Unionised workers at Australian-Japanese joint venture BHP Mitsubishi Alliance (BMA) have accepted a new enterprise employment agreement, bringing an end to an industrial dispute at its coking coal mines in Queensland.
A majority of unionised workers at the BMA mines of Goonyella Riverside, Saraji, Peak Downs and Blackwater voted in favour of the new deal after BHP, which operates the 50:50 joint venture with Mitsubishi, increased the offer to include a 4pc/yr pay rise rather than the 1.5pc/yr previously.
BMA faced industrial action in early November at its Blackwater, Saraji, Peak Downs and Goonyella Riverside mines, with the Mining and Energy Union banning all overtime and step-up duties.
The union's case was helped by a major labour shortage in Australia, particularly in the mining industry, as overseas migration has not returned sufficiently following strict Covid-19 border closures.
BHP has cut all investment in BMA, in response to the state government's coal royalty rate increase and China's ban on imports of Australian coal. This investment ban could be reversed if the rally in metallurgical coal prices persist and Beijing potentially easing its rules that effectively stop Australian coal imports affect BMA's exports.
BMA, which is the world's largest supplier of seaborne coking coal, had its operations crippled the last time its workers went on strike during 2011-12. This industrial action covered all its Queensland coking coal mines and caused it to occasionally declare a force majeure on supplies and helped to keep coking coal prices above $200/t fob Australia until they were resolved in mid-2012.
Premium hard coking coal prices have rallied since late November to $314.75/t fob Australia on 6 January from $244.75/t on 24 November and from $187.35/t on 1 August. At these prices BMA is extremely profitable, with BHP expecting BMA's production costs to rise to $90-100/t in the 2022-23 fiscal year to 30 June from $89.64/t in 2021-22 and $82.64/t in 2020-21.
