Hail Creek Agreement

Mr. Smyth stated that some of the changes that the CFMEU wanted in the agreement were a guarantee for the hiring of temporary workers who, after a certain period of time, would retain permanent or temporary jobs. Rio Tinto has reached a binding agreement with Glencore to sell all of its shares in the Hail Creek coal mine and the Valeria coal development project in Queensland, Australia, for $1.7 billion. The Federal Court of Justice recently found that Hail Creek Coal Pty Ltd, a subsidiary of Rio Tinto, violated its enterprise agreement 506 times and thus Section 50 of the Fair Work Act 2009 (Cth). The offences related to a change in the turnover table implemented by the company, as well as a unilateral reduction in the service allowance applicable to workers. A Rio Tinto spokesman said the mine remained open to negotiating a new agreement in good faith. Hall Payne, who worked for cfMEU, stated that the enterprise agreement does not authorize the company to reduce the service allowance when changing the rollboard, and the Tribunal agreed. As a result of its offences, the company was fined US$45,540 and ordered to pay compensation and interest to the employees concerned for $198,341.69. The Federal Court of Justice found that Rio Tinto broke its enterprise agreement with employees after the company refused to pay sick leave between 2014 and 2016, in violation of the Fair Work Act. The previous agreement for the Hail Creek mine expired in 2013 and negotiations have been ongoing for two and a half years.

An initial offer was made in May 2014, but it was also rejected by staff. “In the meantime, employees will continue to be covered by the 2011 agreement.” Glencore has agreed to acquire an 82% interest in Rio Tintos in the Hail Creek coal mine and adjacent coal reserves, as well as its 71.2% interest in Valeria coal production in central Queensland for a total of $1.7 billion. The remaining 18% of Hail Creek is currently owned by Nippon Steel Australia Pty Ltd (8%), Marubeni Coal Pty Ltd (6.67%) and Sumisho Coal Development Pty Ltd (3.33%). Any joint venture partner has the right to sell its stake in Glencore through a tag along fee for this transaction, which could result in additional consideration of up to $340 million.