In a bid to grow the A$90m Australian mining equipment, technology and services sector, government-funded initiative METS Ignited has compiled a ten-year industry-led plan to strengthen the sector after some challenging years of limited activity due the commodities slump. Heidi Vella caught-up with METS Ignited CEO Ric Gros to find out what the initiative has planned.
The recent commodities downturn resulted in a tough three years for the Australian mining equipment, technology and services (METS) sector, as mining construction came to a near halt.
The sector still exports A$15bn worth of goods and services each year however, and has been identified by the Australian Government as an area for potential growth through the METS Ignited initiative, which published its ‘10 Year Sector Competitiveness Plan’ in November.
From the organisation’s Queensland-based Industry Growth Centre, CEO Ric Gros discusses the sector and the plan, including how innovation will inevitably result in increased automation and more highly skilled jobs, and why companies should view collaboration as self-enlightenment.
Heidi Vella (HV): Would you agree it’s been a bumpy journey for the METS sector over the last decade?
Ric Gros (RC): Well, from 2003-2013 there was significant deployment and development of projects across the world, significantly in Australia, which created a boom in the sector.
But you should remember that the mining sector has two sides – mines that are operating and producing and mines being built – so the boom throughout that time was building significant capacity throughout the world.
But then after the financial crisis at the end of 2013, there was a crash in the market and all these projects were completed and commodity prices collapsed because all the extra capacity came online. This created a significant drop-down in profitability in the sector.
The METS companies that boomed and grew tremendously through that period no longer had work because the projects were all completed. However, in the same period in Australia production of iron ore tripled. Today iron ore production is a fraction of the cost it used to be ten years ago.
Now prices are coming back a bit and we are getting back to a situation where commodity prices and production and demand are starting to balance out again. I don’t think we are returning to another ten-year construction boom as before, but the mining industry will continue to grow and the METS sector will continue to grow, and hopefully, in the future, the industry will be able to manage those cycles a bit better.
HV: How will the ‘10 Year Sector Competitiveness Plan’ help industry do this?
RC: With the sector competitiveness plan we are working with industry to look at five key areas; they centre around industry alliance, our global brand, the global supply chain and competitiveness, innovation and collaboration, and finally, skills. We want to underpin all of those.
There is work to be done on industry knowledge priorities which are the gaps in knowledge that exist. These include looking at where the industry is likely to be ten-20 years from now and looking at regulatory reform, both self-imposed and state-imposed, that impact on productivity in the sector.
In Australia we have great know-how and expertise but we are not necessarily very good at commercialising that technology.
If we understand where the mines of the future are likely to be, the drivers the industry will be facing, we can start to ensure that our research focuses on those requirements, that our innovation is focused on those mining requirements, and that we are driving our educational programmes and recruitment of future graduates into the sectors that are likely to need them.