Darwin had transformed since the first module delivery in June 2014.

“With first arrivals from STP&I and AG&P, we’ve now seen nearly 60 large pre-fabricated modules delivered safely to site,” Bon says.

Many of these modules have been safely installed and many more are soon to be delivered.

A large module is transported to its final position at Bladin Point

www.amma.org.au | WINTER 2015 | RESOURCEPEOPLE

“Many of these modules have been safely installed and many more are soon to be delivered, so we’re on schedule and very pleased with the progress. “The modules are very large assemblies of structural, piping and mechanical equipment, some of which measure around 90m in length and weigh the equivalent of 3,600 family cars, so I’m very proud of our excellent safety record to date.” The pre-fabricated modules are key components of the project’s LNG processing facilities, which will eventually produce 8.4 million tonnes of LNG and 1.6 million tonnes of LPG per annum. RP

MEMBER NEWS

The Gorgon operations team has started commissioning and monitoring systems in the central control room

GORGON START-UP INCHES CLOSER IN A SIGN that Australia’s largest natural gas project is truly coming to life, the first gas turbine generator at the Gorgon project at Barrow Island, Western Australia has successfully started up. Lead project proponent Chevron says the milestone was a ‘critical turning point’ in bringing the project closer to delivery of the first LNG cargo. Staff on Barrow Island had prepared for the start-up by conducting safety muster drills and erecting signage in key areas. Once the project is operational, a total of five gas turbine generators will provide 584MW of electricity to the site. Earlier this year, Chevron confirmed both of the Gorgon LNG tanks were ready, all subsea pipelines and associated facilities for Gorgon and Jansz-lo gas fields were complete, and the first members of the operations team had begun work on systems in the central control room. RP

DRAYTON DONATION BOOSTS CANCER SERVICES IN A GENEROUS contribution to local cancer support programs, Anglo American’s Drayton mine has made a $10,000 donation to the Cancer Council NSW’s Muswellbrook Relay for Life event. More than 500 locals set up camp at the Weeraman Oval in Muswellbrook in April, with 20 teams participating in the relaystyle overnight walk to help raise vital funds for the Cancer Council’s research, prevention and support services. “This donation will go towards helping the local community in reducing their risk of cancer through prevention talks in businesses and local communities,” Cancer Council’s Upper Hunter community relations co-ordinator Glen Parsons says. “The money will also help those local community members going through a cancer experience with supportive care services, help our volunteers in their advocacy campaigns and assist our researchers in their continuing work locally in the Hunter.” RP

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RESOURCEPEOPLE | WINTER 2015 | www.amma.org.au

POLICY

POLICY AT a glance A wrap-up of recent resource industry and employment policy developments by AMMA executive director, policy and public affairs, Scott Barklamb.

BUILDING INDUSTRY WATCHDOG

The Australian Government is attempting to extend the existing powers of the building industry’s current inspectorate, Fair Work Building and Construction (FWBC), as an interim alternative to fully restoring the Australian Building and Construction Commission (ABCC). The Coalition’s long-held policy has been to bring back the ABCC, which was abolished and replaced by the FWBC under the former Labor government. However, this policy has been frustrated by the current Senate and is unlikely to be achieved before May 31, when the existing powers of the FWBC are scheduled to be automatically watered down. EMPLOYERS CAUTIOUS OF CFMEU DRUGS APPROACH

The CFMEU has released a new policy on addressing the risks of drugs and alcohol impairment on Australian building sites, calling for mandatory saliva/breath testing on all worksites but remaining opposed to any form of urine testing. AMMA’s firm view remains it is the responsibility of the employer to ensure workplaces are free from the risks of drugs and alcohol and unions should be on a unity ticket with the employer to eliminate safety risks in a way that best suits each unique workplace, be that urine, saliva, breath testing or other policies.

Scott Barklamb

TOUGHER RULES FOR UNIONS AND

employees who are absent from work EMPLOYER GROUPS VOTED DOWN on workers’ compensation are still The Fair Work (Registered Organisations) entitled to accrue annual leave as Amendment Bill 2014, which sought to part of their continuous service. The hold officials of unions and other registered judgment came after an employee organisations to greater governance took leave for a period of two years standards and financial penalties, has on workers’ compensation payments, failed to pass the Senate. AMMA has after which his employment ended, long argued officials who ethically and successfully argued annual leave represent their members and use funds accrued during his time off should be transparently and appropriately would calculated as part of the final sum to be have nothing to fear from more rigorous paid by the employer. rules and standards. A third amendment bill, understood to be identical to the LEAVE PAYOUTS TO previous two that were defeated, has been INCLUDE HIGHER RATES introduced to parliament. A decision of the Federal Court may see dismissed employees entitled to NEW FWC MEMBERS SHOULD have allowances, penalty rates, overtime COME FROM BUSINESS and loading calculated on top of their AMMA is leading the call for new base rate of pay as part of their annual appointees to the Fair Work Commission leave payout. In an application to seek in 2015 to have practical experience in clarity for section 90 of the Fair Work running a business. As many as eight Act 2009, Centennial Coal argued new members could be required in unused annual leave paid out at the end 2015, and AMMA has called for the of an employment contract should be government to appoint tribunal members calculated at the base rate, however, with the business skills needed to drive Justice Buchanan agreed with the CFMEU employment growth, lift workplace that annual leave payouts should be productivity and make realistic and calculated including all entitlements. practical determinations. FULL BENCH RULES ON ACCRUAL OF ANNUAL LEAVE ON REDUNDANCY DEFINITION WORKERS’ COMPENSATION A Full Bench of the Fair Work The Federal Circuit Court has ruled Commission has ruled the reference to ‘ordinary and customary turnover of labour’ within the Fair Work Act 2009 is of no consequence to redundancy payouts included in a workplace agreement. The ruling related to a major facilities management firm, Spotless Facility Services, which lost its defence contracts and argued associated job losses were due to ‘ordinary and customary turnover of labour’. The Full Bench ruled in favour of the CFMEU, the CEPU and the AMWU’s position the employees should receive redundancy entitlements stipulated in the agreement. RP

www.amma.org.au | WINTER 2015 | RESOURCEPEOPLE

POLICY

FWC SLAMS UNION FOR

‘cynical’ strike tactic IN A RARE acknowledgement of the cost of industrial action that is threatened but not followed through, the Fair Work Commission has criticised a trade union that failed to withdraw a defective Notice of Intention, imposing significant costs on a major transport company. The notice was issued by the Transport Workers Union (TWU) during negotiations with Greyhound toward a new workplace agreement for bus drivers transporting construction workers to Chevron’s Wheatstone gas project in Western Australia. However, the intended action – a one-hour stop work meeting – was to take place four days after the notice was received by Greyhound and outside of the 60-day deadline to strike under the union’s

successfully protected action ballot order. Greyhound warned the action would contravene section 459(1) of the Fair Work Act 2009 and indicated it would pursue legal action if the notice was not withdrawn within the appropriate timeframe. When the union failed to withdraw its notice, Greyhound applied for relief from the Fair Work Commission. The union then proceeded to withdraw the notice just six hours before the industrial action was scheduled to occur. With the intervention hearing subsequently vacated, Greyhound applied instead to recover the cost of legal proceedings imposed as a result of the union’s failure to withdraw the notice earlier. On hearing the application,

Commissioner Williams acknowledged the impact on Greyhound of the proposed industrial action. The Commissioner also berated the union for engaging a ‘cynical and unlawful tactic to circumvent the Act’ and said its attempt to ‘game the system’ should be ‘condemned’. However, he found no scope with section 611 of the Fair Work Act that would cover the costs imposed on Greyhound by the TWU. The company’s application for costs was therefore dismissed. Protections against industrial action, both threatened and taken, is one of six priority reforms advocated by AMMA to the Productivity Commission’s current review of the Australian workplace system. RP

RESOURCEPEOPLE | WINTER 2015 | www.amma.org.au

POLICY

INTERGENERATIONAL REPORT

drives reform urgency

Australian business has called for key reforms to boost productivity growth after the federal government’s Intergenerational Report revealed a picture of falling workforce participation and slowing productive outputs.

