The first major South African mining dispute of 2007 may turn into a long and bitter strike that could cost Anglo Platinum millions of dollars and valuable ounces in lost production.

Angloplats and its black empowerment partner, African Rainbow Minerals, admitted that the first four days of the strike by at least 2,500 workers at their Modikwa plant near Mokopane in Limpopo had cost the companies 20,000 oz worth Rand 20 million ($2.73 million) in lost production. Members of the National Union of Mineworkers plan a mass meeting and picket at the Modikwa mine in support of their wide ranging claims for better pay and conditions.

But late night talks broke down and the NUM confirmed this morning that no fresh negotiations were on the horizon.

Frans Baleni, the secretary general of the NUM, said that progress had been made on the issue of a transport allowance for mineworkers so that they could choose not to live in hostels. However, Baleni admitted that demands to close the wage gap between blacks and whites and for a shut down of the Modikwa mine on Sundays had made little progress.

"The feedback I am getting from my people in the negotiations is that the company appears not to be serious about resolving this dispute," he said.

Simon Tebele, the spokesperson for Anglo Platinum, confirmed that talks had broken down and were unlikely to start up again soon.

"It seems that the outstanding issue is "conops" (continuous operation) the owners cannot agree to a closure on Sundays. They argue that the mine was designed for continuous operation and feel this is how it should work," he said.

Earlier talks had agreed a 7% pay increase at Modikwa, but racial tension sparked the strike. The stumbling block was the long standing unrest over difference in pay for white workers and black workers, which is as much as Rand6,000/month in some cases according to the NUM.

The spark was a racial dispute that developed when two junior managers were found to have sent an e-mail, berating their black colleagues, to a former co-worker now living in Australia. Management suspended two workers this week pending an investigation.