Ririn Radiawati Kusuma – Tony Wenas, the vice chairman of the Indonesian Mining Association, said on Sunday that he was worried a union decision to extend its three-month strike at the Freeport mine in Papua would hurt the country's investment climate.
Juli Parorrongan, a union spokesman, was on Saturday quoted by Bloomberg as saying that the workers would continue their strike until at least Jan. 15. He said they had informed the manpower authority in Papua of the decision on Dec. 5.
About 8,000 of the 12,000 workers at the Grasberg mine, one of the largest copper and gold mines in the world, have been on strike since Sept. 15 seeking higher wages. The mine is owned by Freeport Indonesia, a subsidiary of US miner Freeport-McMoRan.
Tony, who until recently was president director of International Nickel Indonesia, a nickel mining company, said he was worried the strike could "spread to other mining companies."
The worst outcome, he said, would be if workers at manufacturing companies also started following suit. He said that apart from regulatory uncertainty, labor issues were key factors for investors in deciding whether to bring their money to Indonesia.
Juli was quoted as saying that workers "want to encourage further discussion aimed at settling the problem as soon as possible." He added that an agreement would immediately end the strike.
The Grasberg workers originally demanded a pay increase to $30 to $200 an hour, from $1.50 to $3 an hour. Their demand has since fallen to $7.50 an hour. The company has so far only be en willing to raise salaries by 35 percent over two years.
Freeport Indonesia spokesman Ramdani Sirait told the Jakarta Globe in a text message on Sunday that a 20-kilometer concentrate pipeline from mining sites to the port had been damaged during the strike, causing Freeport to be unable to deliver concentrate to a firm that processes it in Gresik, East Java. "We still can't deliver the material to the port," he said.
The strike caused Freeport to declare force majeure at the end of October on concentrate shipments from Grasberg because it couldn't fulfill certain contractual obligations. Grasberg is currently operating at about 5 percent of its daily 230,000 metric ton capacity because of the work stoppage, a mi ning official has said.