May 22, 2014 / 10:00 AM / 4 years ago

UPDATE 1-Australian union suspends iron ore port strike plan for a month

* Potential strike postponed to late June at earliest

* Fortescue to press labour tribunal to block strike

* Strike would halt over half of Australia’s iron ore exports (Adds comments from union and Fortescue CEO)

By Sonali Paul

MELBOURNE, May 22 (Reuters) - Tugboat workers agreed on Thursday to suspend plans to go on strike at Australia’s biggest iron ore port till at least late June, just as miners stepped up efforts to avert action that could halt a quarter of the world’s seaborne iron ore supply.

Deckhands represented by the Maritime Union of Australia (MUA), working on tugboats that guide iron ore ships in and out of the port, have threatened to go on strike for up to seven days, blocking $100 million a day worth of iron ore sales.

The MUA said on Thursday it would hold off industrial action for 30 days but would seek a 30-day extension on an existing approval for a possible strike to allow more time for talks with the tugboat operator, Teekay Shipping.

“Discussions between the two parties this week have been productive and both parties would like to see if we can reach a negotiated outcome without the need for industrial action,” Will Tracey, the MUA’s West Australian secretary, said in a statement.

The deckhands, who work for 28 days and then get 28 days off for A$135,000 ($124,400) a year, want more than a 20 percent pay hike and four weeks extra leave, arguing their long work hours are equivalent to what people usually put in over 54 weeks.

Any strike at Port Hedland would halt more than half of Australia’s iron ore exports, hitting its No.2 and No.3 iron ore producers, BHP Billiton and Fortescue Metals Group Ltd, respectively, as well as Atlas Iron Ltd , who have all slammed the union’s demands.

“There is something wrong with our industrial relations laws when a small group of 45 people who would like to only work 22 weeks a year and be paid a base rate about three times the base wage of a first year nurse...can hold to ransom an industry that generates more export earnings than any other,” Fortescue Chief Executive Nev Power said in a statement.

Fortescue said it was preparing to apply to the Fair Work labour tribunal to stop a strike on the grounds it would significantly harm the company, which is not directly involved in the dispute.

“In the event of a strike, Fortescue will be forced to consider standing down its operations and the associated workforces for indefinite periods of time,” Power said.

The miners have also been highlighting the potential impact on Australia’s economy, given iron ore is the country’s biggest export earner and a major source of royalties and taxes, which could also be grounds for the labour tribunal or the government to stop a strike from going ahead.

Iron ore exports are expected to surge 35 percent to A$76.8 billion this year, according to the Australian Bureau of Resources and Energy Economics.

Australia’s top iron ore producer, Rio Tinto , would not be affected by a strike at Port Hedland, as it does not use that port. ($1 = 1.0850 Australian Dollars) (Editing by Tom Hogue and Muralikumar Anantharaman)

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