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Strike hits Freeport’s Grasberg mine in Indonesia

Freeport McMoRan’s Grasberg is the world’s largest gold mine and third largest copper operation. (Image from archives)

Close to 1,000 workers at Freeport-McMoRan’s (NYSE:FCX) giant Grasberg open pit copper and gold mine in the Indonesian province of Papua have gone on strike over bonus payments, disrupting operations.

The strike has not yet affected output of copper and gold concentrate, according to Freeport.

The strife, involving mostly truck operators, began last Wednesday and while it has hit Grasberg’s open-pit related processes, it has not affected output of copper and gold concentrate yet as underground operations remain untouched, Freeport Indonesia spokesman Riza Pratama told The Jakarta Post.

A processing plant at the mine, however, is operating at limited capacity, he said.

Grasberg, one of the world’s biggest gold and copper mines, has been plagued by labour unrest, accidents and production glitches in recent years.

In 2011, a three-month strike hit the mine’s output and the firm’s balance sheet quite badly.

Production was brought to a halt again in 2015 after employees blocked access to the mine for five days. Exports, in turn, stopped for more than six months during negotiations over compliance with new mining regulations.

In July this year, the Arizona-based cut its output forecast for Grasberg, as it was hampered by repairs to a milling circuit and lower-than-expected mining rates and productivity at the open pit.

Freeport Indonesia, which employs around 24,000 workers, expects gold sales volumes at Grasberg to be 8.1% less this year than what it forecast in April, while copper sales will be 7.1% lower. That is about 180,000-200,000 tonnes of copper ore per day this year.