Tug boat strike may halt BHP, Fortescue iron ore exports

MELBOURNE, April 30 Wed Apr 30, 2014 2:29am EDT

MELBOURNE, April 30 (Reuters) - Australian iron ore exports from BHP Billiton and Fortescue Metals Group could be blocked for up to a week in mid-May, if tugboat workers go on strike in a dispute over annual leave and higher pay.

Deckhands working on tugboats operated by Teekay Shipping Australia and used by BHP and Fortescue, the world's no.3 and 4 iron ore miners respectively, at Port Hedland in Western Australia are voting on whether to stop work for 24 hours, 48 hours or seven days. The ballot result is due on May 12.

If a strike lasted a week, it could halt around 8 million tonnes of iron ore exports. More than 34 million tonnes of iron ore were shipped in March through Port Hedland, with almost all of that going to China, South Korea and Japan.

The Maritime Union of Australia has proposed a strike to pressure Teekay over demands to give deckhands, who work four weeks-on then get four weeks off, annual leave and up to 70 percent of a tug master's pay.

If workers decide to strike, the union needs to give BHP, which has the licence to all the tugboats operating at Port Hedland, three days notice ahead of stopping work. That means any halt to shipments would start on May 15 at the earliest.

Teekay declined to comment on its talks with the three unions representing deckhands, engineers and tugboat masters, as mediation at Australia's Fair Work Commission is confidential, but is trying to resolve the issues.

"Teekay and BHP Billiton are committed to maintaining a viable and efficient towage operation in Port Hedland," Teekay said in a statement.

The commission's next hearing is on May 7.

BHP and Fortescue account for more than half of Australia's iron ore exports. Smaller miners Atlas Iron Ltd and BC Iron Ltd could also be affected, depending on the timing, as they export through Port Hedland.

Australia's biggest iron ore producer, Rio Tinto , would not be hit as it does not use Port Hedland. (Reporting by Sonali Paul; Editing by Ed Davies)

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