Bloomberg News

BHP Australia Coal Miners Say Further Stoppages Hinge on Talks

June 19, 2011

June 20 (Bloomberg) -- Workers at BHP Billiton Ltd. coking coal mines in Australia say talks starting today will determine the likelihood of stoppages that may disrupt production from the world’s largest exporter of the steelmaking commodity.

Labor union representatives for about 3,500 workers at seven mines owned by BHP Billiton Mitsubishi Alliance in Queensland’s Bowen Basin meet management over the next two days to negotiate a new enterprise agreement. Workers have taken part in six-hour rolling stoppages in the past week as they attended meetings ahead of the talks.

If the company and union officials don’t make progress in the talks, the workers “want us to come back and give them an update on all the reasons why and then they’ll take it from there,” Stephen Smyth, president of the Construction, Forestry, Mining and Energy Union’s mining and energy division in Queensland, said by telephone yesterday. “If here’s any further action required the membership will make that decision.”

The risk of further, protracted strikes may 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. has said. BHP reported a 14 percent decline in production last quarter after rains from November to January inundated mines in Queensland, Australia’s biggest exporter of the commodity.

New Deal

The CFMEU, the Australian Manufacturing Workers Union and the Communications, Electrical and Plumbing Union are seeking a new agreement with BMA for better wages and conditions, as well as addressing concerns about job security and recruitment, according to the union website.

The union, which is required to give three full working days notice of any further action, still wants to negotiate, said Smyth.

“Hopefully, this week will be a lot more positive than it has been,” he said.

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.

Stoppages took place across three days, commencing at the Saraji and Norwich Park mines on June 14, then the Gregory, Crinum and Blackwater mines on June 15 and the Goonyella Riverside and Peak Downs mines June 18.

“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 by telephone yesterday.

China Demand

Almost all the coal mined at the BMA mines, with annual capacity of 58 million metric 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 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 twithers@bloomberg.net.

To contact the editor responsible for this story: Paul Tighe at ptighe@bloomberg.net


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