UPDATE 1-Freeport Indonesia union says pay talks risk being deadlocked

Wed Aug 28, 2013 5:28am EDT

* Current pay deal due to end on Sept. 30

* Pay offer is below workers' expectations, says union

* Freeport says it has given a fair offer to the union

JAKARTA, Aug 28 (Reuters) - Pay talks between the Indonesian unit of Freeport-McMoRan Copper & Gold Inc and its workers are in danger of ending in deadlock because the pay offer is too low, a spokesman for the worker's union said on Wednesday.

A stalemate would increase the risk of disruption and unrest at Freeport's Indonesian mine Grasberg, the world's second-biggest copper mine, which resumed some production in late June after being shut for almost six weeks following a tunnel collapse on May 14 that killed 28 people.

Pay talks involving workers from the remote Grasberg mining complex in Papua resumed in late June after being suspended following the tunnel collapse.

"Talks on renewal of 18th joint-work agreement for 2013-2015 is in danger of facing deadlock," union spokesman Juli Parorrongan said in a text message. "The pay rise offered by Freeport management is far below the workers' expectations."

Talks on a new pay deal had been expected to last up to 60 days, with the current agreement due to end on Sept. 30, although a union official said last month that he expected the talks to reach an agreement by August.

Up for discussion are workers' wages, benefits, rights, obligations and pensions, although the exact pay demand is unknown.

"We feel that what we have given a fair offer to the union and we continue to approach the negotiations with a spirit of accommodation, open-mindedness and goodwill to find a solution that is reasonable to all parties," Freeport spokeswoman Daisy Primayanti said in an email.

Relations between Freeport and the union have been strained in recent years following a three-month strike in late 2011 as well as a series of minor spats.

In June, trade union workers called off a planned strike after last-minute talks brokered a deal over a letter workers sent to the Freeport management demanding five senior Indonesian employees be suspended after May's tunnel collapse.

Freeport Indonesia employs about 24,000 workers, of which three-quarters belong to the union.

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