Australia: BHP mine closure signals new corporate offensive

By Richard Phillips
16 April 2012

BHP Billiton Mitsubishi (BMA), the world’s largest producer of coking coal, announced last week that it would shut its Norwich Park open cut pit in Queensland’s Bowen Basin on May 11, retrenching about 500 full-time and 900 contractors. The job destruction will have a devastating impact on the nearby town of Dysart. According to local residents, hundreds of families will be forced to leave their homes.

The decision was provocatively announced a day before 3,500 miners from seven BMA pits in the Bowen Basin struck for 36 hours in a protracted conflict over a new enterprise bargaining agreement (EBA). BHP Billiton declared that Norwich Park was “unprofitable”, blaming higher production costs, falling coal prices and record floods last year, as well as ongoing industrial action.

The closure is a warning to workers throughout the mining industry. It marks a new offensive by BHP Billiton and other mining giants against jobs and conditions amid signs of the unravelling of the mining boom that has underpinned the Australian economy. Global coking coal prices have declined more than 40 percent—from $300 to about $200 per tonne—in the past 12 months, largely because of slowing growth and falling steel production in China.

In the first instance, the Norwich Park closure is obviously aimed at pressuring the Bowen Basin miners into accepting the management’s EBA demands. Despite workers’ objections, the company has secured an order from the Labor government’s Fair Work Australia tribunal for a secret ballot of the BMA workforce on its EBA proposals this week.

The Australian Financial Review reported last Friday that, given weakening demand for coking coal, BHP Billiton was prepared to sit out lengthy industrial action over the EBA to force through its demands for higher productivity. “The hard truth for workers,” it declared, “is that BHP can afford to put up with strike action or undertake a lockout for a far longer period that most employees and their families can afford to go without pay cheques.”

With an estimated 30 percent of mining EBAs nationally about to expire, BHP Billiton is seeking to establish a precedent for all the mining corporations and demonstrate that declining prices and demand for Australian minerals will be met with pit closures, job cuts and restructuring of working conditions. The company is determined to maintain its profits which amounted to $23 billion last year.

BHP Billiton’s move is part of a wider offensive by major corporations to restructure their operations in Australia to start to match the slashing of jobs and conditions being imposed on workers internationally. Lockouts have been threatened by stevedoring companies Asciano and Qube in recent weeks, following mass retrenchments by Qantas, BlueScope Steel and the car companies.

The Labor government of Prime Minister Julia Gillard immediately rubber-stamped the Norwich Park closure. As it has done with the previous large-scale sackings, Labor made clear that it would do everything to assist BHP Billiton. Workplace Relations Minister Bill Shorten told ABC Radio that the company had the right to make “operational and commercial decisions” and the government was “not in the business of running coal mines”.

In line with Shorten’s response, the three mining unions—the Construction Forestry Mining and Energy Union (CFMEU), the Australian Manufacturing Workers Union and the Communications, Electrical and Plumbing Union—did not oppose the shutdown. CFMEU district president Stephen Smyth told the media he was “disappointed” but claimed there were “hundreds of vacancies” in BMA’s Saraji and Peak Downs mines.

Smyth’s comments are designed to chloroform workers as BMA and other corporations prepare for further attacks on jobs and conditions. The EBA negotiations for the Bowen Basin mines indicate that a concerted drive is underway to lower costs and drive up productivity, which is critical for profits in the capital intensive industry.

When management began negotiations on the EBA, it offered annual pay rises of 5 percent over three years, tied to various productivity trade-offs, which have escalated throughout its 16-month negotiations with the unions.

Last month, BMA demanded the right to modify work rosters at any time, reversing a previous “in-principle” deal that any shift or roster changes be endorsed by a majority of employees. Miners have told the media that mine managers are already pressuring them to do multiple 12-hour night shifts, creating serious fatigue and threatening safety.

BMA has also demanded the “right” to appoint health and safety officers, who are currently nominated by the unions. The management has rejected, as “productivity-destroying,” claims for equal pay for labour-hire employees, protections for permanent employees displaced by contractors, three breaks for workers on 12-hour shifts rather than two, increased superannuation and improved housing.

Marcus Randolph, BHP Billiton’s coal and iron chief executive, told local mine managers last month that the company would not compromise on any of its productivity demands. In an email leaked to the media, Randolph declared that this was a “fight we had to have” and that the “battle is likely to get tougher before it’s over.” Two weeks later, the company declared force majeure on its coal supply contracts, citing industrial action and floods. This could provide the basis for a lock out of Bowen Basin miners.

With its share price sliding, BHP Billiton is under pressure from markets to take a tough stand. Mining business analyst Alan Taylor told the Australian Associated Press that the company had to make “quick decisions” about unprofitable mines and “focus on areas where it can get the best outcome.”

As BHP Billiton has stepped up its EBA demands, the trade unions have responded by isolating the Bowen Basin miners nationally and limiting local strike action, while seeking to reach an accommodation with the company in closed door talks.

Over the past three decades, the mining unions have assisted BMA and the other mining corporations to expand the use of contract and part-time labour, introduce fly-in fly-out workforces, impose extended shifts and erode safety.

Like their counterparts in the manufacturing and service industries, the mining unions will assist BMA to carry out an “orderly closure” of Norwich Park. Their refusal to defend jobs and oppose the shutdown is another demonstration that the miners will be defeated if they do not break from the unions.

In order to defend the Norwich Park jobs and fight BMA’s attacks on jobs and working conditions, miners need to establish independent rank-and-file committees, occupy the pit and appeal for support from all Bowen Basin miners and other workers facing similar attacks on their jobs and conditions.

This struggle can only be waged on the basis of a socialist program that unifies the working class against the mining corporations, the Gillard Labor government and the trade union apparatus. That means a political fight for the establishment of a workers’ government that will place mining and other key industries under public ownership and democratic control.

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