PERTH (miningweekly.com) – Mining major BHP Billiton has confirmed that some 300 permanent workers at its Blackwater coal mine, in Queensland, which is jointly owned with Mitsubishi, would be replaced by contract workers.

Project house Downer ENDI has been awarded a A$150-million, two-year contract to provide mining and maintenance services at the BHP Mitsubishi Alliance (BMA) mine, with the contract having an additional one-year option.

The scope of the work would include the load and haul of prestrip material using BMA-owned plant and equipment, as well as maintenance of the plant and equipment.

A second contract, worth A$75-million, was also signed with Downer to provide blasting services at the mine, with the contract running for a period of three years.

BMA said the decision to replace permanent workers with contract workers came after an extensive review of the operation and would ensure that the Blackwater mine continued to be viable.

Asset president Rag Udd said the service contracts were essential in ensuring the best prospect of the mine continuing to operate in a commercially viable way, to provide ongoing employment opportunities.

“Despite extensive work over the past three years to reset our costs and to safely improve the productivity at each of our mines, further deterioration of global metallurgical coal prices means that we must continue to find ways to safely improve our operational performance,” Udd said.

He said the contractual arrangements would enable BMA to bring in dedicated services with performance guarantees to ensure the Blackwater mine could safely make further productivity improvements by meeting global benchmark targets.

Worker union CFMEU said BMA’s decision was a “slap in the face” to both workers at the mine and the community surrounding the Blackwater project.

CFMEU mining and energy Queensland district president Steve Smyth said this decision would seriously damage the community in Blackwater.

“BHP wants to remove full time, permanent employees who live locally and replace them with contractors who have no job security, will receive less pay and have inferior working conditions compared with current BHP employees under their enterprise agreement.”

“It is simply not correct to justify this ruthless behaviour by citing lower coal prices. BHP’s Bowen basin mines are still highly profitable, especially considering that falling prices have been cushioned by the decline in the value of the Australian dollar. Any savings made by ripping off workers will go straight out of the Bowen basin and Queensland and directly into the company’s pockets.

“It is clear that all BHP wants is a cheap and compliant workforce who they can sack at a moment’s notice,” Smyth said.