Sunday, May 20, 2012

BHP's Australia coal miners returning to picket line

Workers at global miner BHP Billiton's Bowen Basin mines will strike for seven full days starting late next week after voting to reject a new employment contract proposed by BHP for the second time, the workers' union said Friday.

The action comes as BHP, the world's biggest diversified mining company, scales back capital spending across business units due to slowing global commodities demand.

The workers at BHP Billiton-Mitsubishi Alliance's (BMA) coal mines in the Bowen Basin of Queensland state have been staging rolling work stoppages for almost a year as they battle with the global miner over work schedules.

A BHP spokeswoman said further industrial action was "unnecessary and would be harmful for all concerned".

"We are focused on finalising an agreement and will resume discussions to complete the agreement as soon as possible," the spokeswoman said.

BHP had already declared force majeure on shipments from the mines as it struggles to meet supply contracts. Force majeure is a legal manoeuvre releasing companies of immediate supply obligations due to circumstances beyond their control.

In total, the mines under the partnership have an output capacity of more than 58 million tonnes a year, representing about a fifth of annual global trade in metallurgical coal.

Stephen Smyth, district president of the Construction, Forestry, Mining and Energy Union, said the workers were determined to continue to press for their terms.

"This result proves BHP is still radically out of touch with its workforce, an overwhelming majority of whom is still not prepared to give up crucial conditions around safety, rosters, housing and equality for contractors," Smyth said.

BHP, in its March quarter production report, blamed a 14 percent drop in metallurgical coal production on work stoppages and other industrial action by roughly a third of its workforce, compounded by heavy rains that hurt operations.

Prices of metallurgical coal, used in steel making, have weakened in recent months to around $200 a tonne, but they are still more than twice as high as estimated production costs of around $80 per tonne at the mines, according to analysts.

BHP Chairman Jacques Nasser said on Wednesday he expects commodity markets to cool further and that investors had lost confidence in the longer-term health of the global economy, in the most cautious comments yet by a major mining company.

He also said BHP had put the brakes on a plan announced by Chief Executive Marius Kloppers in 2011 to spend $80 billion over five years to expand its iron ore, coal, energy and base metals divisions.

Source: Reuters