Freeport-McMoRan Copper & Gold Inc is unlikely to meet third-quarter sales estimates because of a strike at its vast Grasberg mine in Indonesia.

Pressure was further heaped on the company when workers at Freeport's Cerro Verde mine in Peru, which yields 2 percent of the world's copper, said they would start an indefinite strike next Wednesday, raising concerns over a global shortage of the red metal.

The weeklong Grasberg strike has limited mining, milling and concentrate shipping activities, but about half of the labor force, primarily contractors and nonunion staff employees, have reported to work, the company said Wednesday.

The estimated impact on production is about 3 million pounds of copper and 5,000 ounces of gold for each day of the work stoppage, Freeport said. On Tuesday, Chief Executive Officer Richard Adkerson said only that production had been slowed significantly.

Nicholas Snowdon, an analyst with Barclays Capital in New York, said the impact of lost production on copper markets and prices could be significant if the strike drags on.

Over just a day or two, it's not a game-changing amount, but if the unions remain true to their word and hold for a full 30-day strike, that's nearly 40,000 tonnes of copper, which is significant, he said.

Freeport clearly are under pressure from the lost revenues from lost production, so it will be interesting to see how negotiating positions evolve from here.

It comes alongside an absolute plethora of other disruptions experienced this year, and that is certainly feeding through into a tighter (copper) concentrate market, Snowdon said.

Copper prices in New York are trading just above 9-1/2-month lows. On Wednesday it was up 1.25 cents at $3.7380 per pound.

In a statement on Wednesday, the Phoenix-based company said it expected its consolidated third-quarter sales estimates of 940 million pounds of copper and 415,000 ounces of gold to be unfavorably impacted by the strike.

Freeport said it was developing revised operating plans, to begin increasing mining and milling rates with a reduced work force.

The miners' union, which declared a monthlong strike from Sept. 15, is demanding an hourly pay raise to between $17.50 and $43, from a current rate of $1.50 to $3.

The union said Freeport's total work force in Indonesia was 23,000 people, and that more than 12,000 of these were union members and still striking.

Those who are working at Grasberg now are not doing production activities, they are maintaining production tools, said union official Virgo Solossa.

Adkerson and Chairman James Moffett said in a joint statement that Freeport subsidiary PT Freeport Indonesia was working diligently and constructively to reach a new labor agreement.

They noted that in 2010, the contribution from Grasberg to the government of Indonesia and the local community, including taxes, domestic wages and procurement, totaled more than $3.8 billion.

We are committed to maintaining an attractive work environment for our employees and look forward to concluding the negotiations on a mutually agreed basis as soon as possible, Adkerson and Moffett said.

Freeport Indonesia spokesman Ramdani Sirait said in a statement: The strike has caused limited activity in mining, the processing plant, and shipment of concentrate.

In Peru, Cerro Verde workers want a 5 percent salary raise to 2,000 soles ($732) per month and improved benefits. They say the company has offered a 2 percent raise, which they deem unacceptable. Cerro Verde produced 312,336 tonnes of copper in 2010.

Barclays New York Gold Copper