Iron Ore Industry Using Low Prices As An Opportunity To Cut Contract Costs: West Australian Transport Workers Union
Release date: 13/01/2015
Unions are accusing mining companies of using the plunge in the iron ore price as an excuse to slash wages and conditions.
ABC Rural, by Lucinda Jose, 13 January 2015
A truck works at an iron ore mine in the Pilbara region of WA. (AAP: BHP Billiton)
But industry says it's working hard to keep the wheels of commerce turning as margins are squeezed across the board.
The West Australian Transport Workers Union says transport companies are being asked to cut rates and reduce costs for the iron ore industry.
Low commodity prices are causing pain across the iron ore industry, with contraction and job losses, the latest being 117 at Cape Lambert Resources in the Pilbara.
But it's not just mining companies that are being squeezed by the plunging price.
Tim Dawson state secretary of the Transport Workers Union says mining companies are opportunistically using the state of the industry to negotiate leaner contracts with service providers.
"The companies that cart the freight up from Perth into the mining and also the companies that cart the ore for them, they are definitely squeezing them a fair bit and telling them to sharpen their pencils and trying to cut rates," he said.
"There is cost savings definitely going on and the cost savings means that those companies will attack the wages and conditions of the truck drivers."
The Chamber of Minerals and Energy WA say mining companies are looking to cut costs but deputy chief executive Nicole Roocke said the efforts began before the iron ore price dropped.
"What we have actually seen is over the last 12 months quite a lot of criticism levelled at the resource sector about not having very good productivity," she said.
"So even before the iron ore had dropped to the levels that it is at the moment the companies were giving serious consideration to how to do the maximise output with their existing assets and where to get efficiencies in other areas."
The CME said while the falling Australian dollar has brought some relief, low iron ore prices have created an urgent need for industry savings in order to maintain stability.
However the TWU rejects the notion the industry has been bloated with high costs.
"These are people that keep the mining industry going that do these type of jobs so to actually use them as an excuse or a reason to try and cut their costs I think is unwarranted," Mr Dawson said.
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