HARD LESSON: A mining expert says cutting jobs at central Queensland mines is not making them more profitable.
HARD LESSON: A mining expert says cutting jobs at central Queensland mines is not making them more profitable. Katrina Elliott

Cutting mining jobs not the answer to downturn

CUTTING jobs in Central Queensland mines is not the answer to making them more profitable one mining expert says.

Ernst and Young global mining and advisory leader Paul Mitchell said coal mines in the Bowen and Galilee basins had been the first in Australia to learn the hard lessons.

EY and University of Queensland report "Productivity in mining: now comes the hard part" released today says up-scaling mines without taking into account the increased complexity have created "diseconomies of scale".

Mr Mitchell, who co-authored the report with UQ professor John Steen, said he would advise miners to look at how to better use their workforce rather than cutting it.

"If I'm advising clients I'm telling them change what you do, not necessarily how many people you've got doing it," he said.

Prof Steen said while the coal industry was hurting at the moment it could learn valuable lessons.

"I guess one of the good outcomes of this crisis, there's a silver lining, is that the whole way the mines are managed will become much better," he said.

"On top of that I think everyone is acknowledging very inefficient practices, a lot of loose expansion plans and now that's all come home to roost."

Mr Mitchell said increasing the mine size without taking into account the increased complexity had decreased productivity - an issue Queensland mines had been forced to deal with quickly.

"They probably got there earlier than others.

"They also then seem to be the ones who've realised they need a broader and concerted effort to address the issue earlier than others," he said.
 

WHAT CAUSED MINING PRODUCTIVITY PROBLEMS

Labour: Inexperienced teams and high staff turnover as well as a focus on volume rather than efficiency.

Capital: The standards for equipment availability have fallen.

Materials: Depleting reserves and declining ore grades need new ways to recover more metal.

Scale: Larger operations have created complexity, made worse by the skill challenges.



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