Workers at BHP’s (ASX:BHP) Port Hedland operations in Western Australia have launched the first strike at the company’s Pilbara iron ore hub in 26 years after last-minute negotiations failed to prevent industrial action.
About 200 operators and maintenance workers represented by BHP’s combined port unions walked off work for eight hours starting at 2pm local time on Thursday, while workers and their families gathered for a community event organized by the unions. A five-hour bargaining session on Tuesday, facilitated by the Australian Fair Work Commission, failed to achieve a breakthrough, and talks are scheduled to resume on July 21. Sydney-listed BHP shares fell 2.3%.
“We have submitted a draft agreement that includes a 16% pay rise over four years for the majority of employees, improved allowances and simplified pay structures,” BHP said in a statement. “We will have further discussions with the unions at a committee hearing next week.”
The dispute has become one of the biggest union crackdowns at BHP’s iron ore operations in years and could draw the attention of commodity markets if it escalates into long-term unrest at the world’s largest bulk export terminal. Singapore iron ore futures rose to $102 a tonne earlier this week, their highest level since July 2. The unions say they have spent more than six months trying to negotiate a collective agreement, arguing that BHP’s reliance on individual employment contracts leaves workers with inconsistent terms and conditions.
“For eight months, this company has crippled and torched the people whose work generated $15 billion in profits last year,” Adam Wodage, secretary of the Western Australian Electrical Trades Association, said in a statement. “Today we are sending a message that Australian workers will not be burned out.”
About 575 million tonnes of iron ore were transported through Port Hedland last year, although the port is also used by other mining companies that were not affected by Thursday’s strike. BHP said it had contingency plans in place to ensure operations could continue safely during industrial action.
Investment plans
BHP also reported on Thursday that Iron ore production decreased by 3% year-on-year In the June quarter, though, full-year production remained broadly unchanged despite the weaker end to the financial year.
Separately, BHP said it had done so Approval of an investment worth $900 million At the Minzars North project, there is a high-grade iron ore deposit at Brockman, south-east of Yandi in the Pilbara region of Western Australia.
The project will add 20 million tons of annual production capacity once fully scaled up, supporting BHP’s medium-term production target of 305 million tons per year. First crude is expected in fiscal 2029.
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