Selling the story
Richard Roberts, 8 February 2012
Image: Fairfax/Sydney Morning Herald.
WHEN Gina takes over at Fairfax her first decree might be just a tame one: “Columnists, though shalt talk to the mining reporters on staff about basic facts before bagging the industry for the general amusement of mainstream readers”. (The language might be less tame, though).
Australia’s wealthiest woman, head of Hancock Prospecting and new major shareholder in media group Fairfax, Gina Rinehart may have been among mining industry people bemused by a column in Fairfax flagship the Sydney Morning Herald last week in which it was suggested the industry was, right now, trying way too hard to sell its economic importance to Australia!
That attempt at humour contrasted with the overall tone of the article by Ross Gittins, which was acerbic to say the least.
He urged readers not to readily buy the “dodgy economic ‘modelling’ [regularly produced by vested interest groups] to mislead people” and put mining industry employment data front and centre as an example of the type of “con job” he was talking about. The column was basically about the evils of such modelling, and selective use of statistics, which is all well and good, but is the Australian mining industry really the best example of how “dodgy” data is used as a central selling tool?
Well, yes, says the commentator.
“The industry that has been trying hardest to bolster its economic importance lately is mining,” wrote Gittins.
“The Australia [sic] Mines and Metals Association says ‘213,200 people are directly employed in mining, oil and gas operations in Australia, with an additional 639,600 indirect jobs created by the resource industry’.
“Did you notice how the second of those suspiciously precise figures was exactly three times the first? Spurious accuracy is one of the signs that a con job is in progress.
“I’m sure you've seen the ads sponsored by the Minerals Council of Australia and others telling ‘Our Story’ about what a wonderful, caring industry it is. The related website says that ‘mining employs 187,400 people directly, and a further 599,680 in support industries’. So for every mining job, another 3.2 are created elsewhere.
“According to a report funded by Peabody Energy …”, etc, etc.
Gittins asks, where do these figures come from? “Knowing how many people are employed in a particular industry isn't hard. Every month the Bureau of Statistics conducts a giant sample survey of Australian households asking them about their experience in the labour market. That’s where our monthly figures for employment and unemployment come from. Every third month the bureau asks people what industry they work for.”
And as many SMH readers no doubt wiped the froth off their lips and took a deep breath while contemplating the sheer audacity of this economically insignificant industry, the words burning only slightly less intensely than the latte would have been “mining”, “con” and “dodgy”.
While over in Cuckoo Land (aka the West), Gina is thinking: “Geez, if I could only get Ross to have a chat to the resources people at the … SMH. It wouldn’t be in keeping with the theme of the piece, but they might throw in a few balancing lines about the stout contribution the miners are making to Australia’s economic well-being at present. Maybe even just a footnote. Could we footnote some balance into these things?”
Unbalanced thinking, to be sure.
Tim Cornwell, senior consultant in mining and engineering recruitment Queensland with Robert Walters (another vested interest), wasn’t sold on the SMH line on mining: “The mining industry’s effect on the Australian job market and our economy is undeniable. The suggestion that the mining industry is operating on unreliable or ‘dodgy’ figures to make the mining industry appear bigger, or more important than it is, is downplaying the importance of the industry and the value to the economy. The reality is, we're running on a two-speed economy at the moment, with the mining and resources continuing to grow with no signs of slowing down.”
But Cornwell did warm to the main Gittins theme: “Figures will vary depending on the study and where they are from. You can use numbers to prove or disprove anything, but we think the AMMA figures are not too far off the mark. The mining and resources sector is creating more jobs than can be filled, directly and indirectly.”
One example of the latter was, say, Strategic Airlines, which Cornwell said recently unveiled its new image as Air Australia, a cut-price carrier.
“Strategic Airlines started as a charter carrier servicing mining communities and is now flying internationally, despite all the negativity in the airline industry – the grounding of Tiger, the Qantas disputes. It was able to grow its business from successful contract work, and now employs 300 people with plans to increase ‘tenfold’ within the next ten years. It’s just one of many businesses that have benefitted from growth in the sector.”
And probably wouldn’t show up as such in ABS data.
AMMA director Minna Knight loved the Gittins article (not). Apparently the author didn’t seek any reassurance from the association about the source of its mining employment numbers.
“The ‘three-time’ multiplier that the resource industry has used to calculate the number of indirect jobs created with each direct mining job is drawn from the estimates of the Federal Government’s National Resource Sector Employment Taskforce,” Knight told HighGrade.
“Furthermore, the ABS Labour Force figures clearly state there are 217,000 mining workers in Australia in the ‘Mining’ category, but this doesn’t include all those in the ‘Energy and Gas Supply’ and ‘Electricity Supply’ categories that are technically resource workers.
