JAKARTA: Labor issues at U.S. miner Freeport-McMoRan’s Indonesian subsidiary are deepening concerns over the future of the company, which is in dispute with the Indonesian government over exports from its huge Grasberg copper and gold mine.
About 4,000 employees at Freeport Indonesia, the company’s local unit, began a strike on May 1 in protest over the company’s decision to put some workers on temporary leave. The strike was initially slated to last for a month but the labor union said it would be extended for another month amid a lack of progress in negotiations.
One union member said more than 2,000 workers who had participated in the strike had been fired as of May 22. A spokesman for Freeport Indonesia declined to comment but has previously told local media that the workers were deemed to have “voluntarily resigned” after not responding to the company’s calls to return to work.
“This is a clear violation of the law,” said Abraham Tandi Datu, a senior member of the company’s labor union. “We never agreed to resign.”
Freeport’s Grasberg mine, which was discovered in 1988 in Indonesia’s eastern province of Papua, is one of the world’s largest copper mines and said to be one of the most profitable because of its high copper concentrate. Freeport’s U.S.-listed shares fell 1.7% on Thursday amid fresh concerns over a potential decline in production. Three-month copper futures traded on the London Metal Exchange hit a three-week high on Thursday but fell back slightly on Friday.
The strike adds another twist to the high-profile standoff between Freeport and the Indonesian government over new export rules introduced in January.
The Geneva-based IndustriALL Global Union, which is affiliated with Freeport Indonesia’s labor union, on May 24 said the layoffs were “part of the company’s negotiating strategy with the government.”
