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Pipeline 'sabotage' pushes Freeport to halt production

Source
Jakarta Globe - October 18, 2011

Banjir Ambarita & Ririn Radiawati Kusuma, Jayapura – The Indonesian unit of US mining giant Freeport McMoRan announced on Monday that it was suspending its operations in West Papua amid a suspected pipe sabotage and a blockade by striking workers.

The halt, which concerned both the Grasberg gold and copper mine and underground operations, occurred because of "sabotage," said Nurhadi Sabirin, Freeport's vice president for open mines.

The company's pipe network, which carries gold and copper concentrate from the processing center to the port, was tampered with and damaged, he said. "All operations are halted starting this morning because it is impossible for us to work if it is not safe," Nurhadi said. "The concentrate pipe can also no longer channel the concentrate."

Freeport Indonesia executive vice president and chief administration officer Sinta Sirait confirmed that the alleged sabotage had caused the company to halt production.

"The channeling of the gold and copper concentrate from Mile 74 to the portside at Mile 45 has been disturbed seriously, so we have decided to halt production," Sinta said. He added that the company's pipe network for gold and copper concentrate was severed at Mile 25.

Neither Sinta nor Nurhadi would comment on who was suspected of damaging the pipe, but Freeport has faced a general strike with union workers demanding better working conditions and higher pay.

"The mob outside of the Freeport complex is still blocking the way," said Freeport spokesman Ramdani Sirait, adding that the protesters were using heavy digging and earth-moving machinery to enforce their blockade.

Freeport has been operating at only about 80 percent capacity in the past week, Sinta said. The mines' production capacity is between 220,000 tons and 230,000 tons of gold and copper ore per month. The ore is processed at the refinery at Mile 74 into concentrate at a rate of 6,000 to 7,000 tons per day. That concentrate is sent to the port through the pipeline.

The protesters have also been blocking the airport and the local port, cutting off the supply of supplies to the Freeport complex in Tembaga Pura and Kuala Kencana since Sunday.

"We employees inside the Kuala Kencana complex do not have any food stocks left and cannot work. Please solve this matter immediately," said Solihin, a Freeport employee during a video conference with the president and the concerned ministers on the problem at the mine.

Debi Upela, the wife of a Freeport employee in Tembaga Pura, said during the same video conference that employees' children were afraid to go to school.

A total of 1,300 non-staffers and 5,000 employees of contractors who were hired by Freeport have continued to turn up for work at the mine. The halt in production is expected to cause some $8 million in losses to the government, industry sources said.

Papua Police spokesman Sr. Comr. Wachyono said officers were still looking for the six gunmen who attacked a Freeport vehicle and killed three employees on Friday. "We are still pursuing the perpetrators by combing the area around the location. We are also using sniffer dogs," he said.

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