It certainly appears so as Glencore Xstrata prepares to shutter its Collinsville mine on Saturday when Thiess’ contract to operate it expires.
When it reopens, Collinsville will be run as an owner-operator mine.
The mine has been operating at a loss for the past 18 months. The former Xstrata Coal operation flagged its intentions to make productivity improvements in February when it announced it would be taking over the mine’s operations.
One key requirement, from Glencore Xstrata’s point of view, is to get more flexible workplace agreements in place at the operation.
It is not uncommon under some of the agreements Australia’s coal mines operate under that a mine manager has to get union approval to change a roster.
Glencore Xstrata has called for a “greenfield” agreement over Collinsville. Some would argue it is a bit of a novel approach, given the mine has been operating for more than 100 years.
It is understood the package on offer to workers will mean increased wages and superannuation benefits over the agreement that is coming to an end.
Whatever form the agreement takes though, Glencore Xstrata is looking for much greater workplace flexibility than it has been able to achieve in recent years.
However, it is not relying solely on workplace changes.
The company is re-engineering its operation and bringing in much larger shovels and trucks to increase productivity.
The mine will have to be redesigned to allow the larger equipment to be used.
A fleet of Liebherr 996 excavators is being introduced. These diggers will have 89% greater bucket capacity than the ones they replace.
The trucking fleet is being upgraded to 220-tonne Caterpillar 793 haul trucks.
Mine planning activities will include a focus on increasing strip lengths by joining mining areas; minimising the number of ramps; changing pre-strip horizons; and redesigning the pit to minimise dragline rehandle and optimise truck haul cycles.
Works will also be done on the company’s coal handling and preparation plant to increase throughput.
It will include upgrading the raw coal system to increase annual throughput.
A series of planned maintenance shutdowns will be held to allow the necessary engineering changes to be made.
Glencore Xstrata’s attempts to restructure its workplace arrangements have led to parallels being drawn between the Patrick wharf dispute in the 1990s.
A more accurate analogy might be the industrial battles at Robe River in the 1980s that led to massive productivity improvements at that Pilbara iron ore operation.
The mine became an example of union excess.
Not only did the management improve workforce flexibility, it also increased productivity considerably – some say sixfold – by re-engineering and investment in better equipment.
One of the answers there was to simply increase the power of the drives on the conveyor belts through its processing plant.
Australian Mines and Metals Association chief executive Steve Knott said the Australian coal industry was suffering from the Labor government’s focus on returning to a highly regulated and centralised workplace system over the past four years.
“The Queensland and New South Wales coal sectors are among the most heavily unionised in Australia’s wider resource industry,” he said.
“A high exposure to these challenging market conditions has meant the ability for management to drive innovation, flexibility and productivity in the workplace has become critical to the commercial viability of many of Australia’s coal projects.
“Unfortunately, the longer resource employers have had to operate under the Fair Work legislation, the greater their concerns have become about increased union power and influence over basic workforce management issues.
“The most recent survey of our members was published this week and across the board, 75% of resource industry employers believe labour productivity is lower in their operations now than it was in 2010.
“Concerns that unions are pursuing their own workplace agendas in enterprise bargaining rather than focusing on the commercial viability of the business are very common.
“Reversing this trend through both legislative reform and new industry initiatives will be vital to the future prospects of Australia’s coal industry.”