Testing times for mineral assayers
Mineral testing providers have cut staff by about 50 per cent over the past year as they tackle a depressed market with few signs of recovery.
A dearth of cash for exploration activity has also forced the assaying companies to slash prices to find business. A recent uptick in work has been put down to seasonal factors.
Intertek Genalysis has steadily reduced staff numbers from 270 to about 200, either through redundancies or by attrition. Ausdrill has cut deeper, bringing its headcount down from about 100 to 30 to 40.
ALS' metallurgical and geochemistry divisions have seen staff down about 50 per cent from a peak 18 months ago.
Industry players have described the market as "dog eat dog" with few signs of a recovery.
"I don't think there's any new or positive trend emerging at the moment," Ausdrill chief financial officer Jose Martins said. "We've cut to the bare bones."
Ausdrill is a relatively new player in the assaying space, having set up MinAnalytical Laboratory Services in the better times of 2011.
Global player ALS yesterday reported a 28 per cent fall in underlying net profit to $172 million in a mining services environment the company described as extremely challenging.
However, its shares rose 65¢, or 8 per cent, to $7.96 in response despite an overall softer day for listed stocks.
Managing director Greg Kilmister said ALS had done well considering the state of the market.
"That's a lot better than a lot of other companies that are exposed to the resources sector in Australia," Mr Kilmister said.
"If you compare us to a raft of other companies - Ausdrill and others across there in Western Australia - we've certainly fared much, much better," he said.
"That's been an outcome of the diversification strategy we've had in place."
ALS has had a significant presence in the WA market since buying Ammtec for $148 million following a hostile takeover in 2010.
