South32 Fails to Avert Prolonged Strike at Appin Coal Mine

WOLLONGONG, AUSTRALIA - FEBRUARY 01: A general view of smoke rising from the the steelworks in Port Kembla on February 01, 2021 in Wollongong, Australia. Coal mining operations are set to expand in the Illawarra region following the recent move to reopen the area's oldest mine. Wollongong Coal's application to expand operations to extract an additional 3.7 million tonnes of metallurgical coal at its currently dormant Russell Vale colliery over the next five years was approved by the The Independent Planning Commission (IPC) in December 2020. South 32 has also submitted plans to the IPC to extend its Dendrobium underground mine west of Wollongong. Both mines encroach on the water catchment area of Greater Sydney, with concerns raised over the expected impact and damage to Sydney's water supply. Photo by Brook Mitchell/Getty Images

South32 has failed to get end an ongoing strike at its Appin coal mine in New South Wales after it did not reach an agreement with the union of workers at the site.

“Despite members attending the meeting in good faith, South32 refused to put forward a fair and decent offer on conditions and wages,” Collieries’ Staff and Officials Association lead organiser Belinda Giblin said, according to a Reuters report.

The CSOA members initiated the strike on Aug. 11 and said that it would continue the work stoppage protest until at least Sept. 1.

“The action is the result of South32 refusing to put a reasonable offer on the table for a replacement enterprise agreement,” the CSOA said in a Facebook post. “Members are simply seeking locked-in conditions and a competitive package.”

South32 has already discontinued operations at some parts of the Illawarra Metallurgical Coal-operated mine due to the strike but maintained that it does not expect the suspension to impact production.

“This industrial action will impact our ability to supervise our underground workforce and meet our work health and safety obligations. Given the critical safety role these supervisors play, we have taken the unfortunate but necessary decision to continue to make some parts of Appin mine non-operational during this time,” a company spokesperson told the media.

This is not the first time South32 dealt with a strike from its workers at the Appin mine over a compensation package dispute.

In August 2022, members of the Mining & Energy Union announced their intent to stage a strike as they sought higher wages amid rising coal prices and higher cost of living.

Also in 2022, workers at South32’s Worsley alumina and bauxite facility in Western Australia walked off the job after the company said it would import 15-20 percent of its coal requirement to keep the refinery operational.

The workers pointed out discrepancies in their contracts as some of them had six percent less Super and no Medicare benefit, income protection and home loan benefit as compared to other workers who were hired for the same job.

South32 Swings to Net Loss in FY23

Meanwhile, South32 said on Thursday it produced 3.2 million tonnes (Mt) of coal from Appin in fiscal 2023 and expects this to decline to 3.1 Mt next year due to the four longwall moves planned across the complex.

The company noted it increased its safe and reliable capital expenditure to US$470 million (A$725 million) in fiscal 2023 from US$367 million as it invested in the transition of Illawarra Metallurgical Coal to a single longwall configuration at Appin from fiscal 2025 and additional ventilation capacity to enable mining in Appin’s Area 7 through at least 2039.

South32 swung to a net loss of US$173 million for the 12 months to June 30, 2023 from a net income of US$2.67 billion in the previous year. Its revenue fell 15 percent to US$9.05 billion from US$10.63 billion.

The company said that “lower commodity prices from record levels in many markets in the prior period and higher inflation and uncontrollable costs more than offset higher production volumes.”

Its board has declared a final dividend of US$0.032 per share.