RELEASED EVERY FIVE years, the 2015 Intergenerational Report is the fourth in the series, assessing past trends and future projections in population demographics, workforce participation and productivity as key drivers of economic growth. The latest report shows while Australians now produce twice as much per hour in goods and services as they did in the 1970s, productivity growth has fallen to just 1.5 per cent per annum since 2000. “During the 1990s, Australia’s productivity growth was especially high, with an estimated average of 2.2 per cent growth per year,” the report reads. “More recently, however, our productivity growth has slowed, with an average of 1.5 per cent growth per year observed through the 2000s. This is the rate of productivity growth the Intergenerational Report assumes in the next 40 years.” The report points to resource industry investment as a key influence on productivity changes, however, it also highlights fewer economic and labour market reforms as a negative factor. “Productivity growth often slows during a significant investment phase as there are

long lead times before increased output is achieved. That is, in the early investment phase, there will be a high level of capital input, but it will be associated with very little increased output, leading to a fall in measured productivity,” the report states. “There have also been fewer significant policy reforms since the early 2000s, and strong income growth, low unemployment and high rates of profitability through the 2000s may have significantly lowered the pressure on governments to undertake the necessary productivity enhancing reforms.” Another concerning finding from the report was that workforce participation has been projected to fall by 2.2 per cent in the next 40 years, declining from 64.6 per cent to 62.4 per cent in 2055. Treasurer Joe Hockey says that with population growth unlikely to contribute to economic growth in the next 40 years, the focus must turn to lifting workforce participation and productivity. “Australia’s future growth and prosperity relies on having a sufficient workforce to fill the jobs of tomorrow,” Hockey says. “…There are clear opportunities

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to increase workforce participation by supporting Australians to get and keep jobs. These opportunities include continuing to support increased workforce participation by women, by youth, for people with a disability, and by embracing the potential of older Australians. The Treasurer points out Australia could make significant gains if our female participation rate increased four percentage points to be level with Canada. “If Australia lifted its female participation rate to be equal to the rate of Canada, we could potentially see a $25 billion increase in the size of our economy,” he says. The projected impact of lower productivity and workforce participation rates also contributed to a projected national debt of $2.6 trillion, or 60 per cent of GDP, under current economic policy frameworks. The outlook prompted the business community to renew calls for reform. “The government has put its ideas on the table for returning the Budget to surplus and it is time for critics of the approach to put their own ideas forward so we can have an informed debate,” chief of Australian Chamber of Commerce and Industry Kate Carnell says. “Budget deficits will blow out to 60 per cent of GDP by 2055 under current policies, but we can achieve a surplus of 0.5 per net of GDP by that time with the government’s proposed reforms. “This report shows we need to take steps to improve our productivity and workforce participation as we adjust to an ageing population. Better labour productivity accounts for almost all our future real GDP per person growth. “We must break through the legislative gridlock that is holding back essential reforms.” RP

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MIGRATION

MINERS WELCOME ‘SOUND

and considered’ 457 changes The resource industry has welcomed amendments to Australia’s 457 visa program that take a ‘sound and considered approach’ to improving its accessibility and operation, including the adoption of several of the key recommendations advocated by national employer group AMMA.

ASSISTANT MINISTER FOR Immigration and Border Protection, Michaelia Cash, announced the government would adopt the bulk of recommendations made by the 457 visa integrity review panel, which received 189 submissions from businesses, unions, industry bodies and academics. The changes will be made via a combination of legislation and regulations, some which have already been implemented, and are set to deliver a more streamlined process for employers to access overseas skills where genuine shortages exist in the domestic labour market, while at the same time taking a tougher stance against exploitation and abuse. “We will reduce the regulatory burden for those businesses with a proven track record by streamlining sponsorship requirements,” Minister Cash said. “The government will ensure businesses that utilise the 457 program appropriately will incur less regulation and cost, without compromising on the necessary safeguards that underpin the scheme.” The amendments will also strengthen efforts to identify and prosecute the minority which misuses the system. “The government will also introduce a new penalty making it unlawful for sponsors to receive payment in return for sponsoring a worker for a 457 visa,” Minister Cash said. “The Department of Immigration and Border Protection will work collaboratively with the Australian Taxation Office to cross check records to ensure workers on 457 visas are receiving their nominated salary and are not undercutting Australian workers.” As a key submitting party to the review, AMMA welcomed the changes as encouraging for the mining, oil and

gas sectors. “Skilled migrants comprise a very small, yet very important part of the resource industry. During the recent period of increased resources investment and construction, 457 visa holders brought new global skills to Australia that assisted our industry in meeting unprecedented skills demands,” AMMA executive director Scott Barklamb says. “The 457 Visa Review Panel found no evidence to suggest unlawful or exploitative misuse of Australia’s skilled migration programs beyond a tiny minority. We welcome the government’s intention to punish those found to be doing the wrong thing, while recognising the majority of employers who use temporary skilled migration programs responsibly.” Positive changes for the resource industry include more flexibility, less red tape and reduced costs for responsible users of

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457 visas and labour agreements; minor changes to the English language testing competencies to provide a more realistic and practical test; and lowering the market salary threshold from $250,000 to $180,000. While supporting the vast majority of amendments proposed to the 457 visa program, Mr Barklamb voiced concern labour market testing laws introduced under the former Labor government were to be retained, and the proposed new training levy would punish those already significantly contributing to training. The industry’s position is the current system works well in balancing 457 visa use with appropriate training for local workers, and that a ‘per visa’ levy would detract investment from internal company training programs. The government has, however, stated it is open to further consultation on the training changes in which AMMA will make its position heard. RP

MIGRATION

NEW OFFSHORE

migration arrangements THE AUSTRALIAN GOVERNMENT has established new migration arrangements for offshore resources activities, effectively retaining the sector’s current practical operation, following a Federal Court ruling in March that revoked the existing arrangements implemented in July 2014. The new visa requirements relate to the practical implementation of the Migration Amendment (Offshore Resources Activity) Act (the ORA Act), which has been subject to ongoing legal dispute and political debate since it was passed into law by the former Labor government in 2013, and took effect on June 29, 2014. Following the successful challenge by maritime unions to the Coalition’s preexisting arrangements, the government issued two new instruments that together

specify the coverage of the ORA Act and the visas required for non-Australian personnel working on offshore resources activities, depending on the type of vessel concerned. The first instrument relates to the regulation of fixed platforms and vessels attached to the Australian seabed, which continue to require non-citizens working on them to hold a 400, a 457 or a permanent visa, as has been the case for many years. The second means vessels and activities not previously deemed to be in the migration zone, despite being in waters above Australia’s EEZ, are now technically in the migration zone, but will be automatically covered by a Special Purpose Visa (SPV) not requiring them to apply for visas with working rights for their

non-Australian citizens. This SPV effectively replaces the use of Maritime Crew Visas (MCVs) for the same work, which was ruled unlawful by the Federal Court in upholding the maritime unions’ appeal. An SPV is a temporary visa that allows people with prescribed status to lawfully enter and remain in Australia for a specific purpose. This type of visa, for instance, is widely used for airline crew when they enter Australia. The government has assured the industry the use of such visas will be strictly limited to those vessels and maritime activities that historically have required no visa at all. Members seeking more information should contact AMMA’s policy and/or migration team via the AMMA website (amma.org.au). RP

MIGRANTS TO BOOST

GDP by $1.6 trillion MIGRATION WILL PLAY a key role in Australia’s economic development during the coming decades, adding up to $1.6 trillion to the national gross domestic product by 2050, according to new economic analysis. Commissioned to Independent Economics by the Migration Council of Australia, the Economic Impact of Migration report reveals Australia’s migration program will help propel the national population to 38 million in the next 35 years. Australia’s population growth would stagnate at 24m without support for foreign nationals. Similarly, migration is anticipated to improve labour force participation by

15 per cent, with the number of employees holding a university education set to rise by 60.4 per cent by 2050. “Because of the emphasis on students and skilled migrants in Australia’s migration program, many migrants bring higher education and skill levels and higher labour force participation rates than existing Australian residents, leading to economic benefits directly for migrants and indirectly for the existing population,” the report reads. Migration is also expected to have a positive effect on the long-term real net wages for Australia’s workforce, with the average expected to rise by 9.7 per cent. “These gains have a distributional affect, proportionately benefiting low-

skilled and medium-skilled workers,” the report notes. “The effect of migration on wages to 2050 is a 3.5 per cent decrease for high skilled workers, an 11 per cent increase for mid skilled workers and a 21.9 per cent increase for low skilled workers.” Migration Council Australia CEO Carla Wilshire hopes the report will put to bed any debate around the economic contribution of migrants. “For too long, the economic impact of migration has been undervalued,” Wilshire says. “If we are serious about addressing our fiscal deficit and our aging population, then a healthy migration program is critical.” RP

RESOURCEPEOPLE | WINTER 2015 | www.amma.org.au

LEADERSHIP

MMG SOCIAL INVESTMENT

lifts the Congo

Operating in a challenging environment, MMG is earning its stripes in the Democratic Republic of the Congo as an emissary for social development. Marking the three-year anniversary of its takeover of the Kinsevere copper project, Resource People looks at how the global miner is building its local legacy through employment, education and industry.

