Mr Tony Wenas the vice chairman of the Indonesian Mining Association said that he was worried a union decision to extend its 3 month strike at the Freeport mine in Papua would hurt the country’s investment climate.
Mr Juli Parorrongan a union spokesman said that the workers would continue their strike until at least January 15th 2011. They had informed the manpower authority in Papua of the decision on December 5th 2011.
About 8,000 of the 12,000 workers at the Grasberg mine, one of the largest copper and gold mines in the world have been on strike since September 15th 2011 seeking higher wages. The mine is owned by Freeport Indonesia, a subsidiary of US miner Freeport McMoRan.
Mr Tony who until recently was president director of International Nickel Indonesia, a nickel mining company, said that he was worried the strike could spread to other mining companies. The worst outcome would be if workers at manufacturing companies also started following suit. Apart from regulatory uncertainty, labor issues were key factors for investors in deciding whether to bring their money to Indonesia.
Mr Juli said that workers want to encourage further discussion aimed at settling the problem as soon as possible. An agreement would immediately end the strike.
The Grasberg workers originally demanded a pay increase to USD 30 to USD 200 an hour from USD 1.50 to USD 3 an hour. Their demand has since fallen to USD 7.50 an hour. The company has so far only been willing to raise salaries by 35% over 2 years.
Mr Ramdani Sirait spokesman of Freeport Indonesia said that 20 kilometer concentrate pipeline from mining sites to the port had been damaged during the strike causing Freeport to be unable to deliver concentrate to a firm that processes it in Gresik, East Java. We still can’t deliver the material to the port.
A mining official has said that the strike caused Freeport to declare force majeure at the end of October on concentrate shipments from Grasberg because it couldn’t fulfill certain contractual obligations. Grasberg is currently operating at about 5% of its daily 230,000 tonnes capacity because of the work stoppage.
(Sourced from www.thejakartaglobe.com)
