BHP Declares Force Majeure on Coal Shipments on Strike, Rain

BHP Billiton Ltd. (BHP), the world’s biggest coking coal exporter, said it may miss deliveries from its Australian mines after strikes and rain affected output.

BHP declared force majeure because of the strike and wet weather, said Fiona Martin, a spokeswoman for the Melbourne- based company. The clause is used when suppliers can’t meet obligations because of circumstances beyond their control.

Workers at mines in Queensland owned by the BHP Billiton Mitsubishi Alliance, or BMA, the world’s biggest exporter of steelmaking coal, have intensified industrial action since the start of the year, adding to rolling strikes since June. About 3,000 miners at seven operations stopped work for a week last month and have held further strikes since.

“Expectations were that the strike wasn’t going to resolve quickly,” Joel Crane, commodities analyst at Morgan Stanley in Melbourne, said by phone. “The news is likely to be fairly neutral” for prices because the news had been factored in,’’ he said.

Deutsche Bank AG estimates output losses of 3 million metric tons since the start of the year, according to a March 23 report. The BMA joint venture supplies about 18 percent of global coking coal exports, according to a March 22 report by Goldman Sachs Australia Pty.

Labor unions globally are stepping up demands for higher wages and improved conditions as record commodity prices swell profits at mining companies.

“We’re in this for the long haul,” Stephen Smyth, district president of the Construction, Forestry, Mining and Energy Union, said today by phone. “There is significant strike action at a number of BMA’s mines this week.”

BHP advanced 0.9 percent to 1,925 pence at 10:38 a.m. in London trading. Its Sydney stock rose 1.5 percent to close at A$35.12 today.

To contact the reporter on this story: Elisabeth Behrmann in Sydney at ebehrmann1@bloomberg.net

To contact the editor responsible for this story: Rebecca Keenan at rkeenan5@bloomberg.net

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