Fuerza Laboral de la Gran Minería Chilena 2015-2024 1

SUMMARY OF RESULTSCHILEAN LARGE-SCALEMINING WORKFORCE 2015-2024Results and Conclusions

2

Mining Council Team

Joaquín Villarino H., Executive Chairman

Carlos Urenda A., General Manager

Christian Schnettler R., Mining Skills Council Manager

José Tomás Morel L., Studies Manager

Cecilia Valdés V., Communications Manager

Sofía Moreno C., Commission and International Affairs Manager

Christel Lindhorst F., Project Manager

Innovum Fundación Chile Team

Hernán Araneda D., Manager

Diego Richard M., Mining Workforce Program Director

Gabriel Rojas L., Director of Studies

Carolina Salazar E., Studies Specialist

Consuelo Montalva R., Product Manager

This report it’s a product of Consejo de Competencias Mineras, a initiative of Consejo Minero with the expert support of Innovum Fundacion Chile.

Editing, drafting and design were done by Alder Comunicaciones.

We would like to thank the invaluable cooperation of Antofagasta Minerals S.A; Compañía Minera Doña Inés de Collahuasi; Freeport-McMoRan Inc.; Komatsu Chile; Minera Gaby S.A. and Yamana Gold Inc., owners of most of the pictures included in this report.

Mining CouncilAddress: Apoquindo 3500, Piso 7, Las Condes, Santiago.Phone Number: (562) 23472200www.ccm.cl

© Anglo American Norte S.A.; Anglo American Sur S.A.; Anglo American Chile Ltda.; Antofagasta Minerals S.A.; BHP Chile Inc.; Compañia Minera Barrick Chile Ltda.; Compañía Minera Cerro Colorado Ltda.; Minera Escondida Ltda.; Minera Spence S.A.; Compañía Minera Zaldivar Ltda.; Corporación Nacional del Cobre de Chile; Compañía Minera Doña Inés de Collahuasi SCM; Compañía Contractual Minera Candelaria; Sociedad Contractual Minera El Abra; Freeport-McMoRan South America Inc.; Glencore Chile S.A.; SCM Minera Lumina Cooper Chile; Sierra Gorda SCM; Teck Resources Chile Ltda.; Yamana Chile Servicios Ltda.; 2015. ALL RIGHTS RESERVEDREPRODUCTION AND DISTRIBUTION IS AUTHORIZED AS LONG AS THE SOURCE IS QUOTED

3

Index

Executive Summary 4

6

8

10

12

This publication is a summary of the main results obtained through the Chilean Large-Scale Mining Workforce Study 2015 – 2024. The entire book is available for download at www.ccm.cl in case an extended version is needed. Specific data may be consulted in the site’s statistics section and an official presentation of the study is also available for download.

Mining workforce Characterization

Skills supply for the mining sector

Skills demand and shortages forecast

Conclusions and Recommendations

4

Executive Summary

The 2015-2024 Large Scale Chilean Mining Workforce Report, is an initiative of the Chilean Mining Skills Council (CCM), its purpose is to identify the main gaps in human capital that the Chilean mining industry faces in the upcoming years, given the challenges the projects that the industry aims to develop within its investment portfolio, as well as tendencies regarding the labor, formative, and technological markets.

The present study was carried out with information provided by 14 large-scale mining companies and 18 contractor companies, which contributed data in regard to their current staff to June of 2015, that represent 100% of the Chilean large-scale metallic mining workforce (47,624 workers), and 21% of contractor companies employees (17,362 workers).

For projection of futures staffing needs, the industries investment portfolio was analyzed, which includes initiatives which companies considered to be in a feasible or execution stage. Since 2012, the project portfolio has been reduced from 23 to 12 initiatives; higher risk investments have been postponed until more favorable conditions appear within the worlds global commodities market.

According to projections forecasted to 2024, the sector will need 30,000 workers, 2,700 more than the last study’s estimate. For the first time, it is estimated that the sectors demand has a stronger component regarding the potential retirement of workers due to age, than to project necessities. There will be a need for 18,400 workers to replace those who have retired due to age and 11,600 will be needed to cover the new work posts created by the new mining projects. The demand for Human Capital will be less during 2016 and 2017, and shall recover as of 2018.

