The iron ore hub's “salary” settlement with a daily loss of 80 million US dollars is difficult to resolve, and BHP Billiton (BHP.US) Port Hedland salary negotiations have once again run aground

The Zhitong Finance App learned that negotiations between BHP Billiton (BHP.US) and the trade union representing Port Hedland workers came to a standstill again on Tuesday. The two sides plan to resume negotiations next week, and the electricians involved in high-voltage power maintenance will first negotiate separately with the company this Thursday, continuing the labor game at this key global iron ore export hub.

The latest round of negotiations, which ended on July 28, failed to result in a four-year corporate agreement. A Union Port Union spokesman confirmed that negotiations are scheduled to continue next Tuesday. There is no immediate comment from BHP Billiton. The United Port Union represents three trade unions, including the electrical trade union. Among them, the electrical trade union will meet separately with BHP Billiton negotiators on Thursday.

According to information, Port Hedland is located in northwestern Australia and is an important hub for the country's iron ore exports. Every day, BHP Billiton products worth 80 million US dollars are transferred through this. The trend of labor and management affects market nerves as a result.

The talks are a continuation of negotiations that have been going on for more than seven months. The last round of negotiations on July 21 showed some positive signs. At the time, the United Port Union said “some progress has been made, but no agreement has been reached,” and the two sides decided to resume negotiations on July 28, but the impasse in the negotiations made the outlook more variable.

This round of labor negotiations involved around 450 operation and maintenance workers. According to estimates by the electrical trade union, an average of 25,000 Australian dollars per year is sought for each worker in an additional salary increase of 25,000 Australian dollars. The union pointed out that the “fly in and out” work model currently commonly used in mining areas has kept workers away from their families for a long time; in the past, working in the Pilbara region where they could receive double the salary of a similar job in Perth no longer exists. The analysis shows that the salaries of senior employees in BHP Billiton's iron ore business have almost stagnated over the past five or six years, while newly recruited employees have been introduced with higher pay, forming a “double layer employment” pattern where the value of experience is undervalued and fairness is damaged. Meanwhile, BHP Billiton's overall business continues to grow.

Previously, workers had taken restrictive industrial actions. In mid-July, more than 100 workers in the Port Hedland iron ore business stopped work for 8 hours. This was the first time since 2000 that BHP Billiton experienced a shutdown at the Pilbara iron ore hub. Although the electrical trade union later claimed that electricians maintaining high-voltage power networks in the Pilbara region had overwhelmingly supported the strike action, the impact of the strike on operations was still relatively under control. Andy Foster, portfolio manager of Argo Investments, who holds shares in BHP Billiton, said last week that the shutdown did not seem to have greatly disrupted operations, but if it causes further disruptions, the situation will be worrying.

BHP Billiton previously stated in a statement that the company is focused on achieving constructive progress towards a fair and reasonable agreement, and believes that negotiations with the intervention of the Fair Work Committee, an independent industry regulator, is the most constructive way to reach the best results. The committee can assist in negotiations and ultimately act as an arbiter of agreements.