ONE OF 22 members of the International Council of Mining and Metals, MMG has invested significant resources into ensuring its Kinsevere copper mine in the Democratic Republic of the Congo (DRC) works to achieve best practice standards and sustainability. As the DRC seeks to puts its troubled history behind it, a renewed mining industry is playing a major role in the West African nation’s economic and human development. MMG, which acquired Kinsevere in 2012 for USD$1.3 billion, is a leader in the minerals-rich Katanga Province. “The DRC is a nation rebuilding after decades of difficulty,” explains Kinsevere general manager Miles Naude, a South African mining professional who immigrated to Australia in 2007, before moving to DRC in 2013. “Since entering play under MMG in 2012, Kinsevere has significantly expanded its social development program. “Important new initiatives include bursary programs for university and secondary school students, pilot projects to diversify agricultural output in the area and support to improve teacher engagement.” In the education space, MMG sponsors 200 primary school scholarships each year and awards $1000 bursaries to tertiary scholars embarking on mining-related career paths through the nearby University of Lubumbashi. The company has also helped turn around low attendance rates of young Congolese girls in primary school in 26 villages near its mine. To ensure a high quality of educators in the local area, MMG sponsors the salaries of 60 teachers in nearby communities and recently paid for eye examinations and

Kinsevere general manager Miles Naude and a local official opening a new marketplace near the mine in December 2014

the supply of glasses to 32 teachers and school administrators. The company is similarly invested in supporting the local agriculture industry through providing aid to more than 600 farmers annually, helping to increase crop yields and diversify into market garden produce. “For me, the opportunity to move to the DRC and manage the Kinsevere Mine was a chance to not only create and lead a world-class operation, but to also make a meaningful and positive difference,” Naude says. “To be part of this, to actually be providing employment and training opportunities to people, to invest in sustainable development initiatives and to be part of the restoration of the country’s mining industry is something rare. “I believe our internal commitment

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together with our many other initiatives, investments and partnerships, will contribute to ongoing socio-economic development in the region for years to come.” Acknowledging rapid community growth would come with increased business development in local areas, MMG has expanded a range of infrastructure surrounding Kinsevere, including building roadways, bridges and markets. This was all completed with the guidance and support of its most dependable advisors – the Congolese people. At the Katanga Energy Day coordinated by MMG, for example, MMG joined a host of key community stakeholders to canvass solutions for the region’s ongoing energy challenges, endured by Lubumbashi’s population of four million just 35km from the copper mine.

LEADERSHIP

LEADING THE LOCAL TEAM

Beginning his career as a metallurgist in South Africa’s platinum belt more than 23 years ago, Naude has since worked in management positions at various copper, zinc, gold and chrome facilities – including with MMG and Rio Tinto in Australia. Jumping at the challenge to manage a major mining operation in a developing nation, he says the decision to return to Africa was ultimately made ‘as a family’, and the transition has been smooth. “Being from Africa meant we had a good idea of what to expect living and working in Lubumbashi. The city is quite safe, with adequate schools and great recreational facilities, which is a side of the DRC that people don’t always see,” he says. “Of course, each jurisdiction has its challenges. In the DRC, the availability of grid-sourced electricity, the quality of the transport network and lengthy delays are the types of issues that keep us on our toes.”

With Congolese nationals comprising 95 per cent of Kinsevere’s 800-strong workforce, building and supporting the operation’s local workforce is also critical to the mine’s success. Naude’s experience has taught him ‘people always want to do well’. He describes his role as primarily to help the team to realise their strengths, build the right skills and provide a framework for success. “This is achieved through a focus on safety and health, business discipline and a culture of operational excellence,” he continues. “We’ve broadened our employee training and development program and implemented a safety field leadership initiative. We’ve also implemented a multiyear operational excellence program to enable us to maintain and build on current record production rates and embed a culture of operational discipline. “With MMG’s recognition of talent and support for career advancement in the past three years, Congolese nationals now

make up the majority of the leadership team at Kinsevere.” While for any mine operator the benefits of being a highly invested corporate citizen are reciprocated by increased performance and sustainability of local projects, for MMG’s Kinsevere mine this dynamic is heightened by the unique DRC social environment. As the company continues to invest heavily in its community programs, so too is it rewarded with a highly performing mine. In 2015, productivity at the mine is expected to reach up to 72,000 tonnes, well above its nameplate capacity of 60,000. Naude says the mine’s achievements are a testament to the Kinsevere workforce. “I was humbled to be asked to lead our team at Kinsevere and continue to be impressed by their diligence and commitment,” he says. “I believe focusing on building a highperforming narrative for MMG is important and any future role will springboard off this success.” RP

Miles Naude addresses Kinsevere employees

RESOURCEPEOPLE | WINTER 2015 | www.amma.org.au

LEADERSHIP

SVITZER EXECUTIVE IN

race of a lifetime

Being chief commercial officer of world-leading towage and marine services company Svitzer has its fair share of challenges, but it’s outside the workplace where Alan Bradley’s biggest challenge lies.

BEGINNING JUNE 20, Bradley will compete as a member of CEF Team Australia in the 2015 Race Across America (RAAM). Promoted as the world’s toughest endurance cycling race, RAAM is a 4,860km non-stop ride across 12 American states from Oceanside, California, to Annapolis, Maryland. “Without a doubt, this race is the biggest challenge I have ever contemplated and completing it will be a major personal achievement. But my involvement is motivated by much more than a quest for personal satisfaction,” says Bradley who is also Svitzer’s in-house health and wellbeing ambassador. “I want to show it’s possible to maintain a healthy and active lifestyle while holding down a demanding day job that involves long hours and extensive travel. In doing so, hopefully [I can] inspire my colleagues to strive to achieve their own health and wellbeing goals.” The two, four-man teams have nine days to complete a journey that will take them over mountain ranges, through hot deserts and across humid plains, however, their goal is to reach the finish line in just six days. As well as competing against an international field of elite cyclists for a position on the podium, CEF Team Australia is also raising funds for the charities Outrun Cancer that funds cancer prevention projects, and MontroseAccess, which delivers support services to children and young people with physical disabilities. Svitzer has come on board as an official sponsor of CEF Team Australia and managing director Mark Malone is encouraging others within the industry to donate.

“I wish the whole team the best of luck as they prepare to embark on an extraordinary journey that will test them both physically and mentally as they brave heat, wind, thunderstorms, altitude, the

I want to show that it’s possible to maintain a healthy and active lifestyle while holding down a demanding day job that involves long hours and extensive travel.

dark, fatigue and sleep deprivation. I can assure Alan and his team mates that everyone here at Svitzer will be rooting for them,” Malone says. “What’s more, those who support their journey across America will be helping to improve the lives and health of others. I would encourage everyone to donate what they can.” Once the race is underway teams will be equipped with GPS technology, allowing the public to track their progress in real time via the CEF Team Australia Facebook page. To support Bradley and make a donation go to https://give.everydayhero. com/au/alan-bradley. RP

Svitzer executive Alan Bradley will face his toughest race yet

www.amma.org.au | WINTER 2015 | RESOURCEPEOPLE

LEADERSHIP

TRANSFIELD CEO NAMED

new AMMA President HIGHLY EXPERIENCED RESOURCE industry executive and current Transfield Services CEO Graeme Hunt has been appointed president of AMMA’s Board of Directors. Mr Hunt brings to the role extensive leadership experience across the metals, mining and bulk transport sectors. His appointment represents his second stint as AMMA president after previously holding the position from 2002-2004. AMMA chief executive Steve Knott welcomes Mr Hunt’s return and says he is strongly positioned to lead AMMA as it guides and supports its members through an evolving and challenging market. “Under the strategic guidance of Graeme and the other accomplished members of

our Board, AMMA is well-placed to meet the unique and evolving workplace needs of our members across Australia’s resource industry,” Mr Knott says. Prior to his role as Transfield Services CEO, Mr Hunt was chief executive and managing director of Lihir Gold until its takeover by Newcrest. Before that, he spent more than 34 years with BHP Billiton including as president of its Iron Ore business. AMMA’s other Board Directors include Richard Owen, chairman of Exxon Australia; Richard Weston, executive vice president Australasia, Gold Fields; Johnpaul Dimech, chief executive Australia, Sodexo; and Michael Ustler, chief operations officer, Woodside. RP

Graeme Hunt

RESOURCEPEOPLE | WINTER 2015 | www.amma.org.au

INNOVATION

SEABED MINING UNCOVERS

potential of the deep

The deep waters off Papua New Guinea will soon be the scene of a Brisbane company’s pioneering project set to change the way the world thinks about mining.

