BHP Australia Coal Miners Strike for First Time in Decade - Bloomberg

By Soraya Permatasari and Jesse Riseborough
June 9 (Bloomberg) -- BHP Billiton Ltd. coking-coal mine workers in Australia will down tools next week for the first time in a decade, disrupting production from the world’s largest exporter of the steelmaking material.
Workers at BHP Billiton Mitsubishi Alliance mines in Queensland’s Bowen Basin will hold rolling six-hour stoppages at different sites on June 14, June 15 and June 18, said Stephen Smyth, president of the Construction, Forestry, Mining and
Energy Union’s mining and energy division in Queensland.
The strikes may further boost coal prices already driven higher by supply shortages following floods in the state. Unions in Australia are stepping up demands for job security and wage increases after rising commodity prices swelled profits at mining companies including Melbourne-based BHP.
“Any stoppage in the current market environment is likely to be substantial” and would raise coking-coal prices, John Meyer, an analyst at Fairfax IS in London, said yesterday by telephone. “We would expect BHP to cave in relatively quickly.
It’s far more costly to lose coal production than to agree to a wage increase.”
BHP climbed 33 cents to A$42.93 as of 12:11 p.m. in Sydney trading, after its shares in London dropped 2 percent yesterday. As many as 4,000 workers voted last week in favor of supporting industrial action.

Slow Progress
“We’re still negotiating but the progress is very slow,” Smyth said yesterday in a phone interview. The stoppages will enable the union to meet with the workers and update them on the discussions with BHP, he said.
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.
“BMA is extremely disappointed that the unions have elected to take this unnecessarily aggressive action,” Samantha Stevens, a spokeswoman at BHP, said in an e-mail. The company is “continuing to negotiate in good faith with the unions.”
BMA has offered a 5 percent annual pay increase in addition to a A$5,000 ($5,316) bonus to accelerate negotiations, Stevens said.
The work stoppages, lasting six hours for each worker, will be held at BMA’s Saraji and Norwich Park mines on June 14, at the company’s Gregory, Crinum and Blackwater mines on June 15 and at its Goonyella Riverside and Peak Downs mines on June 18, said Smyth today. Workers at the Broadmeadow mine reached an agreement with BMA on May 17 so they won’t participate in the industrial action next week, said Smyth.

Price Gains
Steelmaking coal prices rose 47 percent to a record $330 a ton for three-month contracts starting April 1. Rio Tinto Group, Xstrata Plc and BHP were among companies to notify customers they would miss deliveries after the floods.
Almost all the coal mined at Billiton Mitsubishi Alliance’s 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.
Workers also want a say in a planned roster system, Steve Pierce, a vice president at the union’s mining and energy division, said June 2. The existing workplace agreement expires Aug. 26, BHP’s Stevens said yesterday.
Union officials are in talks with other coal producers which have been “more reasonable” than BHP in their approach, Pierce said last week, without giving details. The last strike at BHP’s coal mines took place in 2001.