Freeport-McMoRan Copper & Gold Inc. is experiencing a suspension of mining at the Grasberg mine in West Papua, Indonesia as workers commence a strike that could last over a month as per a labor union spokesman, Juli Parrorongan.
Mr Juli Parrorongan said that all of the mining operations, except for the public facilities, were shut down. The entire mine workforce of close to 8,000 employees is participating in the strike which demands higher pay for the workers. The strike is scheduled to last till October 15.
In response PT Freeport Indonesia the subsidiary of Freeport-McMoRan Copper & Gold Inc that operates the Grasberg mine issued a statement saying that they were disappointed that union workers decided to implement an illegal work stoppage.
The statement went on to say that the company has negotiated in a diligent good-faith manner with the union toward a collective labor agreement to cover 2011-13. Management expects to continue negotiations in good faith to reach a fair and reasonable agreement for non-staff employees the statement said.
The company is now assessing the impact of the strike on copper and gold production. Freeport had previously suspended operations during a weeklong strike at Grasberg in July earlier this year and suffered a loss of close to 35 million pounds of copper and 60,000 ounces of gold in production output.
Indonesia's Coordinating Minister for the Economy Hatta Rajasa said that the government wants Freeport Indonesia's management to resolve the dispute with the union as soon as possible, as the strike will hit the government's income from taxes, royalties and dividends as a 9.36% stakeholder in the company.
The company is also experiencing a strike at Cerro Verde in Peru. Union leader Leoncio Amudio said that 1,200 workers walked out on Wednesday to back their demand for higher pay at the copper mine. Freeport-McMoRan said that production of copper and molybdenum at Cerro Verde was not impacted by the strike, and that the company would negotiate a new labor contract to replace the one that expired on Aug. 31.