April 5, 2012 / 2:47 AM / in 6 years

BHP coal mines to be hit by new stoppages April 12: union

SYDNEY (Reuters) - Australian coal mines owned by BHP Billiton (BHP.AX) (BLT.L) and Mitsubishi Corp (8058.T) will be hit by a second work stoppage on April 12, with union workers planning to halt work for two days, a union official said on Thursday.

“We’re looking at next Thursday’s night shift to start the stoppage through to Saturday day shift at all seven mines,” Construction, Forestry, Mining and Energy Union (CFMEU) District President Stephen Smyth told Reuters.

The mines, operated under the BHP Billiton-Mitsubishi Alliance joint venture, have a combined output capacity of more than 58 million metric tons (63.94 million tons) a year, representing about a fifth of annual global trade in metallurgical coal.

“There also may be other industrial action taken,” Smyth said. About 3,500 employees led by the CFMEU completed a seven-day strike on Tuesday after talks over working conditions and union entitlements broke down. The mines employ around 10,000 people.

On Monday, BHP declared force majeure on deliveries from the predominately metallurgical coal mines in the Bowen Basin, citing long-running labor stoppages compounded by heavy rains that have impeded production runs.

Force majeure is a legal clause relieving companies of immediate supply obligations due to circumstances beyond their control.

UBS has estimated that the strikes and heavy rains have resulted in 2 to 3 million metric tons of lost production this year.

Smyth said the mines were “struggling” as a result and faced difficulty in filling orders and that some 15 ships were sitting idle off the main coal port terminal of Hay Point.

A BHP spokeswoman declined to discuss specific operations regarding coal shipments, other than saying: “We are unable to meet our obligations with customers, which is why we have declared force majeure.”

The spokeswoman reiterated BHP will release its March-quarter production data on April 18. The company warned in January that labor unrest along with heavy rains in the region were affecting production volumes.

Mine workers had rejected the latest offer for an enterprise bargaining agreement, with 93 percent of members voting to strike again, Smyth said.

“The support is not only to continue the industrial action, but also to increase it,” Smyth said.

BHP has made an offer of a 5 percent a year wage hike for the next three years, plus a guaranteed A$15,000 ($15,400) per year bonus.

Smyth said the stalled talks with management were currently focused on working conditions, such as shift rosters and job opportunities, and that discussions over wages were “down the line.”

“We haven’t got to the stage of discussing money,” he said. “We’ll get to the money once we sort out and put to bed conditions and entitlements.”

Prices for the metallurgical coal mined by BHP and Mitsubishi have weakened in recent months but are still more than twice as high as estimated production costs at the mines of around $80 per metric ton, according to analysts. ($1 = 0.9752 Australian dollars)

Editing by Ed Davies

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