MAC: Mines and Communities

Freeport-Rio Tinto halts operations once again at Papuan mine

Published by MAC on 2012-03-06
Source: Reuters, Jakarta Post

Union claims management hasn't honoured agreement

The world's largest gold, and second most important copper, mine, came to a standstill last week, not long after it had resumed operations following a three-month strike.

The Grasberg mine in Papua is operated by US company, Freeport McMoran - which also has a 60-40 joint venture agreement with Rio Tinto in the lease area.

According to the company, some unionised workers, who recently returned to the mine, have attacked others who refused to support the recent strike.

But the union has accused the management of trying to discredit it, and failing to honour a pay agreement reached in January.

Previous article on MAC (return to work): Papua: Further killings at world's biggest gold-copper mine


Labour problems again at Freeport's Grasberg copper-gold mega mine


23 February 2012

JAKARTA - Freeport-McMoRan Copper & Gold Inc's Indonesia unit is experiencing "work interruptions", the company said on Thursday, hours after a union said thousands of workers at the Grasberg mine have stopped working.

"We are experiencing work interruptions in connection with our efforts to resume normal operations. PTFI (Freeport Indonesia) is complying with the terms of the recent collective labor agreement with its union," said spokeswoman Daisy Primayanti in an email.

"Certain of the returning workers have engaged in acts of violence and intimidation against non-striking workers and supervisory personnel."

The email said the company was working with the government and the union to resolve the dispute.

Thousands of workers at the mine in central Papua stopped working on Thursday following an unresolved dispute with management, union official Virgo Solossa said.

The move comes after miners at Grasberg, the world's largest gold mine and second-biggest copper mine, returned to work last month after ending a three-month strike that crippled output.

Arizona-based Freeport has had a force majeure in place since last October on some concentrate exports from the mine.

The strike ended on Dec. 14 with a deal for a pay increase, allowing workers to gradually return to work, but the force majeure has yet to be officially lifted.

Labor dispute prompts stoppage at Freeport Indonesia mine


26 February 2012

JAKARTA - Freeport McMoRan Copper & Gold Inc.'s Indonesia has told workers at its Grasberg mine not to work due to safety concerns linked to labor unrest, a union official said on Sunday.

Efforts by Freeport's Grasberg mine in the highlands of Papua island to get back to normal after a three-month strike last year have been hampered by protracted disputes between management and union workers, as well as by security concerns.

The mine is the second largest copper mine in the world and the largest gold mine and the strike rocked labor relations in Southeast Asia's biggest economy.

The decision by the company to ask workers not to work was an over-reaction and part of an "effort to discredit union workers as trouble makers," said union spokesman Juli Parorrongan, adding that there was some friction between union and non-union workers.

PT Freeport Indonesia has initiated 'shut-down' procedures, according to a confidential memo dated Feb 23 that was obtained by Reuters. "We will not conduct operations amid situations where we cannot provide a reasonable assurance of safety and security," said the memo, which the company declined to confirm.

Intimidation and violence by some workers against others who did not take part in last year's strike have disrupted the mine, the company said on Thursday.

The Grasberg strike ended Dec. 14 with a deal for a pay increase, allowing workers to gradually return to work, but the force majeure has yet to be officially lifted. (Reporting by Karima Anjani and Olivia Rondonuwu in Jakarta. Editing by Matthew Bigg and Elaine Hardcastle.)

Freeport halts operations amid fight between workers

By Rangga D. Fadillah

The Jakarta Post

25 February 2012

Jakarta - PT Freeport Indonesia (PTFI) is temporarily halting operations at the Grasberg gold and copper mine in Timika, Papua, following a campaign of violence and intimidation by employees against workers who did not join last year's strike.

"We are experiencing work interruptions in connection with our efforts to resume normal operations at PTFI," company spokesperson Ramdani Sirait said in a press statement on Friday.

"Certainly, returning workers have engaged in acts of violence and intimidation against non-striking workers and supervisory personnel. We are working with union officials and government authorities to resolve the ongoing issues between returning workers."

The statement does not provide any description of the violence, but three workers have been arrested and are being held at the Tembagapura Police office.

Virgo Solossa, the head of the Mimika chapter of the All-Indonesian Workers Union (SPSI), told The Jakarta Post that employees stopped working because PTFI management failed to fulfill several terms of an agreement signed on Dec. 22.

"The agreement says that PTFI has to pay salaries of workers who joined last year's strike for the period of Dec. 21 to Jan. 21. However, on Jan. 29 when the payment date came, the workers did not receive the payments as expected," he said in a telephone interview.

He said that workers were angry with the payments, which then saw some committing violent acts against colleagues and supervisors.

"The PTFI management fails to create a conducive environment for reconciliation. It also fails to comply with agreements we have made. We decided to stop working until the company fulfills our demands," Virgo said.

The union demanded that PTFI replace Grasberg supervisors and withdraw legal action against the workers involved in the violence. "We stopped working, as a manifestation of our distrust of PTFI's management," Virgo said.

In reference to the salaries paid, Ramdani said that PTFI "had implemented and was implementing clauses agreed in the joint working agreement (PKB)".

Freeport's workers went on strike from July 4 to 11 last year, demanding a pay rise in the PKB for 2011-2013. On Sept. 15, due to failure to reach agreement with PTFI management, workers decided to stop working until Dec. 14, when another agreement was made.

As a result of the strikes, PTFI declared force majeure in October, freeing it from its obligations. The company claimed the strikes impacted production and shipments. A slower concentrate production had impacted the company's ability to fulfill sales commitments.

The PKB was signed on January 25, witnessed by Manpower and Transportation Ministry officials.

According to a report by US-based Freeport McMoRan Copper & Gold, PTFI's parent company, the estimated impact of the disruptions amounted to production losses of almost 75,000 tons of copper and nearly five tons of gold in the fourth quarter of 2011, and around 106,600 tons of copper and 7.9 tons of gold for the year.

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