PT Freeport Indonesia workers have finally agreed to end their strike after the copper and gold mining giant decided to increase their wages by up to 40 percent.
According to Freeport spokesman Ramdani Sirait, the company has agreed to increase workers’ base wages by 24 percent in the first year and 13 percent in the second year of their employment contracts. This would be equal to a 40 percent increase over two years on a compounded basis.
“In addition, Freeport has agreed to provide improved benefits including enhancements to shift and work location incentives, housing allowances, educational assistance and retirement savings plans,” Ramdani said in a written statement
“For humanitarian purposes, Freeport has also agreed to pay a one-time signing bonus equivalent to three months of base wages.”
Freeport and its workers union have also agreed that future wage negotiations will be based on living expenses and the competitiveness of wages within Indonesia.
Labor union spokesperson Juli Parorrongan said the current monthly wages ranged from Rp 3.3 million (US$361) to Rp 5.5 million.
Juli said the union still not satisfied with the new arrangements.
“However, we decided to agree on the increase because we have to consider the humanitarian aspect, given that the striking workers have not been paid by Freeport for the last three months. We were forced to agree to end the strike, but this is not the end of our struggle,” Juli told The Jakarta Post over the phone on Wednesday.
Juli added that workers would go back to work on Saturday.
He added that labor union chief Sudiro and Freeport Indonesia president director Armando Mahler had signed a memorandum of understanding to end the strike which, has crippled the company’s production from its Grasberg mine.
“The memorandum of understanding is an entry point and will be stated in a more comprehensive agreement that will be discussed later,” Juli said.
Around 8,000 workers at the Grasberg mining site, which holds the world’s largest recoverable reserves of copper, have been on strike since Sept. 15, demanding higher wages.
Prior to the strike, the labor union announced in July demands for Freeport to pay workers $35 per hour. According to the Manpower and Transmigration Ministry, the union later reduced its demand to $17.50 per hour in August, $7.50 an hour in October and $4 an hour more recently.
The prolonged negotiations between Freeport and the union followed repeated calls from politicians and government officials to renegotiate the government’s contract with Freeport. The contract, renewed in 1991 and due to expire in 2021, has been said to position Indonesia on the losing side.
In October, the strike turned violent when two protesters were shot dead by police during a rally in Timika, the closest town to the Grasberg mine.
Freeport’s main pipeline carrying copper and gold ore concentrate from the mine to the port was also sabotaged, and large amounts of concentrate stolen.
The turbulent period resulted in the deaths of more than a dozen people in areas near Freeport’s
The strike and violence led Freeport to suspend its milling operation on Oct. 22. During the dispute, the Grasberg mining site’s production was reduced to only 5 percent of its normal output of 230,000 metric tons per day. (rcf)