•    HOME   
•    NEWS   
•    BUSINESS   
•    INTERNATIONAL   
•    TECH   
•    SPORTS   
•    LIFE & TIMES   
•    OPINION   
•    MY JAKARTA   
•    BLOGS   
•    EYEWITNESS   

A workers union and the Indonesian subsidiary of US mining giant Freeport-McMoRan have agreed on a wage deal that will bring a halt to the more than three-month-long strike that has paralyzed the company’s huge gold and copper mine in Papua. 

“Freeport Indonesia has agreed on a wage increase,” union spokesman Juli Parorrongan said. 

The agreement, he said, would give workers a 37 percent wage increase as well as a housing allowance. Freeport also agreed to pay wages for the three months the workers were on strike and to do so at the new wage level, the spokesman said. 

The workers will be back on the job on Saturday, Juli said. 

Around 8,000 of Freeport’s 12,000 workers have been on strike since Sept. 15, crippling production at the massive Grasberg mine, which holds the world’s largest gold and second-largest copper reserves. 

In a statement sent to the Jakarta Globe, Freeport Indonesia confirmed it had reached “mutually acceptable terms with its union workers.” 

The statement said the terms were to be “incorporated in a two-year extension for the 2011-13 Collective Labor Agreement.” 

“In addition, [Freeport Indonesia] has agreed to provide improved benefits, including enhancements to shift and work location incentives, housing allowances, educational assistance and retirement savings plans,” it added. 

However, Juli said the union was not happy because what was agreed to was far from what the workers had been demanding. “The humanitarian aspect forced us to make this decision,” he said. 

Workers, he said, had originally wanted a 20-fold pay increase on their minimum salary of $1.50 an hour, but their demands had steadily declined. 

In October, Freeport had to declare force majeure, meaning it couldn’t meet certain contractual obligations. Grasberg has been operating at about 5 percent capacity because of the strike.
The strike is one of a wave of industrial actions across Southeast Asia’s largest economy, where the cost of living is rising and a burgeoning middle class is demanding a greater share of the nation’s economic success.

The action at Grasberg triggered a spate of violence, with at least eight people killed in ambush attacks and a clash with police in the already restive province.

The workers claimed to be Freeport’s lowest-paid employees in the world, including those at mines in Africa and South America.

The strike has slashed production by 50 percent, prompting the company in October to declare force majeure — a legal declaration of extraordinary circumstances enabling it to avoid liability on existing orders — as it was unable to deliver shipments to some customers.

Additional reporting from AFP