This present study has sought to delve deeper into the concepts of “Demand” and “Gaps” of human capital, identifying not only the quantitative demand for new workers, but also pointing out the criteria mismatch between the graduate profiles of the formative world and the requirements defined by Chilean Mining Qualifications Framework (Marco de Cualificaciones para la Minería). Furthermore, the importance of demand due sector turnover has been revealed (7% within mining companies and 22% for contractor companies) as well as new industry demands due to emerging conditions and how this will affect the skillsets of future workers.

The educational system linked to the mining sector, at a technical level, shows a high concentration of enrollment in few institutions (over 60% in just two of them). Additionally, Superior Level Technical Programs show a higher growth in their enrollment (68%) as of 2011, higher than at other levels of expenditure.

The estimate of the supply of graduates shows that the Chilean mining sector will have 26,000 new potential workers during the next decade. Notwithstanding that this amount is less than the projected demand, the formative market continues to be misaligned, generating a surplus of graduates in certain specialties and shortages in others, which will impact employment rates in the future. This misalignment requires the formative world to take action. Estimated shortages in human capital based on estimates of supply and calculations of demand, touch upon profiles that present an accumulated deficit towards 2024; mechanical maintenance technicians (5,664); mobile equipment operators (4,483); fixed equipment operators (3,404); electrical maintenance technicians (799), maintenance supervisors (1,016); and maintenance professionals (438).

To these quantitative gaps we must also add the new demands that will be required of the Human Resources areas of mining and contractor companies. Between them, necessities that generate the incorporation of over 20,000 workers to the studied companies due to turnover during the last year, re-training due to incorporation of new technologies within processes, incorporation of a new generation of workers, as well as a higher proportion of female workers within the mining industry.

Large-scale mining, as a productive sector, is searching for its sustainability on a par with improving its productivity. The new work cycle the Mining Skills Council (Consejo de Competencias Mineras) is commencing, based on the products and standards developed over the last four years, is challenged to boost its usability, to apply sector standards to mining operations and to its providers, as well as the adjustment of the formative supply based on the quantitative and qualitative signals being communicated.

(*) Demand due to mining project construction is not included in this study.

Fuerza Laboral de la Gran Minería Chilena 2015-2024

MINERÍA

CHIL

ENA

PERFILDEMANDA

FUERZA LABORAL

CAPITALMain results of

the study

INDUSTRIA

ESTUDIO

METODOLOGÍA

DESAFÍO

CREC

IMIE

NTO TÉCNICOS

EQUIPOS FIJOS

PRODUCTIVIDADLOGROS OFERTA

PROVEEDORES

EMPL

EABI

LIDA

D

EXTRACCIÓN

CONSTRUCCIÓN

MANTENEDORES

EMPRESAS PROVEEDORAS

BREC

HAS

SUSTENTABILIDAD

PROY

ECTO

S

TRABAJOFORMACIÓN

INVE

RSIÓ

N

PERÍODOESPECIALISTAS

OPERACIONES

ANÁLISIS

GEOLOGÍA

DESARROLLOENTRENAMIENTO

CERTIFICACIÓNMINERO

5

Consejo de Competencias Mineras - CCM

• Since 2013, the distribution of staff amongst areas within mining companies and contractor companies has gone through important changes, as a result of the industries contraction. Therefore, areas associated to projects and development have been reduced, and there has been an increase - though very relative - within the main value chain.

• On the other hand, areas related to mining development (exploration, mining site development, and optimization projects) have made a comeback after a considerable fall during 2014. This suggests a tendency towards “industry optimization” in order ensure that in the medium term the industry´s future will not be jeopardized, this since areas that permit the expansion of the industry tend towards a normalization in regards to 2012, when the first measurement was carried out.

• Outside of the main value chain, outsourcing of functions and externalization of jobs has been reduced. The relation of workers of contractor companies to those of workers from mining companies within the main value chain tends to maintain itself at 1.5:1 and for the industry in general is 1.7:1.

• Post secondary education (post high-school) is present at all levels and is almost always greater within mining companies (except in the case of maintenance, were contractor companies overshadow mining companies). What attracts attention to the mining companies specifically is the elevated number of operators with higher-level education; while for contractor companies what stands out is that the percentage of employees with higher education is below average for professional levels.

• There is a fact that is important to consider in the future analysis of contractor companies: while in general there is a rise in the level of professionalization (from 52.4% to 59%), there is a decrease in the number of workers per Supervisor (from 7 to 5.1). This could be interpretated as a mismatch between the tendency

to improve the educational level of those hired, and the degree of autonomy that they may have to carry out their functions.

