Workers at Freeport-McMoRan Copper & Gold Inc.'s Grasberg mine in Indonesia threatened to return to strike as tensions grow following the dismissal of three union members this month, a union official said.

"There's discrimination against workers who participated in last year's strike that is creating a lot of problems and the sacking of three of our members is making it worse," union spokesman Juli Parorrongan said today by phone from Timika, near the mine in Indonesia's Papua province. "We are in talks with the management. Hopefully we'll reach an agreement within two weeks otherwise I can't rule out another strike."

Freeport halted production at Grasberg, which has the world's largest recoverable copper reserves, for more than two weeks in February and March after violence flared following a three-month strike last year over pay that hurt global supply and boosted copper prices. Disruptions at Grasberg cut first-quarter output by 80 million pounds (36,287 metric tons) and 125,000 ounces of gold, Freeport said in April.

Sinta Sirait, an executive vice president at local unit Freeport Indonesia, said yesterday management isn't aware of any strike plan this month, while acknowledging tensions between employees who took part in the strike and those who didn't.

"The dialog between the two parties is taking place to try and solve the problem," Sirait said in an interview in Jakarta yesterday.

The company set up a crisis management unit to deal with the labor dispute, said Ramdani Sirait, a Jakarta-based spokesman for Freeport. He declined to say whether shipments from Grasberg have returned to normal after production resumed in March.