Perilya workers vote on $1.8m pay rise sacrifice

Employees at Broken Hill’s Perilya mine will start voting on whether to accept a company proposal which will see workers sacrifice $1.8 million in wage increases promised for 2014.

The Perilya mine workforce was set to receive a four per cent pay increase in 2014, however management wrote a letter to staff 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,” mine manager David 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.

The region’s CFMEU vice-president Greg Braes said the move to freeze wages had workers worried about the future of the operation, but said the union would not be making recommendations to its members on how to vote, ABC reported.

"The union's role in this is to make sure people understand it to the best of their ability, but it's up to Perilya to make sure that everything is explained properly and people understand it to make an informed decision,” Braes said.

"Hopefully they understand the full aspects of what they're voting on, the position of the company and the agreement that they're working under," he said.

"A lot of people feel that if it can honestly secure jobs it's something they should seriously look at, others believe if things are as bad as how it sounds, it's probably not going to make any difference in freezing it.

In December Perilya was purchased by its major Chinese investor in a deal worth $269.3 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.

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