Workers at Freeport's Grasberg – one of the world's largest gold and copper mines – in the remote Indonesian province of West Papua vowed Friday to paralyse production, as their strike over pay enters its second month.
About 12,000 of Freeport's 23,000 Indonesian workers have joined the strike that started on Sept. 15 and on Friday Freeport said some workers have returned, putting it in a position to increase mining and milling output. The gulf between the the two parties are so wide that chances of a settlement appear remote – Freeport has offered a 25% increase on wages while the union wants the current minimum rate of $1.50 an hour raised more than 8-fold.
AFP quotes Virgo Solossa, spokesman for the workers' union: "If we don't get the pay increase we want, our goal is to stop production by November 15." The current lowest wage is $1.50 an hour, which workers want raised to $12.50 while the maximum hourly rate of $3.50 it wants pegged at $37.
Reuters reports late last month, the company said about 4,200 workers at the mine, mainly contractors and non-union staff, have returned to work, allowing some mining to resume.
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.
Chief Executive Richard Adkerson told Reuters on the sidelines of the African Copper conference in London: "There has been some softening in copper demand, but not to the extent seen in the copper price. There is a disconnect right now and that's because investors are concerned about the future."
Three-month copper on the London Metal Exchange traded at $7,280 a tonne in the afternoon from Thursday's close of $7,225 a tonne, marking its third session of gains, after hitting a 14-month low on Monday.
Al-Jazeera has in-depth coverage on Grasberg where it found a history of violence: 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.