Papuan strike halts world's biggest gold mine

[July 12, 2011]  TIMIKA, Indonesia (AP) -- A few clicks on the keyboard of his computer was enough to get Simon Windesi and his friends riled up about the low wages their employer, a global mining giant, pays in this far-flung Indonesian province.

After years of toiling at Freeport-McMoRan's gold and copper mine in easternmost Papua province -- where tribesman can still be found living a near-Stone Age existence in dense jungles and rugged mountains -- many still get just $1.80 an hour.

"That's a 10th what the company pays workers in other countries!" the 43-year-old said after a quick Internet search. "And this is their biggest profit-maker. Their production costs are the lowest. How does that make sense?"

The men are among 10,000 employees who -- while renegotiating contracts and protesting the dismissal of six union leaders -- last week brought operations at the Grasberg mine to a standstill.

Within days of launching their July 4 strike, the site, a sooty kilometer-wide gash in the otherwise lush Puncak Jaya mountain range, was all but abandoned.

Gray piles of ore stood untouched. Trucks had stopped ferrying copper and gold concentrate to the port. And cargo ships, empty, had no place to go. Grasberg's known gold reserves are the world's largest and it is also one of the biggest copper mines.

Sinta Sirait, vice president of PT Freeport Indonesia, said Tuesday that management and union officials reached an agreement just before midnight Monday.

Details of the new contract have yet to be released, however, and there was no sign by mid afternoon that the mine was coming back to life.

"We need everyone to get back to work as quickly as possible," Sirait told reporters. "Many sites are filling up with water. We have to get them dried out."

Indonesia has had a long, complicated relationship with Freeport -- and Papua, its most remote province, both geographically and politically.

Months after Gen. Suharto seized power in a 1965 coup, Jim Moffett, Freeport's chairman, reached out to the dictator, forming what was to become a close friendship and eventually winning the right to explore for gold and copper.

Freeport, now based in Phoenix, Arizona, pumped $175 million into Papua to build a Western-standard road, pipelines, an airstrip and a new, first-class mining town -- all of it to serve the mining operation.

The Grasberg mine helped bolster Suharto's corrupt and often bloody regime until his 1998 ouster and, even today, remains one of the country's biggest sources of income, helping shield it from outside criticism.

It generates more than $2 billion in taxes, royalties and dividends every year, according to data provided by the University of Indonesia's Economic and Social Research Institute.

Locals complain, however, they have seen little benefit, pointing to environmental damage caused by mine tailings pumped into the Aghawagon River and its tributaries.

Some of the mine employees interviewed by The Associated Press argue that ethnic Papuans should make up a larger part of the Grasberg work force. Of the 20,000 employees, around two-thirds are brought in from Java, Sumatra and other Indonesian islands.

The rugged region is home to a decades-long low-level guerrilla war that has left more than 100,000 people dead, many at the hands of Indonesia's security forces.

Many in the province of nearly 3 million people remain desperately poor and ancient tribal ways still pervade life. Men wear nothing but feathers in their hair and hollowed-out gourds that cover their penises.

They hunt with bows and arrows and live in villages ringed by thatched huts, reachable only by foot or small aircraft.

Windesi and his friends say the Internet has provided a rare direct link to the outside world -- raising awareness among the mine's workers about their low pay.

"We believe this mine helps finance Freeport's other operations," said Herman Sirakoie, 29, who last week joined thousands of others workers in a half-day march from company's mining town, Tembagapura, to Timika.

Dozens collapsed from dehydration and exhaustion along the way, he said, compelling the company to send 60 buses to pick them up.

"We just want to know why we're getting less than workers at other Freeport companies," said Sirakoie, who usually spends his day loading gold and copper concentrates onto cargo ships for export.

___

Online:

Freeport http://www.fcx.com/

Striking workers: http://tinyurl.com/66ssq74

[Associated Press; By ALFIAN KARTONO]

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