Wage talks between South Africa's Amplats, union hit deadlock

JOHANNESBURG (Reuters) - A South African union declared a wage dispute with the world's top platinum producer and a unit of Anglo American (AAL.L) on Tuesday after negotiations deadlocked, setting the stage for a potential strike.

The National Union of Mineworkers (NUM) said in a statement it had rejected the latest offer of a 6.75 percent hike by Anglo American Platinum (Amplats) (AMSJ.J), less than half of the 14.5 percent it is seeking.

The union - whose members comprise about a fifth of the workforce at Amplats - had originally sought a 20 percent wage increase. Amplats shares extended their decline after the news of a deadlock in the wage talks.

A state mediator will now try to help the two parties reach an agreement, but if they fail to do so, the union's members would then have legal grounds to embark on a strike.

The union's members are concentrated in a handful of Amplats' operations including its heavily-mechanised Mogalakwena mine, the company's most profitable asset.

Amplats said the company hoped to reach a deal.

"We continue to engage recognised unions and remain optimistic to reach a sustainable wage agreement," said Amplats spokeswoman Mpumi Sithole.

South African platinum companies have said they cannot afford big wage increases as they grapple with depressed prices and rising costs including power and labour.

Amplats, which is in the process of selling its labour-intensive Rustenburg mines to Sibanye Resources (SGLJ.J), is also in wage talks with its majority union, the Association of Mineworkers and Construction Union (AMCU), which lead a crippling five-month strike against the sector in 2014.

Amplats' share price fell over 3 percent, underperforming Johannesburg's All-share index (.JALSH) which was 0.67 percent lower.

(Reporting by Ed Stoddard; Editing by James Macharia)