MAC: Mines and Communities

Papua: Freeport-Rio Tinto workers are on strike - again

Published by MAC on 2011-09-19
Source: Jakarta Globe (2011-09-14)

Indonesian workers at the world's largest gold - and third biggest copper - mine have started a one month strike, demanding payment of a just wage.

Eight thousand of them went on strike in July 2011 but failed to win meaningful concessions from the management. See: Freeport Indonesia Mine Workers Start Strike

However, the Grasberg mine is not the only source of labour strife for Freeport.  Its majority-controlled Cerro Verdemine in Peru is also experiencing industrial action.

Editorial note: None of the articles below mentions the crucial fact that Freeport's joint venture partner, RioTinto, is entitled to 40% of output from the Grasberg mine and a like share in any new mineral discovery made in its lease area. This contributes considerably to the UK-Australian company's own profits.

 ESPAÑOL

Workers at Freeport Mine in Papua to Strike Again

Jakarta Globe

14 September 2011

It's entertaining that companies like Freeport and Rio Tinto always say "we pay loads of tax" as a defence for treating workers like crap. It's as if they think corporate tax is a charitable donation, which many of their board members probably do. How much of that tax has been spent indirectly on protecting their wealth from a justifiably angry population?

But mostly they pay extra for bribes on the side... As recently as 2008, Freeport admitted it had paid around 1.6 million dollars through wire transfers and cheques ... to provide a 'monthly allowance' to police and soldiers at and around the Grasberg mine.

The payments were made in contravention of a series of legal measures aimed at stopping military units working as paid protection. The $1.6 million in direct payments were part of $8 million that Freeport paid in broader 'support costs' for 1,850 police and soldiers protecting Grasberg last year, according to a company report filed with the US Securities and Exchange Commission.

They've also funded death squads in the DRC. So planting a few trees and building a couple of medical clinics don't go far to clearing their name. Especially when they pay their workers at Grasberg more than 10 times less than others around the world.

Thousands of workers at Freeport McMoRan's giant gold and copper mine in eastern Indonesia prepared to go on a month-long strike over wages at midnight on Wednesday, a workers union said.

"The strike will start midnight involving 9,000 workers and it will last for one month," Virgo Solossa, a spokesman for the Freeport workers union told AFP.

An extra 114 armed police arrived on Wednesday in the mining area from the provincial capital of Jayapura to ensure security during the protest, police spokesman Wachyono told AFP.

In July the Freeport workers held a week-long protest which disrupted production at the mine. They decided to resume the strike due to continued disagreement with the company's management over wages and welfare.

"A series of meetings with the company's management failed to reach an agreement on salary increase," Solossa said.

The workers are paid up to $3.50 an hour compared to about $40 for other Freeport employees around the world, he said.

Company spokesmen could not be reached for comment by AFP.

The Freeport mine sits on some of the world's richest gold reserves and the US company's local subsidiary is the largest single taxpayer to the Indonesian government, contributing billions of dollars a year to state coffers.

The increased police presence in the area "is to anticipate any security disruption during the protest," Wachyono said, adding that there are currently 600 paramilitary police in the mining area.

Papua, a resource-rich region on New Guinea island, has been the site of a low-level separatist insurgency since its incorporation into Indonesia in the 1960s.


Freeport Indonesia strike delays 133,000 tonnes of copper exports

Reuters

16 September 2011

TIMIKA, Indonesia - A strike at Freeport McMoran's Grasberg copper mine has delayed shipments of around 133,000 tonnes of copper ore concentrate, two industry officials said on Friday.

Workers at the Amamapare port in Papua joined miners on Thursday in a month-long strike, stranding six vessels awaiting copper ore cargo to be delivered to smelter plants in Indonesia, China, the Philippines and Japan.

"Right now there is no activity and delays are expected with the six vessels at the port," said Ricky Noviansyah, a port captain for Wilhelmsen Ships Service.

Activity at Grasberg, the world's third biggest copper mine, has stopped as workers demand a larger slice of mining profits.

The huge mine, which also holds the world's largest gold reserves, produces around 150,000 tonnes of copper ore a day, according to the firm's website.

A total of 544,311 tonnes of copper were taken from the Grasberg mine last year, around 3.8 percent of the world's output.

The Indonesian strike, if it lasts, is likely to be more costly for Freeport than the industrial action in July, when the firm said it suffered a production loss of 35 million pounds (15,876 tonnes) of copper and 60,000 ounces of gold.


Indonesia contributing to problems at Freeport gold mine in Papua

Radio Australia

15 September 2011

Hundreds of paramilitary police have been sent to Indonesia's Papua province after 9,000 mining workers started a month-long strike for higher wages.

They're employed at the US owned Freeport McMoran copper and gold mine.

Analyst Dr Chris Ballard says the mine has been plagued with problems because of interference from the Indonesian government and massive wage disparities between locals and foreign executives.

Presenter: Claudette Werden
Speaker: Dr Chris Ballard, ANU College of Asia and the Pacific

· Listen: Windows Media

BALLARD: These are nowhere more obvious than in the large scale resource industries, mining and petroluem and gas in particular where you have very very high paid executives and technical officers who fly around the world on extremely high salaries and then local workforces paid at local wage levels which are extremely low.

