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Tuesday, 24 December 2013

Wilson would use any means to get what he wanted - if you're prepared to blow up a smelter.........

The Sydney Morning Herald

WMC TALKS FAIL; QUITS $105M WA EXPANSION

Author: By BRUCE HEXTALL Resources Writer
Date: 13/11/1991
Words: 968
          Publication: Sydney Morning Herald
Section: Business
Page: 41
Western Mining Corp has carried out its threat to abandon a $105 million expansion of its Kambalda nickel mines in Western Australia after failing to reach agreement with union members on the introduction of continuous rosters.

The decision looks certain to cost the jobs of 150 mine workers.

The company said yesterday it had no other alternative, claiming Australian Workers Union officials had reneged on an agreement that would have allowed the introduction of continuous 8-hour shifts.

"The AWU's declared intention not to honour the agreement reached, but to rather seek further renumeration left WMC with no alternative but to advise the union that our formal offers were withdrawn," WMC's general manager of West Australian operations, Mr Phil Lockyer, said.

"Kambalda must operate at an internationally competitive level.

"If the only way we are allowed to do this is to downsize then that is the course of action we have to take," Mr Lockyer said.

Yesterday's announcement ended months of tense negotiations that began at the start of the year after a 12-month review of the company's nickel operations. The review recommended up to $400 million be spent on the mining, smelting and refining facilities to make these businesses internationally competitive.

To a significant degree WMC was successful, winning sufficient concessions from the State Government and employees to allow it to commit to expand the Kalgoorlie smelter, the Leinster mine and the Kwinana refinery.

But Kambalda, the most important part of the nickel operations, became the stumbling block. The company simply said there were two alternatives. These were to accept a 24-hour-a-day seven-days-a-week roster, or to reduce operations.

The demand for the new roster, which would replace the current 7 1/2-hour roster worked over five days, was made to match the competition, the company argued.

Negotiations on an industrial agreement broke down at a meeting yesterday morning chaired by the Deputy State Premier, Mr Ian Taylor.

WMC said AWU secretary Mr Bruce Wilson had accepted a final package on Saturday, which was subsequently confirmed by Mr Taylor.

The company claimed the union had then withdrawn from the agreement in an attempt to seek more renumeration.

Mr Lockyer said the company had shown good faith in the negotiations by retaining more than 50 employees at Kambalda who were surplus to the current operations.

Western Australia is the only State that restricts mining operations to five days a week under its Mines Regulation Act.

WMC has argued this has put mining operations in the State on the back foot, when compared with competitors here and internationally.

The company managed to gain support for this argument from the State Government but at this point the Act remains in place and union opposition continues to be entrenched.

"Without a full commitment to work practice reform, to eight-hour continuous shift rosters, we were simply unable to justify the capital expenditures necessary to mine deeper ore at some mines. We had no alternative but to downsize our Kambalda operations," the company said.

The Kambalda mines are WMC's largest nickel operations, producing about 32,000 tonnes of contained metal a year out of total contained nickel in concentrate of 54,010 tonnes.

However, the agreed expansion at Leinster and the likely start-up of the Mount Keith open-cut project in WA, recently acquired as a result of the successful bid for Australian Consolidated Minerals, has given WMC some production alternatives.

Although important, the company is now arguing some production at Kambalda is expendable if the right cost structure cannot be put in place.

NICKEL PLANS ON THE SLAG HEAP

1990: WMC plans $400m expansion subject to union/WA Govt approvals.

Sept 4, 1991: $127m expansion of Leinster mine after rail charges reviewed.

Sept 14: $50m upgrading of Kwinana refinery announced.

Sept 27: $41m to be spent on Kalgoorlie nickel smelter.

Nov 4: WA Govt to overhaul mine regulations to allow seven-day rosters.

Nov 11: Australian Workers Union against eight-hour day continuous rosters.

Nov 12: Abandons $105m Kambalda expansion after union blocks new rosters.

ROUGH ROAD TO MINING REFORM

September 1988 - Coal Industrial Tribunal ruling clears the way for flexible rosters in NSW, permitting production six days a week, 52 weeks a year.

March 1991 - MIM Holdings Ltd seeks $100 million of cost savings through work practice changes and redundancy program to guarantee competitiveness of Queensland base metals operations.

April 1991 - At Renison Goldfields Consolidated's Renison tin mine in Tasmania, 350 employees agree to a survival plan to make operations competitive.

November 1991 - WMC Kambalda nickel miners reject 7 day a week continuous rosters. Company says 150 jobs to go.

