UPDATE 1-S.Africa unions declare dispute in coal wage talks

Two South African trade unions declared a dispute on Thursday against coal producers after wage talks hit deadlock, a union official said.

A dispute, the first legal step towards going on strike, was declared after producer group the Chamber of Mines declined to raise its offer of a 7.25 percent wage hike, Solidarity union spokesman Reint Dykema told Reuters.

South Africa's largest mining union, the National Union of Mineworkers, also joined in the dispute, he added. Unions are demanding a wage hike of 15 percent.

Chamber negotiator Eric Nwedo confirmed a dispute had been declared, saying wages were not the only stumbling block, but there were also differences on housing benefits, pension contributions and upgrading job categories.

"These are costly demands, so if we are to make progess on the wages we need to get some clarity on where they are going with these," Nwedo said. "We are still committed to engaging with the unions.

Following the declaration of a dispute, further talks are required, including with government mediators, before any strike can be approved.

South Africa is the world's fifth-largest producer of coal, which is the primary fuel produced and consumed in the country. Around 20,000 workers are covered in the wage talks.

The Chamber represents seven companies, including BHP Billiton Energy Coal South Africa (BHP.AX: Quote, Profile , Research), the coal unit of Anglo American Plc (AAL.L: Quote, Profile , Research) and Xstrata Coal South Africa (XTA.L: Quote, Profile , Research).

The chamber also represents those activities of Exxaro Resources Ltd (EXXJ.J: Quote, Profile , Research) previously owned by Eyesizwe Coal, which merged to form Exxaro.

Source : investing.reuters.co.uk/news