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  • AUSTRALIAN VENTURE CONSULTANTS PTY LTD

    1

    Western Australian Resources Industry

    Construction to Operations Phase

    Workforce Study

    An investigation into the workforce dynamics and implications for skills,

    training and education as major projects transition from a construction

    phase to an operational phase

    June 2014

  • AUSTRALIAN VENTURE CONSULTANTS PTY LTD

    2

    CONTENTS

    Executive Summary ................................................................................................................................... 5

    Background and Purpose ...................................................................................................................... 10

    Background ........................................................................................................................................... 10

    Study Limitations ................................................................................................................................... 12

    Current Resource Project Construction Pipeline and Workforce Estimates ................................. 14

    Transition from Construction to Operations......................................................................................... 16

    Project Development Cycle .............................................................................................................. 16

    Impact on Resources Company Workforce ................................................................................... 19

    Impact on the Construction Workforce ........................................................................................... 21

    Resources Project Construction Workforce Dynamics ..................................................................... 24

    Demand and Supply ........................................................................................................................... 24

    Nature of the Resources Construction Workforce ......................................................................... 25

    Relationship between the Mining and Construction Industry Workforces .................................... 35

    Revenue and Employment ................................................................................................................ 35

    Demographic Comparison ................................................................................................................ 43

    Education and Training Comparison ................................................................................................ 45

    Key Occupations .................................................................................................................................. 50

    Assessment of Workforce Commonality .......................................................................................... 53

    Lessons from the Recent Construction Phase..................................................................................... 55

    Implications for Skills, Training and Education .................................................................................... 57

    Conclusions ............................................................................................................................................... 58

    Appendix 1 Overview of Western Australian Resources Industry Construction Projects ......... 59

    Oil and Gas Projects ............................................................................................................................ 59

    Iron Ore Projects ................................................................................................................................... 61

    Ammonium Nitrate, Nitrate and Urea Projects ............................................................................... 64

    Gold Projects ......................................................................................................................................... 64

    Resources Infrastructure Projects ....................................................................................................... 65

    Appendix 2: Construction and Operational Workforce Estimate .................................................. 67

    Appendix 3: 2012-13 Submissions to Infrastructure Australia ............................................................ 69

  • AUSTRALIAN VENTURE CONSULTANTS PTY LTD

    3

    Disclosure and Disclaimer

    This document has been prepared by Australian Venture Consultants Pty Ltd (ACN: 101 195 699) (AVC). AVC

    has been commissioned to prepare this publication by the Resources Industry Training Council (RITC) and has

    received a fee from the RITC for its preparation.

    While the information contained in this publication has been prepared by AVC with all reasonable care from sources

    that AVC believes to be reliable, no responsibility or liability is accepted from AVC for any errors, omissions or

    misstatements however caused. Any opinions or recommendations reflect the judgment and assumptions of AVC

    as at the date of the document and may change without notice. AVC, its officers, agents and employees exclude

    all liability whatsoever, in negligence or otherwise, for any loss or damage relating to this document to the full extent

    permitted by law. Any opinion contained in this publication is unsolicited general information only. AVC is not aware

    that any recipient intends to rely on this document or of the manner in which a recipient intends to use it. In preparing

    this information it is not possible to take into consideration the information or opinion needs of any individual

    recipient. Recipients should conduct their own research into the issues discussed in this document before acting

    on any recommendation.

  • AUSTRALIAN VENTURE CONSULTANTS PTY LTD

    4

    Interviewees

    While this study was based primarily on the review of published data and literature, the

    following experts provided key input and guidance to the study.

    Andrew Blitz, Business Development Manager, Western Australian Local Government

    Association

    John Galvin, Executive General Manager, Georgiou Group

    Bindi Gove, Government and External Affairs Manager, BHP Billiton Petroleum

    Kiersten Gregg, General Manager Human Resources, Rio Tinto Iron Ore

    Kapila Karunaratna, GM Technical, Mitsubishi Development

    John Phillips, Executive Manager Workplace Business Solutions, Western Australian

    Local Government Association

    Jeanette Roberts, Australian Chair, Kvaerner

    Justin Willis, Practice Leader Rail and Crawler Mounted Mobile Machines, SKM

  • AUSTRALIAN VENTURE CONSULTANTS PTY LTD

    5

    Executive Summary

    Background

    The recent resources industry investment phase has involved a total investment of A$457 billion

    (at current prices) in new resources industry capital in Australia since 2004, an average of

    approximately A$40 billion per annum over that period. Approximately 55.5 percent of this

    investment has been associated with Western Australian resources projects, particularly in the

    iron ore and oil and gas sectors. Presently, there remains a pipeline of 48 new resources

    projects with an associated capital investment of A$229 billion that are currently under

    construction or have been committed to by their proponents.

    This has had a dramatic impact on demand for a range of skills from the project proponents,

    EPCMs managing the construction of those projects and their contractors, which have been

    sourced from construction labour markets across Australia and overseas.

    The resources industry is now passing through peak investment phase, with many large

    resources industry construction projects transitioning into an operational phase. As such, the

    size of the total workforce associated with these projects as well as the occupational structure

    of that workforce will change, focusing on the operational human resource requirements.

    Transition from Construction to Operations

    When a new resources project transitions from the construction phase to the operational

    phase the size of the total workforce associated with the project decreases dramatically. The

    degree to which the size of the workforce decreases is unique to the nature of the construction

    project and the operational specifics of the project. Anecdotally, the operational workforce

    can be:

    As low as 4 percent of the size of the construction workforce in the case of oil and gas

    projects;

    Around 35 percent of the size of the construction workforce in the case of iron ore

    projects;

    Approximately 10 percent of the size of the construction workforce in the case of

    ammonium, ammonium nitrate and urea projects;

    Around 7 percent of the size of the construction workforce in the case of gold projects;

    and

    15 precent of the size of the construction workforce for port oriented resources

    infrastructure projects.

    In most cases, the skills profiles have limited commonality, particularly in the case of the oil and

    gas industry. In the mining industry, occupational skills are skewed heavily toward specialist

    skills such as drillers and shot-firers, metal fitters and machinists and truck drivers). In

    occupational skills where there is commonality such as electricians, the operational resources

    industry needs in terms of workforce numbers are very small compared to those o

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