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Month-long strike begins at Freeport Indonesia

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Associated Press - September 15, 2011

Timika, Indonesia – Thousands of workers at Freeport-McMoran's gold and copper mine in eastern Indonesia began a monthlong strike Thursday over a wage dispute.

Juli Parorongan, spokesman for the union, said roughly 90 percent of the mine's 12,000 workers were taking part. They are seeking salary increases from a current $2.10 to $3.50 dollars an hour to globally competitive levels of $17.50 to $43, he said.

It's the second strike this year at one of the world's biggest gold and copper mines. An eight-day work stoppage in July – also protesting low wages and the dismissal of union leaders – brought the mine to a near standstill.

The Phoenix-based company lost production of 4 million pounds of copper and 7.5 ounces of gold per day, analysts say, or about $30 million daily. Workers only returned to their jobs after management agreed to reinstate the labor leaders and reopen negotiations about wages and benefits.

"We finally decided to go into this strike because negotiations from July 21 to August 26 failed to reach any agreement," Parorongan said, adding that the company was only offering a 22 percent hike within two years.

Ramdani Sirait, a company spokesman, said the US gold mining giant hopes to continue talks to try to find a fair and appropriate solution.

"There's no legal basis for a complete work stoppage, or strike, since the laws provide chances for sustained dialogue and mediation," Sirait told The Associated Press in an email.

In addition to the 22 percent wage increase, he said the company was offering an attractive financial package, including a 230 percent boost in bonuses for higher metal output and a 4 percent contribution to the employee retirement savings plan.

"If totaled in a yearly base, the compensation package will amount to 26 times the basic monthly wage excluding overtime," he wrote, adding that employees also get generous housing loans, bonuses and educational assistance for their children.

An interoffice memorandum from the company called on the workers to boycott the strike and to return to negotiations in good faith.

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