Freeport?s concentrate shipment halted

Shipments of copper and gold concentrate from Freeport Indonesia?s giant copper mine in Papua have been halted as thousands of workers continued their strike, Kontan business daily reported on Tuesday.

Freeport spokesman Ramdani Sirait said that the gold and copper mining giant could no longer be able to ship concentrate supply to PT Smelting in Gresik, East Java and the company?s overseas buyers.

Ramdani said that the shipments had been halted because the pipes which were used to deliver gold and copper concentrate from the processing plant in Grasberg mine to the port had been damaged by the workers. ?It would take at least a month to repair,? he added.

He, however, said that mining activities were still continuing, albeit at limited capacity despite the workers? strike. ?Trucks are still able to transport ore to processing facilities,? he said.

Ida Suhendra, a senior official at the Energy and Mineral Resources Ministry, acknowledged that PT Smelting could no longer receive concentrate supply from Freeport. ?The concentrate supply from Freeport has been halted,? he said, adding that same is the case with Freeport?s overseas buyers due to the strike.

Freeport?s Grasberg mine produced 544,311 tonnes of copper and 1.8 million ounces of gold in 2010, about 3.8 percent of world copper output.

The company's labor union which represents about 8,000 workers, has demanded a pay rise to between US$17.5 and $43 per hour, down from initial demands of between $30 to $200 per hour, but still much above the current hourly rate of $1.5 to $3.

The union has said that other Freeport workers worldwide get 10 times their current salary level.

The strike came one day after workers in Freeport's Peru copper mine Cerro Verde launched similar action for better pay and benefits, Reuters reporter recently (*).