Port Hedland Tug Deckhands Say Teekay Talks Were Constructive

The tugboat workers union at Australia’s Port Hedland, the world’s biggest bulk export terminal, said discussions today to settle potential strike action were constructive and progress had been made.

The Maritime Union of Australia will meet with Teekay Shipping (Australia) Pty again on June 12 and the Fair Work Commission on July 3, union official Will Tracey said in an e-mailed statement. It represents deckhands at Teekay, which is contracted by BHP Billiton Ltd. (BHP) to run tugboat operations at the port, located 1,300 kilometers (810 miles) north of Perth.

Strikes by tugboat workers over annual leave and wages threatened to slow iron ore exports by companies including Fortescue Metals Group Ltd. and BHP, which has estimated that disruption may cost users about A$100 million ($93 million) a day. Shipments through the port expanded to a record last month as mining companies boost output, helping push benchmark prices to the lowest since 2012. The unions representing deckhands and tugboat officers have already approved work stoppages.

“Discussions today were very constructive,” Tracey said in the statement. “Tugboat workers work very long hours. They deserve to be paid well and they deserve holidays.”

The Maritime Union of Australia approved unlimited stoppages of 24 hours, 48 hours and seven days, the Fair Work Commission said May 12. The union said on May 22 that it will suspend taking strike action for 30 days to seek a settlement after productive discussions. The Australian Maritime Officers Union approved strike action including unlimited work stoppages ranging from 2 hours to 72 hours, the commission said May 30.

Record Exports

A third union, the Australian Institute of Marine and Power Engineers, said today that while talks were continuing, it couldn’t rule out industrial action in the absence of an acceptable outcome. The union is balloting members on whether to take action and expects the results on June 10. A spokesman representing Teekay was not immediately able to comment.

BHP’s mining operations may start winding down after two days of strike action because stocks at Port Hedland are reasonably high, Jimmy Wilson, chief executive officer of the company’s iron ore unit, said May 21. A strike would lead Fortescue to reduce costs and could threaten jobs, Chief Executive Officer Nev Power said May 22.

Iron ore exports from Port Hedland surged to an all-time high of 36.1 million metric tons in May from 34.8 million tons in April and 27.9 million tons in May 2013, data on the port authority’s website show. Shipments to China were a record 29.9 million tons last month, the data show. BHP, Fortescue, Australia’s third-largest producer, and Atlas Iron Ltd. ship through Port Hedland. Rio Tinto Group exports through terminals at Cape Lambert and Dampier.

Iron ore with 62 percent content delivered to the Chinese port of Tianjin declined 0.3 percent today to $94.30 a dry ton, according to The Steel Index Ltd.

To contact the reporters on this story: Phoebe Sedgman in Melbourne at psedgman2@bloomberg.net; Jasmine Ng in Singapore at jng299@bloomberg.net

To contact the editors responsible for this story: James Poole at jpoole4@bloomberg.net

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