Iron Ore Exports at Port Hedland at Risk; Tug Workers Strike Approved to Push Through; At Least $100M/Day Could Be Lost
By Esther Tanquintic-Misa | May 13, 2014 12:02 PM EST
Australia, in the midst of a fading mining boom, stands to suffer more losses of at least $100 million a day if tugboat workers at Port Hedland make good their threat to stage a labour strike within the next 30 days. The impending industrial work stoppage could cripple Australia's most lucrative iron ore exports.
Tugboat deckhands at Port Hedland on Monday voted to stage a labour strike if they are unable to resolve a dispute over vacation and pay with Teekay Shipping.
According to the Maritime Workers Union (MUA), which represent the deckhands, 100 per cent of workers voted to strike for 24 hours, while 98 per cent voted to stop work for periods of 48 hours and seven days.
"It has not yet been decided whether industrial action will be taken or which option will be exercised," Will Tracey, MUA assistant WA secretary, said in a statement.
Deckhands are clamouring for an annual leave of four weeks on top of the prevailing system which is four-weeks-on and four-weeks-off.
"We think this is very reasonable, given our members work 12 hours a day for 28 days straight in very tough conditions," Tracey said.
Moreover, they also want a 70 per cent hike to close the gap from what the tugboat masters earn which is A$220,000 per year.
BHP Billiton, which holds the licence for the tugboats at Port Hedland, blasted the impending strike threat.
"Given the current wages and conditions, we think it would be irresponsible for the MUA to take industrial action that would put a stop to one of Australia's most critical national exports," a BHP Billiton spokeswoman said.
A disruption could propel up prices of iron ore in the market.
"It depends on how long the strike lasts. If it lasts for a week or even longer this will provide a strong support to iron ore prices," an iron ore trader in Shanghai told Reuters.
State and federal governments also stand to lose royalty and tax revenue if the strike pushes through, BHP said.
"We estimate this will cost suppliers who ship out of Port Hedland around $100 million a day," the company said in a statement. "Significant royalty and tax revenue will be lost to the Western Australian and federal governments."
"Mining companies like BHP Billiton are not able to make up lost volume of this nature, and governments cannot recover these lost royalties and taxes."
Port Hedland has three maritime unions. The other two, the marine engineers and maritime officers, are also considering strike action.
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