Australia’s mining wages too high

Mitsui’s Australian chief said mining wages in the country are too high and do not match productivity levels.

Mitsui has joint ventures with BHP Billiton in both coal and iron ore, and owns 33 per cent of the Rio Tinto operated Robe River mine in the Pilbara.

The company’s Australian chief , Yasushi Takahashi, said lower commodity prices meant more cuts were needed across its portfolio of investments.

He said high costs and productivity drives were issues the company was looking to address with its business partners, SMH reported.

"It's an inconvenient truth but Australia's high wages are not supported by an equally high productivity," Takahashi said.

 "The biggest subject we are tackling right now with our joint venture partners is to improve productivity to match up with high costs."

Miners in Australia earn an average of $138,000 a year, but some job roles are worth more than others.

Mine managers are clearing $213,000 a year, while chief geologists are taking home $181,000 a year.

Labor is said to make up 25 per cent of a coal mine’s cost in Australia, but only 15 per cent of costs in other countries it competes with such as the US, South Africa and Indonesia.

"That is a good thing we are seeing high wages in the most liveable country in the world," Takahashi said.

"If that's sustainable that's fine. But one concern is, is it really sustainable?"

The mining sector’s high wages have been a hot topic of late, with many claiming they are making the industry less competitive.

Last month, efficiency in Australia’s mining sector was lambasted in a report by PricewaterhouseCoopers (PwC) which said the nation was the second least productive mining region in the world.

“Australia’s declining productivity is one of the most important challenges for our economy,” the report said.

Last year, the QRC also said mining wages were unsustainable and needed to be addressed.

However any attempt at culling cash will be met with harsh criticism by unions who say miners have the ability to deliver greater wages increases.

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