WHEN MOST PEOPLE picture a copper mine, a location 1,500m below the ocean surface encased in pitch-black darkness with a temperature of 2.6°C, is not what typically comes to mind. For Mike Johnston, however, this is the future of precious metals mining and it is the most exciting place on earth. The chief executive of Nautilus Minerals, a Canadian registered company

with a Brisbane-based project office, is leading the world’s first seabed mining project to operation. In 2011, the Papua New Guinea Government awarded Nautilus a mining licence for its Solwara 1 Project located 30km offshore in the Bismarck Sea, and plans are fast progressing to extract the high-grade copper, gold, zinc and silver from ocean-floor sulphide deposits.

The Bulk Cutter – one of three machines to be used in Nautilus’s seabed mining project

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“There’s more copper resources on the seafloor than all the reserves on land,” Johnston says of the potential of seabed mining. “We just haven’t had the technology innovations that exist today, such as dynamic positioning, satellite navigation and 3D imaging for projects like Solwara 1 to become reality.” The final seafloor production tools

INNOVATION

PNG has a lot of well-qualified people in mechanical and electrical roles who have worked in the big mines that have operated here for more than 20 years

A geologist examines drill core

required for the project will be completed and delivered later this year, before ‘wet testing’ commences. Weighing 250 tonnes, the Auxiliary Cutter will first prepare the rough seafloor and create ‘benches’ of material for the Bulk Cutter to work through. The Collecting Machine will then pump the cut material through a pipe and onto the production vessel where it is prepared for shipment. Johnston describes the technology as a marriage between existing machinery used for underground land mining and that for digging pipeline trenches for offshore oil and gas projects. While the tools were largely built in the United Kingdom, design and construction has been a true international feat with input from companies in Italy, Korea, Norway, the US and Russia as well as various research institutions. “We brought together people who are recognised as the best in their field,” Johnston says, adding the engines and thrusters for the production support vessel have been contracted to Rolls Royce in Norway. “The deep ocean is very unforgiving on design. Everything has to be built to handle the high pressures that come with being almost 2km under water.” SKILLS AND RECRUITMENT

While the technology and processes are key, like everything in the resource industry, the project’s success relies on the people behind it. Nautilus is slowly building its skills base to bring the project safely to production, recently hiring both a health and safety manager and maintenance superintendent to cement all related policies and procedures. Johnston will be looking for the top engineering and technology talent from

around the world to fill key positions. However, having spent a significant portion of his 30-year mining career at the now Barrick-owned Porgera gold mine in the PNG highlands, he is well connected to fill a large component of the 180 vacancies locally. “PNG has a lot of well-qualified people in mechanical and electrical roles who have worked in the big mines that have operated here for more than 20 years,” Johnston says. “Well over 50 per cent of the Solwara 1 workforce will be Papua New Guinean. We are determined to make that as high a ratio as we can get. “We’ll also have training opportunities and down the track we’ll look at building a simulator to train people to operate the machines.” PNG COMMUNITIES TO BENEFIT

Located 30km off the West Coast of New Ireland, Papua New Guinea, the project has the potential to significantly lift living standards of remote coastal communities and an agreement is in place with the PNG Government to deliver those benefits. “It is in our interest to improve the health, safety and education of people in this remote part of PNG. We need healthy people in order to employ them,” Johnston says. “We’ve begun a program to build a series of bridges to make travel more reliable and we are working with government to deliver sanitation programs, beginning with running water and toilet facilities at schools and eventually within the villages. “We are also working with a nongovernment organisation to train young people in trades such as carpentry and plumbing so those skills can be used in the villages.” »

RESOURCEPEOPLE | WINTER 2015 | www.amma.org.au

INNOVATION

Work rosters will also differ from a typical mining project. “One of the best ways of spreading the benefits of a project in developing countries is to have more regular and shorter shifts,” Johnston says. “One job can be shared between three to five people, giving more people in the community the opportunity to earn money that can flow into the village economy.” As can be expected with a project that is the first of its kind, environmental groups have raised concerns about the potential impact of seabed mining on marine life and local fishing. In response, Johnston says it is important to clearly communicate the facts. “The physical footprint of this mine is 0.1 of a square kilometre. Putting that into context, the Bismarck Sea is about 325,000 square kilometres,” he says. “We won’t be dumping tailings because we won’t have tailings. There is almost no waste with this project and it will have zero impact on fishing or reef systems.” Once all the pieces of the project come together for an expected 2018 start-up, Johnston is looking forward to demonstrating the true potential of seabed mining. Unsurprisingly, there is a lot of curiosity around cost.

“We have the potential to produce between 80,000 – 100,000 tonnes of copper per year with Solwara 1. In the current environment that’s an annual capital intensity of $4,500-$6,000 per tonne,” he explains. “To build a mine on land of the same production capacity would have an annual capital intensity of $15,000$25,000 per tonne. “This project has the potential to have a significant impact on mining. I see no reason why we can’t do this on a larger scale.” As Nautilus Minerals inches closer to production, it will undoubtedly draw unprecedented attention about what can be achieved using new technology and expertise within one of the most remote and uncharted areas on earth. RP

Artist’s impression of Nautilus’s production support vessel

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Nautilus Minerals geologists

One job can be shared between three to five people, giving more people in the community the opportunity to earn money that can flow into the village economy.

INNOVATION

BIG DATA FOR greater efficiencies BIG DATA IS set to play a key role in lifting productivity and improving safety at Rio Tinto sites. In the latest phase of its Mine of the Future program, the global miner has opened an Analytics Excellence Centre that will be the epicentre of equipment productivity data. The data, captured by sensors attached to Rio Tinto’s fixed and mobile equipment, will be sent to the centre in Pune, India, where it will be analysed to prevent engine breakdowns and other downtime events. Rio Tinto group executive technology and innovation, Greg Lilleyman, expects the analysis will reduce maintenance costs and production losses from unplanned breakdowns. “The Analytics Excellence Centre will

allow us to extract maximum value from the data we are capturing around the performance of our equipment, making our operations more predictable, efficient and safer,” Lilleyman says. “This is a world-first for the mining industry and is all part of Rio Tinto’s relentless pursuit of productivity gains across our businesses. “The centre will help us predict the future through the use of advanced data analytic techniques to pinpoint with incredible accuracy the operating performance of our equipment. Our aim is to run more efficient, smarter and safer mining operations and provide greater shareholder returns. “We’re combining human experience with machine intelligence and providing more support to our operations.”

This new innovation comes as Rio Tinto chief executive Sam Walsh oversees the condensing of the global business into four product groups consisting of aluminium, copper and coal, diamonds and minerals, and iron ore. The restructuring resulted in the redundancy of energy chief executive Harry Kenyon-Slaney. “These changes are part of our continuing business transformation to reduce costs, simplify and strengthen our company and deliver sustainable value for shareholders,” Walsh says. “Our coal and uranium assets remain a part of our world-class portfolio. We will work hard to ensure there is a smooth transition for our colleagues in the energy product group and continue to maximise efficiencies in our coal and uranium operations.” RP

APP PUTS EXPLORATION

data at fingertips THE WEST AUSTRALIAN Government is hoping to promote the discovery of new mineral and petroleum resources through a cutting-edge app, as the latest data shows exploration spending is down. Developed by the Department of Mines and Petroleum’s digital database, the WAGeology app puts the latest mapping and geological data as well as information such as land use, native title and biodiversity at the fingertips of explorers. “Importantly for prospectors and explorers, the app includes measuring, drawing and mapping tools, with the advantage of GPS accuracy,” Mines and Petroleum Minister Bill Marmion says.

