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BHP Coal Workers Open Door to Strike

June 3, 2011

“BHP Billiton Ltd. faces the possibility of strike by thousands of coal workers in Australia’s resource-rich Bowen Basin following a vote by members of three unions. In a ballot that took place in recent days and was counted Friday, roughly 90% of workers voted to give their unions the right to call a strike, Stephen Smyth, district president of one of the three, the Construction, Forestry, Mining and Energy Union, told Dow Jones Newswires. Samantha Stevens, a spokeswoman for Melbourne-based BHP, confirmed the ballot supported a possible strike.

The company continues to meet with the unions to complete negotiations on a new labor agreement, she added, and the two sides have scheduled meetings through the end of July. ‘We continue to make solid progress and as such, industrial action would be premature,’ Ms. Stevens told Dow Jones.”

Source: Wall Street Journal, June 3 2011

Observations:

  • BHP Billiton employs approximately 4,000 people in metallurgical coal operations and approximately 8000 in energy coal operations. In average across all of the companies operations the company has approximately as many contractors as own employees on-site.
  • This would not be the first time a strike at BHP’s coal operations takes place: in 2000 the employees at various mines stopped work. Prior to the changes that led to these strikes the company was perceived to be more friendly to unions than competitors.

Implications:

  • BHP BMA is trying to gain greater flexibility in setting contracts for contract workers separate from the collective agreement and is at the same time trying to limit the power of unions in recruiting decisions. While the potential financial benefit of the first issue could justify a couple of days of lost production, the short term benefit for the second issue will not be enough for the management to risk a strike. Thus the recruiting issue might be used as a tradeable by the negotiators.
  • An important underlying frustration in the negotiations is BHP Billiton’s push to introduce more stringent Fly-In-Fly-Out rosters. The struggle to find enough employees willing to either live in the outback or leave home for multiple nights each week is one of the major HR challenges of mining in Australia in the next decades.

©2011 | Wilfred Visser | thebusinessofmining.com

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