Bloomberg News

BHP Australia Coal Miners Hold Third Strike Before Talks Start

June 17, 2011

June 18 (Bloomberg) -- More than 1,000 workers at two BHP Billiton Ltd. coking coal mines in Australia staged a third day of strikes in a dispute that is disrupting production from the world’s largest exporter of the steelmaking commodity.

Six-hour rolling stoppages are in place at the Goonyella Riverside and Peak Downs mines owned by BHP Billiton Mitsubishi Alliance in Queensland’s Bowen Basin, Stephen Smyth, president of the Construction, Forestry, Mining and Energy Union’s mining and energy division in Queensland, said by telephone today. The stoppages complete strike action involving about 3,500 workers at sites owned by BMA.

The strikes may further boost coking coal prices already driven higher by supply shortages following floods in the state, Natalie Robertson, resources analyst at Australia & New Zealand Banking Group Ltd. said this week. Further industrial action is possible if talks between the labor union and the company beginning June 20 breakdown.

“We’ll see what sort of attitude and approach BHP bring to the table this week,” said Smyth. “We’ll go back to the membership and explain what’s gone on, and the membership will decide whether or not we take further industrial action.”

Labor unions in Australia are stepping up demands for wage rises and job security after rising commodity prices swelled profits at mining companies including Melbourne-based BHP. Steelmaking coal prices rose 47 percent to a record $330 a metric ton for three-month contracts starting April 1.

The earlier stoppages took place at the Saraji and Norwich Park mines on June 14 and the Gregory, Crinum and Blackwater mines on June 15.

Action Premature

“BMA is strongly of the view that taking industrial action is premature given discussions are still progressing,” BHP said in an e-mailed statement on June 13. The company has nothing to add to that statement, spokeswoman Kelly Quirke said today.

“Support has been overwhelming for the position the union has taken,” said Smyth. “The guys are well aware of the matters we’re apart on because from the onset they put those issues to us to take to the bargaining table.”

A strike may further cut output at BHP, which reported a 14 percent decline in production last quarter after torrential rains from November to January inundated mines in Queensland, Australia’s biggest exporter of the commodity. The nation’s coking-coal exports plunged to 7.9 million metric tons in February, the lowest monthly volume in two years.

Steel Production

Almost all the coal mined at the BMA mines, with annual capacity of 58 million tons, is shipped overseas for steel production, BMA said on its website. BMA is equally owned by BHP and Mitsubishi Development Pty. It directly employs more than 4,800 people, the website shows.

China’s imports of coking coal are forecast to gain at an average rate of 9 percent a year to reach 73 million metric tons in 2016, according to Australian government forecasts. India may triple coking coal imports within five years to meet surging demand from steelmakers, ANZ said last month.

Exports of coking coal from Australia are forecast to rise 3 percent this year even after the floods, according to government forecasts. They may total 163 million tons this year compared with 159 million tons last year, the Australian Bureau of Agricultural & Resource Economics and Sciences said in a March report.

--With assistance from Soraya Permatasari in Melbourne. Editors: Paul Tighe, Malcolm Scott

To contact the reporter on this story: Tracy Withers in Wellington at

To contact the editor responsible for this story: Paul Tighe at

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