News / Asia

Labor Strike Closes Indonesian Gold, Copper Mine

Protesters from Freeport-McMoRan Copper & Gold Inc.'s Grasberg mine march during a demonstration in Timika of Indonesia's Papua province, October 10, 2011.
Protesters from Freeport-McMoRan Copper & Gold Inc.'s Grasberg mine march during a demonstration in Timika of Indonesia's Papua province, October 10, 2011.
Kate Lamb

In Indonesia, growing resentment about corporate profits has led to strikes that have temporarily closed one of the world’s largest gold and copper mines. With estimated losses of $6.7 million each day the mine is closed, analysts say Freeport is under increasing pressure to meet worker demands for higher wages.

Freeport labor employee

The Indonesian unit of the P.T. Freeport McMoran was forced to halt productions at its giant gold and copper mine in West Papua late Monday and Tuesday.

The company announced that it was suspending its operations after a pipe channeling copper and gold to the port was severed in several places, and workers blockaded the road to the mine with heavy machinery.

A Freeport spokesperson says the pipe was sabotaged.

The company declined to speculate on who might be responsible for the damage. Some 80 percent of Freeport’s workers are on strike for the second straight month.

Although negotiations between the company and the worker’s union have failed to produce an agreement on wage increases, the strikes around the mine have grown violent. Last week, a clash between protesters and police resulted in the death of one person and injured to six others. On Friday, three workers were shot dead in an ambush blamed on Papuan separatists.

Workers at Freeport’s Grasberg mine - which accounts for more than 90 percent of the company’s gold output - receive a minimum of between $1.50 and $3.00 an hour, the lowest of any Freeport McMoran operation, worldwide.

Julius Parorongan, a spokesperson for the Freeport Worker’s Union says the strike is the best way to make the multinational company take notice. “This is what we have to do, to force the management to fulfill our demands…. We will strike until November 15th or until we get a good deal… We just need $7.50 per hour and so far in the U.S. the lowest wages [for Freeport workers] is $30 per hour. So we think it is easy for the company to fulfill our demands,” he said.

The rugged region in eastern Indonesia has poor roads and other infrastructure in the mountainous terrain, which analysts say increases the cost of mining and depresses local wages.

Closure of the mine

During the initial stages of the strike, Freeport recruited outsourced workers which allowed it operate at 80 percent capacity. But Monday’s closure is likely to incur significant costs to Freeport and the Indonesian government.

Professor Kurtubi is a lecturer in economics at the University of Indonesia who specializes in mineral resource economics. He says the closure of the mine will have two main effects.
“First, it will have a negative impact on the economic activities in the surrounding areas because for most people who live in the Timika, their economy mostly depends on the mining activities," he said. "Second, the government revenue will decline.  It’s quite significant the number if they cannot find a resolution.”

Freeport is the single largest taxpayer to the Indonesian government, contributing more than $1 billion in the first six months this year. Closure of the mine is estimated to cost the government $6.7 million in lost revenue per day.

Kurtubi believes Freeport will have to agree to the workers’ wage demands, if they want to continue operating at full capacity in the future. “Yes, I think Freeport should meet the demands of labor when they want just $7.50 per hour," he noted. "I think that is quite moderate, quite good, acceptable, considering the average wage in Freeport where they pay workers $20 per hour for the same product.”

Although the workers union has urged the government to help resolve the issue, Energy and Mineral Resources Minister Darwin Zahedy Saleh announced late Tuesday that Freeport Indonesia would resume 50 percent of its production this week, despite ongoing strikes and the damaged pipeline.

You May Like

Beijing Warns Hong Kong Protesters, Cracks Down at Home

In suppressing protest news, China reportedly has arrested more than 20 people on the mainland who acted in support of Hong Kong pro-democracy protesters More

Competing Goals Could Frustrate Efforts to Fight Islamic State

As alliances shift and countries re-define themselves, analysts say long-standing goals of some key players in Middle East may soon compete with Western goals More

Child Sexual Exploitation to Worsen in SE Asia

Southeast Asia’s planned economic integration is a key step for boosting the region’s productivity, but carries downsides as well More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
The Legacy of Jimmy Carter: The Preacher from Plainsi
X
October 01, 2014 10:45 AM
It is common in the United States to see tourists flock to sites associated with America's presidents. Some are privately owned and others are run by the National Park Service or the National Archives -- but most have helped draw business and people into the towns and cities where they are located. As VOA’s Kane Farabaugh reports, there is one particular presidential hometown that is unique in what it has to offer those who make the trip.
Video

Video The Legacy of Jimmy Carter: The Preacher from Plains

It is common in the United States to see tourists flock to sites associated with America's presidents. Some are privately owned and others are run by the National Park Service or the National Archives -- but most have helped draw business and people into the towns and cities where they are located. As VOA’s Kane Farabaugh reports, there is one particular presidential hometown that is unique in what it has to offer those who make the trip.
Video

Video Hong Kong Protests Draw New Supporters on National Holiday

On the 65th anniversary of the founding of Communist China, Hong Kong protesters are hoping to stage the largest pro-democracy demonstration since the 1989 Tiananmen protests. VOA's Brian Padden visited one of the protest sites mid-day, when the atmosphere was calm and where the supporters were enthusiastic about joining what they are calling the umbrella revolution.
Video

Video India's PM Continues First US Visit

India's prime minister is on his first visit to Washington, to strengthen political and economic ties between the world's oldest and the world biggest democracies. He came to the U.S. capital from New York, the first stop on his five-day visit to the country that denied him an entry visa in the past. From Washington, Zlatica Hoke reports Modi seemed most focused on attracting foreign investment and trade to increase job opportunities for his people.
Video

Video Malaysia Struggles to Stop People Joining Jihad

Malaysian authorities say militant groups like the so-called "Islamic State" have used social media to entice at least three dozen Malaysian Muslims to fight in what they call "jihad" in Syria and Iraq. As Mahi Ramkrishnan reports from Kuala Lumpur, counterterrorism police are deeply worried about what could happen when these militants return home.
Video

Video Could US Have Done More to Stop Rise of Islamic State?

President Obama says airstrikes against Islamic State militants in Syria will likely continue for some time because, in his words, "there is a cancer that has grown for too long." So what if President Obama had acted sooner in Syria to arm more-moderate opponents of both the Islamic State and the Syrian government? VOA State Department Correspondent Scott Stearns reports from the United Nations.
Video

Video Treasure Hunters Seek 'Hidden Treasure' in Central Kenya

Could a cave in a small village in central Kenya be the site of buried treasure? A rumor of riches, left behind by colonialists, has some residents dreaming of wealth, while others see it as a dangerous hoax. VOA's Gabe Joselow has the story.
Video

Video Ebola Patients Find No Treatment at Sierra Leone Holding Center

At a holding facility in Makeni, central Sierra Leone, dozens of sick people sit on the floor in an empty university building. They wait in filthy conditions. It's a 16-hour drive by ambulance to Kailahun Ebola treatment center. Adam Bailes was there and reports on what he says are some of the worst situations he has seen since the beginning of this Ebola outbreak. And he says it appears case numbers may already be far worse than authorities acknowledge.
Video

Video Identifying Bodies Found in Texas Border Region

Thousands of immigrants have died after crossing the border from Mexico into remote areas of the southwestern United States in recent years. Local officials in south Texas alone have found hundreds of unidentified bodies and buried them in mass graves in local cemeteries. Now an anthropologist and her students at Baylor University have been exhuming bodies and looking for clues to identify them. VOA’s Greg Flakus has more from Waco, Texas.
Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.

AppleAndroid