The mining boom is officially back. New figures released by the Australian Bureau of Statistics reveal that investment by mining companies is expected to climb by 38% to $50 billion over the next financial year as the global economy recovers.
Unfortunately, the news is pretty bleak across the rest of the economies. Business investment in most other sectors is expected to be flat, and manufacturing spending is expected to decline by just over 2%.
All of which means that companies should be looking for some way to get at least some exposure to the next mining boom – direct or indirect.
While that’s not easy for every business, here a few ideas for you to get a slice of the action.
Go west (or north)
West Australia and Queensland benefit most from resources booms and while most of the mining activity is centred around remote towns, the flow-on benefits will boost the entire states. If you’re considering expanding geographically this year, focusing on one of these states could help you grab some of the indirect spoils.
Give them a place to live
One of the biggest challenges of the mining boom is accommodating workers and any business that can help solve this problem is on a winner. This includes providers of temporary accommodation near mine sites, developers who can built accommodation in nearby towns and all trades involved in the construction process.
Keep them safe
Occupational health and safety is a huge part of the modern resources industry. Providers of safety gear and training should be able to cash in on the boom. The harmonisation of OH&S across states will force changes in some companies, which should add to this demand.
Finding and keeping workers
It’s been a horror few years for the recruitment sector, but the mining boom should provide a number of new opportunities, particularly for firms with leverage to the resource states. While skilled mining workers will be like gold, demand across the board will increase as workers from other industries seek to move into mining. Of course, it’s not just recruitment firms. Companies providing talent management software or services (such as tools for performance management) should also refocus on mining.
Keep them trained up
Given the pressure to retain skilled staff, training and education service providers are likely to find many opportunities in the mining boom, particularly around re-skilling workers with non-resources backgrounds and updating qualifications for current workers. But there are also opportunities to sell management training, safety training, administration training and other workplace training products.
Keep them healthy
A little left field this one, but one potential business opportunity to come out of the mining boom could be health and well-being services. Back when he was CEO of Macarthur Coal, mining baron Ken Talbot introduced yoga classes for his mine workers to improve the health of workers who spent a lot of time sitting in diggers or trucks. Could your business provide similar services to mine workers and their families?
Keep them wealthy
We all know mine workers make a lot of money but based on some of the tales of hardship we saw coming out of mining regions during the mini mining bust of late 2008 and early 2009, some of them aren’t so good at managing their money. Sounds like a prime opportunity for financial services, accounting and wealth management firms to set up special products for mine workers.
Slices of luxury
Back in 2005, one of the biggest sellers of luxury Holden vehicles was the dealership in the Queensland town of Mackay – cashed up young mine workers couldn’t wait to spend the cash on a high-performance ute or sporty Commodore model. If you’re in the luxury products business, this anecdote might provide some food for thought – finding a distributor in a mining town (or a least a mining state) might allow you to open up a new market.
Legal it
The unions are back in the mining industry and instances of industrial unrest are on the rise once again. While most of the big companies have dedicated IR teams within their human resources functions, lawyers with specific knowledge of the industry and the new IR rules could pick up plenty of work.
Drive innovation
Mining companies are always looking for ways to cut costs and have plenty to invest in the right technologies. Software and technology firms could do much worse than to focus at least part of their R&D efforts on the mining sector as an area that could provide long-term growth.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
