The Asia Miner

SEP-OCT 2014

The ASIA Miner - Reporting Important Issues to Mining Companies in the Asia Pacific Region

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8 | ASIA Miner | September/October 2014 WORKERS have voiced their opinions about life in fy-in, fy-out (FIFO) employment via an online survey developed by West Austra- lian-based organizations Creating Commu- nities and FIFO Families. The key fndings point to the importance of supporting the health and well-being of the workers and their families. More than 800 individuals commuting long distances for work participated in the FIFO Life Survey. They answered a series of questions around the themes of induction and productiv- ity, employment attraction and retention strat- egies, life circumstances and experiences in the workplace. Around half the participants came from the mining sector, with a quarter from oil and gas, and a quarter from construction. Men made up 80% of all participants and near- ly 80% of respondents were aged between 25 and 44. The majority had been working FIFO, BIBO (bus-in, bus-out) or DIDO (drive- in, drive-out) for between two and nine years and 70% lived in a household with children at home. Most participants (62%) were satisfed with their life working FIFO and said they had a strong sense of loyalty to their com- pany (69%). However, more than one-third did not believe their companies understood the needs of workers (36%) or the needs of workers' families (42%). Family acceptance and availability of family support were seen as very important factors for workers remaining in FIFO work, however only 2% reported having been involved in an induction of family members into the FIFO lifestyle. Creating Communities' senior associate Andrew Watt says: "Many people choose to work FIFO and the majority report being satis- fed with their working life. However, it is very clear that there is an opportunity for compa- nies to create even greater worker satisfaction, well-being and safety through prioritizing per- sonal and family support. Such an approach will enable workers to be better prepared and have the strategies to effectively manage the numerous lifestyle changes that are present in moving to FIFO work." The survey included an analysis of worker satisfaction, which found that people without children were more satisfed with life working FIFO than those with children. The most sat- isfed workers had been working FIFO for a longer period of time and originally intended to work FIFO long term. They had attended a formal induction into the FIFO lifestyle, felt their companies understood their needs and those of their families and felt they belonged with their company. Mining workers were found to be more satisfed than workers in the construction or oil and gas sectors. FIFO Families' founder Nicole Ashby says: "FIFO is an essential component of the na- tional employment landscape. Thousands of Western Australian families, including my own, choose to work this way. However, we need to be continually seeking to improve the satis- faction, health and well-being of FIFO workers. "Greater preparation, induction and ongo- ing support for workers and families will help promote satisfaction and connectedness, which will also lead to greater productivity for companies." M&A in the global mining and metals sector is likely to remain sub- dued for the remainder of 2014 despite a strong deal pipeline and a private capital funds war chest yet to be unleashed, according to Ernst & Young (EY) Global Mining & Metals Transactions leader Lee Downham. EY's quarterly M&A analysis shows 112 deals in the sector during quarter two this year totalling US$9.5 billion. Deal volume was down 21% on the previous quarter and down 41% on the same quarter in 2013. Deal value was up 33% on the previous quarter, primarily due to the US$3.6 billion acquisition of Osisko Mining by Yamana Gold and Agnico Eagle Mines. First half comparisons show total deal values down 69% year-on-year to US$16.7 billion from US$53.8 billion, the fourth consecutive year of decline. Deal volumes for the frst half of 2014 were down 34% to 254, from 386 in the same period of 2013. Lee Downham says, "Deal making in the sector continues to be cau- tious, partly due to the continuing commitment to capital discipline, but also due to a lack of urgency over investment given the lack of com- petition for assets. Some standout deals and hostile bids during Q2, combined with a strong deal pipeline and substantial capital waiting to be deployed by mining-focused funds, suggest that momentum is building. For those brave enough to invest against the cycle there would appear to be good buy-side opportunities." Major diversifeds are continuing to consider divestments as a way of reducing debt, maximizing returns on capital and optimizing their port- folios, however, stronger balance sheets has taken the urgency out of these deals. "We do, however think divestments of non-core assets from the ma- jors will pick up pace in the next six months. While these assets may not be strategic to the divesting companies, they are typically high-quality assets and will likely attract strong competition, particularly from private capital buyers," Lee Downham says. Acquisitions by fnancial investors accounted for 20% of all mining and metals deal volumes globally in the frst half. "The much anticipated infux of substantial capital from new mining-focused private funds is taking longer than expected to hit the market. This is partly driven by the complex nature of executing an investment, which takes time re- gardless of size, but also the lack of competition in the market for deals, with investors happy to wait for clear signs that we are at the bottom of the market before making billion dollar-plus commitments," he says. EY estimates that the mining-focused private capital funds have a war chest of at least US$10 billion and possibly as high as US$20 billion. Mining M&A remains subdued The family of Joe and Nicole from Perth in Western Australia are among many impacted by fy-in, fy-out mining employment. Need to better support FIFO families

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