Extended Abstract

As global mineral and commodity prices hit record lows, many mining companies are struggling to cope with the current challenging times. The Moody’s Investor Service (2016) report has recently highlighted that the current downturn in the mining sector is in fact not a normal cyclical downturn, but rather, an unprecedented downturn. A prompt recovery has also been noted as highly unlikely with an expectation that the imbalance between mineral supply and demand would be expected to widen even further, putting the mining industry in very weak situations in the short- and medium-term (Moody’s Investor Service, 2016).

The study is focused on analysing the mining industry in two countries: Australia and Indonesia. The mining industry with its mineral outputs including precious metals, base metals, light metals, iron ore, and coal, is a significant contributor to Australia’s export, immigration, economic growth and industrial development.  Australia is the world’s leading producer of iron ore and bauxite, and is one of the largest producers of manganese, lead, alumina, coal, gold, silver, nickel, zinc, uranium, aluminium, tin and many other minerals (This is our story, n.d.). The mining industry contributes to 10.2 per cent of Australia’s Gross Domestic Product (GDP), making it one of the most important contributors to Australia’s economic power and sustainability (Department of Employment, Australian Government, 2014).

Being the largest economy in South East Asia, Indonesia’s economic growth is a sign of development and progress in the region. Indonesia is a country that is rich in natural resources. It is well-known since the early days for its resources such as coal, tin, nickel, copper, gold, and precious metals. Contributing to 12 per cent of the country’s GDP (Trading Economics, 2016), the mining industry is one of the key sectors supporting Indonesia’s economic growth. The industry has attracted many foreign investors as well as foreign competitors penetrating the Indonesian market. The abundance of resources particularly in the resource-rich provinces of the country such as West Kalimantan and West Papua, makes Indonesia an important player in the global mining industry.

With the general slowdown in global demand and weakening economic growth in China, the mining organisations and their Human Resources (HR) face challenges to survive the crisis. The aim of the study is thus to provide a more comprehensive review of HR practices during the period of downturn. In doing so, we first analyse the Australian and Indonesian contexts in relation to the mining industry. Second, we examine the impact of the global economic slowdown and the unexpected mining downturn on mining organisations. Third, we conduct a preliminary overview of debates and reviews of HR practices of mining organisations in Australia and Indonesia. Finally, we provide a consideration of HR practices that can assist organisations in making adjustments to the current challenging times and be ready for the future of the industry. The study offers contributions to the HR field in terms of highlighting HR challenges and HR practices during the downturn period, and how HR can essentially assist in managing organisations during the difficult times. The study also offers insights for practitioners to better understand HR practices adopted by companies during the downturn and how these may have a consequent impact for the future.

Keywords: HR practices, mining, downturn, Indonesia

References

Department of Employment, Australian Government (2014). Industry Outlook: Mining. Retrieved from https://cica.org.au/wp-content/uploads/2014-Mining-Industry-Employment-Outlook1.pdf, accessed on 28^th April 2016.

Moody’s Investor Service (2016). Base Metals – Global: Ratings recalibration amid fundamental shift in mining sector. Available from http://www.mining.com/wp-content/uploads/2016/01/Moodys-Base-Metals-Global-Ratings-Recalibration-Amid-Fundamental-Shift-in-Mining-Sector.pdf, accessed on 26^th April 2016.

This is our Story (n.d.). Australian Mining: This is our story. Retrieved from http://thisisourstory.com.au/default.aspx, accessed on 29^th April 2016.

Trading Economics (2016). Indonesia GDP Annual Growth. Retrieved from http://www.tradingeconomics.com/indonesia/gdp-growth-annual, accessed on 29^th April 2016.