High metal prices drive salaries up

Brittan Jones passed up a $100,000-a-year job at a mining company in December when he finished his degree in geology. The 24-year-old Canadian said he was confident he would get a better offer.

"I'm lucky to have graduated when metal prices are so high," Jones said. "There's a lot you can do with this degree."

In the last three years, demand from developing nations, including China, has doubled prices of copper, silver and platinum, and gold reached a record $1,001 an ounce during trading on Thursday in New York.

The result: Mining companies such as Barrick Gold Corp., BHP Billiton Ltd., and Rio Tinto Group are paying geology grads 44 percent more than three years ago, giving them higher salaries than the average M.B.A. in the United States.

"The industry has been understaffed for years," said Greg Wilkins, chief executive officer of Toronto-based Barrick Gold. "The mining industry has generally not been very attractive for graduates, so there is a lack of skilled people."

But since 2004, salaries for geology undergraduates in Canada, home to three of the world's largest gold producers, have jumped about 50 percent to an average of $91,654 U.S., according to Norman Duke, a professor at the University of Western Ontario, who has been a consultant for companies including Teck Cominco Ltd.

Geologists' pay tops the average for new U.S. M.B.A.s, which, according to an August 2007 survey by the National Association of Colleges and Employers, was $86,696. Those with mining skills are also catching up with Harvard University M.B.A.s, whose average starting salary rose 15 percent over three years to $115,000 in 2007, according to the university.

This year there will be about 1,200 geology grads in Canada to fill 9,000 positions in the country's mining industry, said Ryan Montpellier, executive director of the government's Mining Industry Resources Council.

In the United States, the number of jobs open to geologists will rise 22 percent in the decade ending in 2016, about double the average for all occupations, according to the U.S. Department of Labor.

Instead of taking a permanent position, Brittan Jones started a research project after completing his four-year course at Canada's Brandon University in Brandon, Manitoba. In June, he will start a four-month contract managing a British Columbia drilling program. Jones said he was betting the additional experience would result in a more lucrative job than the position offered by a Manitoba exploration company in December.

Demand for his skills is unlikely to drop. Mining companies worldwide announced 1,100 new projects last year with a total value of $308 billion, 50 percent more than a year earlier, said Magnus Ericsson, an analyst at Stockholm-based Raw Materials Group.

Mining companies pared hiring in the 1990s, when a decline in global demand for metals slashed prices and forced cutbacks in exploration. Now, the industry needs to expand its workforce while replacing employees who are set to retire.

"There is a chronic shortage of skilled people, and wages have skyrocketed," said Bart Melek, commodity strategist at BMO Capital Markets in Toronto. "There's no relief in sight."

The shortage of mining expertise is particularly acute in Canada, Australia and the United States, said Frances McGuire, chief executive officer of Major Drilling Group International Inc., a Canadian mining firm.

Rising demand for their labor has given graduates unprecedented bargaining power, said John Humphreys, head of the geology and geological-engineering department at the Colorado School of Mines in Golden.

"We used to tell graduates to hang in there, that something would come along," Humphreys said. "Now we're counseling our students on how to deal with multiple offers."