JOHANNESBURG (Reuters) — Unions representing workers at South African coal producers have dismissed a wage offer from employers' body, the Chamber of Mines, and said negotiations were "not making progress," setting the stage for a potentially prolonged dispute.
Workers want pay increases of up to 15 per cent, while the chamber — which represents firms such as Glencore, Anglo American Coal and Exxaro — has offered a three-year wage deal with pay raises of between 4 to 6.5 per cent.
Coal producers say the sector is struggling with depressed prices, falling production, rising costs and power shortages.
Glencore announced in July it would cut 380 jobs and shut part of its Optimum mine due to lower coal prices, prompting South Africa's mines minister on Tuesday to order Glencore to suspend all operations at the mine.
Coal prices are at near-decade lows and have fallen around 10 per cent this year on a supply glut and expectations are that demand from top consumer China will shrink further.
The National Union of Mineworkers (NUM), which represents most of the workers in the sector, and is asking for up to 15 per cent increases said on Wednesday negotiations had reached an impasse.
"We are highly cognisant of falling commodity prices but in better times companies made money and they should now pay up," Peter Bailey, the NUM's coal negotiator told Reuters.
"We are not making any real progress yet."
The smaller Solidarity Union, which represents mostly skilled workers in the sector, is asking for a 9 per cent pay hike and accused the chamber of not being "transparent" with the process, because it had not made clear that its latest offer of between 4 to 6 per cent was its final offer.
"The chamber appears to be out of touch with the industry as a whole. Trade unions and employers alike are frustrated by the way in which the chamber is handling the negotiations,"Deon Reynecke, Solidarity's head of energy said in a statement.
The unions have until Tuesday next week to respond formally to the chamber's offer.
The chamber said the parties would meet again on Aug. 11.
"We understand that this is a difficult time for unions and employers, and we urge all parties to engage constructively," said Charmane Russell, a spokeswoman in response to the union's criticism of how the chamber was handling the wage talks.
Meanwhile two major unions in the gold industry have rejected a wage increase offer of up to 17 per cent.
The South African government held talks with mining companies on Wednesday to try to save jobs in the industry which contributes about 7 per cent to GDP and is being hit hard by weak commodity prices and power constraints.