Fortescue warns shut Western Australia borders may worsen labor shortage

The chief executive of Australia’s Fortescue Metals Group Ltd warned on Friday that a delay by the state of Western Australia in reopening its borders may worsen a labor shortage currently affecting the mining sector.

The country’s largest state, home to the resource-rich Pilbara region, canceled plans to reopen its borders on Feb. 5 due to health risks from the Omicron coronavirus variant and did not set a new date to ease those curbs.

“With high vaccination rates evident across Western Australia, we believe it is important that we have a defined plan to transition out of the pandemic,” Fortescue CEO Elizabeth Gaines said.

All states and territories in the country, except Western Australia, have reopened their internal borders under a policy of living with COVID-19.

Western Australia state Premier Mark McGowan made an announcement late on Thursday saying it would be “reckless and irresponsible” to open up given the rapid spread of Omicron, adding that the original reopening plan was based on the less transmissible Delta strain.

The miner continued to see shortages in “key specialist skill areas” hurting various industries including the resources sector, Gaines said.

“The lack of clarity on the reopening of WA’s borders may lead to an exacerbated shortage of labor and skills.”

Fortescue, the world’s fourth biggest iron ore miner, has several mines in the state and is also developing the Iron Bridge magnetite project there.

Larger rivals Rio Tinto and BHP this week reported labor shortages hit their quarterly production and forced them to lower their annual forecasts.

(Reporting by Riya Sharma and Shashwat Awasthi; Editing by Shounak Dasgupta)