MAC: Mines and Communities

Freeport, Rio Tinto battle with workers

Published by MAC on 2011-10-05
Source: ICEM, Reuters, AFP

Pay-related strikes break out in Papua, Namibia, Peru

A strike by 8,000 workers at West Papua's Grasberg mine - the world's biggest gold-copper mine - is set to continue, probably until 15 October. See: Papua: Freeport-Rio Tinto workers are on strike - again

The strikers originally demanded a doubling in their average wage rate of only US$1.50 per-hour - one of the lowest in the industry.

According to the international miners' federation, ICEM, the local union then offered to negotiate a 65% increase,  but the company "would not move from 11%".

However, it seems clear from more recent reports that lower-paid workers are actually demanding a wage increase of $12.50, and  the current maximum hourly rate of $3.50 be raised to $37.

Mineworkers in Peru are also engaged in a wages dispute with Freeport, at its Cerro Verde mine. But attempts by the company to get a strike declared illegal now seem to have failed.

In contrast, Rio Tinto - Freeport's 40% joint venture partner in West Papua - has won a small victory. A Namibian labour court has decided that workers must return to their jobs following industrial action at the Rossing uranium mine.

The workers were protesting at discrepancies between bonus payments made to them, and to the mine's management.

Freeport workers in Indonesia vow to halt production

By Angela Dewan


7 October 2011

JAKARTA - Workers at one of the world's largest gold and copper mine in the remote Indonesian province of Papua vowed Friday to paralyse production, as their strike over pay enters its second month.

Workers at the Grasberg mining complex run by US giant Freeport-McMoran began a month long strike on September 15, demanding at least an eight-fold increase in the current minimum wage of $1.5 an hour.

"If we don't get the pay increase we want, our goal is to stop production by November 15," said Virgo Solossa, spokesman for the workers' union, which extended the strike by a month on Thursday.

"Freeport has tried to intimidate us to go back to work, but we won't until they are open to a fair negotiation," he told AFP, adding that at least 8,000 of the company's 23,000 workers would remain on strike.

The Arizona-based company said it was "disappointed" by the union's decision, "which has no basis under Indonesian law".

It added that some workers were gradually returning to work, "allowing the company to scale up mine production, milling production and concentrate sales".

Production at Grasberg, one of the world's largest sources of gold and copper, has suffered considerably since the strike.

Production in the first week of the strike last month was slashed by 230,000 tonnes a day, representing daily losses of $6.7 million in government revenue.

Slowing production at Grasberg, coupled with a spate of strikes at Freeport's South American mines, has raised concerns of a global copper shortage, analysts said.

Freeport's Papuan workers, who are mostly indigenous Melanesians, receive the lowest wages of any Freeport mining facility in the world, according to union workers.

The current lowest wage is $1.50 an hour, which workers want raised to $12.50, the union said. The workers want the maximum hourly rate of $3.50 to rise to $37.

The union had originally demanded a minimum of $17.50 and a maximum of $43.

"We have followed all the right procedures to strike, which is our right. So we hope the company will make a fairer offer soon," Solossa, the union spokesman, said.

The company has offered a 25 percent increase on wages, which the union rejected.

Freeport Indonesia is the largest single taxpayer to the Indonesian government, contributing billions of dollars a year to state coffers.


PT Freeport Mine Managers Turn Rabid on Indonesian Grasberg Strikers

International Federation of Chemical, Energy, Mine and General Workers' Unions (ICEM) statement

26 September 2011

Government-mediated talks broke off last week and labour relations further soured between Freeport-McMoRan and 8,000 striking Indonesian miners of ICEM affiliate FSP-KEP (SPSI), the Trade Union of Chemical, Energy, and Mine Workers (CEMWU).

The PT Freeport Indonesia Workers' Union this week meets the halfway mark of its 30-day strike that now could be prolonged at the world's largest gold and third largest copper mining complex - Freeport McMoRan's Grasberg mine in eastern Papua Province, New Guinea Island.

