Union action cost more than floods

FORGET the 2011 floods, the storm whipped up by mining unions' actions in Central Queensland cost BHP Billiton more in lost production than the disastrous rains that deluged the state one year earlier.

When three unions upped the ante against BHP Billiton Mitsubishi Alliance from the start of the year, ongoing yet unpredictable industrial action was designed to make a maximum impact.

The damage it did to BMA's operations became clear when BHP released its production report on Wednesday, showing coal production this year fell by 1.3 million tonnes compared to the previous year.

This meant 2011 was a stronger year for BMA, even as mines filled with floodwater and rail lines were destroyed during the catastrophic rains that inundated the state.

The Construction Forestry Mining and Energy Union estimated in May its industrial action had cost BHP close to $2 billion.

Beyond the mining giant's bottom line, the Queensland Government believes it has lost $60 million in desperately needed revenue since the battle began.

Acting Treasurer and Deputy Premier Jeff Seeney said these were costs the new government could scarcely afford.

"This should serve as a reminder to union members that, while they have the right to negotiate fair wages and conditions, industrial action doesn't only hurt their employer," Mr Seeney said.

""Their actions flow through to the entire Queensland economy and affect the State Government's bottom line.

"Work stoppages, at a time when Queensland's coal industry is recovering from the 2011 floods and rising operating costs, reduce the industry's competitiveness in the global market.

"That competitiveness is essential to growing the coal industry; an industry that is vital for job creation, as well as the broader Queensland and Australian economies."

In the latest production report, BMA stated it was largely industrial action that restricted the amount of coal it was exporting, although wet weather early in 2012 was a contributing factor.

Those disruptions hit both production and sales, delivering BMA a bruised profit margin.

During both the 2011 storms and 2012 strikes, BMA was forced to declare force majeure, using a contract escape clause when hit by forces outside its control.

The CFMEU, Australian Manufacturing Workers Union and Electrical Trades Union remain bound by a media blackout along with BMA since a preliminary agreement was put in place earlier this month.

It was the result of Federal Government mediation.

BHP used its production release to announce it had lifted its force majeure for Central Queensland, signalling its confidence in the deal.

UBS Investment Research reported that once a final contract was signed, BMA could again reach full speed within two months.

Other than BMA, BHP reported healthy results, exporting record amounts of iron ore and even increasing its coal exports overall through building up projects in Newcastle.


BMA lost a million tonnes of coal

THE bitter war between BHP Billiton Mitsubishi Alliance and mining unions have cost BMA almost a million tonnes of coal.

In BHP's production report released on Wednesday morning, figures from BMA coal mines in Central Queensland take a clear whack in line with industrial action ramping up at the start of the year.

Although the rain was another hurdle to jump, the report makes plain it was "largely industrial action" holding back production at the metallurgical- or metal-making - coal mines.

The report described disruptions to production and sales, leading to a bruised profit margin.

BHP also used the report to announce it had lifted the "force majeure" across the Central Queensland mines, touching on the preliminary deal it did with the three unions earlier this month.

During the three months to the end of 2011, BMA mined five million tonnes of coal, but that fell to just 4.2.million for the next three months - a tumble of 800,000 tonnes.

For the following quarter which ended on June 30, it fell another 100,000 tonnes to 4.1.million.

During the June quarter in 2011, BMA was hitting producing almost 4.9.million tonnes of coal.

Nevertheless, BHP Billiton has described its performance for the 12 months as robust, notching its twelfth year of record-breaking iron ore production in Western Australia.

BHP's other metal-making coal operations in Illawarra Coal - outside BMA - also broke records as "Queensland coal production remained constrained as a result of industrial action and heavy rainfall".

BHP also released its exploration and development report on Wednesday.