The real problem at Freeport is that it's been running since the 1960's and it has failed spectacularly to really train a local workforce to assume those technical roles and in fact to assume technical roles.

There have been a few high profile hirings of Papuans, of indigenous Papuans to senior executive positions but these are not people that the company has cultivated over the last 45 years and grown itself as it were.

Think back to the 1960's which was the time when the Australian mine in Bougainville Panguna was operating and starting up at the same time and they deliberately adopted a policy of hiring and training locally both in Bougainville and across Papua New Guinea, with the result that senior positions in the government and in the mining industry throughout Papua New Guinea and beyond are filled with those trainees, well Freeport failed to do that and really didn't begin a serious training operation until the 1990's, 30 odd years after it had started and I think what we're seeing now is the result of this long term failure.

WERDEN: And how reasonable is their claim for higher wages?

BALLARD: I would have to say entirely reasonable, I think the artificially depressed salaries in eastern Indonesia and in Papua in particular simply can't bee sustained when you're operating in an industry that generates in the case of Freeport, billions of dollars of wealth, the estimates even in the late 1990's were of a further 50-billion dollars worth of unexcavated ore and that was after 30 years of mining.

So this is an industry that generates massive wealth for a few individuals, for shareholders and for an American corporation and some of its Indonesian partners. I think in terms of training and wages and wage opportunities, there's an awful lot more than can be done for local communities.

WERDEN: Well their current wage is $3.50 and what they're asking for is up to $43.00 an hour, obviously there is room to negotiate, what do you think will happen?

BALLARD: I think there's considerable room to negotiate there, I don't think they'll end up with $43.00 an hour but I would be surprised if they don't manage to negotiate some kind of wage increase. That said I think the remaining history of that mine is going to be one of continuing strikes and forms of protest because the basic conditions and the nature of the contract as it were between Freeport, Jakarta and the local community is fundamentally unequal.

WERDEN: How do you redress that?

BALLARD: Well there have been attempts to redress that in the past, attempts to broker honest negotiations, particularly between Freeport and the community but they tend to founder particularly around the government in Jakarta which regards any kind of direct negotiation with Papuans particularly on the part of an outside company like US owned Freeport, as a threat to sovereignty, particularly post East Timor.

Jakarta's profoundly sensitive about any kind of foreign activity in Papua and tends to portray any unrest in Papua as the work of foreign agitators, so Freeport has to toe a fairly tricky line there, the problem is whenever they've been pushed to make a choice, they tend to flit onto the side of Jakarta and the security forces.


Freeport McMoRan Indonesia copper mine workers confirm strike

Reuters

6 September 2011

JAKARTA - Freeport McMoRan Copper & Gold's Indonesia mine workers are set to strike from Sept. 15 to Oct. 15 unless the firm meets their demands for a pay rise, Julia Parorongan, the firm's workers union spokeswoman, told Reuters on Tuesday.

The strike would be the second in three months at Grasberg, the world's third biggest copper mine.

The remote Grasberg mine also has the world's largest gold reserves, so the workers will be eyeing a greater share of profits from a metal seeing record prices .

Three-month copper on the London Metal Exchange is hovering just below $9,000 a tonne, having touched a record high above $10,000 in February.

The decision to go on strike comes after pay talks between the firm and the union, which has about 8,000 workers, reached a deadlock on Aug. 26, and follows an eight-day strike in July.

Workers have demanded a pay rise to between $17.5 and $43 per hour, down from hefty initial demands for $30 to $200 per hour, but still much higher than a current $1.5 to $3 per hour rate.

The firm said it has offered a 22 percent rise for the next two years, plus an increased bonus of as much as 230 percent at current prices for copper and gold.

Freeport Indonesia was unavailable for comment on Tuesday.

Freeport, also facing a two-day copper mine strike in Peru this week, said on Monday, that it is seeking to renew pay talks in Indonesia.

The union held an opinion poll from Friday to Sunday, and found that from about 7,000 ballots received, about 98 percent agreed to go on a strike.

The strike threat at Grasberg comes on the heels of a prolonged strike at Chile's Escondida copper mine, the world's biggest. Escondida lifted a force majeure on concentrate shipments on Sept 2.


Freeport Indonesia workers planning another strike - union

Reuters

26 August 2011

JAKARTA - 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 labour market standard in North America instead of the labour 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 labour costs seen as an advantage. (Reporting by Olivia Rondonuwu; Editing by Neil Chatterjee)


Strike Continues At Peru's Cerro Verde Copper Mine

Ryan Dube

Dow Jones

16 September 2011

LIMA - Union workers at Peruvian mining company Sociedad Minera Cerro Verde SAA continued a strike Friday as they seek higher pay from one of the country's biggest copper producers, union leader Leoncio Almudio said.

Almudio said that the government had scheduled a meeting for Friday between the union and the company but workers did not plan to attend. He said union demands and company offers are "very far apart."

Workers walked off the job indefinitely on Wednesday after holding a 48-hour strike last week.

Cerro Verde is Peru's third biggest copper producer and turned out 668 million pounds of copper in 2010, compared to 662 million pounds in the prior year.

A spokesperson for Cerro Verde was not immediately available for comment.

Cerro Verde is majority-controlled by Freeport-McMoRan Copper & Gold. Compania de Minas Buenaventura SA  and a subsidiary of Sumitomo Corp. also have stakes in the company.

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