Sunday, February 15, 2009

Is a Consultant ever Unemployed?

dumpIs a consultant ever unemployed? This is a question I've been asking myself recently, maybe since about early or mid-October when metal prices began a bit of a slide. As a result of that slide, and along with the combination of the stock market, and the financial and housing markets going down or becoming unstable at about the same time, many mining companies - especially those in base metals like copper, nickel, zinc, and others - have had numerous small to large layoffs and have had to cut back on exploration, project development, and mining.

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Some (a few? several?) copper mines have been shut down, and - as I mentioned above - many companies have had worldwide layoffs, have cut back on things like exploration at mines, or have shifted gears in some way or another by revising mining plans or time schedules. At least one company is planning expansion, which is actually one of the best things that can be done during a fallow season; it can put you way ahead of the game.

The slides have also affected gold mining and exploration companies, but to a lesser degree, and mostly as a result of the decreased ability of companies, especially small ones, to raise money - through borrowing or stock - for operating costs and personnel, for project expenditures like field work, sampling, and drilling, for capital expenditures like mine or mill equipment or plants, for environmental remediation and reclamation which are always ongoing, and for just about anything you can think of that goes into normal and everyday work. Companies with cash are doing better than companies without cash.

Gold charts on

One gold company I know, for example, has enough money to stay in business and hold their exploration properties but do not have enough money to pay anyone to do any work, so no mapping, sampling, or drilling is planned for this year. Of course, the CEO - a former colleague of mine - will be out looking for investors, so the status of his company might change.

Geologists at mines, especially those working in exploration, are usually the first to go. Mine geologists - sometimes that would be one person, sometimes that would be one person with a small staff - are usually kept on.
roadI was given notice back in October that the funding for the part of the project I was working one would probably be cut entirely by the end of 2008, or would be cut back considerably. As such, I've worked one week since the middle of December, which is one week more than I was expecting to work when I first heard the news. I haven't done a lot of job hunting, yet; the looking I have done suggests that things will most likely remain slow into the spring or early summer, barring a major turn-around, a turnaround which many at this point might not trust even if it were to happen. I do have a leads to check on, one of which is a company with entirely private (non-stock) funding.

MOH is continuing his work at the place where we have both been employed for the last 1.5 years or so. He still works his days and nights on his 28-day rotation. So we are continuing to rent our small tiny house in our small eastern Nevada town. My expenses - which included rent, some utilities, a perdiem for food, and my gas mileage back and forth to our home at the lake - are no longer being covered. We recently looked into moving into a somewhat larger house here, but the rent was about than 2x what we are paying, so we decided against it.

Rents have been high here for two or more years; house prices are, even now, comparable to those in Reno - even though prices in Reno have started to drop, and even though the cost of living in Reno has seemed high to me ever since I moved there in the late 1970's from the Washington, D.C. area - lower than San Francisco, comparable to northern Virginia, comparable in many things to Anchorage, AK. So we've decided that $400/mo for 500 450 sq ft is what we'll stick with right now.

Like I've said many times, this place is small: larger than a breadbox, larger than a motel room. The square footage includes an arctic-type entryway that is unheated, has no electricity, and serves mostly as a small storage room. The longer we stay here, the more things accumulate, and the more crowded things seem. We add shelves to the walls, hooks for hanging clothes, and the more storage space we create, the more things we seem to find space for!

I've got lots of geologic literature and old photos here, moved out from our home at the lake; I've got winter and summer clothes, many stored in bins under the bed; we've got lots of miscellaneous books, DVD's, and electrical miscellany (small TV, phone wires, chargers, cords, old computer, head phones... ); and we've got lots of outdoor gear and some miscellaneous tools. Obviously (at least to me!), some of these things can be sorted through and moved to the small storage area we rent here, and some things can be moved back to the lake. At first I was taking winter/summer clothes back and forth when the appropriate time came; more recently I've just stuffed things under the bed.

Anyway, one point of all this is the answer to my first question: are consultants really ever unemployed. Harold Asmis at Ontario Geofish said no, we're just underemployed! I think that's a pretty good answer. As a consultant, I am not technically unemployed, because it is my business to have clients and find work as I see fit. As a consultant and independent contractor, I can't really apply for unemployment, and consequently I, and many other geologists, do not get counted on unemployment rolls: we are not part of the unemployment statistics.

At the moment, I'm confining my exploration adventures to our town here in the hinterland of eastern Nevada. I have plans to take some sightseeing and geologically oriented pleasure trips on my own this month and next. Well, maybe scratch this month - have to get ready for our next trip north, to the Iditarod, see sidebar for countdown!


Lost Geologist said...

Good luck on your job perspectives!

From a few friends in Peru heard the situation there is getting quite bad. The junior, usually Canadian, exploration companies are shutting down their exploration and plenty of geos are getting unemployed because these companies have a hard time getting credits from banks or via the stock market now. Even large projects are shut down completely. In Germany most geo-jobs are somehow related to the construction business and I haven't heard anything bad about that, yet. Heidelberger Cement, one of the largest cement producers, is in big problems though bc the consortium's owner made an astronomical loss at speculating at the stock markets.

I hope it calms down till 2010...

Silver Fox said...

Yes, South America is supposed to be pretty bad right now.

Here, and in China, construction is not generally doing that well. One reason copper is down is because construcion is down. I would think that would affect limestone and other industrial materials like sand and gravel, too, but maybe Europe hasn't been hit as hard?

And thanks!

hypoglycemiagirl said...

un(der)employment is never fun over long periods of time; good luck with finding whatever you need!

Silver Fox said...

HGG, thanks, I'm a little laid back right now, but really *should* start doing someting.

I hate that word, should!

Michael said...

The answer to the question (since I'm a consultant) is no, but they may experience extended and unpredictable periods of time between jobs.

Good luck to you - and to all of us!

Silver Fox said...

Good answer, Michael, and thanks - and best wishes for all of us, indeed. I'll be heading to a couple meetings later this week.

Chuck said...

Gold is doing OK here, so hopefully it will start to pick up out there too. Good luck.

BTW, I did my first undergrad field mapping course south of Ely, on Ward Mountain.

Silver Fox said...

Thanks, Chuck - gold is doing okay here, except for smaller companies. Interesting that you mapped at Ward Mountain! Was that a general mapping project, or did you concentrate on the mining district? I've been to the Ward ovens, but not to the mining district.