12 September, 2011
A branch of the Indonesian trade union FSP-KEP (SPSI), the Trade Union of Chemical, Energy, and Mine Workers (CEMWU), will renew strike action this week, 15 September, with a month-long walkout at a leading global copper and gold mining complex, the Grasberg operation of US-based Freeport-McMoRan in eastern Papua province on New Guinea Island.
The strike by 8,000 Indonesia miners would follow an eight-day strike in July that saw six union leaders sacked, only to be returned to their jobs when mine management relented and agree to re-start pay talks. (See ICEM news article on that initial strike.)
4 July March to Kuala Kencana
Those talks did resume in Timika on 20 July but after a number of sessions, no agreement was reached on pay for 2011 to 2013 and negotiations broke off on 5 September. The FSP-KEP branch is seeking a doubling of miners’ US$1.50-per-hour wage rate, while PT Freeport is offering only an 11% increase, mostly in the form of bonuses.
The Grasberg mine is 91% owned by Freeport-McMoRan and 9% by the Indonesian government, and serves as the American mining company’s biggest revenue producer. The mining house, which also faces a copper strike at its 53.7% held Cerro Verde copper mine in Peru, recorded a second quarter 2011 profit of US$1.37 billion.
The FSP-KEP (SPSI) branch of CWMWU, the PT Freeport Indonesia Workers' Union, is reportedly asking now to negotiate directly with Freeport-McMoRan’s chairman and non-elective board member James Moffett, who took in a total compensation package last year of US$21.5 million.
Grasberg is the world’s largest gold mine and second largest producer of copper concentrates, with daily output of 61,000 tonnes of copper and gold ore. The eight-day strike in July cost the company 16,000 tonnes of copper output and 60,000 ounces of gold production.