Global Mining Industry Faces Severe Skills Shortage

The mining industry is currently facing a significant skills shortage, which threatens to undermine production targets and strategic objectives across the sector. Not confined to one region, this skills gap is a global phenomenon, affecting key mining hubs like Australia, the United States and beyond.

Recent data highlights the severity of the issue. In Australia, the mining sector's vacancy rate reached 5.2% in late 2023, an increase from 3.3% from just three years earlier. The industry is reported to need an estimated 24,000 new workers by 2026, but the supply of skilled workers is expected to fall short, with only about 16,000 likely to be available​.

In the United States, the decline in mining engineering graduates mirrors this trend. Since 2016, there has been a 39% drop in the number of graduates, exacerbating the challenge of finding skilled professionals in essential roles such as mine planning, process engineering and automation​.

“Talent recruitment and retention continues to be a major challenge for mining and metals companies,” Paul Mitchell, EY Global Mining & Metals Leader, said in a recent report highlighting the leading business risks and opportunities for mining and metals in 2024. “Miners are deploying a range of solutions, including upskilling internal candidates as well as considering digital solutions. Developing attractive career pathways can help inspire workers to see their future in mining, and improve retention rates. Building a stronger work culture and brand, including highlighting mining’s role in the energy transition, can also help.”

Causes of the skills shortage

Several factors contribute to the skills shortage. A major issue is the industry's waning appeal to younger generations. Mining is no longer seen as an aspirational career choice, with enrollment in mining engineering courses plummeting by 63% in Australia since 2014​. 

The industry's cyclical nature, with its boom and bust periods, has also led to a lack of long-term career stability, further discouraging potential entrants. The COVID-19 pandemic has also reshaped work preferences, with many workers now prioritising work-life balance and remote working opportunities – options that are typically less feasible in mining​. In a survey by the Mining Industry Human Resources Council of Canada, 70% of 15 to 30 year olds said they would not consider a career in mining: the highest proportion of all other industries surveyed.

The impact on the industry

The skills shortage is having an impact on the industry's ability to meet its objectives. According to a report by McKinsey & Company, 71% of mining leaders believe that the talent shortage is hampering their ability to achieve production targets and strategic goals. Additionally, 86% of executives report greater difficulty in recruiting and retaining the talent they need compared to two years ago.

This shortage is particularly acute in specialised fields that are critical to modern mining operations, such as data science, automation and environmental management. The lack of skilled professionals in these areas not only slows down project development but also increases operational costs as companies are forced to offer higher salaries and other incentives to attract the necessary talent.

Addressing the skills shortage

With a report from PwC identifying that miners can no longer depend on previous portfolios and practices to create value, the industry is increasingly recognising the need to address this crisis through both immediate and long-term strategies. Short-term measures include offering higher wages and benefits to attract workers, but these are proving insufficient to address the root causes of the shortage. As McKinsey's report notes, the traditional "financial carrot" is losing its effectiveness, particularly with younger workers who are looking for more than just monetary compensation​.

Moreover, industry-wide efforts are being made to improve the sector's image and appeal. These include addressing environmental, social, and governance (ESG) concerns more proactively, which is becoming increasingly important not only to the public but also to potential employees. McKinsey suggests that mining companies should elevate talent management to a strategic priority, treating it with the same urgency as safety, production, and cost management.

According to Rob Tyson, CEO of Mining International – speaking as part of a Shell report – miners can address the workforce skills shortage by changing perceptions of the sector.

“The acute workforce skills shortage in the mining industry is made challenging by the ongoing development and adoption of advanced mining equipment and technologies. Miners must adapt rapidly and bring new digital skills into their workforce to drive the productivity and sustainability of their operations.

“There are several factors that miners can address to improve the state of recruitment and retention across the sector. This includes promoting and advocating for education around mining and its importance in schools and universities. At the same time, mining can improve its image and make itself a more desirable choice for candidates by focusing on its ESG efforts whilst emphasising the unique role it plays and benefits it can provide to workers.”

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