F

reeport employees on strike over wage increase demands claimed they had been intimidated by PT Freeport’s management, which on Friday reported that the copper and gold mining company was losing an estimated US$19 million per day as a result of the strike.

More than 7,000 workers had joined the strike in Timika as of Thursday, after salary negotiations with management ended in deadlock. The workers also went on strike from July 4-11.

They have demanded that the company raise the salaries of workers from between $2.10 and $11.00 per hour to between $17.5 and $43 per hour.

The company management was reported to have announced that it would not pay those who skipped work.

The announcement, which was advertised on a local publication and came into effect on Sept. 15, was taken by the strikers as a form of intimidation.

“Regulations allow employees to hold strikes. We cannot be intimidated. Go ahead and not pay us, we can go through legal means,” worker spokesman Julius Parorrongan said when contacted by The Jakarta Post from Jayapura on Friday.

Entering the second day of the strike, the rallying workers, according to Juli, held prayers at a check point in Kuala Kencana, Timika.

Juli said that the workers were waiting for the company’s management to agree to return to the negotiating table.

PT Freeport spokesperson Ramdani Sirait said that the company was still talking with the government about the issue.

Januaris Resubun, a Papua administration official in charge of provincial revenue, said the strike would affect the sum of royalties received by the Papua administration.

“The Papua administration receives Rp 230 billion [US$26.22 million] a year. The strike will definitely affect the royalties,” he said.

In Jakarta, Energy and Mineral Resources Minister Darwin Zahedy Saleh said that the current strike might cost the company $19 million in sales per day.

The strike will also cause the country to lose $6.7 million from the company, given the fact that the company’s ability to produce around 230,000 tons of gold and copper ore might be disturbed.

“We hope that the problems between Freeport’s management and its worker union can be solved as soon as possible. Our ministry is committed to maintain the health of the country’s investment climate,” he told reporters at a press conference at his office in Jakarta on Friday.

Darwin suggested that the company’s management and worker union improve communications to avoid misunderstanding.

Freeport’s mine is 213,000 hectares in area. Royalty payments from the company accounted for 68 percent of Papua’s gross domestic regional product (GDRP) and 96 percent of Timika’s GDRP in 2010. During that year, the company contributed $1.9 billion to the state income from tax and non-tax payments and invested $2.1 billion.

“Given that fact, we hope that all related parties prioritize the national interest to solve the problems,” said Darwin, adding that he and the ministry’s mineral and coal director general, Thamrin Sihite, would go to Timika to supervise the conflict resolution.

“We don’t mean to back one side. We want the rights of workers upheld, but we also hope that we can maintain the investment climate.”

Freeport Indonesia, the Indonesian unit of US mining firm Freeport McMoran Copper & Gold Inc., reported that it had paid $678 million to the government in financial obligations for its first-quarter operations.

The payment comprised $346 million in corporate income tax; $165 million in employee income tax, regional tax and other levies; $51 million in royalties. The remaining $117 million was the government’s share of dividends.

Coordinating Economic Minister Hatta Rajasa said that he would ask the managing director of Freeport to find a solution to mediate the dispute between the labor union and the management.