SYDNEY/PERTH – 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 (LAIN.NS) 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 fields.
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 brink.
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 test case.
China’s Yanzhou Coal Mining Co (600188.SS) and U.S. giant Exxon Mobil Corp (XOM.N) 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.
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