• Despite efforts carried out by some companies, participation of women in mining has maintained its stability over the past four years. Even though participation within contractor companies has increased, this is not reflected within the main value chain, which has maintained the same figures over the past years.

• Even though the participation of women within mining in Australia (15.8%) and Canada (19.6%) has stopped growing, Chile is far from those countries standards. Women participation is still concentrated at professional level or administrative posts, having scarce participation in operations, maintenance, and at Supervisor levels. Furthermore, the percentage increase of women in the mining industry has been in positions outside of the main value chain.

• At every level women have a higher level of professional studies in comparison to their male counterparts, a situation that is most noticeable in operators and maintenance workers.

• The industry shows a contraction, reverting the expansive tendency observed until 2012, mainly due to a decline in copper prices. This dimension is not fully reflected due to the fact that four operations have been in the process of installation and start-up, which has implied hiring workers in a period when the other operations have had to downsize.

• Regarding the staffing adjustment processes within the sector, it can be observed that companies tend towards protection of their human capital, prioritizing other means of cost control before considering downsizing. When this hasn´t been possible, “services” and “support” are the areas that have been mostly affected by this contraction, and in some cases, development and large-scale projects.

6

Mining workforce characterization

Fuerza Laboral de la Gran Minería Chilena 2015-2024 7

• Despite being in a contraction period, more than 20,000 people have rotated or been incorporated into the industry. In the case of mining companies, 11% of current staff was hired during the 2014-2015 period, a figure that in contractor companies

ascends to 21%. This constitutes an important means of pressure to attract, hire, and train, without varying the total size of the industry, but demanding considerable resources.

• For mining as well as contractor companies, the relation of workers per Supervisor has been reduced to 9.6 for mining companies and 5.1 for contractor companies, though this proportion is more evident for contractor companies, which reflects a greater control within the decision-making process, and as a consequence, implies less autonomy for workers.

75.7 5.4

11 11 10.59.6

2012 2013 2014 2015

Average of workers by each supervisor in the mining industry

12

10

8

6

4

2

0

Contractors companiesMining companies

Of the total of workers who left the mining sector in the period September 2014 to August 2015, 67.8% of them had employment contract with a contractor and 32.2% with a mining company.

Mining companies

88.2%remain in their jobs

Contractor companies

79.4%remain in their jobs

0.8% from contractor

companies(381 persons)

1.6%from contractor companies

(1,349 persons)

8.5% from others sectors or unemployement

(4,048 persons)

18.8% from others sectors or unemployement

(15,853 persons)

2.5% from other mining companies

(1,191 persons)

0.2% from other mining companies

(169 persons)

Tournover of workers in mining

5.1

Consejo de Competencias Mineras - CCM

• The increase in first year enrollment has occurred without consideration or linked to the demands for workforce that has been communicated by the series of studies presented by the CCM in previous years. This mismatch will produce an excess or deficit by career type and geographical distribution.

• It is projected that VetaMinera could train close to 800 operators and maintenance workers per year, with specific orientation towards mining. It has been proven that their employability level (45% within the mining sector, and 71% in general) is superior to those that graduate from training in trade programs not managed through VetaMinera.

• The tendency of increase in enrollment indicates that during the next decade the number of graduates looking for employment could double. Almost half of these come from programs that exist as of 2011, which makes it necessary for the IES to revise how pertinent these programs are to the work market.

• This growth in graduates foresees a drop in declared employability, since in this offer estimation each graduate is considered equally competitive within the job market, but it is probable that the surplus of graduates marks a significant difference in employability according to program origin and institution.

8

• Although there is an observed increase in accreditation of institutions that impart programs analyzed as part of the offer, the accreditations of programs remains very low. These signals the formative world is sending are misaligned with the assurance of pertinence the mining industry requires through the Mining Qualifications Framework.

• The increase in enrollment of geology TNS illustrates the greatest mismatch with what was reported by the CCM over the past three years. In this same area, but for the group of Professionals with a Bachelor´s, enrollment is lower than that of the last measurement carried out.

• The processing area (metallurgy) is the one that has the least growth, has a lower percentage of first-year enrollment (27%), and the least amount of participation in programs that began after 2011. On the other hand, it presents the most accreditation, lowest level of desertion, and real duration of the career.

