World No 2 iron ore miner Rio Tinto Ltd/Plc will face the first of a series of rolling strikes by unionised train drivers starting on Saturday, threatening to disrupt up to half the company's daily haulage into its main export terminal, a union leader said on Tuesday. The industrial action will be the first faced at Rio Tinto's Australian iron ore mines since 1992.
Rio Tinto iron ore division chief executive Sam Walsh has already warned workers the action has the potential to negatively impact Rio Tinto's overall performance, according to company spokesman Gervase Greene. "We hope it does not come to that and we certainly view this matter with the utmost importance," Greene said.
In a meeting late on Monday in Perth, 39 drivers voted unanimously in favour of an initial 12-hour stoppage, Construction, Forestry, Mining and Energy Union (CFMEU) mining division secretary Gary Wood said. "We wrote to Rio Tinto yesterday reiterating our desire to commence discussion and they responded by declining. So today we served them the notice of the stoppage.
We don't see we have any other options left," Wood told Reuters by telephone from Perth. The strike was seen as having little impact on markets unless it was extended. "Given they are only promising temporary stoppages and demand for steel is waning due to the global financial situation, I don't see this having much of an impact on iron ore markets," DJ Carmichael & Co analyst James Wilson said.
"Longer term, if the strike were to continue, then there could be an impact," he added. The drivers - out of a total workforce of 315 - are pushing Rio Tinto for higher pay and collective work agreements similar to ones negotiated with rival BHP Billiton Ltd/Plc to replace individual employee contracts that are expiring, Wood said.
Rio was seeking to engage with individual workers directly in hopes of averting any stoppages, according to Greene. The action would delay trains, hauling up to 30,000 tonnes of ore per load across the west Australian outback, to the Port of Dampier, according to Wood. While some trains run into other ports used by Rio Tinto at Cape Lambert and Pannawonica, the main line from most of the ore was into Dampier, Wood said.
The union served Rio Tinto with notice of its plans to disrupt rail service earlier on Tuesday providing the minimum three days notice required under Australia's Workplace Relations Act, Wood said. The drivers also are seeking a 4.75 percent wage hike plus A$20,000 ($14,500) a year for employees affected by Rio Tinto's decision to introduce driverless trains by 2012 under a plan announced in January.
According to Greene, automated trains were necessary because there were not enough experienced drivers to keep up with the company's needs. Overall, Rio Tinto has said it expects to ship around 190 million tonnes of ore this year. Over the next four years it plans to spend $667 million to boost annual Australian iron ore output to 320 million tonnes.
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