Construction and Contractors
A labor of love, lacking in labor
The Chilean mining and construction sectors require an immense amount of labor. According to Statista, the Chilean mining industry directly employs 221,000 people. The construction sector, meanwhile, is estimated to employ 8.7% of the country’s labor force, with a market size of US$42.6 billion in 2021 according to Global Data. The industries require high quantities of labor, and finding skilled workers with the capacity to work in mining and mining-related construction has been a significant challenge over the past few years.
This talent shortage is leading construction companies to develop their own in-house capacity building. STRABAG and Züblin, for example, requires skilled operators capable of handling advanced equipment. Mario Theurl, managing director, explained: “After the peak period of the Covid pandemic, we have noticed a shortage of workers in all industries. To face this challenge, we conduct extensive training and hire employees without industry experience. STRABAG and Züblin is willing to train our employees from scratch.”
The Chilean education system does not focus enough on apprenticeships or developing hard skills, requiring companies to step in and take on that burden. Many companies interviewed for the report described the extensive training and apprenticeships they offer.
In this context, companies must expand beyond traditional hiring pools. One such way to alleviate traditional recruitment challenges is to actively incorporate women. Thiess, for example, runs an apprenticeship program in collaboration with local institutes that allows for on-site training. Darrell White, executive general manager, said: “This program focuses on empowering diverse candidates, and we’re proud that half of this year’s maintenance cohort is female. Our aim is to increase our female representation both in operations and maintenance.”
The government could take certain steps to alleviate this challenge. Currently, the immigration system is not supportive of the need for talented labor. With many countries in Latin America having extensive mining industries, there is a large, trained workforce within the region. Adolfo Sicilia, CEO of OSSA, a worldwide tunneling company, noted: “They cannot come to Chile because of bureaucratic barriers. For example, bringing a machine driver from Colombia to Chile takes eight to 10 months, which is a barrier for companies.”
“The market is shifting towards more integrated solutions. Modularization services have been in high demand recently, which has led to our being awarded contracts with large mining companies.” Tomas Fischer, CEO, Edyce
Automation provides possibility
Automation and technological advancement are filling the labor gap. When there is insufficient labor, the simplest, if challenging, answer is to alleviate the need for workers entirely. Sandro Tavonatti, CEO of Sigdo Koppers, said: “In response to changing labor demands, where experienced construction specialists are aging and younger professionals prefer to avoid working in underground mining conditions indefinitely, we actively seek alternatives to reduce manual labor. This approach allows us to generate flexibility and maneuverability in our operations.”
In part, the rapid shift to automation has been driven by the Covid-19 pandemic. Forced to determine how to continue operations, many construction and mining companies invested in automation to a never-before-seen extent. Although the industry was already moving in that direction, the pandemic demonstrated that a dramatic shift in work towards automated processes was possible.
The more automated a mine is, the less workhours are needed per employee. Automation technology is rapidly developing, but the workforce challenge is here to stay. Automation is not an immediate answer. Sicilia stated: “Automation will change the industry, but that major shift will be visible in over 10 to 15 years, slower than we would like. That is why there will continue to be a workforce gap this decade.”
“Today, inflation is a worldwide challenge. Global financial institutions have taken the correct approach to limit liquidity in the market. However, those steps make credit a little harder to access.”
Christian Abt, Director South America, MJ Gerüst
The digital revolution begins
In construction, the move towards a more technologically advanced industry has historically been particularly slow. “Construction is the fourth least digitalized industry among 100 industries. When it comes to adopting technologies, there is an extent to which resistance is cultural. If something worked in the past, construction workers tend to keep it the same,” said Maguire of Turner & Townsend.
This delay in adaptation of digital tools is something of which STRABAG and Züblin is aware. The construction company has an innovation manager, who works internally and externally to find solutions to improve efficiency and communication in different areas, including technology to remotely monitor tunnels. However, not all digital tools the company has tested have changed productivity levels, explained Mario Theurl, managing director of STRABAG and Züblin: “Our strategy to ensure meaningful change is that when we introduce a different technology, we ask three times how we can ensure that our employees can use it to improve productivity and safety and how it is linked to our profit equation.”
Improved data collection enables construction companies to improve their decision-making and their ability to prevent issues ahead of time. Thiess, for example, focuses on maximizing productivity while protecting assets through digital tools. Utilizing data collection technologies to monitor the need for maintenance prevents the productivity losses of asset failure. White of Thiess explained: “We gave a reliability team in Chile, with support from Brisbane as needed, which pulls digital data from our assets daily. This team then analyzes each asset in operation and utilizes the information gained to guide how we operate our assets to best facilitate asset protection.”
Utilizing data collection technologies to monitor the need for maintenance prevents the productivity losses of asset failure.
For Edyce, a Chilean company which manufactures and assembles steel structures for industrial buildings and offers a diversified range of industrial services, to compete with foreign companies a strong investment in technological advancement is vital. Tomas Fischer, CEO, said: “Machine learning and the Internet of Things are important tools to monitor and optimize our operations. Since acquiring these kinds of technologies, our productivity has increased by around 15 to 20%.”
Article header image courtesy of Freeport McMoRan