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Indonesian Union Seeks Hefty Pay Rise From Freeport

August 4, 2011

From Joyo

Indonesian Union Seeks Hefty Pay Rise From Freeport

JAKARTA, Aug 3 (Reuters) – The union representing workers at Freeport
McMoran Copper & Gold’s giant Indonesian mine is demanding a 20-fold
pay rise and could strike again if its demands are not met, a union
leader said on Wednesday.

Pay talks are in their second week and come after an eight-day union
workers’ strike in July, which lifted global copper prices since it
caused Freeport to stop production at a mine with the biggest
recoverable copper reserves.

The union, which represents 8,000 members, is pushing for $30-$200 an
hour pay, since it says other Freeport workers around the world get
paid much more than the current $1.5-$3.5 per hour for the Grasberg
mine’s lowest or mid-level staff, said union official Virgo Solossa.

"We in the east are in a weak position. We are in a remote area, so it
is easy for a big company to exploit us. We are operating in the same
way as the mine workers in Chile and Congo. The only difference is the
pay," Solossa told Reuters.

Solossa said if the firm refused to give in to workers’ demands by an
Aug. 17 deadline, there was a possibility of another strike.

Freeport Indonesia declined to comment.

At Chile’s Escondida, the world’s top copper mine, negotiations
between workers and mine owner BHP Billiton

also stretched into a second day on Wednesday as both sides seek an
end to a two-week strike that is fanning global supply fears.

Copper prices hit record highs earlier this year, but Solossa said
most Freeport workers still needed bank loans to pay for their
children’s education.

The regional monthly minimum wage was 1.3 million rupiah ($154) last
year in Papua, a province that is one of Indonesia’s most impoverished
and where poor infrastructure leads to higher costs.

A Freeport source said that if the company granted the union’s
demands, it would boost local inflation and provoke other mine workers
to stage similar strikes around a country that is the world’s top
exporter of tin and thermal coal.

Jakarta-based employment lawyer Ibrahim Senen said the worker demands
were "illogical" and too high to be granted.

($1 = 8467.5 rupiah)

(Reporting by Olivia Rondonuwu; Editing by Neil Chatterjee and Will Waterman)

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