Should the government increase funding for mining courses?

The Australian Institute of Metals and Metallurgy says that there is a shortage of graduates for mining companies. Its analysis of why, reported in The Australian this morning, is this:

[AIMM chief executive] Mr Larkin said the federal Government had given a commitment to fund disciplines of national importance but, because of the Government’s philosophy to move to a user-pays and market-driven tertiary education system, that was not happening.

As readers of this blog know, a tertiary education system in which market price signals are banned and places allocated by quota does not constitute a ‘market-driven’ system. Students have had the downside of part-user pays, the added costs, but not the upside, the collective power to shape the system in their interests.

It could be, however, that price signals from government are affecting university behaviour in supplying places relevant to the minerals industry. With a few exceptions, they can move places between courses within the dozen funding clusters, and with declining real funding per student there is a strong incentive to put places in courses with lower costs. If the low number of annual graduates in metallurgy cited in the article is correct, then universities will have a problem achieving economies of scale.

AIMM’s solution is for the federal government to increase funding by $4,000 per student in minerals courses. But why should a massively profitable industry like mining receive an indirect subsidy? Price signals working back through salaries should be sufficient to persuade potential students with interests compatible with mining careers to allow universities to charge the fees necessary to make these courses viable, with far more scope for fine-tuning than a sum like $4,000, which seems based only on matching the subsidy for agriculture, and not on an real cost information.

The problem here is that Australian doesn’t have a market-driven tertiary education system, not that it does.

13 thoughts on “Should the government increase funding for mining courses?

  1. It seems to me that the mining industry simply asks for anything that their pressure groups think they might be able to get for free, no matter how ridiculous. This one actually seems slightly better than some months ago when they were asking the Australian government to pay for a geological mapping of the country so they could find mineral deposits more easily.


  2. When mining companies offer to take their geologists out of the field and put them in classrooms, then they’ll be serious. Downscaling geology as an academic profession has occurred over many years and reversing it requires more than responsiveness to price signals. First-year students in 2008 motivated by Mr Larkin’s calls, if any, may be in for a rude shock. Price signals are one thing, but supplier preparedness to supply is another.


  3. “they were asking the Australian government to pay for a geological mapping of the country so they could find mineral deposits more easily” – Conrad, what should have they done?


  4. Paying for geological mapping is a wise use of taxpayers money. Minerals belong to the Crown, its a relatively small cost, and the data is available to all. If each individual company had to do their own mapping they would keep it secret and there would be massive waste due to duplication. But mining companies have been very slow to put their hand in their own pocket to fund places at universities, they want the taxpayer to do that. They have relied on expat South Africans coming over (and very good professionals they are) to fill gaps. I know of cases where graduates are now being brought in from China and India. Still miners remain reluctant to fund uni places. Looking 4 years ahead is a step too far for them.

    Siltstone (FAusIMM)


  5. Russell: Pay for it themselves.
    Siltstone: If mining companies are too stupid to either train enough people for their industry or pay trivial amounts to do their own mapping, despite their billions of dollars of profit, I really don’t have the slightest bit of sympathy for them, and I don’t see why the average tax payer should be subsidizing them. It’s like Robinhood in reverse.


  6. Conrad – so each company would pay to produce their own geological maps of Australia? I’m sure there already is a publicly available 1:100,000 series, and that most states probably have a 1:50,000 series, and that’s the best way to do it.
    Every company doing their own would be ridiculously wasteful, and nearly all small companies couldn’t afford it. One of the last questions I had when I worked at the State Library was from a small exploration company which needed to know how deep parts of the ocean floor are off the coast of Vietnam – easy, I knew we had the charts. It’s much more efficient for this stuff to be done by governments and made freely available.

    Interestingly, you find that lots of people have uses for information that the producers of the information could never have imagined – another reason to have good libraries.


  7. “so each company would pay to produce their own geological maps of Australia”
    Yes — or, more likely, buy it off a third party, in which case they could get any type of map they wanted vs. just the standard topological ones. I really don’t see why it is more efficient for the government to provide these sorts of services — what about the other hundred services mining companies need — should the government do them too?


  8. conrad, do you mean “topological” or “topographical”? I suspect the latter would be more useful than the former.


  9. More efficient because the exercise won’t be repeated by each company who wants the information, and because the government agency which comprehensively collects the information can manipulate it to suit the needs of different users. Otherwise only the most ‘profitable’ information may be collected.

    Also it’s more efficient if you can just call your State Library and speak to a knowledgeable person who has a really large collection, than try and find out which outfit may be selling the information you need.


  10. In conrad’s logic, there should be no public libraries and if one wanted to read a book one must buy it. And perhaps all car drivers should build their own roads. Fancy subsidising those transport companies by having public highways!


  11. Siltstone,

    North Korea still runs a Maoist regime, feel free live there, although Venezuala has a better food supply — and you could help them renationalize their mining industries and associated industries

    Of course, to get there, you’d probably need a street map, and unfortunately they’re all privately owned (Melways, Sydways, Gregorys etc.), so you shouldn’t use those. You might like to use Google instead, but, again, despite being free, its still a private company. You could ask the Australian government to duplicate that, except that would be a waste — after all, we need to subsidize companies already making record profits to destroy the enivronment and sell more dirt.


  12. comred
    one doesn’t have to go overseas to have public libraries and pubic roads. If thats a Moaist regime, where are you going to move?


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