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Lower nickel prices reduce employment, salaries in mining sector
Author:abs-cbnNEWS Post Date:2008-10-30
Employment and average compensation in the mining and quarrying sector started to fall in the April to June period as companies face declining mineral prices.
After a landmark Supreme Court decision in 2005 allowing foreigners to engage in mining activities, the sector has been touted as a major job provider as the government targeted to add 1 million jobs every year.
But that was when mineral prices were reaching record highs, prompting local players to aggressively promote investments in the extractive industry.
But now that mineral prices have dramatically dropped, the employment numbers are tumbling as well.
According to the National Statistical Coordination Board’s (NSCB) second quarter economic indices report released Thursday, total number of employed people in the mining and quarrying sector was 17 percent lower compared to the same period last year.
To provide a guide to those who analyze the economy based on current economic behaviour and events, NSCB regularly tracks changes on the country’s largest companies’ production volume and gross revenue, and compares these with changes in employment, compensation, and compensation per employee.
17% lower in mining
Statistician Maria Fe M. Talento, who helped prepare the report, noted that the index on gross revenues of the mining and quarrying sector plunged 17.5 percent year-on-year in the April-June period.
This decrease was way lower than those seen in other sectors, including manufacturing (down only 2.2 percent year-on-year) and electricity and water (0.1 percent lower).
The sectors that saw employment grew were finance (6.6 percent increase), transportation and communication (3.6 percent), real estate (1.4 percent), and trade (1.1 percent).
Mineral prices drop
Talento attributed the lower employment in the mining sector to the slump in China’s demand for nickel and chromite after the completion of the Olympic Village in Beijing.
She said mining companies engaged in the production of nickel, which is used for the production of stainless steel, may have stopped or reduced their operations amid a drastic fall in prices.
Nickel prices have fallen to about $11,000 per metric ton this year from a peak of $33,000 per metric ton last year.
Average compensation for those employed in the mining and quarrying sectors also fell by 15.7 percent compared to a year ago.
The compensation index considers the salaries and wages paid by industries both in cash and in kind. The average for all sectors in the second quarter was a 6.9 percent increase.