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

Mugabe Dismisses Male-Female Equality

'It is not possible that women can be at par with men' incoming African Union president declares on eve of summit More

Somali Terror Suspect's Light Sentence Raises Questions

Abdullahi Yusuf, 18, could have spent 15 years in prison but judge instead sentenced him to a halfway house, and a program to try to integrate him back into the community More

Video Kobani Ravaged Following Kurdish Ouster of IS Militants

Even so, hundreds of refugees sheltering in Turkey seek to return; Kurdish forces hold some back, saying fighting continues 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.
Groundbreaking Hand-Painted Documentary About Van Gogh in Productioni
X
George Putic
January 29, 2015 9:43 PM
The troubled life of the famous 19th century Dutch painter Vincent van Gogh has been told through many books and films, but never in the way a group of filmmakers now intends to do. "Loving Vincent " will be the first ever feature-length film made of animated hand-painted images, done in the style of the late artist. VOA’s George Putic reports.
Video

Video Groundbreaking Hand-Painted Documentary About Van Gogh in Production

The troubled life of the famous 19th century Dutch painter Vincent van Gogh has been told through many books and films, but never in the way a group of filmmakers now intends to do. "Loving Vincent " will be the first ever feature-length film made of animated hand-painted images, done in the style of the late artist. VOA’s George Putic reports.
Video

Video Rock-Consuming Organisms Alter Views of Life Processes

Scientists thought they knew much about how life works, until a discovery more than two decades ago challenged conventional beliefs. Scientists found that there are organisms that breathe rocks. And it is only recently that the scientific community is accepting that there are organisms that could get energy out of rocks. Correspondent Elizabeth Lee reports.
Video

Video Paris Attacks Highlight Global Weapons Black Market

As law enforcement officials piece together how the Paris and Belgian terror cells carried out their recent attacks, questions are being asked about how they obtained military grade assault weapons - which are illegal in the European Union. As VOA's Jeff Swicord reports, experts say there is a very active worldwide black market for these weapons, and criminals and terrorists are buying.
Video

Video Activists Accuse China of Targeting Religious Freedom

The U.S.-based Chinese religious rights group ChinaAid says 2014 was the worst year for religious freedom in China since the end of the Cultural Revolution. As Ye Fan reports, activists say Beijing has been tightening religious controls ever since Chinese leader Xi Jinping came to office. Hu Wei narrates.
Video

Video Super Bowl Ads Compete for Eyes on TV, Web

Super Bowl Sunday (Feb. 1) is about more than just the NFL's American football championship and big parties to watch the game. Viewers also tune in for the world famous commercials that send Facebook and Twitter abuzz. Daniela Schrier reports on the social media rewards for America’s priciest advertising.
Video

Video Theologians Cast Doubt on Morality of Drone Strikes

In 2006, stirred by photos of U.S. soldiers mistreating Iraqi prisoners, a group of American faith leaders and academics launched the National Religious Campaign Against Torture. It played an important role in getting Congress to investigate, and the president to ban, torture. VOA's Jerome Socolovsky reports.
Video

Video Freedom on Decline Worldwide, Report Says

The state of global freedom declined for the ninth consecutive year in 2014, according to global watchdog Freedom House's annual report released Wednesday. VOA's William Gallo has more.
Video

Video MRI Seems to Help Diagnose Prostate Cancer, Preliminary Study Shows

Just as with mammography used to detect breast cancer, there's a lot of controversy about tests used to diagnose prostate cancer. Fortunately, a new study shows doctors may now have a more reliable way to diagnose prostate cancer for high risk patients. More from VOA's Carol Pearson.
Video

Video Smartphones About to Make Leap, Carry Basic Senses

Long-distance communication contains mostly sounds and pictures - for now. But scientists in Britain say they are close to creating additions for our smartphones that will make it possible to send taste, smell and even a basic touch. VOA’s George Putic reports.
Video

Video Former Sudan 'Lost Boy' Becomes Chess Master in NYC

In the mid-1980’s, thousands of Sudanese boys escaped the country's civil war by walking for weeks, then months and finally for more than a year, up to 1,500 kilometers across three countries. The so-called Lost Boys of the Sudan had little time for games. But one of them later mastered the game of chess, and now teaches it to children in the New York area. VOA’s Bernard Shusman in New York has his story.
Video

Video NASA Monitors Earth’s Vital Signs From Space

The U.S. space agency, NASA, is wrapping up its busiest 12-month period in more than a decade, with three missions launched in 2014 and two this month, one in early January and the fifth scheduled for January 29. As VOA’s Rosanne Skirble reports, the instruments being lifted into orbit are focused on Earth’s vital life support systems and how they are responding to a warmer planet.
Video

Video Crowded Republican Presidential Field Off to Early Start for 2016

It seems early, but the 2016 U.S. presidential election campaign is already heating up. Though no one has officially announced a candidacy, several potential Republican contenders have been busy speaking to conservative groups about making a White House run next year. Many of the possible contenders are critical of the Obama administration’s foreign policy record. VOA national correspondent Jim Malone reports.

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

All About America

AppleAndroid