“There is a misconception that 10,000 displaced miners are still looking for work,” Caruso said.

“Most have now resettled into other employment. Labour won’t return to mining until there is more certainty in the sector.

“There are issues now with resourcing projects with the right people.

“Contractors are the vehicle which introduces new labour to mining. Introducing new labour is necessary to maintain a balanced industry.”

Mining companies are reluctant to consider this as on face value it doesn't represent value for money, Caruso said.

“If we ignore this issue we are doomed to recreate the situation that drove costs up in the last cycle,” he said.

Employees are trading off earn for tenure and there is a shift from engaging as sub-contractors to employees, he said.

“Displaced former permanent workforces are moving into contractors roles,” Caruso said.

The market is also oversupplied with hire equipment and hire equipment now comes from multiple sources.

“Oversupply is keeping hire prices down,” he said.

“Contractor utilisation rates on development hire equipment is on average below 15%.”

Caruso said the low utilisation is resulting in very little equipment in code.

“The general rule of thumb has always been hire rate equals 1% of capex,” he said.

“This ratio is now between .6% and .75%. Smaller suppliers are charging hire prices that cover the cost of finance only. It’s questionable if current prices are sustainable.”

There is a growing shift towards labour hire contracts, Caruso said.

“Only more complex work being tendered as self-executing contracts,” he said.

“Surprisingly there are very little unit rate or lump sum contracts.

“Companies are reluctant to transfer risk to the contractors. Contracts are shorter. Value in contracts is now looked on much differently. Cash is king.”