“Also, many of the workers in the ‘Industrial Construction and Engineering’ category are working solely on large-scale resources projects. Admittedly it is very difficult to accurately forecast the level of cross-over in these figures, but the vast number being discussed would indicate the three-times multiplier is a relatively conservative estimate.
“Rationale, when combined with some economic analysis, would dictate that if the $281 billion worth of resource projects currently underway in Australia simply stopped tomorrow, a lot more than 200,000 Australian jobs would be lost.
“Construction companies like Bechtel, McConnell Dowell, Chandleor McLeod, Thiess and so on employ thousands of Australian’s simply to build all the infrastructure associated with a large mining project. Similarly, worksite management companies like Sodexo and Morris Corporation employ thousands of cleaners, caterers, logistics personnel, plumbers, etc, for the simple purpose of servicing mines.
“Nonetheless, the great contribution the resource industry makes to the economy and society more broadly is plain to see.
“What is concerning is the continued anti-mining sentiment prevalent in some areas of our community, mostly driven by fear campaigns and the self-interested agendas of competing industries, trade unions and some political groups.
“While AMMA believes it is important to combat such sentiment with the real facts when necessary, the strongest message resources employers across Australia can send to such critics is to continue this unprecedented growth period and prolong the enormous economic and employment benefits they are providing to the Australian people.”
Rinehart may indeed have a hidden agenda when it comes to media ownership, though she’s just as likely as other proprietors to insist that smearing a whole industry with tags like dodgy and desperate should be supported with a few well-sourced facts.
Also in the February 8 - 14, 2012 edition
- AFRICA
- Avonlea’s year of the dragon
- Jungle souvenirs get tongues wagging
- BREAKING NEWS
- ABM welcomes APAC
- Albanese maintains bullish stance
- Alcan hits Rio bottom line
- Altona on the board
- Aquarius feels pinch
- Avalon shake-up
- Avenue targets Rondonia tin
- Bligh agrees split with Blackcrest
- Blue Eyes FEED finished
- Boom times for supplier
- Centerra reserve increase
- Central Rand overcomes stoppage
- Cobre flows for Strategic
- CuDeco awards IndexEMS contract
- Cuervo builds Peru iron resource
- DNP progress for Regency
- Doray wins clearance
- Drilling to extend Achmmach
- Drills return to Matilda
- Eastern Iron takes on Nowa Nowa
- Emeco looks to Chile
- Exotic find for JV partners
- FMG signs MoU with IOH
- Frieda River boost
- GBM happy with sampling
- GC to boost Silvercorp
- Gold Anomaly hopes rise
- Green light for Cortona
- Harper joins Sumatra
- Herencia gets encouragement in Chile
- Jinchuan flags go-ahead
- Kagara to step up search
- Kumba gets Kolomela boost
- Lace restart now in prospect
- Leighton on good WICET
- Likuyu resource next month
- Ludowici contest heats up
- Macmahon bounces back
- Marathon compensated
- Matilda to get back on track
- Mekong joins Southern in Cambodia
- MMG advances on Anvil
- Monadelphous record
- Mt Carrington resource boost
- Mulroney joins Venturex
- Murchison clears path to sale
- Murchison exit complete
- New $US4.5B spend on Escondida
- New life for Atticus
- Optimum lift
- Osisko moves into Nevada
- Padbury, Aurium join forces
- Pinto Valley restart
- Predictive hits Bonsiega target
- Prosperity signs
- Rio's ore-some target
- Rox posts Mt Fisher resource
- Scotgold moves to higher ground
- Shandong will buy Tonkolili iron
- St George confirms gold trend
- Talisman aims to get lucky
- Toro out of Woods
- TriAusMine to start Woodlawn drilling
- UCL unimpressed
- Vale awards Keller contract
- Vale to grow fertiliser profile
- WCP moves on Al Hariqah
- Western Areas' revenues slump
- Yamarna gets positive review
- COAL
- Bell strikes a balance
- Sober coal warning from McCloskey
- EXPLORATION
- Falcon ready to soar again
- FINANCE
- Mega projects will test BHPB’s mettle
- Past gives BC Iron different view of the future
- Remaking Exco too
- FROM THE CAPITAL
- Big deals may signal end of cycle
- GOLD
- Ampella still on track, says analyst
- Copler saving Alacer blushes
- Gold group-think needs to change
- MINING IT
- Mincom becomes Ventyx
- Partnership work rounds out Cube offering
- Report points to IT integration challenge
- PEOPLE
- People on the move: CAE Mining, Barminco, IronClad, Hannans Reward, Centaurus, Burey Gold, PMI Gold
- Richards contemplates next step for IronClad
- RUSSO'S RULES
- All this inking gets you thinking
- TECHNOLOGY
- Automation will cut jobs, but then again …
- VIEW FROM THE WEST END
- Rumble in the jungle