Employees at Broken Hill’s Perilya mine have rejected a proposed freeze on pay rises.
Of the 308 votes cast, the majority of workers voted against the proposal by the company to put a hold on their four per cent wage increase in 2014.
Hoping to save $1.8 million dollars as a result of putting a hold on wages, mine manager David Hume said the company would examine its costs in light of the vote, ABC reported.
"I can't say whether or not redundancies may have to happen, there are none planned at the moment," he said.
"We'll be attempting to cut costs in other ways, also attempting to improve our production performance so that our revenue inflow is improved this year.
"I'm still hopeful that we can achieve profitability without redundancies but I certainly can't give any guarantees."
The four per cent wage rise will take effect immediately.
Management wrote a letter to employees in November explaining it cannot afford the wage hike.
"Our position requires some urgent and quite drastic action … to maximise our chances of a successful 2014,” Hume said at the time.
"Quite honestly, $1.8 million would only be a component of the improvement we need to make in terms of the cost improvement and performance enhancement that is required.”
Hume said low metal prices and a high Australian dollar had impacted the Broken Hill operation with the company reporting an operating loss for the first half of last 2013 in excess of $20 million.
China’s No. 3 zinc producer, Zhongjin Lingnan, already had a 53 per cent stake in the company and announced plans to buy the rest of the stock for 35 cents a share.
Perilya's managing director, Paul Arndt, said he is confident Zhongjin Lingnan will fully support Perilya’s current operations and use their financial strength to underpin the company’s future investment and development plans.