Jakarta – PT Freeport McMoran, Indonesia's largest gold producer, has rejected employee demands for a 25 percent salary increase, arguing that the request had exceeded the company's capacity.

"We have agreed to a 22 percent increase in salaries and we need to be strict in that agreement because we are talking about 9,000 employees here," company spokesman Rhamdani Sirait said Sunday as quoted by tempointeraktif.com.

He said that according to the company's calculation, with the current 22 percent salary raise, every employee could bring home Rp 285 to Rp 310 million (around US$35,000) per annum before allowances and bonuses.

Some 9,000 local employees have staged mass rallies and have refused to work before company management grants their request of 25 percent salary raise, which would collectively amount to wage of U$17.50 an hour.