Freeport Indonesia contract workers end strike as pay row resolved

JAKARTA Thu May 2, 2013 5:12am EDT

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JAKARTA May 2 (Reuters) - A group of contract workers at the Indonesian unit of Freeport-McMoRan Copper & Gold Inc will return to work on Friday after successful pay talks ended their three-day work stoppage at the world's second-largest copper mine.

On Tuesday, around 1,130 workers from three contractor companies involved in a mine expansion project at Freeport Indonesia's Grasberg copper and gold mine in West Papua province went on strike after failing to get pay increases to meet the local minimum.

"We have been informed that PT Jasti Pravita, PT Osato Seike and PT Srikandi Mitra Karya, our three contractors that provide services at the Central Services Workshop (to Freeport Indonesia) have reached an agreement over the pay matters of their workers today," Daisy K. Primayanti, vice president of corporate communications at Freeport's local unit, told Reuters.

"We are pleased that their workers will return to work tomorrow," Primayanti said in an emailed statement on Thursday, adding that the strike had no immediate impact on the mine's overall operations and production.

The workers had planned to strike for one month, according to union officials, who had said more Freeport workers could join the labour action if the company did not meet their demands.

"We succeeded in reaching an agreement," Virgo Solossa, a mining workers' union leader representing the contractors, told Reuters and confirmed the workers will resume work on Friday.

Details of the agreement were not immediately available.

The last major strike at Freeport, in 2011, lasted for three months, caused copper and gold output to drop 15 percent and was Indonesia's longest-ever industrial dispute. Freeport said it cost the Southeast Asian nation $1.5 billion in lost taxes.

The deal that was inked with workers to resolve the earlier dispute, including a 37 percent pay increase over two years, is due to end in October.

As of last year, Freeport employed just over 24,000 workers at its Grasberg mine, about half of whom were contractors.

Earlier, Freeport Indonesia said its sales are expected to reach 1.1 billion pounds of copper and 1.2 million ounces of gold in 2013, up 54 percent and 31 percent over 2012 figures, respectively, as mining moves into higher ore grades.

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