(Adds copper prices climb on supply worries, earlier union
comment on output, additional detail on workforce numbers)
By Susan Taylor
TORONTO May 25 Freeport McMoRan Inc
said Thursday that mining and milling rates at its Grasberg mine
in Papua, Indonesia have been affected by an extended strike,
and a "large number" of approximately 4,000 absentee workers
were deemed to have resigned.
Escalating labor tension is a further disruption for
Freeport, entangled in a lengthy dispute with Indonesia over
rights to the giant mine, which has cost both sides hundreds of
millions of dollars.
Arizona-based Freeport is now trying to mitigate the impact
of workforce issues on mining and milling rates, which it would
not quantify, by re-allocating resources, training additional
workers and supplementing its mill throughput with available
stockpiles, spokesman Eric Kinneberg said.
Benchmark copper prices hit three-week highs
Thursday as worries about prolonged disruptions at Grasberg
triggered short-covering, ahead of a long holiday weekend in
Europe and top consumer China.
Freeport Indonesia union industrial relations officer, Tri
Puspital, told Reuters on Saturday that the strike had halved
A union representing an estimated 9,000 workers, excluding
contractors, recently extended its strike at Grasberg for a
second month, in a dispute over employment terms and layoffs.
Freeport, the world's largest publicly traded copper miner,
said some 4,000 workers, including a limited number of
contractors, have not reported to work despite multiple summons.
"As a result, a large number of these workers were deemed to
have resigned, consistent with agreed industrial relations
guidelines and prevailing law," Kinneberg said.
Union officials were not immediately available for comment.
The majority of Freeport's 30,000-strong Indonesian
workforce is "productively and safely" working, Kinneberg added.
In a May 15 memo seen by Reuters, Freeport said the strike
is illegal and "voluntary resignation is the consequence" for
workers ignoring demands to return to work who were absent for
five consecutive days.
Freeport resumed copper concentrate exports from Grasberg,
the world's second-largest copper mine, last month after a
15-week outage related to its government dispute and had planned
to ramp up production, which was cut by around two-thirds during
Workers now deemed "resigned" are in addition to an
estimated 2,000-3,000 workers Freeport placed on furlough as of
mid-April, when approximately 10 percent of its 32,000 member
workforce was "demobilized" under a cost-cutting effort.
The union, which began a 30-day strike May 1 to try and get
workers' jobs back, is demanding Freeport end its furlough
(Reporting by Susan Taylor; Editing by Dan Grebler and Cynthia