Management spite was apparent at the strike's start on 15 September and it worsened following the breakdown of three days of talks with the Manpower Ministry in Jakarta on 22 September. PT Freeport managers relieved 138 union shop stewards of their job duties on Friday. The union responded by stating the strike likely will be extended beyond 15 October.

Since the wage, pension, and community funds strike started, managers have coerced workers to return to work with threats of dismissal, they have pressed contractors' employees into production, and now they try to decimate the union by sacking union stewards and isolating the branch union's other leaders.

PT Freeport management has attempted to coerce workers to sign a statement saying they will return to work or face getting fired. But despite this, only 500 workers are manning operations and many are staff of contractors.

Freeport-McMoRan last week issued a statement last week saying it was losing three million pounds of copper production daily, and 5,000 ounces of lost gold output daily. To increase pressure on miners to abandon the strike, the company also warned of lost revenues to the Indonesian government and to the seven native groups around Timika, Papua, that Freeport-McMoRan is obliged to support.

The opening salvo came at the strike's outset when Managing Director Armando Mahler announced a "no-work, no-pay" policy. After last week's mediation failure, union and government sources said "complete distrust" exists between Mahler and his team and the union.

Thus, PT Freeport Indonesia Workers' Union asked that US-based Freeport-McMoRan Chairman James Moffett enter discussions. Mine union leaders remember Moffett's visit a few years ago when he encouraged workplace leaders to engage in "win-win" principles of labour relations.

At last week's mediation, PT Freeport, 91% owned by Freeport-McMoRan and 9% by Indonesia's government, said it would not budge from a wage offer of 11% in each year of a two-year accord. (The bi-annual contract comes due on 1 October.)

The average miner's wage rate at Grasberg is US$1.50-per-hour. The union was seeking a doubling of that to US$3-an-hour but in mediation last week, the FSP-KEP miners' branch union offered a compromise and proposed a 65% increase. The company would not move from 11%.

It has offered slight increases in education and housing support and in shift pay, but has said it would not deviate from wage increments that other foreign investors pay in Indonesia. It also refuses to base a pension scheme - 50% paid into by workers - on multiplied years of service, or hear the union's demands for enhanced development and opportunities for the indigenous people of Papua.

Grasberg is Freeport-McMoRan's biggest revenue maker and a year ago, the company's chief financial officer called it "very low cost and a high cash flow generating asset with a very long life." The company's revenues this year from Grasberg are expected to be lower because it is mining lower-grade sections of the open pit mine. But Freeport-McMoRan is bullish on the future; it is developing a deep underground mine adjacent to Grasberg that contains high grades of copper and gold in the same ore body.

The ICEM has intervened in this dispute and through its Indonesian Affiliates' Union Chairman, D. Patombong Sjaiful of FSP-KEP's CEMWU, is giving direct aid and support to the Grasberg strikers. They need the solidarity and support of all miners and all trade unions in mining and other industrial sectors. Please send a short message in your own words to the PT Freeport Indonesia Workers' Union.

In ICEM outreach to the union, when asked to characterise the strike, one officer responded by saying, "determination. That's the one word that describes workers. We're determined to change our future through the work we do for this company."

Freeport-McMoRan Copper & Gold Still Running Strike-Bound Cerro Verde Mine

Gold & Silver Matters

3 October 2011

Freeport-McMoRan Copper & Gold Inc said supervisory staff and volunteers are operating its Cerro Verde mine in Peru and production has not been hurt by a strike.

"Production of copper and molybdenum concentrates have not been materially affected by the strike that began on Sept. 29," spokesman Eric Kinneberg told Reuters in an e-mail.

"We will continue negotiating a new labor contract to replace the one that expired on Aug. 31, 2011," he said.

Talks last Friday failed to end a strike at the giant pit, which churns out 2 percent of the global copper supply.

Kinneberg said Cerro Verde is operating "with supervisory and personnel that volunteered to work under strike conditions."

In what appeared to be a bid to pressure the U.S. company to reach a pact to raise pay for workers, Peru's government upheld a ruling that declared the strike legal.

That gives the union the right to formally ask the government to establish a wage settlement that would end the walkout.


