27 Oct 2011

Growing level of industrial action at mines says analyst

5:01 pm on 27 October 2011

A commodities analyst says there are more mining disruptions now bringing production below capacity than at any other period in history.

About eight-thousand of the 23-thousand workers at Freeport McMoRan's Papua gold and copper mine have been on strike for more than a month for higher wages and better working conditions.

The United States company has declared force majeure on mining shipments from the Indonesian province so it can avoid liability on existing customer orders.

Bart Melek, the head of commodity strategy at TD Securities, says although such disputes are inevitably resolved, they're happening more frequently.

"One of the factors could very well be that commodity prices and copper in particular have been quite high for some time and there seems to be a push on the part of other interests to get a share of this. And that's something that's been done on the political side and it's not particularly surprising that it's happening on the labour side as well."

Bart Melek says the Papua strike and another at Freeport McMoRan's Peru operation are pushing up copper prices.