Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
I have not done this before; I have never repeated a comment as a new posting. I do this now, not because I have become lazy and dependent on others for opinions and perspective, but because I think this comment is worthy of individual exposure and repeat. This is powerful writing and strong opinion. So I post it here for your consideration. I edit a bit for context. Here it is from a commenter who identifies themself only as Andrey. He comments on an old posting on this blog that I repeat below the comment that follows.
Before you read Andrey’s comment, let me comment that he has valid points and offers sound advice. This guy deserves whatever he earns. And thanks to him for his comment.
Jack, the mining industry is just like any other industry, just usually with a lot more money. I am now graduating from a Geology program (Bsc.). I already have a contract signed with a large company for four years. At least 90% of my graduating class already have signed contracts for $70,000/year base salary. After all the bonuses and, depending on the area of work, we are making between$ 75,000 to $105,000/year.
This isn’t just what we expect; this is what you get, and can easily demand; the need for geologists has never been greater.
It is true that the mining industry is cyclical, so when the low hits, those of us who have not proven ourselves as dependable and intelligent workers, will most likely be laid off or move down to junior companies that will hire any P.Geo willing to work.
I realize many people are shocked at the salary I get for my first time job. This is usually because of the great misconception as to what geologists do. It’s not just simply looking at rocks and wearing khakis while sporting an impressive beard; there is a lot more to it.
Steve, [another commenter on the original posting] you sound bitter about the new generation of geologists and software. It is sad seeing some new graduates from universities not being able to tell what is a basic minerals (UoT graduates). My school focused on field work, so I know the importance of getting down and dirty. That being said, it is no less important to know and be proficient with new technology.
To be a good geologist you have to keep up with the times and the technology. The age of prospectors is done. To be valuable to any company you work for, so you can justify a high salary, you have to be proficient in all aspects of exploration and geology.
It’s better to have one P.Geo who knows his geology and the new software than four old geologists and one guy who only knows his software.
Dylan [another commenter on the original posting], I advise that you pursue geology only if you are willing to be serious about it. I don’t mean converting your home to a geological library, but truly to understand what you will be doing. If you get into it just for the money, you will end up just like an old geologist at the mine site who only logged core his whole career and then gets laid off to make room for young guns who are willing to further themselves. You get out what you put in; it’s not like an office job where you can avoid work and still collect salary. Also go to a school that has a good geology program. Just because it’s a prestigious school, does not mean your degree will do you any good in geology. If you get no exposure to field school, then between school years, get a summer job for a geological survey of your state/province. They do great work to expose you to the reality of geological work. The pay is crap but the experience is worth it. I hope this helps Dylan.
Here is the original posting that gave rise to the comment above.
On the plane from EKATI, I overheard a mine geologist bemoaning his lot. “I could have become a miner and earned more, but I wanted to do geology and now look at me,” he said before the noise of the plane drowned him out. I thought of this lad when I came across the following un-readable graph:
Let me try and explain this graph which has some interesting information in it.
Along the X-Axis is plotted the number of years a geologist has been working. Along the Y-Axis is plotted the number of dollars a geologist with X-years’ of experience thinks he/she should be paid. The big name for this is Salary Expectation Versus Years In the Industry (SEYI).
Now you probably cannot read the numbers very well. For that I say sorry, but I cannot get a better, bigger version into this blog, and the creator of the graph won’t give me a link that I can pass on to a better, more legible version. Here is what the graph compiler writes about this graph:
An analysis of InfoMine’s proprietary salary database showed that the average starting salary expectation for a geologist in Canada in 2010 was around USD $60,000. It also showed that over time, Canadian geologists expect an annual salary increase of around 4%, more than twice the Canadian inflation rate of ~ 1.8% (2010). With the increase of industry experience, the salary gap between the 20th and 80th percentile increased significantly. It grew from USD $25,000 at the beginning of a geologist’s career to more than $80,000 with 20 years of experience. This gap is most likely a result of the job setting (office versus field/remote), as well as of the industry type, such as the differences between government and academic positions versus industry (exploration, mine service, mine production), and by commodity. Individual expectations in this study were in line with surveys issued by the CostMine division, including “Canadian Mine Salaries, Wages and Benefits, 2010 survey Results“, with average salaries of Cnd $78,000 and $104,000 for mine geologists and chief geologists, respectively.
