Evolution Mining boss Jake Klein urges migration boost to ease skills crisis

Evolution Mining chairman Jake Klein has backed calls for Australia to lift its skilled immigration intake to ease the growing skills crisis across the Australian resources sector.

Worker shortages caused by Covid-19 severely affected production at Evolution Mining’s operations. Picture: Bloomberg

Evolution Mining executive chairman Jake Klein has backed calls for Australia to lift its skilled immigration intake to ease the growing skills crisis across the Australian resources sector.

Evolution downgraded its annual production guidance on Thursday after revealing that more than a quarter of the workforce at its Cowal gold mine had tested positive for Covid-19 in the March quarter, with staff forced to isolate as close contacts.

Pointing to troubles finding skilled labour for its Kalgoorlie operations in Western Australia, the company joined a raft of Australia’s biggest mining companies in posting lower output and downgrading production expectations due to the combined impact of the pandemic and skilled labour shortages.

Both BHP and Rio Tinto posed lower production levels from their iron ore operations due to the spread of Covid-19 through their workforce, as well as labour market deficits, with Whitehaven Coal boss Paul Flynn also pointing to the tight market for skilled labour as a risk for both production and cost guidance.

Speaking to reporters and analysts on Evolution’s March quarter production briefing, Mr Klein said Evolution would support any moves to increase skilled migration levels to ease the industry’s skills crisis.

“In a tight labour market like we have at the moment, access to skills without creating rampant inflation – and just not being able to fill roles – is critical to the mining industry and frankly the economy of the country,” he said.

Evolution Mining executive chairman Jake Klein. Picture: Hollie Adams

While migration levels have not yet become a factor in the federal election, business groups have consistently called for a review of the country’s skilled intake since federal Treasurer Josh Frydenberg’s March budget showed the government planned to maintain the 2022-23 migration program at 160,000, albeit with a rise in proportion of skilled workers.

Gold production at Cowal took a 13 per cent hit in the March quarter, compared to the December period, as the mine struggled to deal with the loss of workers struck down by Covid-19.

Work at the NSW mine was also slowed by the extraordinary rainfall in the state early in the quarter, the company said.

Overall, Evolution’s total gold production of 148,787 ounces was just ahead of its December quarter total, with production falls at Cowal and Mt Rawdon evened out by a far stronger performance at its Red Lake mine in Canada, and a lift in production at Evolution’s WA assets. But the hit at Cowal forced Evolution to lower its annual output guidance by 20,000 ounces, with the company now saying it expects its mines to produce about 650,000 ounces of gold for the full financial year.

Evolution also completed the acquisition of Glencore’s Ernest Henry copper and gold mine in Queensland in January, and Mr Klein told analysts the operation was already delivering a strong boost to the overall quality of Evolution’s portfolio.

Mr Klein said Evolution’s gold mines delivered net cash flow of $124.5m for the quarter, up 33 per cent from the December period.

Ernest Henry delivered net mine cash flow of $173.8m, Evolution said.

Evolution finished March with $537.8m in cash and bullion, and net debt of $1.3bn.

Evolution shares closed down 22c, or 4.8 per cent, on Thursday.

Originally published as Evolution Mining boss Jake Klein urges migration boost to ease skills crisis