“This is living technology and the information and services on the app will continue expanding. “One of the next steps will be to build in a caching facility so information is available on your smartphone or tablet even when you are out of mobile signal range.” Innovations like the WAGeology app and new online system for the submission of mineral exploration reports are aimed at making the exploration process more cost-efficient. This comes as a recent SNL Metals and Mining survey revealed West Australian resource organisations reduced exploration funds by more than $1 billion in 2013 to $630 million in 2014.

Nationally, the Australian Bureau of Statistics reports mineral and offshore petroleum exploration is 16.7 per cent lower than a year ago. $3bn was spent on all exploration activities in the second half of 2014, reflecting a $400m decrease from the 12 months before that. While the offshore petroleum exploration sector experienced one of the most significant declines of 6.8 per cent, or $50m, to now sit at $680.2m annually, onshore petroleum exploration experienced an increase of 6.7 per cent in the December 2014 quarter to $329.8m. Drilling also increased by $9.2m or 4.9 per cent to reach $195.6m. RP

RESOURCEPEOPLE | WINTER 2015 | www.amma.org.au

INNOVATION

Jason Larke wearing the Gear VR watching his son’s birth

FIFO DAD

witnesses virtual birth Cutting-edge communications have long been used to connect FIFO workers with their families back at home, but in a world first, virtual reality technology has allowed a Perth father to witness the birth of his son live streamed from the other side of the country.

AS ANY FLY-IN, fly-out employee understands, along with the many benefits of the role comes times when significant family moments may be missed. As a FIFO electrical contractor, Jace Larke was faced with this situation when an important work commitment meant he would be in the mining town of Chinchilla, Queensland, on the day his wife Alison was due to give birth to their third child 4,000km away in Perth. Hearing about the Larke’s predicament, tech giant Samsung stepped in to create the world’s first live steamed virtual reality birth. Using its Gear VR headset, Larke was able to experience the birth in real time and offer his wife encouragement as if he was in the room beside her. “Healthy boy and healthy mum, and I got to see it. There’s nothing better than seeing your baby for the first time,” Larke says following the birth of his son. The moment was captured in a short film produced by Samsung, which has

since been viewed more than 9.5 million times. Despite being the star of a viral social media video, wife Alison was simply pleased her husband was able to see the birth of their son. “For me it was like a weight had been lifted off my shoulders knowing he would not be missing out on such a precious moment in our lives and we would virtually be experiencing the birth together,” she says. “It has been an absolutely amazing, once in a lifetime experience that has changed our lives forever.” The virtual reality technology was originally developed for computer gaming but is now being explored for a number of wider purposes including safety training in the resource industry. Samsung chief marketing officer Arno Lenior says the experience offered to Larke through the Gear VR innovation represents what technology is all about – enabling human experiences. “Samsung wanted to demonstrate the

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potential of virtual reality and how this unique technology can address real challenges people face every day,” Lenior says. “Through Alison and Jace’s story, we’re excited to be able to demonstrate how technology can help tackle the tyranny of distance and bring our loved ones closer.” Samsung’s video of the experience is easily accessible via streaming site YouTube.com. RP

Alison Larke with newborn Steele Larke

INNOVATION

PEOPLE INNOVATIONS

to buck the trend DIVERSE TEAMS, CLOUD-BASED technology and more targeted training are areas Deloitte recommends the resource industry to innovate in to attract and retain a new generation of talent. In Tracking the Trends 2015 – its seventh in an annual report series – Deloitte outlines responses proposed by global mining professionals on how to ‘accelerate resurgence from a down cycle’. “For the most part, mining companies are rising to the challenge, strengthening their cost reduction and capital allocation practices. While these are good first steps, more remains to be done,” the report says. When discussing talent, Deloitte points out that despite shifting market conditions a range of specialised skills such as

engineering and geo-metallurgists remain in short supply. However, restructuring has put greater emphasis on management systems and inclusive teams, and new skills gaps are emerging as the industry embraces technological innovations. Deloitte lists four ‘strategies that buck the trend’ in how to attract, retain, manage and develop talent: Commit to diversity – Deloitte says organisations that are serious about driving diversity ‘require strong leadership sponsors, a willingness to uncover unconscious biases and a plan for long-term change’. Explore new systems – Investment in cloud-based talent management systems ‘can help companies identify looming talent gaps, and manage knowledge

sharing and succession planning’. Get competitive – When it comes to attracting high-demand talent, employers should ‘treat recruiting like marketing, extend recruiting targets to new and more talent pools, and use big data tools to locate and assess high-quality candidates’. Invest in training – While acknowledging resource employers already invest heavily in community education, the report suggests it may be time ‘to make more targeted training investments in an effort to attract a more diverse group to the sector, bolster the skillsets in highest demand and foster greater parity among educational institutions in both developed and developing nations’. RP

RESOURCEPEOPLE | WINTER 2015 | www.amma.org.au

DIVERSITY

‘BRAVERY, RESILIENCE’

builds outstanding career Named 2015’s ‘Outstanding Woman in Resources’ on the west coast, Bronwyn Barnes has forged a diverse career through talent, determination and courage. Here, the chairman of Windward Resources lets Resource People in on her career highlights and offers advice for other aspiring resource women.

Your resources career has spanned 15 years and included director, leadership and operational roles. What have been some highlights? I think there have been a number of successes across different parts of the resources sector that I would consider professional highlights which include project development, community engagement and operational successes. For example, working at WMC Resources and BHP Billiton Nickel West to help bring projects to fruition and being involved in takeovers. Specifically, leading the West Australian Government delegation to China to mark the 20th anniversary of the WMC/Jinchuan Joint Venture stands out as a highlight. I was also co-founder of Cresta Resources, which went on to successfully complete the private acquisition and subsequent sale of the Cerro Colorado project in Guatemala. The opportunities to work internationally in places such as Central America and West Africa have been a great achievement for me. There have also been many instances of what I would call personal career highlights. If I had to pick one defining moment it would be being head-hunted to restart the corporate affairs division for WMC Resources – I had wanted to work for that company for a long time, so when

The opportunities to work internationally in places such as Central America and West Africa have been a great achievement for me.

Bronwyn Barnes

building resilience is one of the most valuable tools that a leader can possess. When the economy is good and the markets are booming it’s easy to talk about great leaders and what great leadership entails, but good leadership is really put to the test when challenges are presented. Commit to that 30 minutes of exercise in the morning, make sure you’re eating nourishing food and get enough rest – all of these things are what arms us with the strength, the capacity and the resilience to push forward when we are challenged in our professional lives.

What are you focusing on now? I have a number of roles which are keeping me busy including being chairman of Windward Resources. The company recently reported some very exciting results from its Western Margin prospect, which is 4km from Sirius Resources’ NovaBollinger deposit. This is fantastic news for us and the company is a hive of activity. What advice do you have for I also have a number of directorship women aspiring to leadership and committee member roles with positions in the industry? organisations that are not directly linked My number one piece of advice would to the mining industry. These represent be to network – I am fortunate to have my specific areas of interest; for example a strong network of both personal and I’m on the Curtin Business School professional supporters who have been Advisory Council. I believe education is there for me throughout my career to date. the foundation for success. My second piece of advice would be I am also a director of the Martu Trust, to act with bravery. In my experience which reflects my passion for building some women tend to hesitate when being sustainable communities and continual offered opportunities because they doubt engagement. Working in the mining sector their abilities. Instead, they need to be helps you realise how important it is to be in brave and back themselves – if someone touch with all your stakeholders, including is offering you an opportunity or asking the communities in which you work. you to do a job they’re doing so because Bronwyn won the ‘Outstanding Woman in they believe you have the ability to do it. Resources’ category at the 2015 Chamber My third piece of advice is to build of Commerce and Energy WA Women in resilience. Throughout the years I’ve learnt Resources Awards. RP I got that job I was elated. Other highlights include receiving my first role as the managing director of an ASX-listed company, my first directorship position of an ASX-listed company and being appointed chair of Windward Resources.

www.amma.org.au | WINTER 2015 | RESOURCEPEOPLE

DIVERSITY

The Aurizon Male Champions of Change

AURIZON CHAMPIONS

to drive diversity

A group of male Aurizon employees have joined forces to drive greater gender diversity with the launch of the Aurizon ‘Male Champions of Change’.

