Will Cheaper Labour Slow Down Automation for Tier-2/3 Miners?

Written By Wyatt Zacher

Commodity cycles have always dictated how quickly mining technology rolls out. Right now, falling prices and fresh layoffs mean there are more boots available for less money. It raises a fair question: if people are suddenly affordable again, will smaller miners hit the pause button on automation?

1. The labour market really has loosened—but it’s uneven

  • Nickel, PGMs and coal producers have shed thousands of jobs in the last 12 months, with some operators talking about trimming labour costs by 10 percent.

  • Survey data still shows base wages creeping up by roughly 4 percent a year in North America and Australia, but that’s well below the double-digit jumps of 2022-23.

For tier-2/3 outfits—mid-caps and larger juniors—this means the hiring queue is suddenly a lot shorter and day-rates are softer.

2. Automation is a capex game; wages are opex

Dropping wage pressure lengthens the pay-back period on automation. If an autonomous haul-truck fleet previously broke even in four years, cheaper operators can push that to six or seven. When cash is tight, those extra years matter.

But there’s a catch:

  • Output discipline: Even at lower labour rates, shift variability costs money—equipment mis-use, dilution, re-work. Automation flattens that curve.

  • Safety mandates: Regulators are not dialling back fatigue and exposure limits just because people are cheaper.

  • ESG optics: Investors keep voting with their feet; 71 percent of miners still rank robotics and automation as the technology with the biggest future impact.

3. Funding is the real brake, not cheaper people

Junior lithium players have already postponed new autonomous drilling spreads because equity markets dried up, not because driller day-rates fell. PwC’s Mine 2024 points out that even majors have seen revenue shrink for a second straight year; mid-caps feel that pinch harder.

In short: if a CFO can’t raise capital, the autonomous haul-pack sits on the wish-list—regardless of what a truck driver earns.

4. Skills gap versus warm bodies

Yes, you can now recruit haul-truck operators for less. What you still can’t find (or discount) are:

  • Control-system integrators

  • AI/ML data engineers

  • Remote-operations supervisors

The McKinsey numbers haven’t moved: mining still faces a multi-year shortage of digitally literate talent. Cheaper general labour doesn’t solve that.

5. The modular workaround

Vendors are pushing subscription or “robot-as-a-service” models—dock-and-deploy monitoring bots, autonomous blast-hole rigs rented by the metre drilled. These reduce up-front cash and let smaller mines test automation without betting the farm. Recent funding rounds for mine-monitoring robotics confirm the appetite.

Expect more pilots, fewer full-site roll-outs until commodity prices stabilise.

6. Net effect: delay, not derail

  • Greenfield, all-autonomous pits: likely deferred unless a buyer locks in long-term offtake at premium pricing.

  • Brownfield incremental upgrades: still moving—collision-avoidance, autonomous blasthole guidance, fleet-management analytics.

  • Back-office digitisation: speeding up (low capex, quick wins).

Tier-2/3 miners will slow the big-ticket automation projects where wage arbitrage erodes ROI, but they won’t walk away. The moment prices tighten labour again—or safety rules force their hand—the shelved projects resurface.

Take-aways for operators and tech vendors

  1. Quantify variability costs. Show how even cheaper crews still bleed money through inconsistent cycle times.

  2. Pitch phased automation. Start with autonomy-ready trucks, bolt on full driverless later.

  3. Offer creative financing. Lease, performance-based contracts, or throughput-sharing to sidestep capex walls.

  4. Keep the ESG spotlight bright. Automated sites still win on injuries, emissions and social licence.

  5. Stay talent-centric. Upskill the workforce now; the digital shortage isn’t going away.

Economic downtimes shuffle priorities, but they rarely rewrite the long-term automation story. For nimble tier-2/3 miners, the winners will be those who keep the roadmap alive—just in smaller, cash-flow-friendly steps—while their rivals sit it out.

Wyatt Zacher