Strike impacts Freeport’s Grasberg mine, workers 'resigned'
COMMODITIES | Thu May 25, 2017 | 12:34pm EDT
By Susan Taylor | TORONTO
Freeport McMoRan Inc said on Thursday that mining and milling rates at its Grasberg copper mine in Papua, Indonesia have been affected as some 9,000 workers stage an extended strike, and a "large number" of approximately 4,000 absentee workers were deemed to have resigned.
Escalating tensions with workers is a further disruption for Freeport, entangled in an ongoing dispute with Indonesia over rights to the giant mine, which has cost both sides hundreds of millions of dollars.
An estimated 9,000 workers have extended their strike for a second month at Grasberg, the world's second-largest copper mine, in an ongoing dispute over employment terms and layoffs, the union said on May 20.
Freeport, the world's largest publicly traded copper miner, said that approximately 4,000 workers, including a limited number of contractors, have not reported to work, despite multiple summons to return.
"As a result, a large number of these workers were deemed to have resigned, consistent with agreed Industrial Relations guidelines and prevailing law," spokesman Eric Kinneberg told Reuters.
Officials for the union were not immediately available to comment.
n a May 15 memo obtained by Reuters, Freeport said the strike is illegal and "voluntary resignation is the consequence" for workers who ignored demands to return to work and were absent for five consecutive days.
Freeport is trying to mitigate the impact on mining and milling rates, which were not quantified, by re-allocating resources, training additional workers and supplementing its mill throughput with available stockpiles, Kinneberg said.
Freeport resumed copper concentrate export shipments from Grasberg late last month after a 15-week outage related to its dispute with the government and had planned to ramp up production, which was cut by around two-thirds during the outage.
Freeport had "demobilized" around 10 percent of its Indonesian workforce as of mid-April, among efforts to cut costs resulting from the dispute. The company has repeatedly warned workers that striking will result in disciplinary action.
The union has demanded an end to Freeport's furlough policy and began a 30-day strike on May 1 in an effort to get workers' jobs back.
The majority of Freeport's approximate 30,000-member workforce is working "productively and safely and operations continue to improve," Kinneberg added.
(Reporting by Susan Taylor; Editing by Dan Grebler)