Freeport Indonesia cuts output by about 60 pct -union official

JAKARTA, March 11 Tue Mar 11, 2014 12:45am EDT

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JAKARTA, March 11 (Reuters) - U.S. mining giant Freeport-McMoRan Copper and Gold Inc has cut production at its Indonesian copper and gold mine by around 60 percent, a union official told Reuters on Tuesday, two months after halting exports over a dispute with the government on a new export tax.

Freeport and fellow U.S. miner Newmont Mining Corp have refused to pay an escalating export tax introduced on Jan. 12 as part of package of new mining rules aimed at forcing miners to build smelters and process raw materials in Indonesia.

"Although Freeport Indonesia has cut their production by around 60 percent, Freeport management has not yet announced any layoffs so far," Papua-based Freeport union official Virgo Solossa said by telephone.

"They are still waiting for a government decision on an export tax relaxation."

Freeport, who late last month said it may need to declare force majeure on copper concentrate sales at the world's fifth largest copper mine, could not be immediately reached for comment on Tuesday. (Reporting by Yayat Supriatna; writing by Michael Taylor; Editing by Randy Fabi and Himani Sarkar)

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