Rio Tinto's Rossing: Namibia strike ruled illegal


28 September 2011

The management at Rio Tinto's Rossing uranium mine in Namibia said a labour court had decided in the company's favour and declared an ongoing strike at the operation illegal.

The company said on Wednesday all workers, who have been on strike since the early shift on Friday, were required to return to work immediately. The union said it had appealed the ruling and would continue its walkout.

"The company is pleased to note that the employees' demand for 30,000 Namibian dollars ($3,808) cannot permissibly form part of any lawful industrial action, and a final relief order was issued to declare the current strike illegal," the mining firm said in a statement.

The Mineworkers Union of Namibia (MUN), which represents some 1,200 of Rossing's 1,600 workers, has been protesting over differences in bonuses paid to workers and management in a dispute that sparked a three-day strike in July.

"(The appeal) in principle suspends the labour court verdict, meaning that the status quo remains until the urgent application is heard and the new verdict is given," MUN's Rossing branch representative, Ismael Kasuto, told Reuters.

Rossing had already offered workers an unconditional up-front payment of 15,200 Namibian dollars and a further N$2,100 to N$5,150 per worker, which is conditional on safety and production performance during the fourth quarter.

That offer was snubbed by the workers in favour of a strike.

Workers have been asking for N$30,000 each, on top of N$11,000 they have already received.

The company said on Wednesday it would consider the next steps for resolving the outstanding issues in the dispute once work has returned to normal.

The strike has hurt output at Rossing, where production was already hit by heavy rains earlier in the year. Rossing produced around 8 million pounds (3.63 million kgs) of uranium last year.

Rio Tinto has a 68.6 percent stake in the mine.

($1 = 7.876 Namibian Dollars)

Reporting by Agnieszka Flak and Olivia Kumwenda; Editing by Jon Herskovitz and Jane Baird

Rossing's mine workers back at work

Striking employees at the Rossing uranium mine in Namibia returned to work on Thursday after a labour court again decided in the company's favour, rejecting a union appeal that its industrial action over bonuses was legal.


30 September 2011

JOHANNESBURG - Striking employees returned to work at Rio Tinto's Rossing uranium mine in Namibia on Thursday after a labour court again decided in the company's favour, rejecting a union appeal that its industrial action over bonuses was legal.

"The court ruled again in favour of the company in a motion that was not opposed by the union. The company therefore requires all striking employees to go back to work with immediate effect," Rossing said in a brief statement.

The union confirmed that it was abiding by the ruling and its workers had returned late in the afternoon.

"We have an obligation to comply with whatever the court has decided," Ismael Kasuto, spokesman for the Mineworkers Union of Namibia (MUN), told Reuters.

The company had said on Wednesday that all workers, on strike since the early shift on Friday, were required to return to work after a court declared the strike illegal. But the union had appealed the ruling.

MUN, which represents some 1,200 of Rossing's 1,600 workers, had been protesting over differences in bonuses paid to workers and management in a dispute that sparked a three-day strike in July.

The strike has hurt output at Rossing, where production was already hit by heavy rains earlier in the year. Rossing produced around 8 million lb (3.63 million kgs) of uranium last year.

Union says half of Rio's Rossing workers on strike


26 September 2011

WINDHOEK - Around half of Rio Tinto's Rossing Uranium workers are taking part in a strike that is hitting production at its mine in Namibia, the union involved said on Saturday, also countering company claims that some of the mine was still working.

"Of the 1,055 employees in the bargaining unit that are affected by the production incentive system for workers, a majority of 800 went on strike," Mineworkers Union of Namibia (MUN) spokesman Ismael Kasuto said.

The strike, which started on Friday, centres around a dispute about different incentives for management and workers.

Kasuto also countered claims by the company that "some operational aspects" of the mine were continuing. "As far as I know production has come to a standstill."

Talks are due to resume on Monday.

A court application by Rossing to have the strike declared illegal is likely to be heard on Wednesday. However, the union said the court decision would have no bearing on the strike.

"The company fails to understand that a court ruling will not affect the strike as the application only focuses on one aspect of the dispute," Kasuto said.


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