Iron ore is critical for modern civilization – and critical for corporate profits.
Hundreds of millions of dollars are at stake right now as mining companies, shipping companies, and employees stake out their positions in a bargaining dispute. At issue are pay and work hours for deckhands, masters, and engineers on tugboats at Port Hedland in the Pilbara district of Western Australia.
The tugboats guide iron ore ships in and out of the port, and if the workers strike it could cost companies $100 million a day in lost iron ore sales. The tugboat workers are employed by Teekay Shipping and represented by the Maritime Union of Australia (MUA).
This labor dispute involves the world’s largest mining company, BHP Billiton, which has a contract with Teekay for tug services. BHP is the Anglo-Australian multinational mining, metals, and petroleum company, with headquarters in Melbourne. BHP would be directly affected by a strike, as would Fortescue Metals Group, the third largest iron ore producer in Australia, after BHP and Rio Tinto.
Nev Power, the Chief Executive of Fortescue, was not in a mood to negotiate with the MUA when he released this statement:
There is something wrong with our industrial relations laws when a small group of 45 people who would like to only work 22 weeks a year and be paid a base rate about three times the base wage of a nurse…can hold to ransom an industry that generates more export earnings than any other.
Actually, no, says Will Tracey. He is the Western Australia branch secretary of the MUA, which is seeking a 12% pay increase over four years and wants working time to be cut to five months a year down from the current six. He stated:
Over the course of a year, tugboat workers work six swings of 28 days, at an average of 12 hours a day, and sometimes up to 20 hours a day, depending on the volume of iron ore going through the port.
Total number of hours worked by a tugboat deckhand in a year equates to almost 54 weeks of a standard 37.5-hour working week.
It turns out that the MUA has just agreed to suspend taking industrial action against Teekay Shipping for a 30-day period while negotiations continue. Port Hedland is the world’s biggest export terminal for iron ore, and there would be huge losses for BHP, which ships about a million tons of iron ore a day.
It isn’t just corporate profits that are at stake. Mining royalties and tax revenues are also at risk. Iron ore is a major Australian export and Hamersley Province in Western Australia is one of the world’s best sources. The ores from the major mines are hauled to screening and crushing plants via truck and then transported for further treatment to port sites by train. After arriving at Port Hedland much of the ore is shipped to the Chinese port of Tianjin and then delivered to steel mills in China.
