Freeport-McMoRan, Indonesian Union in Wage Talks

(REUTERS) -- Freeport McMoRan Copper & Gold and its Indonesian union are discussing a possible pay deal to end a three-month strike that has crippled output from the world's second biggest copper mine, which would double pay for some skilled workers.

Union spokesman Juli Parorrongan said the firm's management seemed ready to explore a proposal for an increase of 35 percent for the lowest level of non-staff workers, a 50 percent rise for mid-level workers, and an increase of 100 percent for the highest ranked non-staffers.

The proposal, pitched by the union, would also boost benefit payments, including travel expenses, a monthly savings plan higher pension, and a 2 million rupiah ($220) monthly housing allowance, Parorrongan said.

The union has previously been seeking to triple wages to $7.50 from around $2 an hour now for miners, most of whom are not staff employees, while the firm has been offering a 35 percent rise.

The management has not accepted our solution, but they seem interested to explore this, Parorrongan said.

About 8,000 miners have been on strike since mid-September at the remote Grasberg mine, which has the world's biggest reserves of gold and also produces silver, leading Freeport to declare a force majeure on concentrate shipments in October.

A pay deal would lead workers to end the strike and lift road blocks that have disrupted the company's supply routes for food and fuel, the union said. The output disruption has helped support copper prices in recent weeks.

A deal would likely improve security to speed up the company's efforts to repair pipelines that are meant to take concentrate from the mine to its port, which have suffered unexplained sabotage.

We hear the management's concern over the pipeline being cut here and there, and because of that they should make a quick decision, raise the offer up a little so that we feel the number is decent for us to accept, Parorrongan said.