* All work at Grasberg stopped except maintenance - union
* Thousands of workers plan to demonstrate on Friday
(Adds comments from Freeport, government)
By Fergus Jensen and Wilda Asmarini
JAKARTA, Feb 16 All work has stopped at
Freeport-McMoRan Inc's giant copper mine in Indonesia and its
workers are planning a demonstration against the government's
move last month that halted exports of copper concentrate to
boost domestic industries, a union said.
A prolonged stoppage at the world's second-biggest copper
mine would support copper prices, near 21-month highs this week,
but would also deny the Indonesian government desperately needed
revenue from one of its biggest taxpayers.
Freeport had said the Grasberg mine would have to
slash output by 60 percent to approximately 70 million pounds of
metal per month if it did not get an export permit by
mid-February, due to limited storage.
But a strike at Freeport's sole domestic offtaker of copper
concentrate, PT Smelting, expected to last at least until March,
has limited Freeport's output options, and Grasberg's storage
sites are now full.
"Everything has stopped completely. It's just maintenance
now," Freeport Indonesia worker union chief Virgo Solossa told
Reuters on Thursday, stopping short of saying how many of an
estimated 33,000 workers had been sent home.
Thousands of workers plan to stage a demonstration on Friday
in Timika, Papua, the province where the mine is located, to
demand the government makes "a wise decision" regarding their
situation, Solossa said.
"If they aren't careful, this has and will impact (Freeport
operations), both for workers as immediate beneficiaries and the
broader community as recipients of benefits from Freeport's
Solossa added further action would be considered following
the demonstration on Friday.
When asked about the stoppage, Freeport Indonesia spokesman
Riza Pratama referred to the domestic smelter strike, and told
Reuters that Grasberg's production was now being "managed to
supply PT Smelting when their operations return to normal."
He noted Freeport did not have any plan to announce a force
"We are continuing to cooperate (with the government) so
that our exports of concentrate can return to normal," Pratama
Freeport estimated in January that sales of copper from
Grasberg would reach 1.3 billion pounds in 2017, up from 1.05
billion pounds in 2016, assuming operations were normal.
Coal and Minerals Director General Bambang Gatot declined to
comment on the work stoppage and planned demonstration, but said
the company had not applied for an export permit yet.
"Let's see what happens tomorrow," he said.
Indonesia introduced rules earlier this year requiring
Freeport and some other miners to shift from their current
'contracts of work' to so-called 'special mining permits',
before being allowed to resume exports of semi-processed ores
Phoenix, Arizona-based Freeport has said it will only agree
to a new mining permit with the same fiscal and legal protection
in its current contract.
The company has made direct contributions of more than $16
billion to Southeast Asia's biggest economy in taxes, royalties,
dividends and other payments between 1992 and 2015, according to
Copper was down 0.7 percent at $6,027 a tonne on Thursday,
holding near a 21-month high of $6,204 touched on Monday.
(Editing by Joseph Radford and Mark Potter)