Minister Wong: BHP Labour Row is not Indicator of Mining Industry State

Finance Minister Penny Wong said on Friday that the Wednesday announcement by BHP Mitsubishi Alliance (BMA) that it would close its Norwich Park coking coal mine in Queensland is not an indicator of the state of the mining industry in Australia.

BMA decided to indefinitely close the mine after a seven-week review which failed to find ways to return the operation to profitability. The heavy losses suffered by the joint venture were due to the 2011 floods, lower coal prices and soaring cost of operations.

It was partly also caused by the prolonged labour row that lasted for 16 months. The closure would displace almost 500 workers.

The Opposition has insisted that the mining tax and carbon tax would make Australia's mining sector less competitive in the global arena, worsened by the growing restiveness of employees over work conditions.

However, Ms Wong belied the Coalition's charge.

"Since the mining tax was announced (and) since the carbon price was announced we've still seen continued investment in mining," Sky News quoted Ms Wong.

She said that in the past three years, investments in mining rose to $120 billion from $47 billion which is a substantial amount and are considered the best arguments against accusations that Gillard government policies are deterrents to investments.

Besides announcing the closure of the Norwich Park mines, BHP declared a force majeure and warned customers it could not meet all orders due to the bad weather and industrial dispute.

However, the issue is not over pay because BMA offered a 5 per cent yearly salary adjustment for the next three years. The unions are instead against BHP's call to make safety tests a management decision and not members', resistance to the union's proposal to have a third break for the night shift and change in the use of contractors.

"If BHP were entirely open and honest about what's at the heart of this dispute, it would concede that, from a cost perspective, it wants to move its established hard-coking coalmines from fundamentally residential-based employment to fundamentally commuter-based employment," The Australian quoted Construction Forestry Mining and Energy Union General Secretary for Mining and Energy Andrew Vickers.