Northern Star warns border restrictions driving up labor costs

Northern Star Resources Ltd. is the latest Australian miner warning that pandemic-driven border restrictions in the nation’s major resources state continue to drive up labor-cost pressures.

“It’s been tough,” Chief Executive Stuart Tonkin said in a Bloomberg Television interview on Thursday. “Because over the last couple of years Western Australia has really kept a very tight border, the typical interstate or international imports to supplement that labor pool just hasn’t been there.”

Western Australia, where Northern Star is based and has the bulk of its gold-mining operations, is one of the world’s last jurisdictions attempting to eliminate Covid-19 from within its community through strict border controls and quarantine rules. 

The state’s resources industry, which is a crucial source of revenue for Australia, relies on flying in workers to remote sites, which has been extremely difficult for the past two years. That’s led to labor shortages for everything from truck drivers to explosive experts.

Read More: Dearth of explosive experts to drivers hurt top Australia miners

Tonkin added that the shortages had seen companies “robbing” talent, increasing cost pressures in labor and creating uncertainty that was disrupting plans for many businesses.

Still, Northern Star posted a A$261 million ($187 million) profit for the six months to Dec. 31, up 43% from the corresponding period the year before. It said it remains on track to meet full-year production guidance, despite Western Australia’s border restrictions and their associated labor and cost impacts.

A deal announced in 2020 to acquire Saracen Mineral Holdings has allowed Northern Star to take full control of the Super Pit gold mine in Western Australia. The company aims to almost double gold production by 2026 to 2 million ounces a year.

(By Jason Scott, with assistance from Haidi Lun and Shery Ahn)