Even if BHP Billiton Mitsubishi Alliance (BMA) produces about one fifth of the global supply of seaborne coking coal, its declaration on Monday of a force majeure would have limited impact on coking coal prices, analysts said.

BMA declared a force majeure due to the prolonged labour problem and heavy rains at its seven Bowen Basin mines.

Despite the loss of 2 to 3 million tonnes of coal production due to the strike and bad weather, prices of premium hard coking coal dipped 6 per cent in 2012 to $210 a tonne in the spot market. It is far from the record $330 per tonne last year when production was stopped due to the heavy flood in Queensland.

"This will certainly have some impact on market sentiment; however, most core customers (Japan, South Korea and Europe) remain relatively subdued in terms of steel output, thus any movements in price at expected to be limited," Macquarie Securities said.

Industry experts added that BMA's declaration of force majeure could change the role of unions in the heavily unionised coal sector in Australia.

"A settlement will set a standard, it will be a marker post for all the other workers and miners on what the starting points are for a discussion," Patersons analyst Andrew Harrington was quoted by Reuters.

Mr Harrington said that it BMA would win over the union, it would signify a victory for companies that are battling union activity, while if the union would win, it would lead to more campaigns that would strengthen worker influence.

"It's an important issue because it potentially impacts on how companies like BHP can operate their mines, and they want to be able to operate their mines as they see fit," added Mine Life research analyst Gavin Wendt.

The mine workers have been on rolling work stoppages since 2011 and they went again on strike last week, prompting BMA to inform clients that it could not meet its obligations and to declare a force majeure.

The dispute between BMA and the unions is not over pay, but work conditions.

POSCO of South Korea said it does not expect to be affected by BMA's force majeure since it has more than a month's inventory and different supply sources.

"If this goes on for a while, it's probably going to put a few of the steel companies on edge. I suspect it's probably going to be quite supportive for the coking coal price," Mr Harrington added.

BMA workers said they would go on with their industrial action.

"It's about ensuring companies like BHP, who are earning $6 million a day in profit, put money back in (to the community) through entitlements and conditions... ensuring job security, ensuring houses and accommodation is fixed up," Construction, Forestry, Mining and Engineering Union District President Stephen Smyth was quoted by The Australian.

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