TWENTY-THREE AURIZON employees are seeking to diversify the rail freight company’s traditionally male, blue-collar workforce by bringing men from all its layers, functions and locations to boost the employer’s female participation well above the current 14.4 per cent. One such member of Aurizon’s Male Champions of Change group is Jilalan Rail Yard maintenance manager Mark Burns. Leading a team of 120 maintenance staff who maintain, repair and overhaul wagons and locomotives that haul coal to the ports in Central Queensland, Burns sees diversity as key to organisational success. “I have seen the organisational transformation and change that can occur when we introduce different approaches and thinking. The introduction of diversity makes workplaces perform better,” Burns says. “My objective is to make practical changes now in my part of the business…

and be a part of communicating the journey and successes with the wider business and community. “The challenge is to find real ways to introduce difference, nurture an inclusive environment and then let the successes drive themselves.” Taking inspiration from Aurizon’s managing director and CEO Lance Hockridge, who is chair of the wider ASXfocused Queensland Male Champions of Change, the group’s mandate is to advocate for and take action to advance gender equality throughout Aurizon. Hockridge has set a target of 30 per cent female representation by 2019. “If we treat inequality equally, then we will get what we’ve always had,” he says. “With 86 per cent male representation in Aurizon, the majority of the decision makers are men when it comes to recruitment, promotion, development and project opportunities.

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“This is not a women’s issue, it’s a leadership issue. This is why Aurizon’s Male Champions of Change group has a vital role to play.” In March, Aurizon held its third annual Women’s Conference that brought together 350 women from across its Australian operations to hear presentations and attend workshops on topics the importance of career sponsors and emotional intelligence. RP

This is not a women’s issue, it’s a leadership issue. This is why Aurizon’s Male Champions of Change group has a vital role to play.

DIVERSITY

ANA STEPS INTO CEOâ&#x20AC;&#x2122;S SHOES

Ana Bran

TO HELP ACHIEVE a target of 30 per cent women by 2019, Aurizon has a number of robust diversity programs aimed at providing professional development and leadership training for women employees. Queensland-based Ana Bran, who leads a team of 150 Aurizon employees to transport coal from the various mine to port combinations in the Blackwater and Moura systems, was one deserving woman chosen to take part in the Aurizon CEO Mentor Program. Bran spent six months working as associate executive officer, shadowing CEO Lance Hockridge and gaining valuable insight into what it takes to run a Top 50 ASX-listed company. During the placement, Bran provided comprehensive support in the strategic planning for crisis management, investor meetings and relationship development with significant Asianbased stakeholders. Following completion of the Aurizon CEO Mentor Program in January, Bran was promoted to manager of the Redbank Workshops. She has also completed her executive MBA and travelled to Thailand in February to compete in an international Business Plan competition. RP

RESOURCEPEOPLE | WINTER 2015 | www.amma.org.au

DIVERSITY

MENTOR REVELS IN

learning experience While the benefits of mentoring for up-and-coming professional women are widely celebrated, less documented is the positive learning experience the relationship can have on even the most experienced mentor.

BELINDA STUCKENBERG SIGNED on as a mentor in the Australian Women in Resources Alliance (AWRA) e-Mentoring Program to help other women in the mining, oil and gas sectors. She was surprised, however, to find that she too developed new skills. Having spent more than 20 years in the resource industry working extensively throughout South Africa, Mozambique, Canada and Australia, where she now works as a safety improvement manager with BHP Billiton, Stuckenberg felt it was time to give back. “I have always found value in having a mentor in the workplace, which is typically one of our senior leaders who I can use to bounce ideas off and get some coaching and advice,” she says of her own experience as a mentee. “What I bring to the role of mentor is the experience of working in different environments and different cultures, and I’m absolutely able to draw on those experiences to provide something valuable to the mentee.” That value, Stuckenberg believes, extends beyond the sage advice of an accomplished resource industry professional, to encompass more general woman-to-woman career guidance. “I think that we, as women, experience the workplace differently, and it depends on the organisation and on the culture,” she explains. “When I began my working career, I remember there was definitely a glass ceiling and you had to work a lot harder than your male colleagues to make any progress. “That’s changed today and some of the more progressive organisations recognise the need to have accelerator programs in place to enable women to reach those higher positions.

Belinda Stuckenberg

would never have ordinarily used.” While acknowledging the positive influence she has had on her mentee, Stuckenberg also speaks fondly of the The experience has grown my reciprocal learning experience. “I was apprehensive when I started skills around active listening, out, wondering if I am going to say the as it’s important to really right things and know the right things, understand your mentee. but I think in the first instance, you just need to have the confidence to get in there,” she says. “My experience, however, has equipped me with a good overview of the “The experience has grown my skills industry and how things works, especially around active listening, as it’s important to as a woman, which enables me to give really understand your mentee, what they something back and support other women want out of the program, and then how to in this industry.” provide that advice and coaching so they BHP Billiton is renowned for supporting can get some good results. its female workforce with family“I’ve learned that I can help others, and friendly programs to encourage career I’ve started to reflect, bringing some of progression. Through personal mentoring, the issues I’ve discussed with my mentee however, Stuckenberg is better placed to back to my own team, applying some help women navigate the career ladder. of the skills I’ve developed through the “One of the benefits of having a mentor program to play the role of a coach more outside of your organisation is they are often for my colleagues. “Participating in the program has given removed from your environment and able me the confidence and energy to do more, to reflect and provide advice on how to and I intend to take on another mentee. achieve positive outcomes,” she says. “It will be a different experience again, “This process has definitely raised my mentee’s confidence and enabled her but we will embark on that learning journey together.” RP to try different workplace strategies she

www.amma.org.au | WINTER 2015 | RESOURCEPEOPLE

DIVERSITY

GOLDEN OPPORTUNITY

for Indigenous students Two Indigenous students from Western Australia’s Murdoch University have received valuable assistance toward realising their career goals thanks to Newmont and Fortescue Metals Group.

JENNA WOOD, A Wardandi Noongar woman from the Bundbury region was recently announced as the first recipient of five annual scholarships sponsored by Australia’s largest producing gold mine, Newmont Boddington Gold. The Newmont Kalyagool Kadadjiny Scholarships, provide $24,000 over three years to cover course fees and study materials. Studying community development, politics and international studies, Wood plans to pursue a career in social investment and community relations in the mining industry. “My passion for equality is what drives my commitment to my studies and career,” says Wood who is also chair of notfor-profit Save the Children’s youth leadership roundtable. “I believe that mining companies have a great opportunity to improve the life outcomes of disadvantaged people, most significantly through community engagement, recruitment and social investment.” Newmont Boddington Gold general manager Darren Hall says the launch of the scholarships mark an important milestone in the organisation’s commitment to diversity and inclusion. “In the local Noongar language kalyagool kadadjiny means ‘always thinking, listening and learning’ and not only reflects the intent of the scholarships, but also Newmont’s approach to diversity and inclusion across the site,” Hall says. Equally optimistic about her future mining sector career is fellow Murdoch University business student, Paula Hicks. A Banyjima woman originally from Geraldton, Hicks recently had the enviable chance to shadow Fortescue chief executive officer Nev Power for a day after winning GenerationOne’s CEO for a Day competition. Currently in her first year of a Bachelor of Business in Management, Hicks has already reached middlemanagement level, but has even bigger career goals. “It is my dream to become Fortescue’s first female Aboriginal senior executive. This is a company that is making a difference to Western Australian and Aboriginal people’s lives and I want to play a major role in that,” she says. “I know I have what it takes and this opportunity has given me even more motivation to achieve my goal. Being CEO for a day under the guidance of Nev Power was an amazing and unforgettable experience.” Power says the initiative gave him the opportunity to share advice he has learnt throughout his career.

