While strikes are now rare, the coal industry believes much still has to be done to make work practices more flexible and to improve onsite communication between management and the workforce.

“A work in progress” is how one union leader described the process, insisting that the unions understood the issues – the differences arose in deciding how to resolve them.

Both management and union sources acknowledged that much had been achieved – most NSW mines had not lost production through strikes for many years – but it would be some time before the industry achieved the remarkable transition witnessed in the Pilbara iron ore mines and ports, once the scene of even more industrial trouble than has been experienced in coal.

In the early decades of the Pilbara industry, companies built 20% capacity into their operations to allow them to meet their annual contractual obligations, and offset time lost through strikes.

The viability of one major operation was threatened for a time by frequent strikes.

Two decades ago, new owners of the Robe River iron ore project, the most troubled in the industry, introduced sweeping changes that demolished a thicket of restrictive practices and, after months of dispute, ended union domination of the operation.

The days when a strike could be called over the choice of ice cream in the canteen were gone. The power of shop stewards was removed; in effect, they had taken over management of Robe River.

The dramatic increase in productivity that followed encouraged the other iron ore miners to carry out their own programs of reform. By the 1990s, the industry employed far fewer people and produced more iron ore. (Both production and employment have risen dramatically in the past few years).

The flexibility now possible, and the introduction of new technology, continued the dramatic improvements in productivity, which was just as well, for by then, iron ore prices were about half those in the early years of the industry, in inflation-adjusted terms (a trend that of course has been spectacularly reversed in recent years).

Direct parallels with the NSW and Queensland coal industries would be misleading, for while the Pilbara industry was launched in the 1960s, in a region as remote as the moon for most people, the NSW coal mines were part of Australia’s early history.

The union movement played a vital role in redressing the balance of power between the mine owners and workers. One official pointed out that in the early decades, the industry was dominated by the contract system, in which the owners sold their coal for a negotiated rate, and employed contract miners, paying them at nominated figure per ton (as it was then).

However, there was no protection for miners who could not work at high levels of productivity as they grew older, or the injured and sick. The unions helped introduce levels of welfare that were well ahead of other industries.

The industry was largely underground until the 1970s, with only a few opencuts. After the second oil shock, there was a surge in surface mine development but they were usually on leases too small for their long-term future.

The consolidation that has taken place since has largely solved this problem, and opencuts have provided most of NSW’s production in recent years. However, industry leaders warn that underground mines will again be important to the state’s industry as miners pursue coal seams at greater depth.

Marked improvements in underground mining technology will make these competitive against ever deeper openpits. One mining engineer pointed to the broad equation related to the two – in an underground mine it might be necessary to remove a quarter of waste material, to win three quarters of the material mined as coal. In opencuts the ration could be reversed, so the miner is being paid for only a quarter of what is removed.

NSW mines have to cope with narrow seams – a pit may mine a metre of coal, then have to remove as much or more waste material, before extracting another metre of coal. Some mines have as many as 10 narrow coal seams.

The vast seams in Queensland – one at Blair Athol is 30m thick – reduced actual mining cost to among the lowest in the world.

Years ago, it was estimated that a tonne of Queensland coal could be mined and transported 20,000km to the pithead of a European underground mine, for less than the European coal could be brought to the surface.

Industry leaders are confident that reform in NSW will continue, seeking to make practices more flexible and improving communication between management and workers at a local level.

A broader issue, perhaps more difficult to resolve, is the complaint among mining companies that contributions for workers’ compensation and pension funds are inordinately high.

The Joint Coal Board, established in the 1940s, originally administered these benefits but other statutory bodies replaced it in the 1990s. However, changing the culture embedded in this system will be a formidable challenge.

Meanwhile, the industry chafes under an even greater impediment – the inadequate state-managed infrastructure for moving the coal to the coast, and shipping it.

Mildly smug iron ore miners point to the contrast – ports and railways built and owned by them (because the Western Australian Government did not have the funds to do so 40 years ago) that have been expanded in a timely fashion to meet the rapid increase in exports; there are no significant bottlenecks in Australia’s iron ore industry. (A dispute over whether new iron ore miners should be allowed to use these facilities may cloud this otherwise sunny prospect).

The tale of two industries, launched almost a century apart, two of our biggest exports, is a fascinating aspect of Australia’s mining history.

Published in February 2007 Australia’s Mining Monthly