October 28, 2011 / 9:30 AM / in 9 years

Freeport Indonesia mine pay talks deadlocked -union

JAKARTA, Oct 28 (Reuters) - Pay talks between Freeport McMoRan Copper & Gold and a union representing striking workers at its Indonesia mine are deadlocked after a week of negotiations, the union said on Friday.

The U.S. miner, which was compelled on Wednesday to declare force majeure on shipments from the world’s second-biggest copper mine, has offered workers a 30 percent pay rise, up from 25 percent when talks restarted on Oct. 21, the union said.

The union is still holding out for a hike to $7.5 an hour, as much as a fivefold increase from the $1.5-$3.0 per hour that workers at the remote mountain mine currently earn, but much lower than its initial demand for $30-$200 per hour.

“There was a silver lining in the previous meeting but now the talk is making a U-turn,” said Juli Parorrongan, the union’s spokesman.

“What we are demanding is the final price, $7.50 and no less. And this is small money for a firm that we know earned so much revenue from the mine,” he said.

Freeport Indonesia spokesman Ramdani Sirait declined to comment on the details of the negotiations.

“I hope we can find a solution soon,” Sirait said.

The firm is trying to keep limited output at Grasberg going, but production and its operations have been disrupted by the strike, worker blockades, attacks by gunmen on employees and sabotage to a main pipeline running from the mine to its port.

Freeport’s force majeure decision freed it from some of its contractual obligations to supply buyers of metal produced at Grasberg, which holds more gold and copper reserves than any other mine and also produces silver.

Freeport’s CEO Richard Adkerson has said that an eight-day strike in July and the second continuing strike at Grasberg led to a loss of about 70 million pounds of copper and 100,000 ounces of gold in the third quarter.

The firm is also facing strike action in Peru, where the union at the Cerro Verde copper mine on Wednesday rejected a request from Freeport to go into labour arbitration to end a month-old strike.

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