PT Freeport workers launch month-long strike, output down 50%
Wednesday, May 3 2017 - 03:19 AM WIB
Petromindo|Thomas
Around 1,700 workers of gold and copper giant PT Freeport Indonesia started on Monday a month-long strike, significantly affecting the company?s production, Kontan reported on Wednesday.
The paper quoted PT Freeport Spokesman Riza Pratama as saying that due to the strike, the company?s ore production dropped by around half of the normal production rate. ?The production decline is around 50 percent of the normal production rate of 180,000 tons of ore per day,? Riza told the paper.
He said that the workers primarily are demanding the company to resume employing workers which have been suspended. But Riza said that the suspension policy was made as part of efficiency strategy pending completion of ongoing negotiation with the government over the company?s long-term operation including on the extension of its current mining contract.
Yafet Panggala, a leader at PT Freeport SPSI workers union said that the strike will be ended once the company fulfill the demands of the workers.
PT Freeport, which operates the giant Grasberg gold mine in Papua Province, suspended export in January after the government introduced a new regulation requiring the company to convert its mining permit status from the current mining contract of work (COW) to special mining business license (IUPK) as part of conditions to continue export of copper concentrates. The export suspension had forced the company to suspend some workers as its production of copper concentrates can only be absorbed by PT Smelting, which operates the only copper smelter in the country.
PT Freeport, a local subsidiary of US Freeport McMoRan Inc, has been locked in lengthy negotiation process with the government as the company demanded the IUPK permit to have similar fiscal and legal terms as set in the COW including a nailed-down tax principle to help ensure its investment stability. The company is also seeking to extend its current operation as the new regulation requires the company to divest up to 51 percent stake to Indonesian investors.
The government last month issued a temporary IUPK for PT Freeport to allow the company to resume export of copper concentrates. The government gave an export permit valid until February 2018 with an export quota of 1.1 million tons. PT Freeport resumed export on April 21 at a volume of 22,000 tons to China and 22,000 tons to Japan. (*)