CARNA Contractors and Lanco Infratech are heading to court.
This follows the inability of the two sides to reach an agreement over more than $30 million allegedly owed to Carna by Indian-owned Lanco.
"Under the contract between Lanco Infratech, as the owner of Griffin Coal, payment was meant to have been made by July 1," CMFEU district secretary Gary Wood said
The decision to take legal action follows failed attempts by Carna and Lanco to thrash out their differences, culminating in a meeting of their lawyers on Tuesday afternoon.
Another stormy meeting was held on Wednesday morning but after no agreement was reached the two sides decided to take legal action.
The meetings were confidential and several spokesman from Lanco and Griffin refused to comment or to divulge any details to the Collie Mail.
Carna ordered Griffin miners to down tools and stop operating machinery last Thursday due to the outstanding debt.
"This will continue until full payment is received."
The 260 production workers, however, are continuing to be paid.
"Under the contract between Lanco Infratech, as the owner of Griffin Coal, payment was meant to have been made by July 1," CMFEU district secretary Gary Wood said
"Further terms of the agreement also state that if payment is not received Carna can cease production, however, workers must continue to be paid."
One employee who wished to remain anonymous said: "We have to turn up for shift as per usual but if there is no work, or only a limited amount, it is being rostered out in a fair manner."
"Any surplus workers are sent home where they remain on standby on full pay on the understanding they must be prepared to return to work if called back during normal shift hours," the employee said.
"This will continue until full payment is received."
These developments mean Bluewaters Power Station, which is supplied by Griffin, could very likely run out of coal by the end of the week as coal delivery delays have already eaten into Bluewaters three-week stockpile.
Under the terms of the contract between Buewaters and Griffin Mining, the former can step in to take control of the mine if the coal levels drop below a certain level.
Also effected is Worsley Alumina which relies on Griffin coal but Worsley has coal supplies estimated to last another five months so will probably look into renewing their contract with Griffin.
This is just the latest financial dispute between Lanco, and Carna and the Griffin mine workers.
Several weeks ago another dispute over late payments, which included superannuation, nearly led to workers taking action after payment was also delayed.
Following intensive CFMEU union lobbying and extensive consultation between the relevant authorities from Carna and Lanco payment was eventually received.
Lanco's financial problems have made media headlines repeatedly in the last month, particularly their ambitious project to export coal from Bunbury while critics lash out at what they claim is the inefficiency of the company's local operations.
Furthermore, not only are coal deliveries under threat but so is the future of the mine workers.
Mr Wood said although mine workers were reporting to work each day and continuing to be paid until the situation is resolved, the workers were worried about their long-term future.
"How much longer can Lanco continue to drip-feed operations and expect them to continue running in an efficient manner?" asked Mr Wood.
"This is more than just about payment, it is also about job satisfaction and security."
