John Pakage, Timika – Thousands of workers at Freeport-McMoRan's Grasberg mine in Indonesia have ended a four-day walkout over welfare that had sent copper prices to seven-month highs, the head of a workers' group said on Saturday.
The mine on the island of Papua produces more than 500,000 metric tons of copper annually and is Indonesia's biggest source of tax revenue.
Frans Pigome, chairman of Tongoi Papua, a group representing native Papuan workers, said they would go back to work on Sunday.
"We are going to ask all workers who have been rallying to return to work immediately," Pigome told a news conference after a meeting with company officials.
Freeport had agreed to increase the standard monthly salary to 3.1 million rupiah ($341) from 1.5 million rupiah, he said. Workers had initially asked for 3.6 million a month. The company had also agreed to set up a department to handle the welfare of native Papuan workers.
He said the firm had also promised to replace a number of senior managers, including Armando Mahler, president director of Freeport Indonesia, if it was found that they had failed to meet the company's commitment of improving the welfare of workers.
The Papuan workers had demanded more career opportunities for native workers, improved recruiting and better pensions. The protest coincided with talks over a new two-year collective labor agreement for Grasberg's 9,000 direct employees.
Mindo Pangaribuan, a spokesman for Freeport Indonesia, said that it had agreed to a feasibility study for the creation of a Papuan Affairs Department and remained committed to increasing the number of Papuans in senior posts.
"Tongoi Papua agreed to channel their aspirations through the authorized workers' union, SPSI, during the ongoing Collective Labor Agreement (CLA) negotiation, including an agreed framework for minimum wages," he said via email after the agreement.
Arizona-based Freeport said earlier on Saturday that mining and milling had been hit, but said stocks were being used for shipping. "We are mining and milling at reduced rates. We continue to ship concentrates per existing schedule from available production and inventories," a spokesman said via e-mail.
Freeport had branded the walk-out illegal but police in Papua had declined to take action against the strikers. It is unclear how many workers had walked off the job. Organizers of the protest put the total at 6,000, but that includes 2,000 with companies sub-contracted by Freeport.
With copper in short supply worldwide, traders have been watching developments closely at the mine.
The walk-out helped lift copper prices above $8,000 per metric ton on the London Metal Exchange on Friday, its highest level since September 7. The all-time high was $8,800, reached last May.
The Grasberg mine has long been controversial because of its environmental impact, the share of revenue going to Papuans and the legality of payments to Indonesian security forces who help guard the site.
[Additional reporting by Mita Valina Liem and Fitra Wulandari in Jakarta.]