* Union extends strike to mid-Dec, maintains pay demands
* Industry talks over treatment, refining charges
* Copper prices shrug off supply loss on weak global demand
By Rieka Rahadiana
JAKARTA, Nov 15 Union workers at Freeport
Indonesia are extending their strike into a third month, keeping
production and exports halted from the world's second biggest
The strike at Freeport McMoRan Copper & Gold Inc's
Grasberg, the longest stoppage in Indonesia's mining history,
led the firm to declare force majeure on exports last month and
has helped support global copper prices.
The union said on Tuesday it was extending the strike, due
to end on Tuesday, to mid-December because of a lack of a pay
deal with the firm.
"Tomorrow we are still on strike, no resolution yet," said
union official Virgo Solossa.
A union spokesman said on Monday it was sticking to a pay
demand for a fivefold increase for workers to $7.50 an hour, an
apparent hardening of their stance given the union said last
week they might cut their pay demand to $4 an hour.
"The management hopes dialogue can continue to be done to
expedite a fair and reasonable agreement," said Ramdani Sirait,
Freeport Indonesia's spokesman.
Copper prices were little changed on Tuesday, with
three-month London futures down 0.7 percent at $7,705 a
tonne by 0942 GMT, though analysts said the strike had tightened
the market and was holding up industry talks over annual
A Japanese trader said talks over treatment and refining
charges (TC/RC) between producers and smelters were being
delayed because of uncertainty over how long the Freeport force
majeure would last.
"It's not the right time to exchange the number. It's better
to wait," the trader said. "The market is tight. Traders are
trying to cover short positions."
He said most people had been able to cover for lost
shipments since the force majeure, but if the stoppage continued
for another two or three months then market players would have a
"Smelters may reduce output," the trader said.
Even if a pay deal is worked out in coming days, Freeport
still has to repair its main pipeline taking concentrate from
the mine to its port in the remote Papua region. Freeport said
at the start of November that it could take a month to fix the
Any pay deal would enable the firm to get more secure access
to the pipe's route, after a series of deadly attacks on
employees in recent months worsened the security situation in a
region facing a simmering independence movement.
Citigroup head of metals research David Thurtell said the
Freeport supply loss was limiting price weakness for copper,
despite expectations of weaker global demand.
"Worries about a global slowdown have understandably led to
a lot of the froth being taken out of the London Metals Exchange
complex over the past two months," Thurtell said.
Barclays Capital has forecast copper mine supply to fall 2
percent this year -- the first production drop since 2002 -- on
a litany of disruptions, including the Freeport strikes at
Grasberg and Peru's No. 3 copper mine Cerro Verde.
The strikes have raised doubts that Freeport McMoRan can
meet fourth-quarter output and sales targets.