Jul. 25 (Bloomberg) –Mine workers across three continents are striking over pay, disrupting production as near-record prices for coal, copper and gold boost profit at BHP Billiton Ltd. (BHP), Xstrata Plc (XTA) and Anglo American Plc. (AAL)
BHP workers voted yesterday to extend their strike at the Escondida copper mine in Chile, the world's largest. Stoppages at BHP's Australian steelmaking coal operations may resume this week. Thirty thousand South African coal mine workers for companies including Anglo American and Xstrata who walked off the job yesterday may be joined by 160,000 gold industry workers seeking a pay increase more than twice as large as employers are offering.
Workers are seeking a larger slice as global producers report record earnings. Melbourne-based BHP, the world's biggest mining company, will report its highest full-year profit of $22.5 billion next month, almost double 2010's net income, according to analyst estimates compiled by Bloomberg. Xstrata may report record 2011 profit of $7.3 billion, and Anglo American of $7.4 billion, estimates show.
Mining companies "are making record profits, commodity prices have held up pretty well and of course workers can see this, so as a result they're saying ‘We want our share,'" Gavin Wendt, director at Sydney-based Mine Life Pty Ltd. said by phone. "It's happening at a time when investors already are nervous about a whole bunch of things. This doesn't help."
Copper prices, up 38 percent in the past 12 months, rose last week amid concern that other mines in Chile may join the stoppage by workers at Escondida, source of about a fifth of all copper produced in Chile, the top supplier of the metal used in wiring and plumbing.
Staff at the mine are seeking higher production bonuses and better job conditions, union leaders have said.
"The company has indicated it doesn't want to talk anymore with us so we'll remain halted," Salomon Alcaino, a union director, said yesterday by telephone from Antofagasta.
He spoke after a meeting of union officials representing workers at mines owned by Anglo American, Freeport-McMoRan Copper & Gold Inc. (FCX) and Xstrata. The Chilean mining union movement is on "a state of alert" and may join the walkout if Escondida's demands aren't met, he said.
South Africa's National Union of Mineworkers, the country's biggest labor union, wants a 14 percent pay increase, while coal producers are offering 7 percent, and 8.5 percent to entry-level employees. Oil workers have been on strike since July 11 over their demand for a pay increase of at least 10 percent.
The country's Richards Bay Coal Terminal is the largest in Africa, shipping about 63 million metric tons annually, including to power plants in Europe and India. The terminal had 2.99 million tons of stockpiles at the end of June.
Wage talks affecting 160,000 South African gold industry workers resume today and unions say they will strike if their demands for a 14 percent increase aren't met. Employers including AngloGold Ashanti Ltd. (ANG), the third-largest producer, and Gold Fields Ltd. are offering maximum 5.5 percent increases.
Gold climbed to a record in London and New York today. Immediate delivery gold advanced as much as 1.4 percent to $1,624.07 an ounce in London. Gold for August delivery reached a record $1,624.30 an ounce on the Comex in New York.
De Beers, the world's largest diamond producer, said today "some" output continues at its mines in South Africa after a strike over pay started July 22.
About 3,500 workers at BHP's coking coal mines in Queensland are taking part in rolling strikes that began in June, the company's first in a decade at its Australian coal mines. The last stoppages took place over the weekend at Saraji mine, one of the mines owned by BHP Billiton Mitsubishi Alliance, a joint venture by BHP and Mitsubishi Development Pty.
Workers will stop work for 36 hours on July 27 at the Norwich Park mine, followed by halts at six other mines, according to Stephen Smyth, a division president at the Construction, Forestry, Mining and Energy Union in Queensland, one of the unions representing the workers in negotiations with BHP. The workers are seeking changes to job contracts in matters relating to job security, recruitment, use of contractors, training and development, Smyth said.
The strikes may have bolstered coal prices already driven higher by supply shortages following floods in the Australian state earlier this year. Steelmaking-coal prices rose 47 percent to a record $330 a ton for three-month contracts ended in June after heavy rain and flooding in Australia shut mines and disrupted deliveries in the first three months of the year.