A pay dispute involving frontline supervisors at Illawarra Coal's Appin mine might boil over into industrial action if a new deal can't be reached, the workers' union has warned.
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The union representing about 50 mine deputies said Illawarra Coal had refused to meet the workers' pay claim despite massive operating profits in recent years.
Negotiations over a new enterprise agreement have been under way for three months.
Frustrated deputies were pushing for a 34 per cent pay rise over four years, made up of an 18 per cent "market adjustment" plus 4 per cent increases each year for the life of the agreement, the Association of Professional Engineers, Scientists and Managers of Australia (APESMA) said.
APESMA collieries staff division director Catherine Bolger said the request would raise their base salaries to match market rates at mines in NSW and Queensland.
"Deputies' rates at Appin haven't been adjusted according to the market over the last four years and over the last four years Illawarra Coal's earnings have been $2.258 billion," she said.
"Deputies seek a modest adjustment of 0.01 per cent of Illawarra Coal's earnings.
"They're essential in driving the profit for the company . . . as first line supervisors and ensuring the safe running of the mine as well."
An expansion in coal mining in NSW and Queensland meant there was a shortage of deputies, so higher pay was needed to attract experienced employees, she said.
Appin deputies will vote this month on whether to authorise rare industrial action, ranging from brief stop work meetings to week-long strikes.
Ms Bolger said the union hoped to avoid the need for action.
Deputies were "very disappointed" with the company, she said.
"They see the negotiation of the new enterprise agreement as the time for the company to recognise the input they've had into the massive profits of Illawarra Coal," she said.
Arbitration was another key sticking point.
An Illawarra Coal spokeswoman said it would "continue to work with the Appin mine supervisors and their representatives to conclude an enterprise agreement on terms that are reasonable".
In recent months companies including BHP Billiton have slashed hundreds of coal mining jobs, mostly in Queensland, in the face of lower coal prices and higher costs.
In June, BHP approved an $833 million investment in Illawarra Coal to open a new mining area at Appin.
Records show the mining giant earned about $650 million before interest and taxes from metallurgical coal sales from the Illawarra last financial year.
Illawarra Coal reported its record annual production in 2011-12. Production fell in the September 2012 quarter due to a planned longwall shift at the Appin mine.