Sabotage, deadly clashes shut down Grasberg

China's state news agency reports all production at Freeport McMoran's Grasberg mine in a remote province of Indonesia has been halted after a pipeline was sabotaged, access to the pit and underground operations were blocked and three miners were killed in an ambush.

The latest attack follows an incident last week when Indonesian security forces fired on striking workers after a protest turned violent, killing one and injuring a dozen other, including seven police, some of them critically. The local police chief said between 500 – 600 policemen are now billeted at the mine.

Some 12,000 Workers at Grasberg began a strike on 15 September and earlier this month vowed to shut down the mine if hourly wages of $1.50 is not upped 8-fold.

Xinhua reports "As of today we had to stop all production process," Freeport Vice President Nurhadi Sabirin said in a teleconference with the media held here.

Sabirin said that the pipeline transferring gold and copper ores from its mill to the seaport cannot operate properly following the shootings and sabotage. The pipeline stretches 114 km from Freeport's mill center on Grassberg hill in Tembagapura, Papua to the seaport.

As of Oct. 15, Freeport has shipped 103,189 tons of gold and copper concentrate from its seaport in Papua.

Al-Jazeera has in-depth coverage on Grasberg: Freeport began to disclose security-related payments in filings with the US Securities and Exchange Commission in 2001. It confirmed annual payments reaching an average $5m each year for government-provided security of the Grasberg complex and its staff and fluctuating annual costs reaching $12m for unarmed, in-house security costs. A spokesman for the company later told the Jakarta Post that these payments had been taking place since the 1970s.

Reuters reports Freeport-McMoRan Copper & Gold Inc (NYSE:FCX) is the largest taxpayer in Indonesia and in the first week of the strike last month when production was slashed by 230,000 tonnes a day, it represented daily losses of $6.7 million in government revenue. Freeport, the world's largest publicly traded copper miner, is also facing labour action at its Corro Verde mine in Peru.