Another Reason Why Gold Prices Will Rise

Recently I told you about some labor issues in South Africa that had been plaguing the gold market, to the benefit of the gold bugs. The miners had gone on strike, in short halting the industry for five days until an agreement was reached.

It seems that the mining industry in Canada is facing some labor issues of its own these days, and this is yet another reason why I believe gold prices will continue to rise. This time, however, the problem is not a matter of striking employees, but of lacking employees…

The Canadian mining industry is looking at a shortfall of 81,000 employees over the next 10 years if it cannot find a way to attract new workers. As you know, fewer employees means lower gold production, which equals higher prices.

“With this looming skills shortage, the career potential is great for the right people with the right skill set — particularly for the skilled-trade workers, engineers, and geoscientists,” Paul Hebert, Executive Director of Mining Industry Training and Adjustment Council — Canada (MITAC), said. “Some people continue to assume mining is primarily a brute-force occupation, in fact, mining has evolved to become a highly skilled and technical industry.”

About 50% of those currently employed in the mineral and metal industry are between the age of 40 and 54 and have plans to retire in the next 10 years. The growth of mining Gross Domestic Product (GDP), however, has been about twice the rate of the rest of the industries in Canada since 2002. There is evidence that this will only continue to grow.

Many companies are starting to focus on a number of recruitment tactics to garner interest in the industry, which will include targeting youth, women, and visible minorities. Fewer people are entering careers in mining, despite the opportunities available, which is seen in the low enrolment numbers at local colleges. This is partly due to a lack of knowledge about the industry. Mining is often brought into light only in negative terms after an accident. But, there are many different factors to a career in mining, which need to be brought out into the open.

“Additional skill gaps are emerging as mining becomes even more knowledge-based and technology-intensive,” Patricia Dillon, Manager, Corporate Relations, Teck Cominco Ltd and Chair of the Minerals and Metals Industry Sector Study Steering Committee (MMISSC), said. “For instance, tele-mining and automation have become increasingly important to the Canadian mining industry. What we are seeing is an industry that has and is evolving and in need of highly skilled workers to continue the growth of mining in Canada.”

New technology is now available in mining, while health and safety practices have also improved. By raising awareness of the industry, the threat and risk to the industry can be reduced. “Proactive human resource practices such as ongoing training and workforce planning and mentoring programs will encourage retention into this vital industry,” Dillon said.

While the question of whether or not the new recruitment strategies will work or not remains up in the air, there’s one thing I’m quite certain of. Throughout the world, I wouldn’t be the least bit surprised to see gold production drop over the coming years — and lower gold production in a weak economic environment can only mean one thing:

A boom in gold prices is on the horizon.