Analysis and discussion of issues that impact business

I find this article absolutely fascinating. It's a look at the US mining industry and the factors that influence it.

With a boom in demand, mining companies can't seem to get the commodities out the ground fast enough.

There are major shortages of the equipment used to move and break up the tons of rock that yield just ounces of metal and that's posing big challenges to an industry that can't seem to feed demand fast enough.

For people who have a hard time understanding why the price of gas is so high, read this and you might gain a better understanding of the market forces that push businesses around like ships on a raging sea.

The factors facing the mining industry are legion.

• Then there are large electric shovels. Delivery time for these are well over a year. "We ordered one of those 12 months ago and we'll be receiving one in June. We'll get that in the dirt in October. And we'll have another one arriving next March. So lead times for the electric shovel are 12-18 months," said Roy McKinstry, site manager at the mine.
• Apart from equipment shortage, the mining industry is facing another huge challenge. Just as demand is hitting historical highs, there is an acute shortage of miners — from truck operators to trained geologists —and it’s forcing the mining industry to get creative, in order to keep production humming.
• Fewer schools and fewer graduates caused the crunch. The number of programs offering degrees in mine engineering has dwindled by almost half in the past 15 years. Compounding that: an aging workforce.

The future is bringing its own challenges as well.

The coal industry alone will need 50,000 miners — that's nearly 80 percent of the current workforce — in the next five years to replace retirees and expand production. That's making it a job-seeker's market, with wages in the mines growing twice as fast as the overall labor market.

Mining workers are sitting pretty right now with the labor shortfall.

All this means that labor costs for the industry are up, on top of rising energy and equipment prices. To top this is the risk of investing in training workers and then losing them if a rival makes a better offer.

I encourage you to read this article over a couple of times, and get a feel for the dynamics of business and industry. Then pass it around to people you know. Maybe even to your elected officials. They could probably use a refresher course on the factors that affect businesses.