Scholarship winner Jenna Wood with Newmont Boddington Gold’s Javier Brodalka

Murdoch University student Paula Hicks with Fortescue CEO Nev Power

“I am very proud to be involved in GenerationOne’s CEO for a Day initiative,” he says. “At Fortescue we create opportunities for Aboriginal people by offering a hand up and not a hand out. It’s the same principle on which GenerationOne’s CEO for a Day campaign is founded, and together we’re helping empower young and aspiring Aboriginal people to challenge the status quo and take positive steps towards becoming our future business leaders.” RP

RESOURCEPEOPLE | WINTER 2015 | www.amma.org.au

ECONOMY & FINANCE

IRON ORE:

A trade in transition As the price of iron ore crashed below the $US50 per tonne mark in April, debate intensified around market saturation and the prospects of smaller miners. This extract from a recent Resource Super discussion paper outlines the state of play for Australia’s iron ore trade.

Figure 2: Value and Volume of Iron Ore Exports 1000

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Value of Iron Ore Exports ($ Billions)

Volume of Iron Exports (Millions of Tonnes)

IF THERE WAS one word to describe the iron ore trade until 2005, it would be consistent. Until then, the price of one tonne of iron ore almost constantly hovered in the tight range of $US20$US25, a stability rarely seen in commodity markets. Iron ore accounted for approximately 3 per cent of the total value of Australia’s exports, and mining itself was largely viewed as a remnant of the ‘old economy’. Fast forward to 2015 and the world of iron ore mining bears little resemblance to its former self. Since 2005, iron ore volumes and the value of iron ore exports have increased by 1,033 per cent and 242 per cent, respectively (Figure 2). Iron ore now makes up roughly a quarter of the value of the nation’s exports. However, the 65 per cent decline in the price of iron ore from its 2011 peak of $US180 a tonne to $US50 a tonne has brought discussion of the commodity’s future to the fore. The stratified nature of the supply side, in which four producers account for 68 per cent of global seaborne iron ore trade, – Vale 26 per cent, Rio Tinto 17 per cent, BHP Billiton 15 per cent and Fortescue 10 per cent – allows individual suppliers to affect the prevailing iron ore price to a greater extent than in other commodities. BHP and Rio Tinto are making use of their low break-even costs, estimated to be $US51 and $US42 per tonne respectively, to lift volumes in order to make up for the dramatic price slide. Many commentators have suggested a more perverse incentive behind the move – the pair wishes to put higher-cost producers out of business. 2015 should see an average iron ore

100 0

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Source: ABS, BREE *2014 - 2019 is a forecasted outcome

price in the range of$USD58-$USD70, according to forecasts from Citi, JP Morgan, UBS, ANZ and other private sector analysts. The federal government’s Department of Industry is forecasting an average price of $USD63 for the year. This price range puts the majority of Australia’s smaller iron ore miners, who have an average breakeven cost of around $USD65, in the red. However, the ongoing decline in the Australian dollar will provide some cushioning to these miners. Indeed, Goldman Sachs estimates the market will now have to absorb a surplus of 110 million tonnes in 2015, up by 50 million from the previous year, due to the major players’ decision to increase production. Export volumes will continue to increase in coming years, with the Bureau of Resources and Energy Economics (BREE) forecasting 2019 volumes to increase by more than 25 per cent on 2014 levels (Figure 2). India, which was formerly the third largest exporter of iron ore, will be a source of short-to-medium term relief.

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Court-imposed bans on mining in the states of Karnataka and Goa, along with mine closures in Jharkhand and Odisha, has generated expectations the country will need to import about 10-15 million tonnes of iron ore in 2014-15, up from 0.37 million tonnes only a year earlier. Demand from China, which accounts for two-thirds of the global seaborne iron ore trade, has moderated due to a slowing of Chinese steel production growth. That is not to say China is reducing its iron ore imports. In fact, BREE forecasts China’s iron ore imports will actually increase by 3.7 per cent in 2015. China’s long-term demand fundamentals remain robust. It is estimated that by 2025, China will make up 80 per cent of the seaborne iron ore trade, and no one is set to benefit more than Australia’s iron ore miners. Resource Super is a provider of superannuation for people working in the resources sector. The full discussion paper can be found at: www.resourcesuper.com.au. RP

ECONOMY & FINANCE

ENERGY DEMAND

to shift by 2035 NON-OECD COUNTRIES will be the sole driving force behind a 0.8 per cent increase in demand for oil until 2035, while oil consumption in the OECD will have fallen to levels not seen since 1986, according to BP economists. The BP Energy Outlook 2035: Growing Gas and Shifting Flows forecasts the ‘most likely’ trajectory of global energy supply and demand to inform the decisions of industry and governments. Speaking from London at the launch of the report, BP chief economist Spencer Dale says it is important to look beyond the recent fall in oil prices. “After three years of high, deceptively steady oil prices, the fall of recent months is a stark reminder

the norm in energy markets is one of continuous change,” Dale says. “It is important we look through short term volatility to identify those longer term trends in supply and demand that are likely to shape the energy sector in the next 20 years and so help inform the strategic choices facing the industry and policy makers alike.” Globally, BP sees natural gas as the fastest growing energy source, increasing by 1.9 per cent every year until 2035. “Production of LNG will show dramatic growth during the rest of this decade, with supply growing almost 8 per cent a year through the period to 2020. This also means by 2035 LNG will have

overtaken pipelines as the dominant form of traded gas,” the report states. LNG supply will grow by 48 billion cubic feet per day (Bcf/d) by 2035 with Australia (16 Bcf/d) and the US (14 Bcf/d) each contributing around a third of the increase. Australia is expected to overtake Qatar as the leading supplier of LNG, with a market share of 24 per cent, followed by Africa at 21 per cent and the US at 18 per cent. While demand from China led to coal being the fastest growing fossil fuel in the past decade, slowing industrialisation coupled with environmental policies will see it be the slowest growing fossil fuel in the next 20 years. RP

RESOURCEPEOPLE | WINTER 2015 | www.amma.org.au

ECONOMY & FINANCE

REPORTS OUTLINE MAJOR

project shortfall

Two separate reports have outlined the need to secure further investment in new major projects.

AS INVESTORS TIGHTEN their belts on major mining, energy and infrastructure projects, the ANZ Bank predicts capital expenditure will drop by more than 60 per cent nationally during the next three years. In its Australian Major Project Update 2015 report, ANZ analyses developments requiring at least $100 million of investment and estimates aggregate major projects spending in these sectors will fall to around $32 billion in 2017 from $88bn last year. The report indicates national LNG capital expenditure (excluding operational spending) is forecast to decline to less than $5bn in 2017 after hitting around $55bn in 2013. The report points out that with fewer mining sector projects in the pipeline, committed capital expenditure will remain below $5bn annually. Coupled with the impact of lower commodity prices and the transition of large-scale projects from construction to production, Western Australia and Queensland in particular will need to fill the shortfall with new non-mining infrastructure investments. However, ANZ chief economist Warren Hogan expects government-funded infrastructure spending to remain subdued in the near term, with activity picking up in 2017, mostly in New South Wales. “While it is widely known capital expenditure in the resources industry will fall sharply in coming years as major projects transition into production and also reflecting the fall in commodity prices, it is less well understood the expected strengthening in public infrastructure investment will only provide a very modest offset,” Hogan says. The similarly titled 2015 Major Projects Report, released by the Queensland Major Contractors Association and Construction Skills Queensland reiterated

KCGM’s Super Pit mine, Kagloorlie WA

the national findings. Queensland engineering construction for major engineering construction projects fell 22 per cent in 2013/14, from a record $18bn in 2012/13 to $14.7 bn. In line with this, workforce demand fell 23 per cent in 2013/14, from a record 23,500 positions in 2012/13 to 18,100 positions. Engineering construction activity in the state is forecast to fall a further 55 per cent in the next two years, however, an upswing could begin in 2016/17 and continue through 2018/19. “Resources projects are still important in generating major project work. Mining investment, though lower, will still drive more than half of all major project work done through the forecast period, with (albeit risky) projects such as the Galilee Basin and LNG projects key drivers,” the report states.”

