AUSTMINE 2007Perth, WA

13 February, 2007

PROVIDING THE SKILLS FOR THE NEXT GENERATION OF MINING

TECHNOLOGY.

Don Larkin FAusIMM

Chief Executive Officer

The AusIMM

PROVIDING THE SKILLS FOR THE PROVIDING THE SKILLS FOR THE NEXT GENERATION OF MINING NEXT GENERATION OF MINING

TECHNOLOGY.TECHNOLOGY.

• Defining the MTS sector and skills needs.

• Vision 2020 – impacts on attraction and retention.

• Role of employers / role of Governments.

• Last words.

BackgroundBackground• Mining and its related activities are knowledge intensive

with continuing potential to deliver prosperity for the longer term with the right settings.

• Productivity Commission Report on Science and Innovation acknowledged the importance of R&D to the success of the industry.

• Mining also underpins the competitiveness of a number of associated services and technology industries located in Australia in a global economy that demands specialisation.

• “Now here is a shock manufacturing exporters to have a future”

THE MTS SECTORTHE MTS SECTOR

• ABARE Surveys – 2002 and 2004 (published April 2005).

• Gross Sales Revenue 2003/04 - $4.75b.

• Gross Export Sales revenue 2003/04 - $1.11b (est. 2004/05 – $1.24b.)

• Target MTSAA of $6.6b export sales by 2010.

• Only 52% earning more than $1m in gross sales.

• Only 26% earning more that $1m in gross export sales.

• 16,800 employees 2003/04.

Source: ABARE (2004)

THE MTS SECTORTHE MTS SECTOR(continued)(continued)

• 53% of businesses employ less than ten people for MTS-related work.

• 63% of businesses undertaking R&D.• 69.4% completed tertiary qualifications (20%

trade or VET)• 86.5% undertaking further development to

improve.• 24% company-specific development (largest

category)Source: ABARE (2004)

THE MTS SECTORTHE MTS SECTOROCCUPATIONSOCCUPATIONS

• Occupations required to deal with current job shortages:– 62% Engineers (including Metallurgists)– 49% Geologists– 46% Computer Science

• Occupations required to deal with forecast job shortages:– 66% Engineers (incl. Metallurgists)– 52% Computer Science– 50% Geologists– 50% Managers and Administrators.

• MTS expertise according to industry categories:– 73% Technical Services– 50% Exploration and other mining services.

Source: ABARE (2004)

MTSAA OUTCOMES 2006MTSAA OUTCOMES 2006EDUCATIONEDUCATION

• Increased awareness of sector and its skills needs.

• Due to size and diversity of needs, cannot be viewed in isolation.

• Identified skills in demand.• Led to inclusion of sector in existing and new

education and careers initiatives (MCA, MTEC, CMEWA, AusIMM, DEST etc).

• Trades and VET – RIISC Survey and initiatives.

OECD/KISA REPORTOECD/KISA REPORTInnovation and disciplines requiredInnovation and disciplines required

• Science in the new discovery.• Technology in the process and machinery to put

it into production.• Engineering in the design work that makes it

happen.• Therefore, access to a pool of university-trained

science, engineering and technology graduates is essential to sustainability.

• Engineers, metallurgists and other scientists, managers and administrators are essential.

OECD KISA REPORTOECD KISA REPORTStaff rolesStaff roles

• All case study firms employed expert technical staff who acted as the main gatekeepers for new information coming into the firm, and were responsible for much of the environmental scanning. Ausenco had the most formal of these arrangements, but all firms relied on technically-qualified engineers, geologists and/or surveyors for these roles.

• The firms were in direct contact with customers and had largely informal systems for obtaining customer feedback. All case study firms also have mechanisms in place to capture ideas suggested by staff, and to ensure that customer feedback heard by staff is passed on to management.

A VISION FOR 2020

The Changing Workplace

• Focus on asset utilisation and balance sheet management

• Workplace flexibility driven by structural reform • Industrial, rule driven logic dominates• Removing the barriers for women

The ChangingWorld

The ChangingMindset

Retirement disappearsNew generation of old workers

Three generations in the workforce

• Steadily shortening working life

• Baby Boomers dominate workforce

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The New Labour Market

China and India emerge as massive economies

Offshoring takes off, whole economy affected

• 1997 crash puts Asia on back burner

• Emergence of low cost economies

The New Global Economic Order

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Focus on human optimisation

Workplace flexibility becomes key to attracting and retaining staffPeople and creativity logic emergesTaking accountability for outcomes for women