Kind of tough to understand, so here is my explanation:
The average geologist, just starting his/her career in Canada (mining or otherwise, I presume) expects a salary of $60,000. This does no mean that is what they get: there is always a disconnect between expectation and achievement; between what you think you should get and what you actually get.
Now for the 4 percent number. Seems if you read the graph a-right, the longer the geologist has been working, the more they expect as a salary. Again this does not mean that they get more, just that they hope to get more if they change jobs–jump ship to put it simply. The rate of increase of expected salary is 4 percent per year.
Now as pointed out that is more than twice the rate of inflation. So either geologists are in deep illusion about salaries or they are being paid sufficiently more to inflate their expectations. Or maybe they are just setting impossible goals when out job hunting.
As for the gap between the 20 and the 80 percentile. The quote attributes this to different jobs as a geologist. For example a geologist with an easy job in a depressed sector may have lower salary expectations than somebody in a booming sector. At least that is how I read the quote.
Of course there are other possible explanations. Once you have been working as a geologist for twenty years, you pretty much know your worth and the industry know your ability. Maybe this gap between the 20 and the 80 percentile is a reflection of personal objectivity regarding one’s ability. Some geologists just know they are good, and obviously some geologists just know they are not. Hence some expect more money when seeking a new jobs, and some acknowledge that they will have to settle for less.
Still $80,000 is a big difference in expectation between competent and incompetent geologists. Maybe though that is a reflection of reality. If all the geologist can do is log core after 20 years why pay him as much as a geologist who can find a great new ore body to mine?
I am told there are many more graphs like this, and the promise is someday to make them public. In the meantime, if you are curious, email Jan Pfeifer [email protected]> and ask him for information, advice, and help.
As for the correlation to actual salaries earned by mining geologists as tabulated by CostMine, all I can say is take a look at the many, far more detailed postings on this blog of publically-available information about mining salaries. You can find them all by way of a simple search using the Search box above. Alternatively here are links to a few:
5 Comments
Rock Jock
Why are you dogging on core logging geologists? To understand mineral relationships is crucial to resource discovery and expansion at every phase of exploration. Delegating core logging to the geologists with the least experience is one of the mistakes that many (most?) organizations make. As for what a geologist is worth- doesn’t that depend on supply and demand, like any other skilled and specialized occupation? Aren’t all wage-earners’ salaries tempered by ‘ceilings’ set by the company or the industry at large?
Mrkhrdr
I detect a belief system throughout this discussion in which salary and career longevity are determined by such absolutes as the industry’s “need” for your labor and your “worth” to your employer(s). It is my opinion that there are no such absolute needs and worths. The only absolutes are the laws of the marketplace. What an employer has is a demand for your labor and they will try to pay you what they need in order to employ you and no more. They will continue to employ you as long as you are their best option. Once they detect that there are better bargains out there than continuing to pay your wages, you are history. This decision has nothing to do with your worth. For example, an older employee with more experience may be laid off in favor of a newbie because the cost of training him/her and the associated benefits (eg. health care) is less than that of retaining the older employee. Happens all the time and if it happens to you, it’s going to be hard to accept if you believe your employer’s decision has anything to do with your work ethic, or your abilities, or loyalties or any intrinsic worthiness you may possess.
Dav19oo
I am a truck driver in the same industry and I make $172.000 plus a year with overtime. I agree with this gentleman, you get payed in our industry just what you are worth. Mabey you should reconsider your life’s work/occupation, dude??? ‘Lil, Dav.’
Dav1942
This guy is probably your boss Dav?? But he makes just what he deserives to make for what little that he does! “Big Dav.”
NevadaJoe
Yes, indeed what you are worth. I did not know consuming energy drinks and listening to satellite radio and trying to keep it between the berms was worth$172k. The fact of the matter is you provide a service that anyone without a DUI can do. That means there are quite a few people who are capable of doing your job. Appologies for the sarcasm. However, when are people going to realize we all have a role to play? I have done both jobs in question. Do not take this as a personal attack, I respect the work that you do, it is necessary by all means. However, the individual has to do what they enjoy doing for a living. If you do then great, and your work will show it what ever your responsibilities are. We would all be further ahead (miners) whatever your role, if we did not get into the uncessary ego match. We all have a job to do, we all rely on each other to make it happen.