March 2010

Overview

Mining is a small industry in terms of employment in New Zealand with approximately 7,270 workers (or 0.33% of the total workforce) as at December 2009^[1]. In addition to the core workers of the industry, approximately 8,000 people are indirectly employed as suppliers of goods and services, according to the New Zealand Minerals Industry Association. Currently there are 600 active mining operations in New Zealand^[2].

Industry Growth

Figure 1 below shows Gross Domestic Product (GDP) growth in the mining industry compared to total GDP growth. There was a large spike in GDP growth in mining related activities between 2007 and 2008 which was likely due to investment within the Taranaki Basin. Mining is a capital intensive industry and productivity growth has been static in the past. Productivity in the oil and gas extraction sector is expected to grow less than in the mineral and quarrying sector.

Figure 1: Annual percentage change in Total GDP and GDP in Mining related activities (Sep 04 – Sep 09)

Source: Statistics New Zealand

Data table for Figure 1

Employment Growth

Employment within the mining, gas and oil extraction industry has increased by 1,100 (or 18%) to 7,270 (see Figure 2 below) between December 2004 and December 2009.

Figure 2: Mining Employment (Dec 2004 – Dec 2009)

Source: Department of Labour Employment Estimates

Data table for Figure 2

The Department of Labour reports employment figures based on the Australian and New Zealand Standard Industrial Classification (ANZSIC 2006). Under this classification system the mining, gas and oil extraction industry is divided into 11 sectors: coal mining; oil and gas extraction; iron ore mining; gold ore mining; other metal ore mining; gravel and sand quarrying; other construction material mining; other non-metallic mineral mining and quarrying; petroleum exploration; mineral exploration; and other mining support services^[3].

Employment growth was unevenly distributed within these categories. One category in particular (other mining support services) was the driver of this employment growth, with employment more than doubling between December 2004 and December 2009. Reasons for the growth in services to mining sector are not clear from the data used in this analysis.

Table 1 on the following page shows that mining, gas and oil extraction employment is dominated by other mining support services and other construction material mining, employing 2,100 and 1,150 (or 29% and 16% of industry employment respectively) in December 2009.

Table 1: Mining industry employment by sector, June 2009

Industry	Employment (Dec 04)	Employment (Dec 09)	Share of Industry Employment	Employment Growth (Dec 04 - Dec 09)
Coal Mining	1,000	690	9%	-31%
Oil and Gas Extraction	520	640	9%	23%
Iron Ore Mining	60	80	1%	33%
Gold Ore Mining	430	600	8%	40%
Other Metal Ore Mining	190	110	2%	-42%
Gravel and Sand Quarrying	1,100	930	13%	-15%
Other Construction Material Mining	1,420	1,150	16%	-19%
Other Non-Metallic Mineral Mining and Quarrying	120	80	1%	-33%
Petroleum Exploration	470	510	7%	8%
Mineral Exploration	70	380	5%	443%
Other Mining Support Services	810	2,100	29%	159%
Mining, gas and oil extraction	6,190	7,270	-	17%
Total (All Industries)	2,083,200	2,175,000	-	4%

Source: Department of Labour Employment Estimates

Work Permits

Over the past five years, increasing numbers of work permits have been issued for migrants in the mining industry under the skilled migrant category. These permits covered a broad section of mining-related occupations, ranging from mining labourers to highly skilled mining engineers, metallurgists and related professionals; with total work permits for these occupations increasing from 10 in 2005/06 to 41 in 2008/09.

Skills Profile

The mining, gas and oil extraction industry has a wide range of occupations (e.g. mining engineers, metallurgists, quarry and mine workers, heavy truck or tanker drivers, general labourers) and the qualifications vary accordingly. 2006 Census data shows that these industries have a high proportion of staff with no formal qualifications compared to the national average (see figure 3).

Figure 3: Qualifications held by employees in the mining, oil and gas extraction industry, 2006

Source: Census of Population and Dwellings, 2006

Data table for Figure 3

Demographic Profile

In 2006, the overwhelming majority of employees within the mining sector were male, accounting for 88% of total employment as shown in figure 4 below.

Figure 4: Age and gender profile of mining sector employees compared to the working age population, 2006

Source: 2006 Census of Population and Dwellings

Data table for Figure 4

Commentary

In 2008 a report published by the Department of Labour^[4] in consultation with the Petroleum Exploration and Production Association of New Zealand (PEPANZ) indicated that there may be skills shortages within the Taranaki oil and gas industry over the coming years.

With a number of oil and gas fields recently commencing production, skills shortages could lead to future constraints on industry production and growth. Although the mining, oil and gas production industries are small in terms of total employment, anecdotal evidence suggests it is unlikely these future skills requirements will be met from training within the New Zealand labour market.

A number of skilled oil and gas industry workers are from overseas as they tend to be employed by multi-national oil and gas companies.

For more information, please contact the Labour Market Skills Team at info@dol.govt.nz or for further employment and skills snapshots please visit our website.

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Footnotes

[1] Based on Department of Labour Employment Estimates

[2] www.minerals.co.nz

[3] This class consists of workers engaged in providing mining support services integral to the mining process. Primary activities include: cementing oil and gas castings, directional drilling and re-drilling, mining draining and pumping service, and oil and gas field support service not elsewhere classified.

[4] Producing The Talent – New Zealand Oil and Gas Industry Skills Action Plan.