Indonesia strike slashes Freeport mine production

TIMIKA, Indonesia — A strike at Freeport McMoRan’s huge gold and copper mine in eastern Indonesia has slashed production by 230,000 tonnes a day, the energy and minerals ministry said Friday.

The production cut at the mine in eastern Indonesia’s Papua province represents daily losses of $6.7 million in government revenue, energy and minerals minister Darwin Zahedy Saleh told Dow Jones.

“The government will help facilitate the negotiations. I will visit West Papua (on Friday),” Saleh said.

Freeport’s Grasberg mine sits on some of the world’s richest gold and copper reserves, and the company’s local unit is the largest single taxpayer to the Indonesian government, contributing billions of dollars a year to state coffers.

Around 9,000 Freeport workers began a month-long strike on Thursday in Timika town demanding better wages.

The current lowest wage is $1.50 an hour, which workers want raised to $17, the labour union said. The workers want the maximum hourly rate of $3.50 to rise to $43.

The union said the company had offered workers a wage increase of 11 percent.

On Friday morning a thousand workers travelled from Timika to Kuala Kencana town 20 kilometres away, where Freeport has employee housing and offices.

Union spokesman Juli Parorongan said that more striking workers would go to Kuala Kencana on Saturday.

“We expect 9,000 to 10,000 workers to gather there,” he said.
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