Jakarta – Production at a giant US-run mine in Indonesia's remote Papua province has been slashed to 20 percent due to a protest by thousands of workers, a government minister said Thursday.
Energy and Mineral Resources Minister Purnomo Yusgiantoro said the ongoing protest, which started Wednesday over pay and welfare demands, had slowed operations at Freeport MacMoRan's Grasberg open-pit gold and copper mine.
The underground mine at Grasberg was also running at just 60 percent of normal capacity, he also said, according to the official Antara news agency.
"Even though this is a corporate matter, I call that this be quickly settled in a peaceful manner so that the activities can return to normal," Yusgiantoro said. Freeport has said production has not been disrupted.
The protracted dispute, which centres on demands for higher wages, welfare and increased recruitment of Papuan workers as permanent employees, has helped push world copper prices to seven-month highs.
The minister's comments came as the two sides were locked in talks after failing to reach agreement Wednesday. Thousands of striking workers, mostly native Papuans, continued their peaceful protest.
"They (protesting workers) are now in Kuala Kencana, numbering just as much as yesterday (Wednesday)," said local police officer Yudiantara. Kuala Kencana is the site of the headquarters of PT Freeport Indonesia, which operates the mine, just outside the town of Timika.
Betty Ibo, from the West Papuan Workers Union, said talks were continuing into the evening. It was unclear if a breakthrough was in sight.
Critics accuse Freeport of not giving enough to the people of Papua in return for the mine. They allege the mine causes pollution and that the military's protection of the site leads to human rights abuses. The firm has disputed the claims.
Freeport operates concessions totalling 3.6 million hectares (8.9 million acres) stretching from the coast to the central mountain range at Timika, with its copper reserves estimated at 2.6 billion tonnes.
It runs its Grasberg mine in southwest Papua under a 30-year contract with the Indonesian government that began in 1992. The company owns 91 percent of PT Freeport Indonesia, with the rest in government hands.