PERTH (miningweekly.com) – A new report by consulting services firm MinterEllison has highlighted the three key issues facing the mining and services sector.

Research conducted among Western Australian mining executives has revealed concerns about rising costs, labour shortages, inflationary pressure, supply chain and global macroeconomic issues.

“Many of the executives we spoke with indicated that staff retention and attracting new employees were significant concerns for them. This is reflected in the issues they raised around labour shortages and inclusivity in the workplace,” said MinterElllison partner Craig Boyle on Monday.

“A focus on creating diverse workplaces is an important step - greater diversity, more acceptance of people in workplaces, and where people feel comfortable to be themselves. The sector is already taking important steps in response to Western Australia's Enough is Enough report, but respondents believe the work is ongoing and more action is needed," he added.

Meanwhile, the report found that there was still an appetite for mergers and acquisitions, and that businesses have long-term optimism but were bracing for short- to medium-term challenges.

After bouncing back from Covid-19 and seeing high levels of corporate activity, many respondents believe the sector is past the high point of market activity. However, research indicates that the sector is still performing well.

MinterEllison noted that in the first half of 2022, the materials sector comprised 80% of all new small-cap listings compared with 54% in the same period in 2021. Due to the predominance of the resources sector, 71% of new listings came from Western Australia, reflecting the strength of these sectors in the state.

“We're seeing that many projects still offer attractive returns, such as those aligned with decarbonisation and renewable energy themes, and with a focus on meeting ESG requirements,” said partner David Suttner.

Long term, respondents were optimistic that the market would improve in the new year – noting the ongoing attractiveness of the sector.

“Factors such as Australia's stable regulatory environment and the increasing clarity around environmental and social governance expectations are important drivers for long-term growth,” Suttner said.

“Despite the pressure, the mining sector in Western Australia remains a leading jurisdiction for mining investment and is at the forefront of mining and energy innovation. We're seeing great prospects for the industry as it shifts its direction and tackles new challenges and opportunities," he added.