President Susilo Bambang Yudhoyono has called for an immediate resolution of a nearly two-month strike by workers at a giant US-owned gold and copper mine in Papua province.
About one-third of the 23,000 workers at Freeport McMoRan’s Grasberg mining complex, who have been on strike since mid-September over better wages, threatened on Tuesday to extend their action until mid-December if no agreement is reached this week.
Freeport, the largest taxpayer to the government, has said the strike is costing it losses of US$19 million a day.
“I’ve given a special order for the labour dispute at Freeport to be managed properly to find an immediate solution,” the president said at a meeting with cabinet members at the state palace on Wednesday.
Late last month Freeport declared force majeure on shipments from the Grasberg mine, saying it was unable to make good on contractual obligations, triggering a spike in global copper prices.
“The central government has an obligation to facilitate and mediate in order to help find a solution,” the president said.
Freeport’s losses are also losses for the government, which collected $1.4 billion in taxes and royalties in the first half of the year, and dividends on its 9.36-percent stake in the company.
The workers originally demanded drastic wage increases, from a minimum hourly rate of $1.50 to $3.50 an hour, and are now calling for $4 an hour.
They claim to be Freeport’s lowest paid workers in the world.
The strikes have also triggered ambushes and clashes with police that have killed eight people in the vicinity of the mine north of Timika town.
In the latest unrest unknown gunmen opened fire on Monday at a Freeport vehicle in the mine area, injuring a police guard in the face, national police spokesman Saud Usman Nasution said.
Last year, Freeport reported sales revenues of more than $5 billion from Grasberg.