• Concentration of formative offer is another relevant aspect, since enrollment associated to Superior Level Institutions for Superior Level Technicians highlights 21 institutions as the most relevant. Of these, seven concentrate 81% of total enrollment, while two of these concentrate 62%.

Skills supply for the mining sector

Fuerza Laboral de la Gran Minería Chilena 2015-2024 9 9

Evolution of freshman enrollment in mining specialties higher education by type of program. (In thousands of persons)

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

30

25

20

15

10

5

0

24.8

7.6

5.8

TNS PsL PcL

Aggregate supply of graduates by profile proyected 2015- 2024

2,884

3,856

2,247

2,126

2,099

2,062

1,887

1,860

1,587

1,397

1,327

1,023

900

728

115

Maintenance mechanical

Other geological area occupations

Extraction supervisor

Mine extraction professional

Electrical maintenance technician

Geologist

Mobile equipment operator

Extraction engeneering specialist

Processing supervisor

Maintenance engeneering specialist

Processing engeneering specialist

Fixed equipment operator

Processing professional

Maintenance supervisor

Maintenance professional

0 500 1,000 1,500 2,000 2,500 3,000 3,500

• The high-speed increase in enrollment of Superior Level Technicians make it urgent and necessary to link specific requirements of the mining industry to higher level educational institutions, in order to adjust the quality and quantity of their formative offer.

• Of the total number of graduates related to mining programs during the 2015-2024 period, only 26 thousand may be attracted by the sector. The profiles that present the most projected offer are: Maintenance mechanic (3,856), careers related to geology (2,884), Extraction supervisor (2,247), and Mining extraction professionals (2,126).

Consejo de Competencias Mineras - CCM

• The analyzed project portfolio shows a more restrictive scenario than other years. New initiatives were not incorporated and five projects are out of analysis, therefore the main focus is on maintaining company’s competitiveness and productivity.

• Within the portfolio there are three initiatives being evaluated and seven projects appear to have a high degree of certainty regarding execution and progress stages. Finally, two projects are undefined, that could be considered under evaluation. This leaves several regions within the country outside of the investment scheme of the large-scale mining industry.

• The estimated workforce demand for the cycle under study is of 30 thousand, driven by age projections to 2024 and the non realization of retirements up until 2015, as well as the staffing demand for a few specific projects.

• This study shows that only 24% of workers over 60 years of age retired from the industry during 2015, and that for the total demand estimated to 2024, 18 thousand vacancies correspond a to potential retirements given that they will be over 60 years of age for the studied period.

• Taking a yearly look at these figures, 2018 and 2021 constitute peaks in the need for workers, similar to past projections. The accumulated demand for the decade is concentrated in two specific groups of profiles with highest staff and potential need for replacement: operators (10,796) and maintenance workers (12,420).

• The projection of offer increased by including those that graduated from Training in Trades Programs, reducing the sectorial shortage of those specific profiles. Nonetheless, profiles that show shortages from the previous studies

maintain themselves: Operators, Maintenance personnel, and Maintenance Supervisors.

• A wider view in the analysis of demand and shortages concludes that there is not a match between quantitative demand and projection of graduates from the formative/educational system. On the contrary, it must be understood that demand and shortages in human capital are challenges that the industry must address in multidimensional ways.

• Based on projections and estimations of investment projects, it seems that the relation of mining workers to those of contractor companies will not change (1:1.7).

• Annual sector turnaround is close to 17%, even in times of mining industry contraction there is great importance in being able to count on well trained workers. In figures, this means 20 thousand new workers every year. In seven years, this number will be equal to that of the total current staff of large-scale mining.

• It is increasingly important that that the industry dialog with institutional actors of the formative world due to the increase in enrollment for technical and professional professions in Chile, and the signals given by the industry in defining a Mining Qualifications Framework will not be articulated by themselves nor produce changes spontaneously.

• On the other hand, assurance of pertinence and quality in training and formation is a challenge that has yet to be addressed, since the signals given by accreditation systems do not refer to what is necessary to make this a virtous system between what the formative world offers and the needs of the mining industry.

