Samuel Wanda and Olivia Rondonuwu, Timika, Indonesia – Energy minister Darwin Zahedy Saleh said Indonesia is losing $6.7 million from revenue every day due to the strike involving thousands of workers at Freeport McMoRan's Indonesian copper mine.
The government is looking to mediate talks between the firm and union. The union, representing about 8,000 workers, has demanded a pay rise to between $17.5 to $43 per hour, down from initial demands for $30 to $200 per hour, but still above a current $1.5 to $3 per hour rate. It has said that other Freeport workers worldwide get 10 times their current level.
The strike, combined with recent supply disruptions at Latin American mines, has raised concerns over a global shortage of the metal, though so far this week copper price gains have been dampened by worries about the global economy.
Workers at Freeport's Amamapare port in Papua joined miners on Thursday in a month-long strike over pay, stranding six vessels awaiting copper ore cargo to be delivered to smelter plants in Indonesia, China, the Philippines and Japan.
"Right now there is no activity and delays are expected with the six vessels at the port," said Ricky Noviansyah, a port captain for Wilhelmsen Ships Service.
Based on the mine's daily production target, the strike could potentially cut output of 230,000 tonnes of ore per day, said energy ministry official Thamrin Sihite, after a meeting with Freeport Indonesia's management on Friday.
Four Freeport supporting vessels, including two boats to help load concentrate onto ships, as well as a tug boat and another vessel for coal and fuel to supply power stations at the mine, have halted operations and locked up, as the captains and engineers joined the strike on Friday, a port worker told Reuters by telephone.
Freeport has so far declined to comment on production. Activity at Grasberg, the world's third-biggest copper mine, has stopped as workers demand a larger slice of mining profits.
The huge mine, which also holds the world's largest gold reserves, produces around 150,000 tonnes of copper ore a day, according to the firm's Web site.
Copper prices rose 0.7 percent on Friday to $8,773 a tonne, but has dropped about 9 percent so far this year. A total 544,311 tonnes of copper was taken from the Grasberg mine last year, around 3.8 percent of the world's output.
The Indonesian strike, if it lasts, is likely to be more costly for Freeport than the eight-day work stoppage in July, when the firm said it suffered a production loss of 35 million pounds (15,876 tonnes) of copper and 60,000 ounces of gold.
The strike in Indonesia comes after workers in Freeport's Peru copper mine Cerro Verde, which produces 2 percent of the world's copper supply, launched an indefinite strike this week for better pay and benefits.