19 Nov 2011

Jakarta says resolution to Freeport industrial dispute in Papua is nearing

6:43 am on 19 November 2011

Indonesia's government says a compromise has nearly been reached between a striking workers union and the management of the Papua operations of US gold and copper mining giant Freeport McMoran.

The strike by thousands of workers at Freeport's giant Grasberg mine in Timika has entered a third month.

Workers are demanding better wages and improved working conditions however collective bargaining has failed to break the industrial action.

The labor strike and the violence have prompted Freeport to declare force majeure in its Papua operation.

The company's current production is 5 percent of its normal output. Under normal conditions, Freeport recorded US$8 million in revenue per day.

However, Indonesia's Energy and Mineral Resources Minister Jero Wacik says that the union's salary demand had come down to US$4 per hour from the initial demand of $35 per hour.

Freeport Indonesia's management recently agreed to a 28 percent salary increase to $3.09 per hour.

The Minister says they are close to a settlement.