10

Skills demand and shortages forecast

Fuerza Laboral de la Gran Minería Chilena 2015-2024

• The changes that are announced for the work world at a global level also constitute relevant challenges that the mining sector must take into consideration, given that they call for a important modifications in the way work is carried out. Themes such working remotely within the operation, or digitalization of processes connected to intelligent control systems, have installed themselves within the industry and are in full deployment. Furthermore, relational aspects

- such as coexistence of different generations of employees as a result of the extension of a persons work cycle- is something new to the industry, and which has an impact in the way it communicates and coordinates. There are skills that will be needed that are not being currently addressed in formative processes and that should begin to mark a trend, in the formal formative offer as well as in training for job posts.

11

Other geological area occupations

Geologist

Mine extraction professional

Extraction engeneering specialist

Processing supervisor

Extraction supervisor

Processing engeneering specialist

Processing professional

Maintenance engeneering specialist

Maintenance professional

Electrical maintenance technician

Maintenance supervisor

Fixed equipment operator

Mobile equipment operator

Maintenance mechanical

1.9

1.8

1.6

1.0

1.0

0.9

0.6

0.3

-0.4

-0.8

-1.0

-3.4

-4.4

-5.6

2.6

-7.0 -6.0 -5.0 -4.0 -3.0 -2.0 -1.0 0.0 1.0 2.0 3.0 4.0

Aggregate shortages by profile 2015-2024(in thousands of workers)

Consejo de Competencias Mineras - CCM12

MINERÍA

CHIL

ENA

PERFILDEMANDA

FUERZA LABORAL

CAPITALConclusions and

recommendations

INDUSTRIA

ESTUDIO

METODOLOGÍA

DESAFÍO

CREC

IMIE

NTO TÉCNICOS

EQUIPOS FIJOS

PRODUCTIVIDADLOGROS OFERTA

PROVEEDORES

EMPL

EABI

LIDA

D

EXTRACCIÓN

CONSTRUCCIÓN

MANTENEDORES

EMPRESAS PROVEEDORAS

BREC

HAS

SUSTENTABILIDAD

PROY

ECTO

S

TRABAJOFORMACIÓN

INVE

RSIÓ

N

PERÍODOESPECIALISTAS

OPERACIONES

ANÁLISIS

GEOLOGÍA

DESARROLLOENTRENAMIENTO

CERTIFICACIÓNMINERO

13

Conclusions regarding characterization

• Since 2012, Chilean large-scale mining has been going through an adjustment period, reducing 12,400 job posts, which represent 10% of the initial workforce. This process was contrasted by the implementation of four investment projects during the same period (Antucoya, Caserones, Ministro Hales, and Sierra Gorda), which have hired 14,500 workers (internal and contractors).

• The workforce contraction within mining companies was concentrated in areas associated with mining development, large-scale projects, and staff, producing a relative increase within the main chain of value (3% of the workforce) within the same period.

• For contractor companies’ workforce contraction focused on services related to production support, therefore maintaining staffing within the main value chain.

• Having characterized the downsizing process with mining companies, we can conclude that: a) 25% of mining companies decreased their workforce by more than 10%; b) this process began in 2013 and has been carried out continuously by not replacing workers who voluntarily retire, implementing voluntary retirement plans, and finally, forced retirement plans; c) factors that are prioritized when considering worker retirement are, in order of relevance: performance records, labor costs, and low polyfuntionality, which makes relocation difficult.

• Between 2012 and 2015 there has been a decrease regarding the number of workers Supervisors oversee (13% within mining companies and 27% in contractor companies). Various factors influence this: workforce adjustments, changes within process organization, or greater control of the operation.

• This last point can be contrasted with an increase in the level of professionalization of mining workers over the past 4 years, for maintenance, operational posts, as well as supervisor positions.

• Since 2013, there has been a stabilization of female workers within the mining industry (7%), which is still far from international standards (15.8% in Australia, and 19.6% in Canada). Women present a higher level of professionalization in all job posts analyzed within the main value chain. Profiles with highest number of female participation are: Geologists (21%), Processing specialist engineers (15%), and processing professional (12%).

• In 2015, 17% of the workforce had less than a year of tenure within their companies. This is equivalent to over 20,000 workers (first job employment, or coming from other companies within the industry, or other productive sectors, or the work market) who have gone through recruitment, selection, induction, and training processes. Of these, contractor companies hired 75%.

• The mining industry presents a high training rate with an average of 32 hours per worker and an investment of $188.500, by 2014.

Recommendations

• In consideration of the sectors efforts to increase productivity, the role of Front Line Supervisor has been identified as crucial for this aspect to materialize. It is for this reason that the CCM (Skills Council) has updated this profile and its competencies, developing a Training Package as well as instructing Training and Development Centers (OTEC´s) on its use. It is recommended that companies begin training and certification of Supervisors, impacting productivity through company optimization and team resource management.

