Strike Could Cost Port Hedland $100M a Day in Iron Ore Export

A strike with Tugboat workers could leave Port Hedland facing a potential loss of $100 million per day, drastically affecting the Australian economy

Port Hedland is one of the most economical export ports in West Australia, bringing in around $100 million dollars each day for its iron ore exports, and within the next 30 days a potential strike may take effect, thus resulting in a huge loss for the Australian economy. The tugboat deckhands for Teekay Corporation, a North American shipping company that exports through Port Hedland, have been demanding better conditions and balloted to potentially go on strike for better treatment. Just last week, the ballot passed and now a strike may occur. 

BHB Billiton, Fortescue Metals group and Atlas Iron will be mostly affected if the strike occurs.

“If the Port operations are suspended, Australia's iron ore exports are significantly impacted. We estimate this will cost suppliers who ship out of Port Hedland around $100 million a day,'' a spokesman for BHB said. “Significant royalty and tax revenue will be lost to the West 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.”

With the current export production without the threat of a strike, companies such as Fortescue Metals Group are struggling to stay on track to reach its full year iron ore export guidance and to miss out on a month of exporting would vastly impact their results. Fortescue Metals Group CEO, Nev Power, issued a statement saying the export of iron ore through Port Hedland was critical not only to the company, but the mining industry and the Australian economy as a whole.

“There is a need to reform the outdated industrial laws that allow a handful of workers to hold to ransom the jobs of thousands of people, threaten state revenue, jeopardize the sustainability of local communities and damage our international trade reputation," Power said. However, if Port Hedland does get closed for a short period of time, this will benefit some of the ports just south of Port Hedland, such as Rio Tinto due to the loss of access to Port Hedland.

The ballot results reveal that the MUA deckhands have the option of whether or not they strike but it doesn’t seem likely that they will pass up this opportunity. This April, exports have been reported to be 33% higher than last April which is why the MUA is seeking improved treatment of the workers. The Deckhands want better pay and to be eligible to earn leave. Will Tracey from the Maritime Union speaks for the workers when he says, “we are pursuing a claim of four weeks’ leave a year and we think it is very reasonable, given our members work 12 hours a day for 28 days straight in very tough conditions.” Tracy also expresses that promises have been made to the workers that never happened. "We've had a number of meetings but when the company continues to slide backwards on what we thought was a previously agreed position, workers have no other option but to go down that path," Tracy says.

BHP is working with the union to try to make an agreement of some sort within the constraints of the Fair Work Act.

“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,'' said the spokeswoman for BHP.

The MUA is still attempting to negotiate the demands of the workers but the ballot is only valid for 30 days so if they do decide to move forward with the strike, it will happen by early June.  Under the terms of the ballot, the strike is permitted to last anywhere from 24 hours to one full week.