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union representative says workers at Freeport McMoRan Copper & Gold Inc. Indonesia may return to work at the Grasberg mine in Papua on Tuesday, marking the end of a contentious three-month strike in the nation’s easternmost province.

The workers remained on strike due to a dispute with the company’s contractor, PT Kuala Pelabuhan Indonesia (KPI), over possible sanctions to be levied against 500 workers who took part in the labor action, union spokesman Virgo Solossa said on Monday as quoted by kompas.com.

Virgo said that KPI agreed to rehire the workers and not to impose sanctions.

If the problem was really settled, he added, the Freeport workers would return to work on Tuesday.

The workers, who were demanding increased wages, agreed to end their strike on Dec. 14, 2011, after Freeport agreed to increase their salaries up to 39 percent and to improve benefits.

Production at the Grasberg mine has been crippled since 8,000 workers walked off the job in September, The Associated Press reported.

Workers removed roadblocks to the mine last week. Freeport previously predicted that it would take about a week for full operations to resume.

Speaking at the signing of an agreement between KPI and the union in Timika on Friday, PT Freeport spokesman Derek Motte said the company would not sanction striking workers.

Employees who were on strike and who promised not to retaliate against those who did not join the protest would receive a bonus payment under the new agreement.

The contract further stipulated that employees who were dismissed during the labor action would be allowed to resume work without any sanctions.

Both sides accepted the conditions of the contract, Antara news agency reported.

Derek welcomed the agreement between PT KPI and the labor union, adding that he hoped the agreement could be used as a template by Freeport’s other contractors and subcontractors.

As previously reported, Juwarsa, an executive of PT KPI, insisted that sanctions be imposed on the hundreds of workers who went on strike against PT Freeport.

PT KPI’s management previously dismissed 18 workers who were leaders in the union and sent 100 others home.

The company also demanded that 400 workers sign so-called letters of commitment.

Derek said he hoped the strikers would return to work Tuesday and that all roadblocks to the Freeport mining sites would be dismantled.

Recently, the Indonesian Forum for the Environment (Walhi) warned the government of the potential for conflicts to arise in areas of the nation that have abundant natural resources targeted by mining, forest and plantation companies.

The potential for such conflicts, according to Walhi, could only be minimized through the willingness of the government and the relevant companies to listen to the aspirations of the people, including workers and members of the local community.

“People are more aware of their rights. They are getting braver to fight against repressive authority for their rights. This can lead to an uncontrollable social unrest if the government refuses to listen to their voices,” Walhi executive director Berry Nahdian Forqan said.