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Freeport warns Indonesia copper mine workers as Grasberg strike looms

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    • Strike may impact Freeport's efforts to ramp up output
    • Workers concerned over future employment amid contract dispute
    • Deal expected soon to allow temporary resumption of exports

    Copper miner Freeport-McMoRan Inc FCX.N warned on Friday it would punish workers for absenteeism at its Indonesian unit, a day after one of its main unions announced plans to go on a one-month strike over employment conditions.

    Tensions are rising around Grasberg, the world's second-biggest copper mine, after operator Freeport laid off thousands of workers there to stem losses from an ongoing dispute with the Indonesian government over mining rights.

    While Freeport is expecting to soon seal agreements with Jakarta to allow it to temporarily resume copper concentrate exports after a more than three-month hiatus, a strike could impact its efforts to ramp up production.

    "Freeport Indonesia has experienced a high level of absenteeism over the last several days," Freeport spokesman Eric told Reuters.

    "Absenteeism is being tracked and disciplinary actions will be enforced under the terms of the Collective Labor Agreement," Kinneberg said.

    As of last week Freeport had "demobilized" just over 10 percent of its workforce of 32,000, a number expected to grow until its dispute with the government is fully resolved.

    Further adding to tensions around Grasberg, several Freeport workers and police were injured in a clash in Papua on Thursday, when officers fired rubber bullets at demonstrators in Timika.

    The Freeport workers' union said in a statement on Thursday that the company's efforts so far to reduce its workforce have had "extensive impacts on workers and their families".

    Workers are worried about the layoffs "because there are no limits or specific criteria on workers who will be furloughed," the union said. It demanded an end to the furlough policy, and notified Freeport of plans to strike for 30 days from May 1.

    'AGITATED' "Efforts by the company to cut costs and reduce their numbers of workers, this is what has made them feel agitated," said Virgo Solossa, a Freeport workers' union member told Reuters. He added that in his view Freeport was only doing what it needed to survive, and that he and many other workers would not join the strike.

    Some workers on Thursday "carried out acts of anarchy ... so police took action and fired rubber bullets," Solossa said. He said four workers and seven police were injured in the clash but that the dispute was not related to the planned strike.

    Timika Police Chief Victor Machbon confirmed the details of the incident, adding that approximately 1,000 demonstrators attempting to free a union leader at a court hearing had not dispersed when tear gas was fired.

    Indonesia halted Freeport's copper concentrate exports in January under new rules that require the Arizona-based company to adopt a special licence, pay new taxes and royalties, divest a 51 percent stake in its operations and relinquish arbitration rights. The stoppage has cost both the company and Indonesia hundreds of millions of dollars, but negotiations over sticking points is expected to continue for the next six months at least.

    In February Freeport served notice to Jakarta in the dispute, saying it has the right to commence arbitration in 120 days if no agreement is reached.

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