Freeport Indonesia union says pay talks stall, timeframe extended

JAKARTA, Sept 19 Thu Sep 19, 2013 4:05am EDT

JAKARTA, Sept 19 (Reuters) - Pay talks at Freeport-McMoRan Copper & Gold Inc's Indonesian unit have stalled but a deadline for an end to negotiations has been extended, a union official said on Thursday, easing the threat of any disruption.

Pay negotiations between workers and management at Freeport's remote Grasberg mine in Papua, the world's second-biggest copper mine, resumed in late June after being suspended in May when a tunnel collapse killed 28 people.

"Freeport only offered us a quarter of the pay rise that we are demanding," union spokesman Juli Parorrongan told Reuters in a text after talks this week involving Freeport Indonesia CEO Rozik Soetjipto and Freeport CEO Richard Adkerson.

"Workers cannot accept the offer because it is considered too low," said Parorrongan, adding that the union was pushing for a 40 percent pay increase over two years or two annual 20 percent rises.

Relations between Freeport and the union have been strained in recent years following a three-month strike in late 2011, May's deadly accident and a series of minor spats.

The Freeport union agreed a deal for a 37 percent pay rise over two years in late 2011, after initially pushing for a pay rise to as much as $200 an hour compared with a pay rate at the time of $2-$3 an hour.

Under the current wage agreement, which is due to end on Sept. 30, the majority of workers are paid 4.6 million rupiah to 7.7 million rupiah ($400-$670) a month, said Parorrongan on Thursday.

Freeport Indonesia employs about 24,000 workers, including contractors and staff. About three-quarters are union members.

Talks on a new pay deal had been expected to last up to 60 days, and Parorrongan said a new deadline of Oct. 4 had been set for talks to conclude.

Freeport unions had yet to decide what action to take if no agreement was reached by the new deadline, Parorrongan said.

Freeport Indonesia could not be reached for immediate comment on Thursday.

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