• Along these same lines, it is suggested that companies review the relation between Supervisors and number of workers they oversee, checking for optimization opportunities. The increase in professionalization of technical roles opens up chances for greater responsibility and autonomy in the execution of job roles.

• Considering the sectors turnover of 17% (7% for mining companies and 22% for contractor companies), and the costs associated to this matter, this also opens up the chance to consider retention initiatives, with training and certification programs based on sector standards that allow for worker commitment to their Learning Path and development, keeping them within the productive sector.

14

Conclusions regarding formative offer

• The formative offer of technicians pertinent to the mining sector has presented a sustained level of increase in enrollment since 2011 (70%), mainly sustained by new programs (55%) in accredited institutions (89%), but with a very low coverage in accreditation of programs.

• This growth, projected to 10 years, presents considerable imbalances, even considering that this study only considers the requirements of large-scale metallic mining within the country. Among those that stand out:

- Mismatch of required specialties. Specialties such as mining and geology present a surplus of offer of 1.300% and 500% respectively. In others, such as metallurgy, the surplus of offer is less (200%). Finally, specialties related to maintenance present a deficit between 30%-60%.

- Misalignments of geographical distribution. Central regions and the Coquimbo region present a surplus in contrast to demand of 73% and 177% respectively. On the other hand, regions with an important mining presence, such as Tarapaca and Antofagasta present a deficit of 70%.

- Misalignments of pertinence. In the continuous professionalization process that the mining sector has been experiencing over the past 4 years, the penetration of technicians (Superior Level Technicians

or Professionals without a degree) is still low, in operations as well as in maintenance. In the case of Supervisors, this presence is not only low, but is decreasing as a tendency. These positions, which in reference countries are covered by technicians, in Chile are occupied by professionals (57% in mining companies and 37% in contractor companies). This shows that the market is privileging management competencies for these roles, which cannot be found in technicians that have graduated from mining careers.

• The growth of technical careers with the mentioned misalignments foresees a drop in employability for graduates over the next few years. This will be mostly focused on careers for technicians (TNS) and Profesionals without a degree (PsL) in mining and geology, and to a lesser extent in metallurgy.

• On the other hand, training in trades (less than six months, carried out by tecnical training centers, OTECs) has positioned itself as a valid offer, pertinent and geographically adequate to the industry’s requirements, highlighting programs that have obtained the CCMs Seal of Quality.

15

Recommendations

• During 2015, 18 new Training Packages were developed, reaching a total of 30. These products have constituted a fundamental tool to push the adjustment of the formative offer towards the industries agreed upon work standards.

• As a product of the work carried out by the OTECs and IES Practice Communities, a Framework for Quality in Mining training has been defined and agreed upon. This Framework has a version for shorter programs (OTECs´), and another for programs that lead to a degree (IES).

• In the case of OTECs´, during 2015 there was an audit of 15 formative programs, 11 of which were approved, obtaining the CCM Seal of Quality, 2 are pending evaluation until full execution is carried out, and 2 were not approved - being that they were not up to par with standards required by the industry.

• In December of 2015 the CCM launched a new tool, www.serminero.cl, its purpose is to orient young potential workers in training and working in the mining industry, providing information regarding pertinent formative offers and its relation to the Mining Qualifications Framework, as well as signals of offer, demand, and employment expectations of the training programs. To date, over 10,193 people have used this platform to orient their vocational decisions.

• We recommend companies use the CCM Seal of Quality as a reference when acquiring training programs, for their own personnel as well as apprentice programs and for community development. This seal will guarantee pertinence, quality, and adequate infrastructure as well as follow-up of results.

• Based upon the CCM standards that were developed (work standards, formative offer, quality, and certification), it is recommended that a sustained and relevant process be carried out in the adjustment of the technical formative offer at all levels (EMTP, TNS, PsL, and trades). This is a process that requires the commitment of the whole industry, but also of public bodies involved, such as the Ministries of Work and Education, as well as Training and development organisms.

• To increase the availability of formative program graduates linked to mining, it is recommended that the State and superior educational institutions promote the entrance of women into programs associated to profiles of the main value chain, especially those in the maintenance area.

