Freeport Indonesia Resumes Talks with Striking Grasberg Miners

Freeport-McMoRan Copper & Gold Inc. resumed pay talks on Friday with its Indonesian mine workers union in a bid to end a month-long strike as gunmen killed three people near the giant facility.

A spokesman for the company said the three men, including a contract worker and two others who were not employees, were killed on an access road to the Grasberg mine, which has the world's highest copper and gold reserves.

Also on Friday, a pipeline carrying metal concentrate started leaking, the latest setback for a firm suffering from sabotage and worker blockades that have disrupted output and lifted copper prices .

But the resumption of pay talks offered some hope.

I am at the negotiating table now with the firm. We have started negotiations on worker demands and the strike, and we are trying to seek a solution, said union spokesman Juli Parorrongan.

He said the two sides were given a one-day deadline by the local government to reach an agreement, though he saw such a quick resolution as unlikely.

The gunmen who attacked the three men near the mine had not yet been identified, said Freeport Indonesia spokesman Ramdani Sirait.

Police are investigating the incident with our full support and cooperation, said Sirait of the shooting.

A similar attack came several miles away on Oct. 14 when unidentified gunmen shot dead two men and another burned to death inside a car.

The Freeport area in remote Papua province in eastern Indonesia suffers from sporadic shootings, although the latest deaths mark an escalation of violence in a region with a simmering separatist conflict.

It was not clear if the shootings were linked to the strike or to the independence movement in Papua, which is seeking a greater share of revenues from its resources.

The leaking pipeline, which contains copper, gold and silver, is at an area called Mile 29, a worker told Reuters. The firm said on Monday its main pipeline taking concentrate to its port in the Papua region was cut, leading to a halt in output.

An employee at the Papua mine said workers were unable to get close to the leaking pipeline due to security forces closing the access road after the shootings.

The union has said it does not know who is responsible for the sabotage, but would end the strike and blockades on roads if the firm agrees to remove sanctions on workers, pay them while they have been on strike and consider a fivefold pay increase.

The union initially demanded $30 to $200 an hour for miners earning $1.50 to $3, after finding out their counterparts around the world earned 10 times more, but they scaled back pay demands last week to $7.50 an hour, as the company boosted production without them by using contractors and other workers.

Earlier this week, the firm said the Grasberg mine was operating at about two-thirds of its capacity.

Freeport managed to beat Wall Street estimates for its third-quarter profit as weak copper prices were offset by soaring gold, but it cut its sales forecasts for next year and said output was hurt by a strike due to last until mid-November.