Freeport Indonesia Union threatens strike for pay demands

Freeport McMoRan Copper & Gold's Indonesia mine workers will go on a strike indefinitely from Sept. 15 unless the firm meets their demands on a pay rise, a union official told Reuters on Monday.

The strike would be the second since July at Grasberg, the world's third biggest copper mine, and would tighten global supplies of an industrial metal that have already been thinned by industrial action in top producer Chile.

The strike would go on "indefinitely until the firm agreed" to the workers' demands, said the official Virgo Solossa.

Freeport, also facing a two-day copper mine strike in Peru this week, said it is seeking to renew pay talks in Indonesia.

The decision to go on strike in Indonesia comes after two-yearly pay talks between the firm and the union, which has about 8,000 workers, reached a deadlock on Aug. 26, following an eight-day strike in July.

"We should not be considered as a production burden, but as a partner to make the business wheel go round, because the firm should have known that with their mounting money they can't make things work without workers," another union official, Juli Parorongan, told Reuters by telephone.

Parorongan said the Indonesia mine made a substantial contribution to the firm's global operations, but the welfare of its workers in Indonesia was among the lowest.

The remote mountain Grasberg mine also has the world's largest gold reserves, so the workers will be eyeing a greater share of profits from a metal seeing record prices .

Workers have demanded a pay rise to between $17.5 and $43 per hour, down from hefty initial demands for $30 to $200 per hour, but still much higher than a current $1.5 to $3 per hour rate.

The firm said it has offered a 22 percent rise for the next two years, plus an increased bonus of as much as 230 percent at current prices for copper and gold.

"The management expects to continue negotiations in good faith to reach a fair and reasonable agreement for non-staff employees," Ramdani Sirait, Freeport Indonesia's spokesman, told Reuters.

"There is no legal basis for any form of work stoppage that is considered a strike, as the laws provide for sustained dialogue and mediation," he added.

The union held an opinion poll from Friday to Sunday, and found that from about 7,000 ballots received, about 98 percent agreed to go on a strike.

The firm says the July strike by 8,000 workers halted ore shipments and caused a production loss of 60,000 ounces of gold and 35 million pounds (15,876 tonnes) of copper.

The strike threat at Grasberg comes on the heels of a prolonged strike at Chile's Escondida copper mine, the world's biggest. Escondida lifted a force majeure on concentrate shipments on Sept 2.

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