CCM actions linked to offer

16

Conclusions regarding demand and shortages (gaps)

• The mining sectors investment portfolio has evolved over the past 3 years, impacting workforce estimations, mainly due to three reasons:

- Project realization. There are currently four mining operations within the portfolio that have begun their production phase. These operations are Ministro Hales, Sierra Gorda, Antucoya, and Caserones, which have generated 14,500 direct and indirect job posts for their regular operation.

- Project backlog. Within the portfolio there are projects from the past three years which have delayed their initial construction and entrance of operation dates.

- Project dismissal. At least five projects have been discarded from the portfolio and the companies have reported that they are no longer viable to be considered.

• Total workforce demand has gone from 27 thousand workers from the last study, to an estimate of 30 thousand workers needed by 2024. This is because the project portfolio which sustains the demand for new work posts went from 11 thousand workers in the 2014 study, to 11.6 thousand for the current version.

• This demand for new work posts is completed when considering that due to an increase of retirement estimations, 18.3 thousand work posts will be needed in this version of the study, in contrast to the 16.5 thousand workers of the 2014 study. This is explained by two factors: a) Postponement of retirement of workers over 60 years of age, and b) increase in proportion of workers that reach 60 years of age.

• Together with the quantitative demand presented, which groups staffing requirements due to replacements because of retirement and creation of new job posts, another three sources of demand have been identified for the mining sector. These are:

- Demand due to turnover. It is perceived that worker rotation/turnover is a game that adds up to zero, were workers carry their abilities from on employer to another. Yet replacing a worker involves costs associated to recruitment, selection, induction, and training for the job post. These costs are augmented when recruiting young persons or workers from other industries. Today the mining sector presents a 17% of turnover, which means that there are more than 20 thousand workers whom have less than one years tenure with their new employer. Of these, 7% are in their first job and 79% come from the work market or other productive sectors. The rest corresponds to turnover within the mining sector.

- Gaps between the graduation profile of technical careers and the labor standards agreed upon by the sectors companies. This phenomenon has two consequences for the sectors companies. In first place, efforts to re-train and accompany workers for a short period of time. Secondly, the hiring of over-qualified educational profiles for technical jobs.

- New demands due to changes in the environment. The increase in life expectancy and average age of the population, plus incorporation of new tech, amongst others factors, will push for the design of new processes, the need for re-training of active workers and also changes in the graduation profiles of the formative sector.

17

Recommendations

• The Chilean Large-scale Mining Workforce Study carried out during the past four years has allowed for the sector to count on precise information regarding offer, demand, and shortages (gaps) of human capital. This study is a sectorial contribution for the making of informed decisions by institutions related to the formative sector, the State, sector companies, and those who are defining their future employment.

• The CCM (Chilean Mining Skills Council) has maintained coordination with ChileValora and the Mining OSCL (Sector Organization of Work Competencies) for the gathering of information and validation of the sectors work standards. This allows for the validity of mining standards by companies, workers, and bodies of the State, giving it national recognition.

• The first four-year stage of the CCM culminated with encounters/workshops between Human Resources Management of mining and contractor companies to establish the goals that had been achieved as well as to identify pending challenges, confirming the importance of having a sector initiative that faces the challenges of human capital development, thus renovating the CCM for 2016 and 2017. This new stage expands participation to unions, as well as contractor companies that represent different views within the main value chain.

• In order to keep on counting with precise information that orientates the adustment of formative programs regarding sector demands, as well as anticipating the demand for new competencies, it is recommended that these human capital studies continue periodically (at least every two years).

• Due to the growing turnover rate of the past years, it is recommended that the sector encourage the certificaction of work competencies on a national level to workers within the sector, as a way of lowering costs associated to work mobility (Recruitment, selection, and induction).

• In order for this to happen, it is recommended there be a clear link generated by sector companies Human Resource Management and the standards agreed upon by the industry. Evaluation and Certification of Competencies allows for the identification of individual gaps and their closure, therefore avoiding it to be considered only as a means of recognition.

• Investigation with partner companies of the CCM the factors that contribute or are an obstacle for the retirement

of workers over 6o years of age. This will allow for a better management in retaining critical personnel.

• Begin to incorporate within update process of the Mining Qualifications Framework the effects of changes in the working environment of the mining industry - especially those associated to technological advances, and that demand greater and more behavioral competencies.

CCM actions linked to demand and shortages

Consejo de Competencias Mineras - CCM18

CCM participating companies