Freeport-McMoRan Copper & Gold reported November 1, 2011, that milling operations at the Grasberg mining complex of PT Freeport Indonesia (PT-FI) in the Indonesian province of Papua had been temporarily suspended since October 22 pending repairs to concentrate pipelines damaged as a result of civil unrest that occurred during the course of a strike that began September 15. PT-FI is owned 90.64% by Freeport-McMoRan Copper & Gold. The pipelines transport concentrate about 100 km from the mill to the Port at Timika.
Union workers at Grasberg are represented by the Geneva-based International Federation of Chemical, Energy, Mine and General Workers’ Unions (ICEM). The union sent a delegation to Indonesia in late October to investigate the strike and on November 2 issued a press release stating: “The ICEM delegation is steadfast that this is an industrial dispute involving differences in wages and working conditions and solutions will only be found at the bargaining table in an atmosphere of good faith and a will to resolve differences. The delegation is highly concerned with the volatile situation that exists on picket lines leading to the mine and urges restraint by all parties in order to avoid further violence and physical conflict.”
“The delegation is encouraged that the two sides have shown a willingness to return to bargaining, October 7, and it strongly urges both sides to treat this resumption of talks as a new beginning in order to solve differences.”
In its November 1 statement, Freeport said it was following the established Indonesian legal process, including pursuit of a resolution through a labor court process, while continuing to seek to negotiate with the union in good faith.
Neither the company nor the union offered specifics as to how far apart they were on a wage settlement. Business news sources, including Reuters and UPI, reported workers were seeking a five-fold increase to bring their wages in line with other Freeport operations elsewhere in the world, while Freeport was offering a 30% increase over a period of two years.
Regarding the damaged concentrate pipelines, Freeport said PT-FI had initiated repairs but had not been able to gain full access to the affected areas of the pipelines because of road blockages by striking workers. Further updates on the status of operations and revised estimates of fourth-quarter production would be forthcoming when access was restored and repairs completed, the company said.
In Freeport’s October 19 conference call on its third-quarter 2011 results, the company said PT-FI had been operating at about 75% of capacity (mill throughput of 175,000 mt/d), using a workforce that included staff and about 15% to 20% of the operation’s union workers, who had returned to work.
Business news sources have reported that violence during the course of the strike has included the killing of at least one person by police during a confrontation near the mine in early October and other deaths resulting from ambush shootings in the mine area. Some reports suggested that at least some of the violence was carried out not by strikers but by members of an ongoing Papua independence movement.
