Sep

11

BHP Billiton’s Coal Miners Resume Strikes After Talks Fail

September 11, 2011 | Leave a Comment

BHP Billiton Ltd. (BHP)’s coking coal miners in Australia have resumed strikes after failing to agree with management on pay and work conditions, further disrupting the largest exporter of the steelmaking material.

“Strikes are continuing and now we are considering an escalation,” said Stephen Smyth, president of the Construction, Forestry, Mining and Energy Union’s mining and energy division in Queensland, in a phone interview. Strikes that disrupted operations at the three BHP Billiton Mitsubishi Alliance mines yesterday will continue until at least Sept. 13, Smyth said. The action may be extended to BMA’s four other mines, pending a member vote later this week, he said.

About 3,500 coal miners have taken part in rolling work stoppages that began in June, the first in a decade at BHP’s Australian coal mines. The Melbourne-based company said it will allow all workers at the mines to vote on its proposal at a meeting at the end of September.

“We have reached an impasse in negotiations,” after a meeting with unionists yesterday failed to reach an agreement, BHP spokeswoman Samantha Stevens said in an e-mailed statement today. “We are keen for employees to take the time in the coming weeks to review and understand the agreement in detail, before the end-of-September ballot.”

Labor unions globally are stepping up demands for higher wages and improved conditions as surging commodity prices swell profits at mining companies including BHP. About 1,200 workers at Freeport-McMoRan Copper & Gold Inc. (FCX)’s Peruvian copper mine this week began the first of a series of strikes planned over pay increases.
Shipping Coal

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

A full-day strike may cut output by 130,000 metric tons a day from the mines, Melinda Moore, an analyst at Credit Suisse Group AG said in a June 27 report. She also said protracted strikes could sustain current price levels.

Steelmaking-coal prices rose 47 percent to a record $330 a metric ton for three-month contracts starting April 1 after heavy rain and flooding in Australia shut mines. In June, Asian steelmakers agreed to pay Anglo American Plc (AAL) $315 a ton for the September quarter, according to UBS AG.

The strikes have had a “modest impact” on production, BHP Chief Executive Officer Marius Kloppers said last month.

“BHP believes it’s negotiated enough and further talks won’t assist,” the CFMEU’s Smyth said today. “Negotiations should be alive and active. BHP is setting itself up to roll out an agreement that it will present to workers that the union doesn’t support in any shape or form.”

BHP closed 0.7 percent lower to A$37.91 in Sydney trading on Sept. 9. The shares have fallen 16 percent this year.


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