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Tension persists at Indonesia gold mine
Freeport appeals for security as strike by workers over low wages takes its toll on production and supplies.
Last Modified: 18 Oct 2011 19:46

Production at Freeport-McMoRan Copper & Gold Inc.'s mine in eastern Indonesia is back at 50 per cent capacity after a sabotaged pipeline that transports concentrates to a port was repaired, according to an Indonesian government official.

Striking workers at the troubled Grasberg mine in Papua province, which holds some of the largest gold and copper reserves in the world, brought operations to a complete standstill on Monday.

Al Jazeera's Step Vaessen, reporting from Jakarta, says the company is now asking government and state officials to restore security in the area as production grinds to a halt and supplies for those families living on the mining site start to run low.

They continued to blockade roads leading to the mine on Tuesday, preventing food, medicine and other supplies from reaching holed-up staffers and their families.

The strike, now in its second month, is being waged over low salaries.

Union's demand

The union is demanding the equivalent to what Freeport-McMoRan, the Phoenix, USA-based company, pays workers in other countries.

Analysts say this is unlikely given the high cost of doing business in the remote, mountainous region, which is home to a decades-long, low-level insurgency.

Tensions soared with the deaths last week of five miners - two shot by police trying to control a crowd and three killed by unidentified assailants - prompting Freeport to announce a halt to operations Monday at both its underground and open-pit mines.

After the government helped secure the area so a pipeline damaged by strikers could be repaired, the mine was pumping out 221,000 tonnes of ore and 5,460 tonnes of concentrate, Darwin Saleh, the energy and mines minister, said.

That is about half its capacity, Saleh said.

Supplies blocked

The blockade around the mine and at the sea port about 110 km away was preventing the Grasberg mine from sending supplies to replacement workers and their families, Ramdani Sirait, a spokesman for PT Freeport Indonesia, said.

"With no food or medical supplies, we're very worried about the condition of our employees and their families," he said.

"We really hope the government will help open this blockade."

About 90 per cent of the mine's 12,000 employees went on strike on September 15 demanding that their current salaries of between $2.10 to $3.50 an hour be pushed to as high as $17 to $43.

But analysts say the high cost of additional infrastructure needed to support operations in Papua's rugged Puncak Jaya mountains, like roads and housing, make it unlikely they will be able to negotiate a globally competitive wage.

It is the second strike this year at the gold and copper mine in Papua. Freeport said the first, eight-day work stoppage in July affected its revenue by $30m a day.

Source:
Al Jazeera and agencies
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