 

So 13 November, 1991 - sackings and no agreement from the AWU.

 

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But by January 1992 - after the Thiess/Wannunup announcement in the Dawesville project and contract signing.......

 

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I'll leave you with this exchange taken from the Hansard on Wednesday, 6 May, 1992.

Hon N.E. MOORE: That idea came from Western Mining management - from a mine in
Canada, if my memory serves me correctly. It is a proposition the company is trying.
However, Hon Mark Nevill must remember that in the current dispute the miners in
Kambalda had virtually reached agreement on the continuous shift arrangements: after a long
gestation period they had virtually reached agreement with the company when onto the scene
arrived one Bruce Wilson, about whom Hon Mark Nevill spoke a moment ago. He was out
to make a name for himself in the world of union politics and he descended upon a mass
meeting in Kambalda. To give him his due, he is obviously a good talker; he talked them out
of all the arrangements they had made up to that point.
Hon Mark Nevill: No; he wanted to be included on the negotiating team.
Hon N.F. MOORE: The result of his efforts was to completely upset the arrangements that
had been made up to that point, and the negotiations that had been carefully and quietly
worked out between union leaders, the work force and the company were set back virtually
10 years. Bruce Wilson - who has a history of fairly aggressive union activities and is
regarded on the North West Shelf as nothing to write home about - for reasons best known to
himself and perhaps others outside the House, went in there as t new Secretary of the
Australian Workers Union and changed all of the practices of the previous leadens of the
AWU, who I suppose were old-fashioned goldfielders.
Hon Mark Nevill: It was overdue.
Hon N.F. MOORE: The member can argue that if he wishes.
Hon Mark Nevill: I will say it publicly.
Hon N.F. MOORE: The bottom line is that Bruce Wilson turned upside dawn the virtual
agreement that had been reached at that stage and, for reasons best known to him - and I
think they may be political - he has continued to cause problem after problemn at Kamnbalda.
And it is not just Kambalda which has a problem with continuous shifts; there is also a
problem at Leinster, where Western Mning runs a very successful nickel operation. That
operation cannot have continuous shifts either, because Western Mining cannot get an
exemption under the Act. So it is not just Kambalda; it is Western Mining in total. It is one
company with two mining operations.
Hon Mark Nevill: Western Mining made a big mistake when it tried to exclude him from
negotiations.
1785Hon H.F. MOORE: If I were Western Mining I would have excluded him too. It is the same
as if Hon Mark Nevill and I were to sit down and do a deal, and when we were virtually
prepared to make a decision Hon Tom Stephens turned up and said he warnted to be involved.
Of course the agreement would break down, because we would know where he was coming
from. There would be no hope of agreement. That is a very simple analogy.
The Mines Regulation Act provides for exemptions from the Act. It says in section 5(2) -
The Governor may from time to time exempt from the operation of this Act, or any of
the provisions thereof, any mine or class of mines, for such period and on such
conditions (if any) as he may think fit.
In other words, it is competent for the Government to exempt anybody from any of the
provisions of that Act. That exemption is provided to just about every company in the State
that seeks an exemption, except Western Mining Corporation.
Hon Mark Nevill: It has had exemptions before.
Hon N.F. MOORE: Of course, it may have had, but why should a company of that
magnitude, with the investments it has in the goldfields of Western Australia, have to rely on
the whim of the Minister every time it wants to get an exemption for anything, whereas most
other companies are given an exemption without any questions being asked?
Hon Mark Nevill: Western Mining has had exemptions in the past. It has them now.
Hon Max Evans: Whereabouts?
Hon Mark Nevili: At the Revenge mine.
Hon H.P. MOORE: Then why will the Government not give the company an exemption in
Leinster or Kambalda?
Hon Mark Nevill: There is a particular problem with this dispute that needs to be solved.
Hon N.F. MOORE: The reason is that the union is telling the Government not to give
Western Mining an exemption. It comes back to the fact that in 1991 the Premier and the
Deputy Premier, who happens to be the Minister for Goldfields, publicly stated that they would amend the Mines Regulation Act to allow for companies to operate continuous shifts.
Then the ALP State Conference was held, and it decided - I suspect at the instigation of the
Australian Workers Union - that it would not go along with that proposition, so the
conference voted against it- So the union movement, through the Labor Party State
Conference, told the Government it should not go down that path, and that is what happened.
Because of the dispute with Western Mining Corporation the Government caved in to the
unions and would not go ahead with the decision to amend the Act
Hon Mark Nevill: If that is correct why are we amending the Act?



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