‘Economy held to ransom’: Warning as BHP workers vote to strike in Port Hedland

Western Australia’s peak resources body says proposed strike action by BHP workers at the world’s largest iron ore export hub is holding the state’s most important economic asset to hostage.

However, Electrical Trades Union WA secretary Adam Woodage said workers were simply standing up for their rights in the first industrial strike action in the Pilbara in decades.

The stop-work action could last as long as 24 hours which, going off the amount of iron ore flowing through the port every day, could cost BHP up to $120 million.

The Australian Manufacturing Workers’ Union confirmed 90 per cent of its members at BHP’s Pilbara port operations had backed the proposal to stop work.

Woodage said he had received a 100 per cent endorsement for strike action from ETU members, while other unions were in the process of seeking endorsement from their membership.

Chamber of Minerals and Energy WA chief executive Aaron Morey said the proposed action was concerning, and feared for the economic impact it could have on the nation.

“Our most important economic asset is being held hostage,” he said.

“The Port Hedland port is the biggest iron ore export hub in the world. It will cost society millions upon millions of dollars a day [to close].

“What we have here are some industrial but militant unions that are simply seeking to sow conflict and creating a weaker economy for everybody.”

Woodage said the union had pencilled in a bargaining meeting with BHP for later this month, meaning there was still time for the miner to avert a strike.

“We understand that it will cost BHP up to $120 million a day for a 24-hour stoppage at the BHP port, and we do not shy away from that, because the only thing that these big businesses understand is when the profit margins are hit,” he said.

Asked if he thought workers earned sufficient pay on their current level, Woodage argued the company could afford to meet union demands for a safe, fair and productive workplace.

“I say that BHP earn a lot. More than what our members earn, and I say that our members are entitled to a greater share of the economic pie that BHP pulled out on one day alone of export out of the Port Hedland facilities,” he said.

“If every employer at that port earned $200,000 – just a random figure out of the 450 employees up there – that’s a $90 million wage bill.

“So they cover a wage bill with one day of export.”

Morey called for the unions involved to stop taking industrial action at the very first opportunity.

“What we’ve seen over time is employers and employees in the resources sector have been able to come to agreements where pay increases considerably for workers,” he said.

“It’s all about conflict, it’s all about division, and those unions need to be pulled into line.”

AMWU WA state secretary Steve McCartney said BHP’s global net profit after tax averaged about $439,600 per worker over the past five years, with WA iron ore delivering even higher returns.

“That figure is almost three times what the average AMWU member earns each year while helping generate those profits,” he said.

“After seven months of bargaining, AMWU members at BHP ports are still waiting for meaningful movement from the company.”

McCartney cautioned BHP against attempting to undermine lawful industrial action by bringing in contractors or alternative labour.

“More than 100 workers are standing up for fair wages and conditions during a cost-of-living crisis. The company should be focused on reaching an agreement, not finding ways around its workforce,” he said.

Highlighting the wage demands of the ETU’s members, Woodage pointed to the Alkimos desalination plant in Perth’s north, where he said electricians could earn about $240,000 a year.

“BHP do not pay all their electricians $240,000 a year to work in the Pilbara,” he said.

“There shouldn’t be wage disparity of up to $40,000 in the Pilbara, or anywhere, for people doing the same job.”

Chamber of Commerce and Industry WA chief executive Will Goldsby said the strike decision should “alarm the nation”.

“The Pilbara is Australia’s economic engine room. Strike action in our iron ore sector will inflict significant economic and reputation damage,” he said.

Minerals Council of Australia chief executive Tania Constable said the proposed stoppages at Port Hedland were an attack on productivity at one of Australia’s most economically significant ports, which accounted for more than 60 per cent of Australia’s iron ore exports.

“The Pilbara’s cooperative workplace model has delivered the highest wages of any industry, world-leading productivity and secure jobs through modern workplace arrangements,” she said.

“Rising disruption and escalating right of entry activity undermine the productivity and reliability that have defined the Pilbara region for more than three decades.”

A BHP spokesperson said the company is negotiating a new enterprise agreement with its Port operations team.

“Our focus remains on continuing constructive engagement to reach an outcome that maintains industry-leading pay and conditions while supporting safe, productive and sustainable operations,” the spokesperson said.

“In the event of union disruptions at our sites, we have strong contingency plans in place to protect our people and ensure safe, reliable operations can continue.”

Curtin University School of Mines economist Dr Eric Lilford said while a 24-hour strike would have little impact on supply or sales of iron ore, longer action could cost financially.

“Exporters will have contingencies built into their daily planned-loading schedules. However, beyond 24 to 48 hours, and the problem starts to bite as recovery or recoupment becomes more challenging,” he said.

“Notably, there is a cost to not loading ships over a 24-hour or extended period, and that’s demurrage.

“There is a cost for a ship to anchor idly while waiting to be loaded, and that’s demurrage. Someone must pay for that.”

Start the day with a summary of the day’s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter.