Coal industry rail drivers in NSW are still due to strike for 48 hours from Friday after mediation talks broke down.
The Rail, Tram and Bus Union (RTBU) and Pacific National Coal could not agree on a new enterprise agreement for its 800 workers, despite the involvement of the Fair Work Commission and discussions with Workplace Relations Minister Bill Shorten.
Major coal producers Xstrata and Whitehaven are considering applying to the Fair Work Commission for third-party termination orders that could legally stop the strike on the basis of significant economic harm.
The strike threatens the delivery of 600,000 tonnes of coal worth more than $55 million at current prices by Pacific National, while disrupting the 20 to 30 per cent of the state's coal it does not haul because of about 40 idle trains blocking lines.
The RTBU started negotiations last year by asking for pay rises over three years of nine, seven and seven per cent.
Pacific National responded with four per cent a year for three years.
The workers rejected the offer but Pacific National reduced its offer to three per cent from this week, which led to an escalation of the proposed strike action from 24 hours to 48 hours.
AAP understands the union has reduced its offer to seven, five and five per cent.
The union has not ruled out more strike action while Pacific National could reduce its pay rise offer further to 2.5 per cent.
Bob Nanva, the union's national secretary, said that since April last year Pacific National had reduced an offer that had already been rejected by 85 per cent of the workforce.
"While we would be happy to meet again, Pacific National needs to shift in order to resolve this dispute," he said.
Most of the workers, which include train drivers, maintainers and terminal operators, are paid a base rate of $63,000 a year, but the company says the average fully trained train driver actually earns $105,000 including overtime.
AAP was seeking a comment from Pacific National's owner, Asciano.