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Australia coal industry threatened by major strike

Workers at Australia’s Newcastle port, the largest thermal coal export facility in the world, will hold an eight-hour stoppage on Friday to protest proposed revisions to their contract that could hit labour conditions and jobs.

The strike, announced by The Maritime Union of Australia (MUA), comes after over 200 employees at Port Waratah Coal Services (PWCS) last week voted in favour of a two-week campaign of industrial action, which includes plans to stage similar such halts, ranging from eight to 24 hours.

Dropping commodity prices and increasing operating costs have already wreaking havoc on Australia’s coal sector in recent months, with the country’s Coal Association saying over 9,000 jobs have gone since early 2012.

If industrial actions continue for a lengthy period at Newcastle’s port, which ships thermal coal mostly to countries such as Japan, South Korea and China, they could help diminishing excessive supplies in the region and boost coal prices, which have fallen 8% in the last two months.

The five unions involved in the PWCS dispute are the Australian Manufacturing Workers’ Union, the Maritime Union of Australia, the Transport Workers’ Union, the Australian Workers’ Union, and the Communications, Electrical and Plumbing Union. They have been negotiating a new workplace agreement for more than nine months.

According to The Newcastle Herald, over 50% of the coal being exported through Newcastle is sold at a loss.

Almost 85% of the region’s coal exports is made up of lower-priced thermal coal, used in power stations, not coking coal, which is used in steelmaking and is still running at about $140 a tonne.

The lower-priced thermal coal is selling at about $87 a tonne and, based on a new report by consulting group Wood Mackenzie —commissioned by the Australian Coal Association— more than 40 of the 71 thermal mines surveyed had cash operating costs above that level.

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