16 February 2023 – The skills shortage is hitting the mining industry hard. Mining engineering degrees have fallen by up to 63%. At the same time, there is a massive lack of investment. Indonesian stainless steel mill raises prices further. LME nickel stocks at lowest level since 2008. And EU wants to get into the linen of sanctions evaders, but not the new best friends who are open about it?
Mining industry: Skills shortage meets lack of investment
The mining industry is running out of skilled workers. This is shown in a recent report by the management consulting firm McKinsey & Company. The cross-disciplinary research found, among other things, a decline in mining engineering degrees of almost 40% (2015 – 2020) in Australia and as much as 63% (2014 – 2018) in the United States. Surveys (2020) from the important resource producing country Canada also show that about 70% of the respondents between 15 and 30 years of age do not want to take a job in the mining industry. This is closely followed by the oil and gas industry and the construction sector.
Mining sector extremely unattractive?
The McKinsey consultants have identified as the main reasons for this the unattractive working conditions and safety standards, but also the concerns of young people about the environmental destruction in mining or the ruthless action against local population groups by the mining corporations. Already today, 86% of the surveyed managers from the mining sector find that it has become significantly more difficult to find new employees and to retain the existing ones.
There is a lack of investment everywhere
At the same time, and this is only mentioned in passing in the McKinsey report, there is a massive lack of investment in the mining industry. For years, it has been repeatedly pointed out that important investments have not been made, or have been made only hesitantly.
The most recent examples are the difficulties of the Eramet subsidiary SLN in New Caledonia, for example, which has been on the drip of rescue packages for years, or recent reports from South Africa, where investment in the mining sector is now said to have fallen to almost zero. While poor working conditions had led to an uprising of miners in Indonesia in January 2023, in which two people died. And the list could be extended to include ongoing protests in Peru and elsewhere.
Investment in staff and equipment urgently needed
Thus, the authors of the McKinsey article also conclude that employees could only possibly stop the trend in the workforce, especially those with higher degrees, through a fundamental reorientation in recruiting and with investments, not only in human resources.
Indonesian stainless steel group raises prices
Despite the fall in nickel prices, the Indonesian stainless steel producer Tsingshan has recently increased the prices of hot-rolled stainless steel once again. This can be interpreted as an indication that the current correction in the nickel price was artificially induced. Something that could be observed again and again in the past years and was largely controlled by the Tsingshan Group and its nickel trader Big Short.
Stainless steels with molybdenum content still in short supply
Demand for stainless steel grade 316/316L also remains high due to acute shortages. Tight supplies of stainless steel grades containing molybdenum are also reported from Asian countries such as Taiwan.
Nickel: LME warehouses at lowest level since 2008
Looking at the stocks in the warehouses of the commodity exchange LME, which have fallen by 16% from the end of December 2022 to mid-February 2023 and thus to the lowest level since 2008, there is so far no sign of surplus production.
EU wants to fight sanctions evasion more strongly
In its proposal for a tenth sanctions package against Russia, the European Commission has announced, among other things, tougher measures against sanctions evasion.
And finally, we are working closely with Member States, operators and partner countries to tackle circumvention. Our special envoy David O’Sullivan is reaching out to third countries, to ensure strict implementation of sanctions and prevent circumvention. And next week, we will organise a Sanctions Coordinators Forum, gathering our international partners and Member States, to strengthen enforcement efforts. Together, we are tightening the screws on Russia more and more.
President von der Leyen, European Commission, 15 February 2023
You don’t criticise new best friends?
While on the one hand the European Commission wants to further tighten the thumbscrews against Russia in order to raise public awareness, on the other hand it is celebrating the new best friendship with India, which continues to refuse to support Western sanctions. And this not only on the government side, but also among large Indian corporations, which at the same time are trying to push through better tariff rate quotas in relation to the EU Safeguard measures. And boasting about circumventing and ignoring Western sanctions.
The EU and India share a deep commitment to ensuring a trade and technology landscape that generates economic gains for our people and companies, underpinned by democratic values. Working together in this new forum will build our bilateral trade relationship, which still has strong potential for growth – while providing a platform for shared leadership on global trade challenges. We expect the EU-India TTC to play a central role in making our economies greener, more prosperous and more competitive.
Valdis Dombrovskis, Executive Vice-President and Commissioner for Trade – 06/02/2023
Double standards of the EC once again?
While reports are being made in Germany about how the authorities are proceeding against alleged sanctions violations by German companies, on the European side they don’t dare criticise countries like India, which are economically Russia’s best friends.
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