* Workers at Lanco's Griffin Coal mine face 43 pct wage cut
* Other resource firms want changes to boom time wages,
* 46,000 mining construction jobs lost 2013-15 - NAB
By Jonathan Barrett and Aaron Bunch
SYDNEY/PERTH, Nov 23 Coal prices may be
recovering, but there are no celebrations in the mining town of
Collie, Western Australia, where workers are fighting Indian
conglomerate Lanco Infratech over plans to slash their
wages almost in half.
The move to cut pay at Lanco's Griffin Coal mine comes five
years after the peak of a commodity price boom that saw miners,
truck drivers and even cleaners earning six-figure incomes in
Australia's remote outback mines and offshore oil and gas
But unwinding the wage hikes has proved difficult after a
collapse in prices for coal, iron ore and other resources pushed
dozens of mining companies into bankruptcy and many more to the
Lanco's move to switch from an employee-friendly wage
agreement to statutory minimum pay when the agreement expired is
among the first of its kind and has quickly become a national
China's Yanzhou Coal Mining Co and U.S. giant
Exxon Mobil Corp are among other companies pursuing
controversial changes to wages and conditions.
While lower wages will help struggling projects survive,
some economists worry widespread cuts to worker incomes will
weigh on consumer spending and economic growth.
Australian wages are growing at their slowest pace on
record, the Australian Bureau of Statistics data for the
September quarter shows, representing less than half the wage
growth rate workers enjoyed a decade ago.
Workers in Collie believe the wage cuts will have
devastating consequences for their tight-knit town of about
Graham Latham, who retired from Griffin Coal in July because
he was unhappy with the new pay rate and job conditions, said
businesses including a hardware store, camera shop and fashion
boutique have already shut their doors.
"When I first started at out there it felt like a family
atmosphere, but now you just feel like a number, you know?," he
A KPMG report for lobby group the Australian Mines and
Metals Association (AMMA) has found wages in the iron ore
industry are 20 percent higher in Australia than in competing
jurisdictions, and offshore vessel operators are paid 2-1/2
During the boom time, miners regularly paid dump truck
drivers high six figure salaries, while travel arrangements
allowed some workers to live in holiday areas such as the
Indonesian island of Bali during their breaks.
Nicholas Ellery, partner in legal firm Corrs Chambers
Westgarth, said the severity of the wage cuts was a result of
these high wages and incentives many people enjoyed in stronger
"Businesses are just trying to find ways to survive and stay
viable," Ellery said. "This is happening across sectors and
while industries are doing it tough, we'll see more of it."
Companies including Fortescue Metals Group have
changed shift rosters, and penny pinching - from cutting back on
soap and bottled water at mines - has become commonplace.
Still around 46,000 mining construction jobs were lost
between 2013 and 2015, according to National Australia Bank
Coal prices have surged this year but projects run by Lanco
and Yanzhou's local arm, also in Collie, operate on longer-term
contracts and have yet to see higher prices feed through.
Griffin has lost an average A$48.9 million ($36.2 million) a
year since 2011, according to court filings.
"There is a significant gap between the cost of production
and the income received for selling each tonne of coal,"
Griffin's chief financial controller James Riordan told Reuters.
"Labour costs are by far the biggest cost of production."
A spokesman for Yanzhou's local coal operations said the
company had been negotiating since early last year without
"The proposed 15 percent reduction is unfortunately
reflective of the difficult economic and operating conditions we
are continuing to address at this time," the spokesman said in a
COMPANIES IN BOX SEAT
Lanco's successful bid in Australia's industrial relations
tribunal to return workers to an industry minimum has set a
precedent that other companies are now holding over their work
forces during negotiations, said unionist Steve McCartney.
"Companies think this is a green light to attack wages and
conditions for workers all over Australia," said McCartney. "Our
people in Collie are digging in."
Some Griffin maintenance workers are facing a potential pay
cut from around A$130,000 a year to A$80,000, although
negotiations with the company are ongoing.
Exxon Mobil subsidiary Esso wants to move workers at its oil
platform operations in the Bass Strait fields, south of
Australia's mainland, from one-week-on, one-week-off shifts, to
two-weekly shifts designed to improve productivity.
It has started proceedings to move workers onto award wages
although an agreement could be reached in the interim.
An Esso spokesman declined to comment.
Jane Beauglehole, a long-term resident of Collie and wife of
a worker at Lanco's operations, said industry minimum wages
would affect all aspects of family life.
"Work is saying, 'We've got counsellors you can use, come
use them'," said Beauglehole. "And I say, 'a workforce shouldn't
need counsellors to help the workers because it should be a
happy place to work in'."
($1 = 1.3524 Australian dollars)
(Editing by Lincoln Feast)