Mining sector hiring slows
Many micro-cap companies in survival mode
Derek Sankey, For The Calgary Herald
Published: Saturday, June 15, 2013
The pace of hiring in the mining sector is expected to be flat for at least the next six months, while 46 per cent of mining executives say they are considering layoffs, according to a recent survey by the Vancouver-based Mining Recruitment Group.
“What sticks out is just how negative the short-term sense of (hiring) is,” says Andrew Pollard, president of the Mining Recruitment Group. “When you’re looking at only nine per cent of executives in the industry having any sort of positivity on the market over the next six to 12 months, it doesn’t breed confidence.”
That number is lower than in any of the firm’s previous annual surveys and has already led to layoffs and reduced spending on investor relations and exploration – all facets of the business.
“You see that companies of all sizes are feeling strong headwinds, but the battles they face differ wildly depending on the size and stage of development they’re in,” he adds.
For micro-cap companies – those with $10 million or less in market capitalization – it means 65 per cent of their executives say they’re in pure survival mode. That compares to 15 per cent of larger firms reporting the same thing with more than $50 million in market capitalization.
“It’s these larger companies with larger projects … that will always have a need for scientific and professional staff,” Pollard says.
However, it’s actually executives that face the best job prospects. Of those hiring, 33 per cent of companies expect to make additions to their executive teams compared to 18 per cent for mining engineers.
That’s mostly due to demographics: “The mining industry is generally older than the rest of the population,” he says, particularly in the executive ranks. “The executive demand is always going to be there, whether it’s a good market or a bad market.”
It is the companies that can most easily access capital – typically the larger firms with proven, advanced projects – that are moving ahead with hiring, despite negativity in business outlooks for the mining sector.
Smart hiring decisions will ultimately yield the biggest returns, Pollard says. “A good executive and technical team is often the difference between standing still or fading into oblivion. There are many companies … that see this shakeout as a great opportunity to bolster their own team,” he says.
Most mining companies are active in gold, silver, copper or uranium, which is probably the best place to look for jobs among larger, established companies. Geologists and mining engineers are still being recruited in these areas, if you know where to look.
Steven Feldman is an exception to the overall hiring trend. He recently landed a job with Calgary-based TVI Pacific Inc. as vice-president of investor and corporate relations. The small-cap company with about $15.5 million in market capitalization discovers and operates mining projects. It currently has a copper and zinc mine in operation and has near-term projects in gold, silver and nickel ready to launch in the Philippines. He says the general hiring trend is reflective of the tight capital markets.
“The money isn’t flowing like it was a few years back,” says Feldman. “There’s probably some shyness out there in the marketplace about the big (companies) making further acquisitions.”
TVI Pacific is unique in that, as a small-cap firm, it doesn’t just explore for new mining projects and sell them to larger players, but actually operates its finds, providing more stability and the ability to hire people on location to run the operation.
Despite the current negative perceptions, Pollard believes the markets will bounce back, given some encouragement by gold. Hiring forecasts may be bleak for the foreseeable future, but that’s not to say they will remain so.
“There seems to be a consensus … that there is still a lot of potential,” says Pollard.
Hiring outlook in the mining sector
- Sixty-two per cent of respondents do not expect to recruit in the next six months
- About 82 per cent of executives say the fear of a sustained downturn has affected their budgeting and hiring outlook
- Of mining executives surveyed, 39 per cent say their companies has been launched into pure survival mode
- Only nine per cent of executives are bullish on the year ahead
- The Mining Recruitment Group