29 July 2022

Hollowing Itself Out to Hit Quarterly Numbers

Whether it's airline pilots, teachers, or now technical talent in the rare earths industry, we see industries literally unable to find people who can do the work that is central to their business.

In the quest to hit the numbers, and bump up the share price that to turn senior executives stock options from worthless to a not-so-small fortune, they have shed staff, refused to train new staff, and made the conditions so onerous that new talent looks elsewhere.

Of course, if they were willing to put in a bit of training (maybe a year?) and paid and treated their staff well, they would find that there was no shortage of potential employees.

But there is no money in that for senior management:

Luisa Moreno, president and director of the Canadian rare earth mining company Defense Metals, rattles off the ages of some of her colleagues.

Their chief metallurgist, who consults for the company, is 81. A petrologist and geologist, who serves as a part-time expert advisor, is in his late 80s. One of their directors, a mineralogist specializing in rare earths, is 80-something.

“This is a major, major problem,” said Moreno.

That problem, specifically, is an acute shortage of skills and new talent in the critical minerals industry, which supplies lithium for batteries, rare earths for permanent magnets, and copper for electric vehicles and battery storage. And Defense Metals is no anomaly: another rare earths company she was chatting with recently has an average employee age of 75, she said.

“I think that skills is a missing element,” Peter Handley, who works for the European Commission on issues related to energy-intensive industries, said at a recent webinar on critical minerals. “We need to have resources, we need to have the refining, we need to have everything from exploration through to the recycling and reuse of things.”

To source enough raw material to power the global energy transition is as much a challenge of mining the earth as it is of hiring people to do that. 

Right now, there’s a shortage of both. The Paris-based International Energy Agency warned last year that insufficient mineral supply threatens to derail the energy transition. On the human capital front, a shortage of mining engineers and operators risks stalling projects.

As if this shortage of trained personnel somehow mysteriously just happened.

This is the natural result of decades of neglect.  It's a failure of imagination and a failure of management.

It's modern capitalism in a nutshell.


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