Indonesia threatens 'harsh measures' against miners who dismiss workers

Forex Pros reports Indonesian Minister of Energy and Mining Jero Wacik has threatened to carry out "harsh measures" against mining companies that lay off workers without consulting the government.

Wacik's announcement came after two companies – Agincourt Resources and Newmont Nusa Tenggara – made public layoffs designed to cut down on costs.

Agincourt, a subsidiary of Hong Kong-listed G-Resources (1051.HK), said it would dismiss 300 employees from its gold mine in Indonesia which only opened in July.

The $1 billion mine in the north of the Sumatra island was designed to produces 250,000 ounces at full tilt by next year but has been hit by blockades and unrest over environmental issues.

Newmont Nusa Tenggara, a subsidiary of Colorado-based Newmont Mining (NYSE:NEM), announced it would let go 100 workers.

Many Western firms including US-based Freeport McMoRan whose giant Grasberg gold and copper mine in west Papua is the world's largest producer of the precious metal have been hit by strikes and disruptions.

Indonesia's bullion production declined 24% last year to fewer than 100 tonnes dropping the country from 7th place in 2010 to 9th in 2011 globally in terms of gold output.

Image shows the Grand Mosque of Medan, North Sumatra, Indonesia.