Freeport McMoRan Copper & Gold's Indonesian workers plan to stage another strike at its huge Grasberg mine in coming days after a deadlock in talks with the company's management, a union official told Reuters on Friday.
The union's deadline for a pay deal was Friday, though a Freeport spokesman said the firm still expects to extend the talks to avoid a second strike at the mine within two months.
"The talks are deadlocked. The gap between what we wanted and what the company offered was enormous. They think a bonus is considered a rise, for us a pay rise is a pay rise," union official Virgo Solossa told Reuters.
Around 8,000 workers in July held an eight-day strike at Grasberg, which has the world's biggest reserves of gold and biggest recoverable reserves of copper, causing a production loss of 60,000 ounces of gold and 35 million pounds of copper.
The July strike at the Grasberg mine and other worker-related disruptions at mines in Chile boosted copper prices to a three-month high.
The workers returned to the remote mountain mine in Papua after the U.S. firm agreed to bring forward pay talks that had been scheduled for later this year and to not penalise union leaders. But the key issue of pay level was left unresolved.
Freeport has offered workers a 10 percent pay rise in the coming year and another 10 percent for the following year, according to a company source, who declined to be indentified because the talks were not public.
"The management has offered a better pay rise than other mining firms in the country," said the source. "The union had demanded a rise using the labor market standard in North America instead of the labor market in Indonesia."
Indonesia's economy, the biggest in Southeast Asia, is powering along at over six percent growth this year, driven by resource exports and buoyant consumer demand, though the Papua region is among the poorest in the sprawling archipelago.
Foreign direct investment in Indonesia has taken off this year because of the strong growth and political stability, with relatively low labor costs seen as an advantage.
Reuters