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Queensland Major Contractors Association executive committee member Iain Ward says there is a lot that should be done to ensure the state’s economy is productive and globally competitive. “Governments and industry need to work together to tackle productivity and competitiveness pressures facing major project development in Queensland. This includes sensible plans and processes that ensure public infrastructure is delivered in a timely and efficient manner to meet the needs of a growing state,” Ward says. “From an industry perspective contractors must exhibit flexibility and innovation to meet demand. Further, appropriate investment should be made now to ensure that skills and competencies are developed and retained in the construction industry to meet the demands of future investment cycles.” RP

ECONOMY & FINANCE

AUSTRALIA LESS COMPETITIVE

than Russia, survey shows RESOURCE COMPANIES ARE more likely to invest in Russia, Nicaragua and the Ivory Coast than most Australian states and territories, according to the Fraser Institute’s latest survey of mining executives around the world. The annual Survey of Mining Companies: 2014 assesses how resource industry executives perceive a range of countries and regions in terms of investment attractiveness. Western Australia, which had formerly taken the top spot in the survey as the most attractive investment destination, was displaced by Finland, falling instead to fifth place behind Nevada, US, and the Canadian

provinces of Saskatchewan and Manitoba. According to the survey, regulatory burden and a combative workplace relations system played a key role in executive perceptions that deterred potential investment. A minimum of 23 per cent of survey respondents said labour regulations and work disruptions reduced investment attractiveness for all Australian states and territories, with Queensland emerging as the most challenging in this field at 34 per cent. National resource employer group AMMA has long advocated for a policy framework that improves Australia’s

attractiveness as an investment destination and executive director Scott Barklamb says the latest data from the Fraser Institute highlights the need for reform. “Australia’s declining investment pipeline of resource industry projects should be evidence enough of our competitive challenges, but this report shows how dire the situation really is for Australia’s mining, oil and gas future,” Barklamb says. “Clearly, Australia needs to improve on its perception as a place to invest and do business. Critical to this is a more competitive policy platform including in areas such as taxation, project approval processes and workplace relations.” RP

TAX CREDITS TO boost exploration NEW INCENTIVES FOR greenfields mineral exploration will soon be available to junior mining companies after the Senate passed a bill to establish the Exploration Development Incentive, effective from July 1, 2015. Passed as part of the Tax and Superannuation Laws Amendment Bill 2014, the legislation facilitates access to the Exploration Development Incentive for Australian-resident investors, entitling them to potential tax offsets and additional franking credits. Available over three years and capped at $100 million, the incentive will enable exploration companies to convert a portion of their tax loss to exploration credits, which may be provided to shareholders to entitle them to an equivalent tax benefit. The bill brings into legislation some of the 22 recommendations made by the Productivity Commission Inquiry

into Mineral and Energy Resource Exploration’s report, carried out to respond to declining exploration expenditure. Association of Mining and Exploration Companies (AMEC) chief Simon Bennison said three recent reports had highlighted the impact of a challenging business environment for resource industry explorers. “In the Fraser Institute’s Annual Survey of Mining Companies for 2014, all Australian jurisdictions except for South Australia decreased on the Investment Attractiveness Index, and in 2014, 47 per cent of capital raised on the Australian Securities Exchange for mineral exploration was invested globally,” Bennison says. “SNL Metals & Mining’s World Exploration Trends 2015 reported a 26 per cent decrease in worldwide nonferrous metals exploration

budgets in 2014, stemming from investor wariness of the junior sector and producers scaling back their exploration spending. “While there was a small increase in mineral exploration expenditure and metres drilled on new deposits in the Mineral and Petroleum Exploration, Australia December 2014 quarter results from the Australian Bureau of Statistics, there is still a long way to go to restore equity between investments on new compared with existing deposits.” The Exploration Development Incentive has been widely welcomed as a step towards reinvigorating exploration activity in Australia. The Incentive is predicted to underpin up to $350 million in eligible exploration expenditure, creating around $1 billion in subsequent economic activity. RP

RESOURCEPEOPLE | WINTER 2015 | www.amma.org.au

EVENTS 54

EVENTS

MAY

JULY

APPEA CONFERENCE & EXHIBITION

AUSTRALIAN URANIUM CONFERENCE

AMMA CEO Steve Knott will be one of the many resource industry leaders speaking at the 2015 APPEA Conference. Mr Knott will discuss the role of workplace relations reform in increasing productivity and keeping the Australian resource industry competitive. Held at the Melbourne Convention and Exhibition Centre. More info at: www.appeaconference.com.au

While negative sentiment and low prices have made for a challenging few years for the uranium sector, many nuclear reactors are coming back on line and new agreements to combat greenhouse gas emissions which involve the increasing use of nuclear energy point to recovery. Now in its eleventh year, this conference will explore opportunities in both the uranium and rare earth industries. Held at the Hyatt Regency, Perth. More info at: www.verticalevents.com.au/uranium2015

Sun 17 – Wed 20

Wed 15 – Thurs 16

Tues 19 – Wed 20 AUSTMINE 2015

Mon 20 – Wed 22

Under the theme Transforming Mining: Technology Innovation, Austmine 2015 will explore the new strategies, solutions and ideas that will rule the future of the resource industry. Held at the Royal International Convention Centre, Brisbane. More info at: www.austmine2015.com

DEVELOPING NORTHERN AUSTRALIA CONFERENCE

JUNE

Tues 9 – Wed 10 THE AUSIMM INTERNATIONAL URANIUM CONFERENCE 2015

Now in its 10th consecutive year, the AusIMM International Uranium Conference 2015 will include a two-day technical program, networking opportunities, technical tours to South Australian sites and much more. Held at the Adelaide Convention Centre. More info at: www.uranium2015.ausimm.com.au

Tues 16 – Wed 17 AUSTRALIAN COPPER CONFERENCE 2015

The Australian Copper Conference provides one of the few corporate events dedicated solely to the copper environment. The conference brings together Australia’s leading players in the copper mining sector with an audience of industry experts, and retail and institutional investors. Held at Hilton Hotel, Brisbane. More info at: www.verticalevents.com.au/copper2015

Thurs 23 – Fri 24 SECOND ANNUAL OFFSHORE VESSELS

Australia is poised to become the world’s largest exporter of LNG, fuelling massive demand for offshore support vessels. This conference will focus on providing practical examples of successful OSV operational performance and technical capacity. Held at the Novotel Langley, Perth. More info at: www.informa.com.au

Mon 29 – Tues 30 SAFETY AND HEALTH IN RESOURCES

Providing a forum for discussion of the safety and health issues facing the resource industry, this conference will cover issues such as the Western Australian resource sector’s safety regulatory regime, accident reduction, safety leadership, and employee health and wellbeing programs. Held at the Fraser Suites, Perth. More info at: www.informa.com.a

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This conference will cover the critical issues facing the area north of the Tropic of Capricorn spanning Western Australia, the Northern Territory and Queensland. Meeting the demand for skilled labour whilst tackling regional unemployment will be addressed as will management, ownership and access to national resources. Held at Rydges Southbank Townsville. More info at: www.northaust.org.au

EVENTS

AUGUST

Thurs 6 – Fri 7 AMMA RESOURCE PEOPLE NATIONAL CONFERENCE

The 2015 AMMA Resource People National Conference is the industry’s leading forum where evolving workforce challenges are unravelled by top executives, professionals and thought-leaders throughout the mining, oil and gas sectors. The theme for 2015 is Engagement in the resource industry as it transforms from an era of construction into the long-term production phase. Confirmed speakers include Chevron general manager of human resources, Kaye Butler; Roy Hill CEO, Barry Fitzgerald; Transfield Services chairman, Diane Smith-Gander; Boral executive general manager of human resources, Bill Fisher; and Gold Fields Australia vice president and head of human resources, Wimpie du Toit. With many more key political figures, industry executive leaders and expert voices in workforce matters to be announced in the coming weeks, this is one resource industry event those involved in the ‘people’ side of the industry won’t want to miss. Hosted by national resource industry employer group AMMA, the conference also features a special industry gala dinner to celebrate the 2015 AMMA Industry Awards winners and their achievements across a range of workforce areas. More info at: www.nationalconference.amma.org.au

Barry Fitzgerald

Diane Smith-Gander Transfield Services’s Diane Smith-Gander and Roy Hill’s Barry Fitzgerald will speak at the AMMA Resource People National Conference

RESOURCEPEOPLE | WINTER 2015 | www.amma.org.au

BUSINESS PARTNER DIRECTORY