Strike Impacts Production At Freeport’s Grasberg Mine

“When I left the situation was like an abandoned war zone,” said the mechanic, who said he was in the last batch of about 2,000 workers to leave the open pit mine. “It was dead quiet, no operations, no cars, were moving… All engines were shut down, operation tools and the power have all been turned off,” he said (Reuters)

Demo Karyawan Freeport Foto: Koran SI (Okezone)

The strike by workers at the Freeport’s Grasberg mine in Papua has continued into its third day.  On Tuesday thousands of workers marched 60 kilometers from Tembagapura to Timika, and Wednesday saw thousands of workers protesting outside company headquarters and another 300 workers blocking a main route to the mine.  Throughout, Freeport has been quick to assure the public that shipments will not be disrupted and at least one anonymous “non-striking” Freeport employee has claimed the size of the strike has been “exaggerated.”  Yet, workers’ claims that production at the Grasberg mine has stopped appears to have been confirmed by a local government official.  This, from Reuters:

“The production has completely stopped,” said Dionisius Mameyau, the head of the government’s local manpower office. “Freeport management admitted this in a meeting with the Freeport Indonesia union, which still hasn’t resulted in any deal.”

The strike is also raising concerns in the business press about its potential effect on the global copper supply chain.  Again, from Reuters:

Three of the world’s biggest copper mines face strike-related disruptions this week, early signs of a possible resurgence in labor unrest that could strain an already fragile supply pipeline. In Indonesia, a strike for higher pay has paralyzed output at Freeport McMoRan Copper & Gold’s (FCX.N) giant Grasberg mine, workers said on Wednesday. In Chile, some workers at state-owned Codelco are planning a one-day walk-out, while unions in Peru called off a two-day strike at the last moment. Coupled with diminishing output at older mines and a severe cold snap that has curtailed production at other mines in Chile, which produces a third of the world’s copper, news of growing dissent is helping propel prices back toward the record above $10,000 a tonne hit in February.


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