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Will Safety be a casualty in the rush to reduce costs in Australia’s resources sector?

Mining SafetyAs has been well documented in recent months, the mining boom in resource rich Queensland and Western Australia is well and truly over.

Falling commodity prices are limiting the number of new projects getting the green light, which is resulting in a challenging time for the EPCM and mining services markets.  With fewer contracts available for tender, and existing ones being renegotiated, margins across the sector are under significant pressure.

As a recent article in the Australian Financial Review outlines, there is incidental evidence emerging from Western Australia that this squeeze may be affecting safety within the sector, as contractors consider reducing their pricing by sacrificing safety to remain competitive.

Although the number of work related fatalities within the industry has been steadily falling in the last decade, it could be argued that this trend has not been tested by the current rush for cost reduction, which has been noticeably absent in the boom years.

It is understandable that businesses face a dilemma in how to remain competitive when being asked to deliver the same for less, but how many will contemplate reducing safety provisions to achieve this?

Clearly it has been a subject of discussion within some organisations with Watpac Chief Executive Martin Munro already stating in the article above, “are we willing to be in business at these prices and compromise safety – the answer is we’re not”. The uncomfortable question for the industry in these challenging times is how many are willing to follow his lead?

The Resources sector in Australia has come a long way with its safety record during the last decade, and to sacrifice these gains when times get tough would be an injustice to the hard work already done in this area. Let’s hope for the sake of everyone concerned that safety remains a top priority despite the changing landscape for mining businesses in Australia.

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TMS Consulting