Thursday, October 27th 04:03 PM IST

Freeport declares Force Majeure at Grasberg mine

# Freeport McMoran  # Grassberg and Deep Ore Zone  

Days after gunmen killed three people near its mine , Freeport McMoran Copper and Gold Inc declared “Force Majeure” at its Grasberg mine in Papua of Indonesia as the strikes of thousands of its workers have declined outputs.

Freeport McMoran logo

JAKARTA(BullionStreet): Days after gunmen killed three people near its mine , Freeport McMoran Copper and Gold Inc declared "Force Majeure" at its Grasberg mine in Papua of Indonesia as the strikes of thousands of its workers have declined outputs.

The production of the firm has been disturbed since thousands of its workers had gone on strikes since October 15 for a pay hike demand, the 2nd rally after they took a similar action for 8 days in July following a deadlock of the negotiation with management.

"The strikes action at PT Freeport Indonesia has impacted our production and concentrate shipments. The lower concentrate production has impacted our ability to fully perform our sales commitments and as a result, we were required to declare "Force Majeure" on the affected concentrate sales agreement," Ramdani Sirait, spokesman of the firm said. The spokesman did not mention how much the strikes impacted on its production.

Before the strikes, Freeport operates 220-230 thousand tons of ores per day in Grassberg and Deep Ore Zone mining sites. According to the data released by Freeport last year, each ton of ore contains 8 kg of Copper and 0.91 gram of Gold. "The estimated impacts were included in our earning report issued last week," said Ramdani.

The declaration has led the firm free from some of its contractual obligation of supplying metal from its Grasberg mine in Papua.

"Throughout the period, we have worked cooperatively with our customers on the revised concentrate production and shipping schedule," the spokesman said.

The Indonesian government has frequently tried to mediate the dispute between the workers and management but fails to reach an agreement due to the lower pay hike offered by the government.

Spokesman of the labor union at the firm Yuli Pararongan said that the striking miners had decreased their pay demand hike from the level of US$17.50 to 43.00 per hour to US$7.50 per hour.

Besides, the increased tense of security in Papua has led to the shooting of workers of the firms that killed 5 of them and wounded scores others.

Papua has been long homed by the low-level armed separatist Free Papua Movement, which has often targeted civilians, Indonesian armed forces and mining firm of PT Freeport Indonesia, killing many people and wounding many others.

Indonesian police has sent 170 mobile brigade police officer to Papua as security alertness has been raised.

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