People, Flexibility, Creativity

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The Expert Steward

• Obsession with shareholder value

• 'Cult' of the CEO

• Generalists dominate

• Dramatic remuneration increases

Serving all stakeholders

'Cult' of the top team

Experts dominate

Managing substantial personal wealth>

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Exhibit 1Exhibit 1

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TRANSITION IN LEADERSHIP PROFILEExhibit 2Exhibit 2

• Deep knowledge of the business

• Single company career

• General management skills, rather than deep expertise

• Moves between companies and industries

• High order communication and collegiate management skills

• Deep industry or subject expertise

• Holds senior role for substantial period

Job For Life

Cross Industry Hire

LeaderExpert

Overall Skill Level

1950 1980 2000 2005 2020

THE NEW WORKING LIFE PROFILE

Working Life

2000 2020

Income

AgePension

Income

Age

40-45 yearsworking

15-20 yearsretired

25-30 yearsworking

25-30 yearsstill working

Working Life

Exhibit 5Exhibit 5

RESPONSES TO – A VISION FOR 2020

THE CHANGING WORLD

The New Labour Market

Retirement disappears ▪ Career planning beyond 50▪ Changes to superannuation▪ Improving educational attainment▪ Knowledge management

New generationof older workers ▪ Ageing workforce

benchmarking▪ Lifelong learning▪ See flexibility below

RESPONSES TO – A VISION FOR 2020 (continued)

THE CHANGING WORLD

The New Labour Market

Three generations in the ▪ Understanding and generation

workplace specific management skills▪ Communication and collegiate skills▪ Empathy▪ Satisfaction = reality/expectations

RESPONSES TO – A VISION FOR 2020 (continued)

THE CHANGING WORLD

The New Global Economic Order

China and India emerge as ▪ Multiple culture, language and

massive economies time zones▪ Promote global opportunities▪ Negotiation and cultural sensitivity

Offshoring takes off, whole ▪ Managing spatially dispersed

economy affected networks, plants, attitudes and suppliers▪ Manage large, complex adaptive systems of businesses▪ Around the clock access

RESPONSES TO – A VISION FOR 2020 (continued)

THE CHANGING WORKPLACE

Focus on human ▪ Human resources vital component optimisation of business planning, budgeting,

risk management

▪ Talent, knowledge management, mission critical employees

▪ Graduate programs, CPD, mentoring, succession planning, etc.

Workplace flexibility ▪ Individual contractsbecomes key to ▪ Flexible environments and terms attracting and retaining and conditions of employmentstaff ▪ Telecommuting, flexi time, rosters

▪ Part time, parental leave, career break, etc.

▪ Google environment

RESPONSES TO – A VISION FOR 2020 (continued)

THE CHANGING WORKPLACE

People and creativity ▪ Encourage diversity and creativity

logic emerges ▪ Indigenous and new sources of labour

▪ Outsourcing – contract management

Taking accountability ▪ Improving child care facilities

for outcomes for ▪ Improving health

women ▪ Undertaking welfare reform▪ All the above regarding flexibility

RESPONSES TO – A VISION FOR 2020 (continued)

THE CHANGING MINDSET

Servicing all ▪ Higher order communication skills

stakeholders and transparency▪ Emphasis on social interactions/

complex interactions

Cult of the top team ▪ Team skills – leading teams

▪ Communication/emotional intelligence skills▪ Recruitment, delegation and motivation

RESPONSES TO – A VISION FOR 2020 (continued)

THE CHANGING MINDSET

Experts dominate ▪ Building and maintaining personal

expertise and deep industry or systems expertise▪ Use of independent specialists/ contractors▪ CPD

Managing substantial ▪ Financial/health/superannuation

wealth advice ▪ Work and life choices

▪ Extent of working life/when to peak

IN SUMMARY LEADERSHIP CHALLENGES

• Doing more with less• People leadership and management• Reducing uncertainty• Understanding and addressing demographic destiny• Mission critical employees – management of talent and

knowledge• Managing creativity and embracing diversity• Emphasis on complex interactions• Forecasting and planning

Not just a commodity

ROLE OF GOVERNMENTSROLE OF GOVERNMENTS

• Promoting science and engineering careers.• Improving science and engineering teaching.• Acknowledging disciplines of national importance.• Funding for science and engineering tertiary education.• CASR funding for MEA.• Research quality framework – implement.• CRCs and CSIRO support, CODES and MDU.• SME participation in innovation process.• R&D tax concession for commercialisation of step

change technologies.• Support for embedded researchers.• Continued support MTSAA and AUSTMINE.

LAST WORDSLAST WORDS

• Mining is a knowledge intense industry, R&D, innovation essential.

• Need to do more with less.

• Human resources is more than a commodity.

• Retention of skills starts with attraction as satisfaction = Reality

Experience

www.ausimm.com