Relief for mining giants as Australian port strike on hold

22nd May 2014, Comments 0 comments

A strike threat which could have shut down key iron ore operations in Western Australia was suspended Thursday, as miners BHP Billiton and Fortescue warned industrial action would hurt the economy.

Maritime Union of Australia (MUA) members employed by tugboat operator Teekay at Port Hedland voted last week to walk out if they were unable to agree to pay and conditions with the firm.

But imminent strike action was averted Thursday when the MUA agreed to suspend taking industrial action against Teekay for 30 days in the spirit of continuing negotiations.

"Both parties would like to see if we can reach a negotiated outcome without the need for industrial action," MUA state branch assistant secretary Will Tracey said in a statement.

Iron ores and concentrates accounted for 18.9 percent of Australia's total exports in 2013, bringing in some Aus$57.1 billion.

Port Hedland -- in the resource-rich Pilbara region -- is the largest iron ore export port in Australia.

The prospect of a strike had worried mining firms who said it could impact the economy given that iron ore is Australia's most valuable export. They had suggested they could ask the government to intervene.

Fortescue chief executive Nev Power said in the event of a strike, the miner would be "forced to consider standing down its operations and the associated workforces for indefinite periods of time".

"Australia's reputation as a reliable low-cost supplier of iron ore that has been built up over many years of hard work is today at stake because a handful of people advised by the most militant union in the nation have been given authorisation to strike," he said.

On Wednesday, BHP Billiton's iron ore president Jimmy Wilson said a strike would impact exports and the company was pursuing legal options to prevent industrial action.

"Industrial action by the MUA will stop all shipments out of the port and cost exporters like BHP Billiton, Fortescue Metals Group and Atlas Iron about Aus$100 million (US$92.6 million) a day," he said.

"Any interruption to shipments of iron ore would have a detrimental impact on Australia's international reputation as a stable and reliable supplier of critical resources."

Wilson said mining companies such as BHP Billiton would not be able to make up shipments of the crucial steel-making component lost during industrial action.

Discussions have been under way between Teekay, which is contracted by BHP to run tugboat operations at Port Hedland, and the maritime unions, including the MUA for months.

"Teekay's maritime union employees at Port Hedland are already the highest paid in the towage industry in Australia," Wilson said.

"Their demands are unreasonable and out of touch with the current economic conditions faced by Australian exporters."

The MUA said earlier the main sticking point was annual leave entitlements, adding its claim was "very reasonable, given our members work 12 hours a day for 28 days straight in very tough conditions".

© 2014 AFP

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