Civil Infrastructure
The Civil Infrastructure sector continues to operate during the COVID-19 outbreak. The sector incorporates all civic and industrial infrastructure works, excluding the erection of buildings. The sector’s activities include road construction, plant operation, pipeline construction, trenchless technology, bridge construction, rail construction and tunnelling. The Civil Contractors Federation National COVID-19 Member Survey report states the results of the survey conducted in early April indicate that more than 80% of respondent businesses have experienced a minor or moderate impact reinforcing that the industry at large is in a strong position and remains ‘open for business’. Respondents indicated business impact is largely due to four main interruptions: supply chain, travel restrictions, lack of work opportunities and client direction. Respondents also indicated that in addition to being able to tender for new work, an overwhelming majority of companies would also employ additional workers when the Government provides additional project funding.
Roads Australia has conducted three surveys to date. Results from the first survey conducted in March indicated the sector was already being affected by the pandemic. The infrastructure sector was largely operating at 86 per cent of its capacity in the two weeks prior to the survey. Organisations were having difficulty with the availability of staff, sub-contractors and equipment. Respondents also nominated border and travel restrictions which had stopped the transfer of interstate and overseas staff to key projects, unavailability of clients and key personnel to provide direction and sign-off on approvals, loss of current and future revenue, unavailability of COVID-19 preventative supplies, such as sanitisers, and basic worksite staples such as toilet paper. The sector must adhere to strict physical distancing on worksites, resulting in slower progress. The second survey found while respondents were mainly experiencing minor delays in progress, there was concern clients may enforce contract terms without allowances for delays caused by the pandemic. The third survey indicates most respondents were still only experiencing minor delays in progress, however less than half indicated they had seen an increased willingness to be more flexible on time and cost variations. On the question of ‘where should governments be focusing their attention right now’ the option ‘continue expediting projects to market’ received the highest score.
A large proportion of the Commonwealth, state and territory economic recovery planning has initially been focused on the infrastructure sector. In the Prime Minister’s address to the CEDA’s State of the Nation Conference on 15 June 2020, $1 billion was committed for small priority projects identified by the states and the territories and $500 million for road safety works to supplement the $7.8 billion of infrastructure spending brought forward that was announced in November 2019. Media releases from the Minister for Infrastructure, Transport and Regional Development in late June suggest the states and territories will be commencing projects with a total value of nearly $2.4 billion. NBN Co has also announced it will bringing forward the next phase of planned network investment, which will enable customers connected to Fibre-to-the-Node (FTTN), Fibre-to-the-Curb (FTTC) and Hybrid-Fibre-Coaxial (HFC) networks access to the higher peak wholesale speed tiers of the Fibre-to-the-Premises (FTTP) technology. Their 2021 corporate plan also includes the creation of up to 240 nbn Business Fibre Zones, delivering the necessary fibre infrastructure to support Enterprise Ethernet, and working with local councils and state and territory governments to identify opportunities to extend business-grade services outside of designated nbn Business Fibre Zones. The announcement states economics firm AlphaBeta estimates the stimulus package has the potential to add more than $6.4 billion to the annual GDP from 2024 and create an additional 25,000 direct, indirect and induced jobs over the next two years.
Mining Industry
Mining operations have continued during the COVID-19 outbreak. At the federal and state resources ministers meeting on Tuesday 24 March 2020, the ministers discussed the need for a coordinated national approach to managing the impacts of COVID-19 in the resources sector, and agreed that the sector is essential in maintaining a strong Australian economy. Mining was deemed an essential service allowing the industry to continue operations. However, the industry has had to contend with numerous challenges, including:
- Australia closed its borders to non-citizens and non-residents on 20 March 2020, requires exemptions to be obtained for the travel of essential workers and 14 day quarantines for overseas arrivals, affecting multinational companies with global workforces.
- The industry operates in remote or regional areas, and many of its employees are large fly-in, fly-out (FIFO) workers. A range of internal border restrictions have been implemented by the states and territories that have been varied at short notice to accommodate rapid changes in jurisdictional circumstances. The Northern Territory, Western Australia, South Australia and Queensland also restricted travel to indigenous communities.
- Without the continued level of business and tourism travel, companies operating in the commercial aviation industry have had to severely reduce their services.
- Mining sites include accommodation and food service areas.
- The pandemic has disrupted global supply chains, and there was a risk companies would not be able to acquire crucial services and supplies to sustain health and safety requirements and continued operations.
The Resources sector –National COVID-19 Protocols, written in consultation with all peak state and territory representative mining bodies and with the cooperation of the Australian Petroleum Production and Exploration Association, were released in March. The protocols cover: primary health and safety advice, education and communication, families and mental health; travel and accommodation, safety at work, in the event of an incident, critical suppliers and contractors, and Indigenous communities. There is also a ‘Supporting guide for engaging with remote Aboriginal and Torres Strait Islander communities’, which is updated to reflect changes in circumstances when they occur. The Resources Industry Training Council (RITCWA) 2020 Mining/Oil and Gas Industry Snapshot states Western Australia’s resources sector has implemented strict protocols to ensure the safety of its workforce and the communities in which the industry operates. The protocols include minimising the movement of people to sites, requiring the lengthening of rosters across the sector and deferral of non-essential maintenance activities. Many companies moved critical workers based in other states into Western Australia when border restrictions were enacted by the Western Australian Government. BHP also reports introducing flexible shift and rostering arrangements, and working with people to relocate temporarily to comply with cross-border restrictions and quarantine requirements. In the same media release, BHP lists the numerous measures introduced to their work sites in line with the national protocols. In Queensland, BHP Mitsubishi Alliance (BMA) announced it would only use charter flights to transport FIFO employees and contractors and restrict non-residential workers from visiting townships near its mine sites to protect local communities. PwC’s Global Mine Report 2020 highlights the alternative workforce delivery models, including remote working and roster changes, Rio Tinto implemented have resulted in unexpected productivity gains and potentially will make them permanent.
