Unionised workers at Australian-Japanese joint venture BHP Mitsubishi Alliance (BMA) are voting on whether to accept a new enterprise employment agreement, which could bring an end to an industrial dispute at its coking coal mines in Queensland.
BHP, which operates the 50:50 joint venture with Mitsubishi, has put a new enterprise agreement to workers that includes a 4pc/yr pay rise, rather than the 1.5pc/yr previously. A ballot on the new deal will close on 22 December and needs a 50pc plus one employee majority to approve the new package, which will be backdated to May 2021 when the last agreement expired.
BMA faced industrial action in early November at its Blackwater, Saraji, Peak Downs and Goonyella Riverside mines, with the Mining and Energy Union (MEU) banning all overtime and step up duties. But negotiations between BHP and the MEU resulted in the new agreement being finalised in late November with a pause on industrial action.
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's 50pc stake in BMA contributed earnings before interest and tax of $5.71bn in 2021-22 compared with a loss of $30mn in 2020-21, largely on higher received prices. The firm has cut all investment in BMA, in response to the state government's coal royalty rate increase and China's continuing ban on imports of Australian coal.
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 the start of August to $267/t fob Australia on 20 December from $187.35/t on 1 August, with workers rejecting an initial employment offer from BHP in a ballot in the second week in August. Exports from the BMA port of Hay Point were below 4mn t/month during August-November, having been above 4mn t/month for March-July.
