Rio Tinto reveals more bad news but not for work in Australia

- Posted in Australia by Dominicon 10 October 2012

Rio Tinto has confirmed more
cuts will be made to its global

One of Australia's biggest multi-national mining companies, Rio Tinto, has continued the recent slew of bad news in the country's mining boom by confirming that further cuts are planned, but it wasn't all bad news, especially where potential migrants to Australia are concerned.

We have written over the past couple of months what these changes mean for people considering an Australia visa application, particularly those who intended on taking advantage of the opportunities the mining industry affords.

Whether the mining boom which has sustained Australia throughout the global financial crisis is truly over has become a debatable topic in Australia over recent weeks. Despite Prime Minister Julia Gillard assuring people that 'reports of the mining boom's death are exaggerated', it cannot be denied that changes are taking place.

Mining cuts deep

The first reports of the end of the mining boom emerged when several of the country's largest mining companies, including Rio Tinto, began to scale back investment in the country in the wake of a slowing of demand from China.

Chinese demand has fuelled Australia's mining boom in recent years but its rapid rates of construction - said to be the equivalent of building Rome every two months - have begun to slow, and with it, demand for Australia's abundant resources.

And now Rio Tinto chief executive Tom Albanese has said that, despite the US$500 million (£310 million) of cuts already made, further cuts are expected.

"So far we've already hit US$500 million of annualised savings, and are planning further significant reductions in operating, evaluation and sustaining capital spend" said Mr Albanese.

"That will involve reductions in employment levels."

Mr Albanese did not elaborate where, or how many, jobs could be at stake but explained that many of the projects and mines in line for cuts are not in Australia.

Rio Tinto is a truly global conglomerate and the plans to scale back investment and increase savings do not necessarily reflect tough times for Australia in the near future. Mr Albanese said coal exports in Mozambique, copper mining in Mongolia and energy deals between Mongolia and China were expected to be the toughest hit.

Mr Albanese confirmed that the planned expansion to the company's flagship iron ore mine in Western Australia were to go ahead.

What opportunities are available in Australia?

Much of the intra-country migration and international immigration in Australia in recent years has been fuelled, or at least heavily influenced by the mining industry; some Australian workers with skills in demand have left old positions and industries for the more lucrative opportunities in the mining industry, thousands of foreign labourers have also been brought in to augment the growing workforce.

The movement of workers already in Australia, combined with the growing infrastructure around the mining centres - particularly Western Australia - caused labour needs in other industries such as hospitality and tourism.

With the mining industry beginning to stabilise and periods of rapid growth seemingly behind the industry, what does that mean for Australian workers and those wanting to move to Australia?

The mining industry may have proved to sustain Australia during tough economic times but even at its peak, its contribution to Australia's total economic output was still dwarfed by the services sector.

The services sector, centred on the opposite side of the country from the mining industry, contributes 70% of Australia's total GDP and Australia is still in need of workers in plenty of industries.

Leonie Cotton, casework manager at the Australian Visa Bureau, says the impact of the mining boom was so sensationalised that other industries were neglected despite also being in need of workers.

"As so many of the mining projects are in remote locations, the salaries needed to draw in workers were much higher than average and, as the industry was booming, the companies could afford to pay them," said Ms Cotton.

"It's understandable that offers of high wages will always grab the headlines and skilled workers will still be needed on the continuing mining projects, of which there are many even if investment in new projects is beginning to slow.

"However, Australia is still in need of skilled workers in plenty of other industries including IT, medicine, engineering and teaching.

"The mining boom may be beginning to slow but opportunities to move to Australia most certainly aren't."

- Dominic Ladden-Powell is the Online Editor for the Australian Visa Bureau.