JOHANNESBURG: Wage talks between South African bullion producers and unions started on Monday, with both sides far apart, setting the stage for protracted wrangling in the ailing industry.

The talks, which involve AngloGold Ashanti, Harmony Gold and two smaller producers, come at a time when the sector is grappling with depressed prices, falling production and rising costs.

"We need to place the viability and sustainability of our industry and the jobs it provides at the centre of our discussions," Harmony Chief Executive Graham Briggs said.

In labor's corner stand four unions representing 94,000 miners. The two biggest, which are arch rivals, have submitted wage increase demands ranging from 80 percent to over 100 percent for the lowest-paid workers.

Solidarity, a smaller union representing high-skilled workers, said it was seeking a 12 percent raise for its members, for the retirement age of 60 to move to 63 and for companies to increase their contribution to medical insurance to 60 percent.

Investor jitters about the talks were underscored on Monday as Johannesburg's Gold Mining Index dropped almost 5 percent. Bullion's spot price also fell, slipping back below $1,200 an ounce, a critical level seen key to maintaining the profits of many marginal mines.

In a departure from past practice, the talks are beginning with neutral chairpersons who will act as facilitators.

Another departure is an industry proposal to offer labor an "economic and social compact" or a welfare package which it says is needed to keep the shafts profitable while providing for the welfare of miners.

The Chamber of Mines said last week this would include proposals to share the gains of a rising gold price with workers while also sharing the pain of price declines. Proposals on housing, retirement benefits and employee debt will be included.