PwC’s Global Mine Report 2020 also states global supply chains and transient workforces have been highly effective in keeping the costs of mining down, however when the pandemic closed borders and factories, miners heavily reliant on this model found the situation the most difficult. The report highlights several of the global top 40 mining companies have announced initiatives to increase support for their local suppliers. The Australian Competition and Consumer Commission (ACCC) granted interim authorisation for members of the Minerals Council of Australia (MCA) and other mining associations to work together on the sourcing, purchase and distribution of crucial supplies and services such as health and safety equipment, logistics, equipment maintenance and consumables like fuel and explosives during the COVID 19 pandemic. On its Resources for managing COVID-19 page, the MCA has provided a guide to managing supply risks, a list of critical health products suppliers, and links to a portal provided by the Industry Capability Network (ICN) where suppliers can register their interest to provide key goods and services. BHP has partnered with Austmine to launch the BHP Supplier Innovation Program across Australia. The program will consist of a series of events that showcase BHP business problems to mining equipment, technology and services (METS) sector participants, and inviting their participation in workshops to develop solutions to these challenges.
The Mining, Drilling and Civil Infrastructure IRC's 2019 Skills Forecast identifies community perception of the industry as an important influence on how mining companies operate. The Global Mine Report 2020 report highlights mining’s social licence to operate has never been more critical as companies seek to utilise skills and resources from their local communities. Large mining companies have been building resilience through training, infrastructure and assistance, continuing to pay people unable to work, and helping local people with logistics and medical equipment. Mining companies in Australia have been very proactive in assisting their communities, establishing community funds and providing business and logistical support. The following is a small sample of the assistance announced by the Australian mining companies listed in the report:
- As part of its community strategy, BHP reports its supply chain is also supplying food supplies to childcare centres, school canteens and not for profit organisations, supporting local Aboriginal organisations and services to assist people to return to remote communities, and working with those communities and government to ensure people have what they need to stay in their communities. Fortescue has donated non-perishable food and critical hygiene products and is ensuring Aboriginal businesses that form part of its supply chain remain resilient during the outbreak.
- Rio Tinto reports it is manufacturing hand sanitiser, to giving protective equipment to hospitals and funding local response initiatives. Newcrest has supplied protective equipment and supported the development of low cost locally made ventilators. South 32 has established a new medical clinic on Groote Eylandt.
- BHP, Rio Tinto and Fortescue have pledged funds to support aeromedical care and health care services in the communities in which they operate. Newcrest reports it is one of 20 companies to donate a total of $6.6 million to Foodbank, RFDS, and Lifeline. South 32 was another of these companies. Newcrest have also supported community meal providers in Melbourne.
- Rio Tinto has donated to the Murdoch Children’s Research Institute (MCRI) COVID Immune research program to investigate COVID-19 effects on children’s immune systems, and Newcrest is supporting the University of Queensland’s vaccine research.
- Internationally, Australia’s largest mining companies have supported local communities with health care, quarantine and testing facilities, hygiene products, personal protective equipment, clean water and meals.
RITCWA reports a number of mining companies and contractors servicing the industry continue to report a tightening of the skilled labour market for trades, particularly for experienced heavy-duty diesel fitters/mechanics, and that the Hays Jobs Report for resources and mining additionally indicates strong demand for RC drillers, diamond drillers, field assistants, drill and blast operators, auto electricians, and surface mining plant operators (load and haul). The resources industry in Western Australia is moving into a growth phase with new project activity and the expansion of existing mines, and continuing border restrictions are expected to intensify the demand for skilled workers, particularly as this demand has been largely unaffected by the pandemic. Modelling undertaken on RITCWA’s behalf shows in peak recovery (December 2020/January 2021) an additional 8,049 workers will be required which includes 2,647 tradespeople, 2,565 machinery operators and drivers; and 997 labourers. Skills shortages may be further exacerbated by state and Commonwealth Government infrastructure spending to stimulate job creation as a COVID recovery strategy.
The Minerals Council of Australia and CoverCard Mining Job Advertisement Analysis found Queensland and Western Australian mining job advertisements increased in the March to May period. The key findings of the analysis suggest changes to roster and travel arrangements may have created a requirement for more FIFO workers from within certain states, with the increase also potentially linked to a greater share of ads for trades and skilled workers versus ads for professionals. BHP announced in March it would be hiring an additional 1,500 people to support its operations, with roles including machinery and production operators, truck and ancillary equipment drivers, excavator operators, diesel mechanics boilermakers, trades assistants, electricians, cleaners and warehousing. In May, the Western Australian Government announced Rio Tinto in partnership with South Metropolitan TAFE (SM TAFE) will cover course fees for up to 200 apprentices displaced by the outbreak to complete the recently accredited automation micro-credential course developed by the Resource Industry Collaboration, led by Rio Tinto, the Western Australian Government and SM TAFE. Rio Tinto has also approved a further $50,000 for another 200 apprentices at TAFEs in regional WA the near future.